Remaking Poland

It’s a gray, windswept afternoon in Warsaw, and Donald Tusk, the Polish Prime Minister, is running late. His flight in from Gdansk has been delayed by a storm; the schedule is tight. The Georgian President has come to visit, and then there’s the weekend trip to Washington to talk over missile defense with George W. Bush. Three guests are waiting in the Chancellery when Tusk arrives. “I am not crazy about this job,” he sighs, plunking down in an armchair and unbuttoning his jacket. That’s understandable. Nineteen years after his country broke free from the Soviet bloc, it is still ridding itself of the effects of communist rule. Employment levels are among the worst in Europe. Roads, telecommunications and sewage lines are in terrible shape. As for Polish political life, Tusk admits, it can only be described as “weird.”

And yet in some ways, Poles, including Tusk himself, have never had it so good. Leszek Balcerowicz, a former Finance Minister and the chief architect of Poland’s post-communist reforms, says the country is living through “its best period in 300 years.” The economy is growing, and the country’s alliances with Europe and the U.S. are strong. Not since 1989, according to one recent survey, have the Polish people felt so optimistic about the direction their country is taking.

Tusk’s election last October, moreover, may mark a new consolidation of Polish democracy. Where once 20 political parties vied for space in the Sejm (the Polish parliament), now a manageable four hold the floor. For the first time since the end of communism, voters reaffirmed the ascendancy of Poland’s economic conservatives. The post-communist left has now failed to win in two successive votes. Yet Tusk, 50, is keenly aware of the challenges ahead. His party has no experience in power, and he has been criticized by the opposition for being a “media star” without substance. “If the aim of government is not to disturb much, then he is a good PM,” jokes Jaroslaw Flis, a political commentator at Krakow’s Jagiellonian University.

In a lengthy interview, Tusk says his government’s ambition is great: to complete the transformation to a free-market system begun almost two decades ago. The disastrous legacies of 45 years of communist rule — from a bloated bureaucracy to punishing unemployment — have yet to be cleared away, he says, and Poland cannot afford to waste more time. “We have no oil and gas,” he says. “We don’t have high tech. Our centers of development, are far, far behind others. We will never be an extraordinary tourist attraction. Poland is quite a mediocre country in some regards. The only natural resource that we have, and with which we can compete, is freedom.”

Making the Most of It
It’s not much to go on, but Jan Krzysztof Bielecki, Poland’s Prime Minister in 1991, suggests Tusk can make the most of it. He has known Tusk since the two men were Solidarity activists in the 1980s, and they still play old-timers football together. “Tusk is pure striker,” says Bielecki, now CEO of Bank Pekao, one of Poland’s biggest financial institutions. “He is not a water boy or even central defender. He puts his head where others will only put their feet. And by that I mean that he has courage.”

Tusk showed some on his early March visit to the U.S., when he told President George W. Bush that Poland’s security interests would be harmed, not helped, by a U.S. plan to erect a missile shield on Polish territory. He said that Poland would reject the installation, which the U.S. says is aimed at deterring Iranian and North Korean missiles, unless Washington comes with concrete commitments to help Poland upgrade its own defense systems. He is also vehemently opposing Russia’s latest demand that it be allowed to permanently station its officers on Polish soil to monitor the antimissile sites.

Tusk’s line on the missiles was a particularly sharp departure from his predecessor, but not the only one. The previous government, led by Prime Minister Jaroslaw Kaczynski, whose identical twin Lech is still Polish President, was so plagued by in-fighting, scandal and sour relations with Poland’s neighbors that Tusk’s victory in last October’s election can be partly ascribed to the relatively competent impression he makes. But Tusk’s success also represents Poland’s growing acceptance of free-market ideas. In 1993, an economically liberal forerunner to the party that Tusk co-founded in 2001 drew just 4% of the vote amid criticism that it was insensitive to the poor. In October, Tusk’s Civic Platform, running on similar ideas, got 42%. (Since the election, support has climbed further to 60%.) In a recent survey, moreover, 42% of Poles identified themselves as being on the right in terms of their economic outlook, as against just 22% on the left. Even some rural areas in northern and western Poland that have traditionally backed the left or the populist right voted for Tusk this time, in the hope that a stronger economy would help improve their lot. Says veteran pollster Krzysztof Zagorski, “People expected Tusk to win, but not by this margin.”

Many Poles hope the new government is more apt to address Poland’s lingering economic ills, beginning with the fact that nearly one-half the working-age population is not officially working, and public spending still soaks up 45% of GDP. Low investment in infrastructure means that it takes longer to drive from Warsaw to Krakow today than it did 10 years ago. Though the exodus is slowing, some 20% of young Poles seek their first jobs outside the country. “A poor country with a badly structured welfare state cannot become an economic tiger,” says Balcerowicz. “If Poland is to become another Ireland it has to complete its fiscal reforms.”

Bringing Them Home
To that end, Tusk says he wants to shrink government, curb central authority, “radically” deregulate, and cut taxes. The first priority, says Michal Boni, Tusk’s chief economic adviser, is to discourage early retirement; nearly three in four Poles stop work by the time they are 55, more than anywhere else in Europe. By increasing pay and promoting retraining, says Boni, Poland could save up to $13 billion in premature retirement benefits over the next 12 years. To lure younger Polish talent home, the government also wants to lower barriers to starting a business, and provide better science and technical education. “Some of this can seem tedious,” says Tusk. “But for Poland there is no other way.”

Tusk has never been out for the quick fix. Raised in Gdansk as a member of the tiny Kashubian ethnic minority, he joined the anticommunist Solidarity movement in the 1970s while studying history at university. He was later forced by the authorities to work as a house-painter because of his dissident activities. Tusk shared with Lech Walesa and other Solidarity leaders an antipathy to the government that he says was self-evident: “Communism was something so hideous that you had to be an exceptional conformist or a fool not to see the evil around you.”

In the mid ’80s, Tusk and a group of other Solidarity intellectuals began publishing an underground monthly pamphlet featuring the writings of the liberal economist Friedrich Hayek and essays on private property. Their heroes were Ronald Reagan and Margaret Thatcher. “We had to wait many, many years for our way of thinking to be accepted in Poland,” Tusk says. “But now it has been. And we are ready.”

Not all Poles share his enthusiasm. Pollsters say that the October election marked the sharpest divide yet between Poland’s rural and urban electorate. While the Civic Platform drew most of its support from what pollsters now refer to as Poland A — urban, educated, younger voters — the rural, older, more devout voters who make up Poland B favored Jaroslaw Kaczynski’s Law and Justice Party (PIS) and other parties. In crude terms, the first group includes the winners of Poland’s economic transition; the second group, the losers.

No place better exemplifies Poland A — Tusk’s Poland — than the western university town of Wroclaw, which voted overwhelmingly for him. Poland’s fourth largest city, situated on the Oder River close to the German border, was neglected under communism, its Gothic architecture blackened by coal dust and its shop shelves bare. Nowadays, the elegant old market square in the city center, once the site of a few scruffy museums, is lined with designer shops, sushi bars and restaurants. Companies from LG Philips (LCD screens) to Google (service support) have poured $5 billion into the local economy in the past five years, creating 200,000 jobs in a city of just 650,000. The mayor’s office reviewed 560 investment projects last year alone. Since 2002, unemployment dropped from 14% to under 5%. Mayor Rafal Dutkiewicz credits low production costs, a good location near the autobahns to Western Europe and a deep pool of educated young workers: local universities graduate 24,000 students each year. To achieve similar results elsewhere, he says, Poland needs better infrastructure and less regulation. “Anything entrepreneurial is still looked upon with suspicion,” says Dutkiewicz. “It’s crazy! Let people make money.”

But Wroclaw is only one version of Poland. Many of the 40% of Poles who still live in smaller towns take a different view. In the village of Radecznica, nestled in rolling hills near the Ukrainian border, some 45% of the 6,500 inhabitants voted for the PIS in the last election; Tusk’s party got only 10%. The region is poor: Radecznica’s sole employer is a state mental institution. The town lacks paved roads and even a sewage system. Mayor Gabryel Gabka, 58, has applied for European Union money to build one. “But even if we get it, there may not be the people here to do the job,” he says. As for Tusk’s “liberal” agenda, says Lucjan Bednarz, a local PIS activist: “Only youngsters who are not yet able to have a stable opinion and who are influenced by certain TV programs adopt the kind of rootless, temporary opinions which are favorable to the Civic Platform.” As for Tusk himself, says Bednarz, “So far, he hasn’t shown anything.” PIS supporters, by contrast, he says, “are devout. They go to church and they value patriotism. PIS gives them these values without promising a pie in the sky.”

For Poland to flourish in the company of European nations, it has to help places like Radecznica. Tusk acknowledges as much. His party doesn’t promote the liberal label and has tried to show a social conscience. During the past election, for example, unsanctioned text messages urged young voters to “hide your grandma’s ID” (so that she couldn’t vote PIS). The Civic Platform countered with a message that voters should bring Grandma along to the voting booth and explain to her that her future, too, depends on growth.

Tusk needs the cooperation of the opposition — and of Poland B — to push through the legislative changes he believes Poland needs. The opposition, both on the left and the populist right, is not disposed to tolerance. A failure to deliver on promises, PIS leader Jaroslaw Kaczynski warned recently, could produce “serious social conflict” and “social depression.” Certainly Poland has had more than its share of both those ills. “I spent an important part of my life participating in conflicts,” says Tusk. “But for me conflict was not the main principle.” His central task is to heal the ideological divisions of the past and get Poland moving forward together as one.