April 13th, 2015

Poland’s First Economic Reform Plan of July 1989

In July 1989, the leadership of Solidarity asked me to draft an urgent memo on how Poland could undertake economic reforms to become a market economy and a part of Europe. One of Solidarity’s great leaders, the late Jacek Kuron discussed the key ideas with me in his flat very late into the evening on July night, and then asked me and David Lipton to put the ideas onto paper by the next morning, in effect an overnight reform plan. The timing was absolutely urgent: Poland was in the throes of revolutionary change from one-party dictatorship to a new democracy. The economy was collapsing. Solidarity was negotiating with the Communist leaders and indirectly with the Soviet leaders as well. The Solidarity leaders needed an economic plan in order to move forward politically as well as economically. Kuron’s request resulted in this overnight plan. The plan was widely discussed and publicized, and I presented it in the new Polish Senate. When the first post-communist government came to power the following month, Prime Minister Tadeusz Mazowiecki appointed Leszek Balcerowicz to be Finance Minister. Many of the ideas of the memo were incorporated into the Balcerowicz Plan that was launched at the start of 1990. Happily, the controversial call for debt cancellation was agreed by the Western powers. — Jeffrey Sachs, June 4, 2014

Poland Reform Memo (original typed memo); Poland Reform Memo (retyped memo)

 

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