Failure of state planning system to spur economic growth

Failure of state planning system to spur economic growth lead
to social unrest with Polish workers going on strike in the summer of 1980 being
dissatisfied with the communist regime. The activity of opposition groups
started to grow then. A policy reform started with the Solidarity Trade Union
established in 1980 founded by Lech Walesa, which Polish communist government
attempted to destroy by establishing martial law in 1981. Except for the
Communist party, the activity of all organizations were suspended over time.
Solidarity was declared
illegal, and its leaders were arrested. The union was formally dissolved by the
Parliament in 1982, but in spite of this it continued its activity as an
underground organization. People were not allowed to organize manifestations, telephones were
turned off and mails censored. However, all this repression, has not broken the
resistance of the society. Martial law has not destroyed the Solidarity, but it weakened it. In 1988,
a new wave of strikes and unrest spread across Poland which has lead to the
initiation of reforms. The
authorities offered to conduct talks at the Round Table in exchange for the end
of the protest, which began in 1989, bringing members of Solidarity and
communists party members together for negotiation. As a result, the government
agreed to legalize Solidarity and allow it to take part in free elections for
Polish parliament. The government announced an economic plan and promised more
freedom for the media. Elections were set for June 4. Even though they had
minimal resources Solidarity quickly organized an electoral campaign with the
first issue of the independent daily newspaper Election Gazette to be
introduced on May 8th, to support Solidarity campaign. In the elections, held
in June of that year Solidarity
obtained 99 of 100 seats in the senate and a majority in the lower house,
taking 162 out of 460 seats. On August, Tadeusz Mazowiecki, a Solidarity
representative, was elected Prime Minister and became the first non-communist
prime minister. In
December 1990, Walesa was elected president which was the end of the communist
governmental system in Poland. Under the leadership of Tadeusz Mazowiecki and
with massive public support, the first noncommunist government imposed a shock
therapy reform program, formally named the Balcerowicz Plan after its architect
Leszek Balcerowicz, which was intended to shift from the centrally planned
economy into a privatized market-based, Western style market economy. The government’s activities aimed to
stabilize the macroeconomy and to create the conditions necessary for
privatization, enterprise restructuring, and the development of a system
aligned with a market economy, e.g. reduce the inflation rate, eliminate
shortages, make the Polish currency convertible into other currencies or remove
some of the restrictions on foreign trade. With the speed and scope of the reforms, the main goals
were achieved within a few months and the impact on Polish market was profound.