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1960-71—in its tourist trade with the other Communist countries.

Earlier credits from the U.S.S.R. totaled at least $378 million, of which $300 million was granted in late 1956 for purchases of grain and other commodities, and $78 million in 1964 for oil and gas development. In 1971, the U.S.S.R. extended a $1.1 billion credit—of which $100 million reportedly was in hard currency—for the purchase of meat in the West. Czechoslovakia granted $87 million in 1957 for the development of sulfur and hard coal, and $125 million in 1961 for the development of copper, the construction of a nitrogen fertilizer plant, and other machinery and materials. East Germany extended $100 million in 1957 for brown coal development, and $64 million in 1961 to cover deliveries of pipes and other materials for the construction of the Friendship Pipeline. By the end of 1971, Polish indebtedness to Communist countries came to roughly $0.7 billion. Interest payments are an estimated $15 million a year.

The CEMA Investment Bank, formed in 1970, has extended medium- and long-term credits to Poland worth over $30 million, of which at least $14 million is for hard currency purchases. These credits are for the construction and modernization of several plants, mostly in the machine building industry.

Poland has extended more than $365 million in credits to other Communist countries since 1956, including two credits to the U.S.S.R. in 1963—a $75 million credit for the development of potash mines (drawn during 1966-70) and a contribution of unknown size to a joint Soviet bloc investment project for construction of a phosphate mine at Kingisepp in the U.S.S.R.

b. Industrial West

Polish indebtedness to the industrial West on medium- and long-term credits was estimated at about $1.5 billion at the end of 1972. This included about $1.1 billion owed to Western Europe and Japan and about $0.4 billion to the United States, mainly for Commodity Credit Corporation (CCC) credits and long-term P.L. 480 loans. Principal repayments on medium- and long-term debt to the West have risen from an estimated $100 million in 1966 to about $200 million in 1972, and interest payments have risen from about $20 million to about $50 million. However, this debt service (principal and interest) consumes only about one-fifth of earnings from exports to the industrial West and is well within Poland's repayment capability.

The trade plan for 1971-75 indicates a willingness to increase hard currency indebtedness by drawing heavily on long-term Western credits. As the plan now stands, Poland hopes to finance as much as 60% of its imports of Western machinery and equipment through credits of 7 or more years. In addition, the country presumably will receive some shorter-term credits, so that by the end of 1975 hard currency indebtedness on medium- and long-term credits could surpass $2 billion.

In addition to its cumulative deficit on commodity trade ($0.9 billion during 1956-72) with the industrial West and on interest payments (at least $0.3 billion), Poland has incurred a cumulative deficit (roughly $0.2 billion) with the West on transportation account Furthermore. Poland has paid out a substantial amount—probably over $0.1 billion since 1955—on nationalized property claims and prewar bonds to a number of Western countries, including the United States.

These net expenditures—over $1.5 billion during 1965-72—on current account have been only partly offset by net receipts from transfer payments and tourism. Transfer payments from Western countries probably have provided at least $0.2 billion in hard currency since 1955. The major portion has come from the United States in the form of private remittances, social security, veterans' payments, and government grants. Net earnings from all Western tourists totaled $53 million during 1960-71.

In 1968, Poland reportedly had foreign exchange reserves of slightly more than $200 million, consisting of $80 million to $90 million in gold and the remainder in convertible currencies. Poland apparently accumulated this reserve almost entirely on the basis of P.L. 480 credits after 1956, when the Polish national treasury held virtually no foreign exchange. It did so by using feed grains, imported under the deferred P.L. 480 repayments schedule, to enlarge domestic livestock herds, and exporting meat products for hard currencies.

5. Organization (U/OU)

Foreign trade in Poland is a state monopoly and is handled almost entirely by the Ministry of Foreign Trade and specialized foreign trade enterprises

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