# _Table 10:_ Poland: External Debt (in US$ million)

|Convertible Currency<br>External Debt of which<br>|33,528<br>|39,249|39,165|41,387|49,019|50,780|50,700|
|---|---|---|---|---|---|---|---|
|MLT<br>|30,593|37,749|37,133|37,061|46,625|47,676|46,891|
|ST<br>|1,392|1,500|1,450|1,295|1,339|1,384|1,302|
|By Creditor||||||||
|IFIs|2,641|2,815|2,614|2,631|3,288|3,976|5,162|
|Bilateral<br>|20,337|24,901|25,862|28,634|33,385|33,612|32,190|
|Commercial Banks of which|8,617|9,529|8,856|8,580|10,627|11,438|11,767|
|MLT|7,225|8,029|7,406|7,360|8,386|8,335|7,958|
|ST|1,392|1,500|1,450|1,080|1,339|1,384|1,302|
|Interest Arrears|0|0|0|140|901|1.720|2,507|
|Other Private Creditors|1,933|2,004|1,833|1,542|1,720|1,753|1,581|
|Interest Arrears|0|0|0|0|0|0|0|
|Reserves excl. Gold<br>|698|1,495|2,055|2,314|4,492|3,968|4,069|
|Deposits in BIS Banks|1,721|2,995|3,619|3,929|7,762|-|-|

Source: IIF, Country Report, dated November 3. 1991 For all of 1990, the combination of a Paris Club rescheduling, the accumulation of interest arrears and new credits permitted Poland to accunulate total foreign exchange assets of US$5.5 billion. Approximately US$2.2 billion of this was recorded as an increase in official reserves, with the remainder being deposited by Polish banks with banks abroad. This should give Polish banks the ability to generate trade "credits" on a fully covered basis. In fact, it is reported by a reliable source in the market that Polish commercial banksarebecoming heavily involved in project fnance and commodity fmancing in Poland. A number of them are involved in channelling (small amounts of) hard currency credits to the emerging private sector.

# _Table)):_ **Pohlnd's External iancig Flows** (in US$ milion)

|19|1991(e)|1922(f)|
|---|---|---|
|External Financing, Net<br>3,885<br>of which|2,135|2,490|
|Commercial Banks<br>796<br> <br>|850<br>|855|
|Disbursements<br>0<br> <br>|0<br>|0<br>|
|Repayments<br>0<br> <br>|0<br>|0|
|Due<br>0<br>|-345<br>|-160<br>|
|Rescheduled/Postponed 0<br> <br>|345|160|
|ST Credits, Net<br>0<br> <br>|0<br>|0<br>|
|Interest Arrears<br>796|850|855|
|Other Private Creditors, Net 103|40|-115|

Source: HF, Country Report, dated November 3. 1991

# _Factors lWuencingForeign lnvolvementin the Economy Inpact of Private Sector_

The decline of industrial production has been broadbased. Output in the machine building and metallurgy sectors was hardest hit, while production in food processing and wood/paper sectors showed strong growth reflecting in part an increase of exports to western countries. Growth of output in the private sector has been buoyant, although measurement problems make it difficult to quantify.

Government hopes for speeding up the privatization process rest mostly on the implementation of a scheme involving the issuance of vouchers to the public. Holders will deposit the vouchers with investment funds which will use them to bid for shares at auctions. In this way, investor riskistobereduced.Thegovemmentalsohopestoaccelerate privatization through a substantial relaxation of existing legislation which requires the approval of the Foreign Investment Agency for a foreign equity stake of more than 10 percent.

Despite more than 3000 joint ventures with foreign partners having been approved, foreign direct investment has remained insignificant so far. The uncertain political situation combined with continued confusion about property laws has dampened the confidence of foreign investars. A revised Foreign Investment Act came into effect in July 1991, which eliminates the minimum investment amount, guarantees the repatriation of 100 percent aftertax profits and guarantees compensation for all losses resulting from expatriation.

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