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TITLE:  POLAND ECONOMIC POLICY AND TRADE PRACTICES
DATE:  FEBRUARY 1994
AUTHOR:  U.S. DEPARTMENT OF STATE

                              POLAND

                     Key Economic Indicators
           (Billions of zlotys unless otherwise noted)


                                  1991      1992      1993 
Income, Production,
 and Employment

Real GDP (1990 prices)             530,583    538,609   557,000
Real GDP Growth (pct.)               -7        1.5       4
GDP (at current prices)            824,329  1,142,429 1,188,126
GDP by Sector (pct.): /1 
  Agriculture                       6.2       7.3       7.0
  Energy and Water                  n/a       n/a       n/a
  Manufacturing                    40.2      39.6      40.2
  Construction                     10.2      11.2      11.3
  Rents                             n/a       n/a       n/a
  Financial Services                n/a       n/a       n/a
  Other Services                    n/a       n/a       n/a
  Government, Health
   and Education                    n/a       n/a       n/a
Net Exports of Goods
  and Services                      n/a       n/a       n/a
Real Per Capita GDP 
(000 Zlotys)                         13,876    14,039    14,551
Labor Force (000's)                  18,300    18,400    18,000
Unemployment Rate (pct.)            11.8      13.6      16.0

Money and Prices
(annual percentage growth)

Money supply (M2)                  44.5      56.5      37.0
Base Interest Rate                 /2        38        29
Personal Saving Rate               10.4      22.4      20.7
Wholesale Inflation                48        37        38
Consumer Price Index               70        43        38
Exchange rate (000's PZL/$)
  Official                         13.0      15.5      19.8 /5
  Parallel                         13.5      15.8      20.1 /5 

Balance of Payments and Trade
(millions of U.S. dollars)

Total Exports (FOB)                14,903    13,187       n/a
  Exports to U.S.                     351       374       n/a
Total Imports (CIF)                15,756    15,913       n/a
  Imports from U.S.                   441       637       n/a
Aid from U.S.  /3                     115       179       n/a
Aid from other countries /4           440       270       300
External public debt               46,500    47,044    47,700
Debt service payments (paid)        1,702     2,393     2,509
Gold and foreign exchange 
Reserves (end-of-year)              3,800     4,280     3,720 /5
Trade balance                        -853    -2,726       n/a
  Balance with U.S.                   -90      -262       n/a


Notes:

1/   In some cases the statistical systems and methods applied
    in Poland differ from those used in U.S.  The GDP by
    sectors is presented in Polish statistical publications as
    follows:

                                  1991      1992      1993

Industry                          40.2      39.6      40.2
Agriculture                        6.2       7.3       7.0
Construction                      10.2      11.2      11.3
Transportation/
Communications                     5.6       3.5       3.5  
Trade                             13.1      15.0      15.0

2/  In 1991 and 1992 the base interest rate was the refinance
    credit rate while in 1993 the rediscount credit rate.  In
    February 1991, the refinance credit rate was raised from
    55 percent to 72 percent, and lowered to 59 percent in
    May, and then to 50 percent in July, 44 percent in August,
    and 40 percent in September.  Because of the success of
    Poland's anti-inflationary policies, the rate was stable
    in 1992.  In July 1992, it was reduced from 40 percent to
    38 percent.  In February 1993, the refinance credit rate
    was lowered to 35 percent and remained at that level.  For
    1993 the rediscount credit rate has been accepted as the
    base interest rate and has been set at 29 percent.

3/  Aid from U.S. consists of SEED funding and food assistance
    only.

4/  Aid from other countries mainly consists of EEC grants, the
    British Know-How Fund and the French assistance program.

5/  End-September 1993.



1.  General Policy Framework

    The year 1993 was a year of accelerating economic recovery
and growing impatience with the cost of reform in Poland. 
While the economy grew four percent (following one percent
growth in 1992), public perception was increasingly that
reforms had failed to restore prosperity to Poland
(notwithstanding soaring sales of many types of consumer goods)
and should be changed.  This negative sentiment culminated in
the September 19 elections, which produced a majority for two
left wing parties.

    After two years of steep decline, the economy began to
recover in 1992.  Even though the worst drought on record cut
one percent off of GDP, GDP still grew by over one percent. 
This performance was followed by four percent growth in 1993,
making Poland the fastest growing economy in Europe.  The
strongest sector, leading the recovery, has been industrial
production.  Although at the start of the recovery in early
1992 Poland was running a substantial trade surplus, giving the
impression that exports were leading growth, since the fourth
quarter of 1992 there has been a large trade deficit, 
indicating that demand is rising even faster than output. 
While much of the trade deficit is the result of imports of
capital goods funded by foreign investment and represents the
modernization of the Polish economy, there are also large
imports of consumer goods, which may put unsustainable pressure
on the balance of payments.  The size of the trade deficit has
led to increased pressure from Polish farmers and manufacturers
for protection from foreign competition, as well as demands
from exporters for competitive devaluation, subsidized export
credits, and other support for Polish exports.  In August,
1993, the National Bank of Poland (NBP -- the central bank)
responded with an eight percent devaluation of the zloty.

    Parliamentary elections held in September, 1993 gave nearly
two-thirds of the seats in the Sejm (the dominant lower house
of Parliament) to two leftist parties, the SLD (descended from
the Polish communist party) and the PSL (formerly the
Communists' fellow traveller peasant party).  These parties
have formed a coalition, which has stated its intention of
continuing economic reform, but also faces many demands from
different groups for benefits to moderate the harsher effects
of reform.  The PSL's agrarian constituency is particularly
interested in higher support  prices for farm products, and
also variable levies and export credit guarantees.

    The fiscal deficit appears to be a long term problem for
the Polish government.  After persuading the IMF to accept 1993
deficit targets of ZL 81 trillion (five percent of GDP), it
appears Poland will actually run a deficit in 1993 of ZL 55-60
trillion, in part because the government has been unable to
sell sufficient numbers of its bonds to the banking system. 
With the new government facing increasing pressure to assist
the unemployed and others hardest hit by the recession, and a
weak tax collection system unable to fully enforce taxes, it
appears the deficit will be a chronic problem.

    Monetary and credit restraint aimed at controlling
inflation and making the market allocate credit efficiently has
made positive real interest rates the rule for the last four
years.  Credit policy has become increasingly contentious as
businesses argue that interest rates are too high, building in
inflationary expectations and stifling business growth.  Banks,
on the other hand, argue that present interest rates are
justified by high commercial default risk and large government
borrowing to finance the budget deficit.

    Polish trade policy has undergone a number of rapid changes
since 1990.  Currently, it appears aimed at securing improved
preferential access to export markets for Polish goods, while
protecting Polish producers in their home market.  Even before
the elections the Ministry of Foreign Economic Relations
(MFERS) had prepared a plan for export credit guarantees and
other export promotion measures aimed at restoring Polish
exports to the former Soviet Union.  The Ministry of
Agriculture had also prepared a plan for a variable levy to
protect farm price supports.  Both these projects have been
included in early policy statements by the new government.

    In 1990, Poland established a trade regime which could be
described as the most open in Europe.  After the zloty became
internally convertible in January 1990, imports grew rapidly. 
In mid-1990 the government suspended (completely or partially)
tariffs on the majority of Polish imports as both an
anti-inflationary and anti-monopoly policy tool.

    While suspended tariffs helped lower inflation and provided
competition for domestic monopolies, they also fueled rapid
growth of imports.  With state enterprises already battered by
the recession and the loss of the Soviet market, this led to
rising pressures for protection.  After a series of stopgap
measures in the first half of 1991, on August 1, 1991 the
Polish government adopted on three days' notice a new tariff
schedule with an average duty of 14 percent.  Tariffs were
increased further in January 1992 when tariffs were raised on
consumer luxuries (tobacco products, electronics, computers,
and automobiles).  Yet another new tariff schedule was
introduced on July 5, 1993.  While it incorporated only minor
changes in tariff rates, it did introduce new elements, like
seasonal tariffs on agricultural produce and increased use of
tariff rate quotas.  It was accompanied by a number of tariff
suspensions, which MFERS says lowered the average applied
tariff to 11 percent.

    Although Poland's association agreement with the EC has not
been ratified, its trade provisions were brought into effect by
a transitional agreement in March 1992.  This agreement gives
both Poland and the EU preferential access to each other's
markets.  Resulting tariff preferences for EU products have
given them a competitive advantage over products from the
United States and other countries.

    Because the association agreement has been followed by
large deficits in Poland's trade with the EU, it has generally
been viewed in Poland as favoring the EU and giving Poland
inadequate preference in the EU market, despite the EU's
insistence that the benefits in the agreement do favor Poland
and that the trade deficit is the result of Poland's need to
import goods to modernize its economy.  The association
agreement probably helped galvanize sectoral representatives
who felt sold out by the concessions given to the EU into
organizing more effective lobbying of the government.


2.  Exchange Rate Policy

    The zloty has been internally convertible for all current
transactions (merchandise and services) since January 1, 1990. 
Since October 1991 the National Bank of Poland (NBP -- the
central bank) has managed the exchange rate through a crawling
peg mechanism.  This is intended to devalue the zloty by small,
daily increments to offset domestic inflation and keep Polish
exports competitive.  On August 27, 1993 the NBP responded to
the deteriorating current account with a one-time devaluation
of eight percent.  At the same time, the NBP slowed the rate of
the crawling peg devaluation from 1.8 percent per month to 1.6
percent per month.  The exchange rate is set against a basket
of reserve currencies, currently the dollar (45 percent), the
D-mark (35 percent), sterling (10 percent), the French franc
(five percent), and the Swiss franc (five percent).  Zloty
rates against individual currencies in the basket fluctuate in
accordance with changes in cross rates.

    Capital transactions remain controlled.  A license from the
NBP is required to grant or receive foreign credits.


3.  Structural Policies

    Prices:  Almost all subsidies and controls on the prices of
consumer goods have been eliminated.  Subsidies remain on a few
items, including preferential credit for pesticides and
fertilizers.  Prices of fuel, public transportation, and rents
for government and state enterprise-owned housing (the bulk of
the rental housing stock) are set administratively.  Housing
rents are set well below the cost of maintaining the
buildings.  The government has an anti-monopoly policy to
prevent domestic producers from taking unfair advantage of
their monopoly positions in the Polish market.

    Taxes:  On July 5, 1993, Poland introduced a value added
tax (VAT), replacing the turnover tax, a complicated and
non-transparent tax on output formerly used by communist
governments.  Indirect taxes (VAT and excise taxes) are the
Polish government's largest source of income, producing about
40 percent of revenues.  The personal income tax (introduced
only in January 1992) is the second-largest source, producing
about 25 percent of revenues.  The corporate income tax
produces about 15 percent of revenues, and customs duties nine
percent.

    Regulatory policies:  Poland has eliminated the former
state monopoly on foreign trade.  The foreign trade
organizations which conducted all trade under communist rule
now compete with private traders.  Any person or firm
registered as a business may engage in foreign trade.  This has
put severe pressure on Poland's outmoded customs service.

    No restrictions are imposed on foreign trade, except on
items in strategic areas.  All quantitative restrictions on
imports purchased with convertible currency were eliminated on
January 1, 1990.  Import licenses are required only for
radioactive materials and military goods, fuel, wine and hard
liquor, cigarettes, and, new in 1993, for whole poultry. 
Imports of some high proof spirits and cars over 10 years old
are banned.

    Export licenses are required for products in the following
areas:

--  petroleum products:  petroleum fuels for engines (other
    than aircraft); fuel for self ignition engines; fuel oil;

--  metals:  non-ferrous scrap; lead; and aluminum;

--  soil products:  nitrogenous fertilizers; peat and peat
    products; phosphatic fertilizers; and potash fertilizers;

--  plastics:  polyethylene; polypropylene; and copolymer
    ethylene propylene;

--  polyvinyl chloride;

--  synthetic rubber and synthetic fiber;

--  chip-boards; wood cellulose; and waste paper;

--  preserved and half-tanned hides.

    The law does not distinguish between foreign and domestic
investors for purposes of foreign trade.


4.  Debt Management Policies

    Poland is a heavily indebted country.  Its hard currency
debt was about $48 billion at the end of August 1993.  Debt to
foreign government creditors is to be reduced by a minimum of
50 percent (calculated according to net present value) through
a two-stage process worked out by Poland's Paris Club creditors
in March 1991.  Debt relief of 30 percent is provided during
1991-1994; and an additional 20 percent is available after
April 1994, contingent upon Poland's remaining in compliance
with an IMF agreement.  Poland is pursuing comparable treatment
from its commercial bank creditors.  Creditor countries do this
by reducing the principal; reducing interest payments; or
through a mixture of lower interest payments and new credits. 
The U.S. made a further 10 percent reduction and agreed to
Poland's using another 10 percent for an environmental fund. 
This reduced Poland's debt to the U.S. by 70 percent, from $3.8
billion to $1.14 billion.  Following Poland's conclusion of a
Standby Agreement with the IMF in March 1993, talks with
Poland's London Club commercial bank creditors have resumed. 
Negotiations are ongoing about settling mutual indebtedness
between Poland and the former Soviet Union.


5.  Significant Barriers to U.S. Exports

    U.S. exports to Poland are disadvantaged by Poland's
Association Agreement with the EU.  Although the Association
Agreement has not yet been ratified, its trade provisions were
brought into effect in March 1992.  This reduced or eliminated
tariffs on about one-quarter of Poland's imports from the EU. 
These tariff preferences give EU exporters a competitive
advantage over their rivals from the United States and other
countries.  Remedies are being sought in the course of
negotiations for Poland's re-accession to the GATT.

    While Poland is in the process of developing its own export
controls for strategic items, it remains subject to COCOM
controls.  Therefore, certain high technology exports to Poland
still require a U.S. export license.  A Polish import
certificate is necessary to support the U.S. export license.

    Standards for testing, labelling, and certification in most
cases have not presented significant barriers to U.S. exports,
although in some cases they are more specific and rigid than
equivalent regulations found in Western countries.  Existing
regulations are being revised to reflect Poland's new open
trade regime and to conform to EU standards.  Standards
enforcement remains in need of improvement.  The Ministry of
Health's Central Inspectorate of Sanitation (SANEPID) inspects
and tests food and cosmetics imports to ensure that they meet
acceptable health standards.  Since 1990, SANEPID has been
overwhelmed by increases in food imports, resulting in delayed
certifications and much food entering the Polish market without
inspection.  Some U.S. exporters have complained that
particular SANEPID offices have levied unnecessary quarantine
requirements on them.  New legislation on sanitary standards is
being drafted by SANEPID.  U.S. firms have not encountered
difficulties getting approval to sell pharmaceuticals in
Poland, providing the products have been approved for sale in
developed countries.

    Services barriers:  Legally, foreign banks are permitted to
establish themselves in Poland, either as joint ventures with
Poles or as wholly foreign owned ventures.  However, in an
effort to get foreign banks to invest in financially troubled
Polish banks, the NBP has said it will suspend the issuance of
permits necessary for foreign banks to establish themselves in
Poland.  Minimum capital requirements for establishing new
banks are $6 million for foreign banks and $2 million for
domestic banks.  Foreign banks may also open representative
offices.  Five banks with foreign ownership are operating. 
Since July 1990 foreign insurance firms have been able to enter
the Polish market.  Foreign companies are playing a growing
role in the tourist industry, but entry is still regulated by
the Ministry of Industry and Trade.

    Investment barriers:  The law on foreign investment,
effective from July 4, 1991 represents a significant change
from previous Polish law insofar as it substitutes the removal
of restrictions for the granting of incentives.  Most of the
incentives included in the old law have been repealed.

    Under the new law, the old Foreign Investment Agency, which
had important regulatory functions controlling the inflow of
foreign investment, has been transformed into an investment
promotion agency, now called the State Foreign Investment
Agency (SFIA).  The SFIA reports to the Minister of
Privatization.  Most of the regulatory functions of the old
agency have been dropped.

    One-hundred-percent foreign ownership is permitted.  No
registration of foreign investment with the government or
approval by the government is required, nor is any screening
applied, except for the following cases:

--  Real Estate:  foreign acquisition of real estate, either by
purchase or long term lease, or foreign acquisition of 49
percent or more of a Polish enterprise which owns real estate,
must be approved by the Interior Ministry.

--  Strategic industries:  a permit from the Minister of
Privatization is required for foreign investment in:

    operation of seaports or airports;
    real estate agency transactions;
    defense industries;
    wholesale trade in consumer goods; and 
    performance of legal services.

    A permit can only be denied if a proposed investment would
threaten the economic interests of the state or state security.

    A permit from the Minister of Privatization is required for
acquisition of a state owned enterprise or contribution by a
state entity of the whole or part of a separate enterprise to a
company with foreign participation.

    Foreigners are no longer subject to requirements for a
minimum investment amount or minimum share of ownership, other
than those imposed on all companies by the commercial code. 
These are initial capitalization of ZL one billion for joint
stock companies, and ZL 40 million for limited liability
companies.

    Most investment incentives contained in the previous Polish
law were repealed by the 1991 law.  A foreign investor may
apply to the Ministry of Finance for a tax holiday from
corporate income tax if the foreign investor's equity exceeds
ECU two million and one of the following conditions is met:

    The company will operate in regions of high structural
    unemployment;

    The company will ensure the introduction of new
    technologies;

    The company will export at least 20 percent of output.

    The value of the tax holiday may not exceed the value of
    the foreign investor's equity.

    Companies which were established under the previous foreign
investment law continue to enjoy the exemptions from income
taxes and customs duties specified in their permits until those
exemptions expire.

    Poland is eligible for Overseas Private Insurance
Corporation (OPIC) credit guarantees and political risk
insurance for U.S. investors, and for EXIM Bank loan guarantees
and direct lending to finance U.S. exports.

    The Business and Economic Treaty signed between the United
States and Poland has never come into force, but the 1991
Foreign Investment Law actually provides stronger protection to
foreign investors than those contained in the treaty.

    Government procurement practices:  As Poland moves toward a
western oriented market economy, improving procedures for
government procurement has been a declared governmental
priority.  The current procedure is to submit procurement
projects for tender.  Questions still arise about how a
particular bidder was selected, but there has been improvement
in procedures since 1991.  The Polish government has received
OECD and World Bank assistance in this area.  Poland is not a
signatory of the GATT procurement code because of
inconsistencies with its legislation.  Poland may sign the Code
in the future, after adoption of new legislation.

    Customs procedures:  Since July 1993, Poland's MFN duties
have averaged 14 percent, although a number of these tariffs
have been suspended to lower levels, so that the applied rate
averages 11 percent.  Since December 1992, a six percent
customs surcharge has been applied on top of the scheduled 
duty.  This is a temporary measure designed to help close the
budget deficit and protect Poland's balance of payments, and is
to be phased out by the end of 1995.  It is applied to all
Polish imports, including those from the EU.  Imports are also
subject to VAT (also applied to domestic goods), which has a
basic rate of 22 percent.  Customs requirements do not seem to
burden most U.S. exporters, but some have complained about the
service provided by over-worked customs officials.  Businessmen
also note difficulties resulting from slow communications
between Warsaw and customs posts on the border.  Poland
accepted the GATT customs valuation code in 1989.  It is still
pending ratification, but the substance has already been
incorporated into Polish customs law.  Since 1991, the Customs
Office has used minimum import values for some products,
because of the difficulty of imposing transparent valuation
practices on thousands of new traders entering the market.


6.  Export Subsidy Policies

    Poland is a signatory of the GATT export subsidies code,
but has not ratified it.  Present plans call for postponing
ratification until completion of a new Code in the Uruguay
Round, to avoid duplication of effort on enactment of
implementing legislation.  The government has eliminated most
of its past practices of tax incentives for exporters, but
still provides limited tax holidays for foreign investors who
establish export oriented firms.  As Poland moves its energy
prices to world levels, past implicit subsidies are vanishing.


7.  Protection of U.S. Intellectual Property Rights

    Intellectual property is an area of some concern,
particularly in copyright matters.  The Polish government in
theory subscribes to most international standards for
protection of intellectual property.  Poland is a member of 
the World Intellectual Property Organization (WIPO), and a
party to the 1888 Berne Convention on Protection of Literary
and Artistic Works, and the 1971 Paris Convention on
Copyrights.  However, some legal holdovers from the Communist
period create problems for western businessmen and
disincentives to trade and investment.  A 1987 law specifically
extends protection to video cassettes, but sound recordings are
not protected.  In the March 1990, Business and Economic
Treaty, Poland undertook to adopt adequate legislation in all
areas of intellectual property rights, but the Polish
government is still in the process of enacting this
legislation.  In the meantime, violations of U.S. copyrights,
notably of sound recordings, video cassettes, and computer
software, have become increasingly troublesome to U.S.
copyright holders.  As a result, Poland was placed on the
Special 301 Watch List in 1992 and 1993.  In 1993, the
International Intellectual Property Association filed a
petition to remove GSP benefits from Poland for failure to
provide an effective level of intellectual property rights
protection.  The petition was accepted for review.  A final
decision is expected by mid-1994.


8.  Worker Rights

    a.   Right Of Association

    The Polish government has ratified ILO Convention Number
87.  Key laws concerning employment, trade unions, and
collective bargaining that were revised in early 1991 are once
again under revision.  Currently, all workers, including the
police and frontier guards, have the right to establish and to
join trade unions of their choice, have the right to join labor
federations and confederations, and have the right to affiliate
with international labor organizations.  Inter-branch national
unions and national inter-branch federations must register with
the provincial court in Warsaw.

    Regarding the right to strike, the Trade Union Law passed
in 1991 is less restrictive than the 1982 version passed soon
after the imposition of Martial Law, but still prescribes a
lengthy process before a strike may be launched.  If strictly
adhered to, the law provides several opportunities to challenge
a strike including the threat of legal action.  An employer (no
distinction between state and private firms) must start
negotiations the moment a dispute begins.

    Negotiations end with either an agreement or a protocol
elaborating divergences between the parties involved.  If
negotiations fail, a mandatory mediation process takes effect;
the mediator is appointed jointly by the disputing parties or,
lacking agreement from them, by the Minister of Labor and
Social Policy.  If mediation fails, the trade union may launch
a warning strike for a period of two hours or seek arbitration
of the dispute.  Starting after negotiations fail, the
so-called mediation efforts more closely resemble arbitration
in practice.  Most importantly, both employers and employees
have frequently questioned the impartiality and credibility of
the mediators.  A full-fledged strike may not be launched until
14 days after the dispute is announced (strikes are prohibited
entirely in the Office of State Protection, police, fire
brigades, military, prison services, and frontier guards).  A
strike may be proclaimed by the trade union after approval by
the majority of voting workers and should be announced at least
five days before its commencement.  If the strike is organized
in accordance with the provisions of the Act, the worker
retains his right to social insurance benefits but not pay.  If
a strike is "organized contrary to the provisions of the law",
the workers may lose social insurance benefits; organizers are
liable for damages and may face civil charges and fines.

    b.   Right To Organize And Bargain Collectively

    Poland has ratified ILO Convention Number 98, the Right to
Organize and Bargain Collectively.  The May 1991 Law on Trade
Unions and Collective Bargaining provides for legal sanctions
for anti-union discrimination and generally creates a favorable
environment to conduct trade union activity through provisions
for time off with pay, as well as facilities and technical
equipment in the enterprise.  A notable weakness in the law,
given Poland's ongoing economic transition, is the lack of
specific provisions to ensure that the union has continued
rights of representation when a state firm undergoes
privatization, bankruptcy, or sale.

    Wages are set in ad hoc negotiations at the enterprise
level between unions, management, and workers councils.  Polish
law does not require that wage agreements be registered with
the government.  Formal collective agreements have been reached
in the hard coal, soft coal, and transportation sectors.  In
the coal mining sectors, agreements have since been ignored and
overtaken by enterprise level disputes which rippled through
those industries in July and August 1992.

    Throughout 1992-93, the government has continued to impose
a ceiling on wages in state enterprises through a penalty tax,
the so-called Popiwek, in an effort to link wages to increases
in productivity and reduce inflationary pressures in the state
sector.  The penalty tax is charged on any state company that
increases its average wage in excess of a government set
"inflation coefficient."  Legislation lifting the Popiwek tax
on firms exporting 40 percent of their production was
introduced in the September 1992 session of Parliament. 
Current government policy aims to liberalize investment
procedures for both domestic and foreign firms rather than
seeking to promote special incentives programs.  Special
duty-free zones exist in or have been contemplated for some 15
locations throughout Poland, but with the exception of one zone
in Poznan have not thus far attracted much attention.  Thus
traditional export processing zones which relax legal
guarantees do not, at this time, constitute a threat to workers
rights to organize or bargain collectively.

    c.   Prohibition Of Forced Or Compulsory Labor

    Poland has ratified ILO Conventions Numbers 29 and 105 on
forced labor.  Compulsory labor does not exist in Poland,
except for prisoners convicted of criminal offenses.  Forced
labor is prohibited by Polish law.

    d.   Minimum Age For Employment Of Children

    Poland has ratified ILO Convention Number 138 on child
labor.  The Polish labor code forbids the employment of persons
under the age of 15.  The employment of persons aged 15 to 18
is permitted only if that person has completed basic schooling
and if the proposed employment constitutes vocational
training.  The age floor is raised to 18 if a specific job
poses a health risk.  The government enforces legal protection
of minors, but its inability to monitor the growing private
sector leaves officials less certain that the problem does not
exist.

    e.   Acceptable Conditions of Work

    Minimum wages, negotiated every three months by the
Ministry of Labor and the trade unions, are ZL 1,650,000 per
month (or roughly $85 at the exchange rate of Zl 19,500/Dollar)
as of October 1, 1993.  The average monthly wage is roughly Zl
3,845,000 ($197).

    The Polish legal code defines minimum conditions for the
protection of workers' health and safety; a new draft of that
code has been approved by the parliament.  Enforcement is a
growing problem because an increasing portion of Polish
economic activity is in private hands and outside the purview
of the State Labor Inspectorate, which is only prepared to
monitor state firms.  In addition, it is unclear which
government or legislative body has the responsibility for
enforcing the law.  Working conditions in Poland are poor;
standards for chemicals, dust, and noise are routinely
exceeded.  There were about 116,000 work related accidents in
1991, resulting in 781 deaths and 4,925 cases of dismemberment.

    f.   Workers Rights in Sectors with U.S. Investment

    As with the rest of the Polish private sector, it is
impossible to comment authoritatively on workers rights in
sectors of U.S. investment because of inadequate government
monitoring.



         Extent of U.S. Investment in Selected Industries

              U.S. Direct Investment Position Abroad
                on an Historical Cost Basis - 1992
                    (millions of U.S. dollars)

Category                                    Amount

Petroleum                                               0
Total Manufacturing                                   264
    Food & Kindred Products                  60
    Chemicals and Allied Products             0
    Metals, Primary & Fabricated              0
    Machinery, except Electrical              D
    Electric & Electronic Equipment           O
    Transportation Equipment                  0
    Other Manufacturing                       D
Wholesale Trade                                         0
Banking                                                 D
Finance and Insurance                                   D
Services                                                2
Other Industries                                        0

TOTAL ALL INDUSTRIES                                  285


Source:  U.S. Department of Commerce, Bureau of Economic
Analysis.

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