allan chernoff sits down with poland's former deputy prime minister who's earned the title of the best reformer in the european union stay with us. in the faraway land. where human life is ruled by nature. the past of planet earth is scarcely preserved by the poor. lie hidden in the deep permafrost. and for those who deal with them restored times are still. however again a welcome to. the show. today my guest is. in

polish recent history the country had a little time to convert its planned economy into a complex market back and. there had been no precedent and the country needed a qualified and charismatic economist to do the job and here. came up with the idea of shop terror many years later it brought him the title of the best reformer in the european union his former polish deputy prime minister. when communist regimes in eastern europe were close to collapse it was clear their restricted economies wouldn't stand a chance against the free market the need for reform was clear in poland one of the leading economists. for the package of shock measures later known as the plan it was designed to allow the tradition of a state controlled economy to

a market oriented mechanism the shot was immense over a million people lost their jobs but very. clearly there are people have it companies which provide a jobs for one point five million people it became the basis of shock therapy plans in other communist economies including russia recently the european enterprise institute described plastic box rubbish as the best reformer in the european union . columnist about solution welcome to the show thank you very much thank you very much for coming well first of all today you are in the top five on the list of the most popular polish probably attentions but what about the public opinion that there in the ninety's were you as popular as you had today initially yes because there are expectations and most people wanted to change the system to have low inflation but

of course with the passage of time and the turnout they are not on the benefits but also of course my popular has fallen it was fluctuating but now more and more people realize that it was worse transforming a start because in politic on so so what you just said. makes me think that the most difficult thing about reforms in poland or maybe also in russia at that time was changing the mentality of the people well what was changing changing their expectations there or not i think you have to change the conditions under which people operate and work and you have to do it in a radical way and then people are just many people just as they behave you know they started in a new way and some of the adjust their views so i didn't want to try to change mentality because i was not a preacher i wanted to change the conditions to improve the conditions for good

work. for research etc well for for us for journalists i'm an expert in poland and i have i never written actually a lot about problem but for us there that time was fun i mean great fun i mean poland salad out an arse less well and sour all those crack off and all all those things and so it was i mean real fun real i mean life but they had the blood pumping in so i want to put you know i bet you know the conditions you know what was behind behind these pictures yet so what were the conditions in poland was it was in any any similar to what we had in russia during the purser ica when there was garbage on the screen but nothing nothing in the food stores and we have ensured that you have to extraordinary periods in poland's recent history the first one ninety eight made to work and there was

a first solidarity movement which was unprecedented and the communist or socialist because this was the independent organization. and now as i became a hero about it was surprised by the introduction of martial law in december eighty one and then you have nine rather gloomy years. and there was not much right at the end of the children but it appeared and then there was a compromise of negotiations that round table in poland the creation of the new government with the first non-coms prime minister there was most of these and i was asked to take the responsibility for the economic reforms and coming to a question where certainly those poland teenage tonight and russia. two years later we have a very very difficult dramatic economic condition similar very very high inflation hyperinflation production also falling. in poland to be have a very heavy rainfall and. foreign reserves how the

exchange was very very low so it was a catastrophic but it was also a great opportunity to study and reform the country. well it's an interesting thing listen when you went to school and when i went to school the only russia but it was it was the same period of time it was the coming of communist rule both in poli russia so the only type of economy we studied was marxist economy and marxist leninist economy so who will you teach here's how did you get an opportunity to learn about the transition to learn about how what so an economist can do with a plan to save your economy to change it who taught you first of all i was not very good at econ and political economy socialism i was always proud of go to bed great that i was interested in other subjects like history the laws of i thought of

mathematics thirty health certain exact science. being able to count years to reason to calculate it very very my best advisors were physicists or mathematician and they started reforms i never recruited politics columnists who were educated on the source of the problem is and thirty pollard was a bit more open. is german of the promise of a union so he could travel and they also offered to the possibility to start the united states so you did. education which is called master of public administration business and from your converse of that said that certain that when you were when you were pretty i was the younger sister was called central school of planning and so this is the also and i was i was over this opportunity to say spent almost two years in new york. did you have an opportunity

to complete your reforms well all that there was in the visit by the by the and butter of his plan was it all done was it all i have been told by my friend because i have three years initially and i went with the team so we have advance basic reforms liberalizing the economist and started to this basic institutions stock exchange starting privatization so i was in a better situation proper legal point of view but of course even three years is not enough so i have the second stage between two like ninety seven and two thousand and i have i was also a deputy prime minister and we have accelerated some other reforms well in transition from state to market economy russia too had to go through some very painful reforms spotlight to me that has more in that. words like

inflation or unemployment were very distant to reality for the so that people low prices and decent wages were guaranteed by the state starting the nineteen eighties when the world was hit by a new crisis it was harder and harder to keep things the way they were mikhail gorbachev came up with very strong but the reforms he introduced did not bring relief after the fool of the soviet union in government came up with the so-called shock therapy the author of the rebuke of reforms he grew gaidar remains a controversial figure for russians in one thousand nine to two prices were freed and the savings of millions of people devalued overnight industries had to adapt to new market economy around the lack of state support led to massive job losses millions witnessed into poverty. guider supporters say there was simply no

alternative to this type of radical change to see people me from total disaster in the country from civil war ordinary people had to learn to survive in the new economic reality and some are still unable to be philosophical about the reforms to them it was just two worst time in their lives. you might gorbachev in ninety ninety one the first chance i was the first foreign politician who came with the official visit to russia just after this failed call after the coup happened that i i you talk to what was his opinion on the reforms that you were carrying out in poland and he was very polite . also but he wasn't crazy about the i don't know i can't somehow that certainly he said he was very much interested in the policy experience he invited me to come

later but when i came for the second time it was the second night of our doors or the change in russia i talked to i spoke to two year old son and two you go gaidar interesting event we've discussed what i was russia and then during to listen is it true that yeltsin when you met him in ninety one was ready to offer you any job any salary if you only stayed in russia but you but you but you chose to go to poland is that true i thought this was just supposed very polite way of expressing his appreciation so little respect he said but i never considered this to be more than just a very kind. kind words that certainly we have. imported an interesting conversation. he was at the time in the city as my own person. and he asked me what is going to be in phase. and i bought in russia wants to liberalize i

remember i told them higher than forecast that. theirs was the polish experience though. and says a last. ditch the form of polish deputy prime minister spotlight will be back shortly we'll continue this insidious after the short break sound don't go away stay with us. this was a city. of about one hundred ninety thousand people and we had eighty thousand people working for general motors. or a job that depended on general motors. general motors is if it's not relations you it might be your neighbor or somebody you knew so it's kind of a family run business you know myself i'm third generation my father was working

there and you have a lot of two three and four generation families that are there first let's understand that it is this is if a man doesn't want. it he should not. it is gong to want a man to work but. i think for a long time this notion in america that bigger is better was simply an undisputed fact in the twenty first century smarter it's going to be better general motors simply became too large for their own good and so many brands that they couldn't even keep up with they just basically became a dinosaur. which was. just. mission free. education free. for charge agreed to make

amends three. three. three. download free volunteer video for your media projects free media don carty dot com . welcome back to spotlight i'm al green of and just a reminder that my guest in the studio today is the lashing about iran which the form of polish deputy prime minister the man who reformed poland in the late one nine hundred eighty s. and the ninety's as a matter of fact lashing poland's annual growth rate in not in nineteen eighty nine two thousand was i mean the highest in all post communist

economies on the contrary in guiders russia you said you followed guidance reforms and you met gaidar and yeltsin going to be sure of the graduates reforms led led russia to the biggest economic slump since world war two so what was the reason the the difference in the initial conditions of the reforms or the methods or maybe something else but i think it's a mistake to blame guide us reforms for this recession because a recession was due the documentation of problems communism distorted the conger i understand that the nina many people have been have a few nostalgia for this all ties about this old thanks could not have been meant a it was a collapse and he called on the first second to say or the knowledge that you have in paul a possibility is to introduce small reforms that need russia initiative this. always having to do small treatment. economists with problems regular sick patients

so you need a treatment if you introduce less treatment you have less effects of certain diseases or problems were delayed that accumulate why would you have this possibility which go there because the country's big or wide where it was there are . huge problems but in russia there was even more you have still you have constitutional problems the constitution conflict. the problem of negotiating borders so i think this race the struggle is now mostly i'm not blaming it on the guy and i understand that but what i see where when i was when i was expecting here in the studio i read about your force there realized that gaidar copied a lot from what you did but not everything worked as smoothly as with as in poland does i mean the events are lessons in the specific role of polish and russian if you have hyperinflation. you have to act it's very dangerous for the karma and for

the people so you have to act very decisively and quickly this is the safest strategy so we have did it area and without much of the day i think there was for political reasons programs more day in russia does one difference we have liberalized the common much more massively there was lots less liberalization if you liberalise less you have less competition and you have oligarchs. less competition we have bluegrass much more and you don't have this problem which is referred to as politically connected all the gox is it true that poles in general are more business minded than russia and i don't think that they have always been more ready to start making money now no i don't think so that culture matters on march first of all conditions in every society you have enough intrapreneur your people so far the differences in conditions for them if you have more regulations

less freedom less opportunity you don't use the potential to the same extent as in countries which have introduced more freedom this is the basic difference you know what some people say they say that they say that each introduce shop terribly and gaidar turned it into shock without terribly knowing about it is more than just. sounds good that does not reflect the truth the truth is ok. listen you are here now does that in i mean the russian moscow does that mean the russian policymakers the russian projections are still they still need your advice they still interested in your experience in poland well this is not my advice personally because i say said suddenly verso lessons if you have too much state as an owner that's bad both for the economy and for politics so you have to privatized the true needs you d. politicize the economy if you phrase. and it's ten percent

a year like in russia it's too high so the central bank has to lower interest and that's possible we had even i became the central bank in the year two thousand and one inflation also daft ten percent but in five years time we brought it down to two percent so it's possible that there are universal lessons and i don't think it is very difficult to learn about them or what's absolutely crucial it's political will. to draw to use these universal lessons do you think that the main problem with russia is that the economy in russia is too politicized we should be politicized at the granary certainly there are problems there usually because of excessive politicization in various ways russia has actually been a very political country you know you. judge your history of the human experience. it seemed to me that when i read your history that you are on the way a date of one thousand century early twentieth century to become democratic

capitalistic country and something an accident happened and well it didn't work. or call it but now. ok now there is there is a good crowd about about what you did with your own country or again this parliament proved to be the only eat you country where the current world economic crisis didn't cause an economic slump is it true and what was this polish recipe for success of its that's true that we have avoided recession meaning negative growth that we had not avoided a slowdown of the rate of growth two thousand and eight was five percent decrease fallen to one point seven but not negative still positive why so combination of sectors several factors first we have avoided the credit boom if you have a credit bull then you will usually have a bust this was the case in the baltics ins in spain in russia too

there was excessive girls of credit in russia so we have avoided this i upset because the central banking problem was pretty conservative and the regulations were all second. we are russia for example depends in exports extent on commodities oil and gas and they and their prices are rising and falling we don't fortunately we don't have so much natural resources in poland so our economy is much more diversified this is the second i think important reason the third one is that policy conaway when you compare polish economy policy can i would the baltics even hunger policy can and is much larger so we depend much stress on foreign shocks rachael's you know. fortunately they don't have a lot of natural resources i once talked to the prime minister of albania and i was amazed when they knew they had a lot of oil you have

a lot of oil in the well being yeah and i asked him how come there is so so much oil and use so poor and he said you know. when god gave some countries lots of oil he unfortunately didn't give them enough grains and he looked me in. the natural resources and they should hear their victim to shoot as a matter of fact some people say that there are predictions that for example saudi oil minister iyad money said that that that given the political situation well what price can go to two two to three hundred dollars pretty soon wouldn't be very bad for a guy who was produced the shock to important country was not very good the longer around. the world this will strengthen scent of still be less dependent on oil so in the longer run it will do not be very good for exporting countries. so for

russia this such such prices could be even damaging so they would weaken incentives to reform what industries are growing today contemporary poland what are the main industries treatment diversified and you could never plan. interesting note don't try to plan what industries have to be successful because this usually favors these national champions are national losers not national chantal's what we do three tracks we liberalize but he did not try to defend she so that equal conditions so that you can get to the market. are acting on the competition. shaping the structure so we are exporting bass at all so all sun electronics furniture food stamps etc are very diversified. president medvedev in russia today likes to talk about innovation the skulk of a project he says that innovation is the key to success do you agree do you think

that that economic growth should be based on and the variation and doesn't doesn't the japanese example show that is that it's questionable but now i think innovation is the most important thing the universal source of growth barbecue is what to do to have regular you know vacations and for that you need lots of competition you do need a limited state you need to rule of law so that people would have certain i could confidence trust to invest into research and into investments so you can get innovation basic common if you create the proper. conditions for for that. any solution you can propose to the current euro zone crisis like like is subsidizing poor countries by countries like germany is that the only way out. certain and not the longer term solution. it's useful to stress that the eurozone

problems are in fact problems resulting from that policies for of certain countries greece because they were they were expanding their fiscal expenditures they became bankruptcy it is not the fault of europe but because that's a fault of that policy is in greece in spain in turn there was a. too much credit generated by the presence of course a private sector also they were boom and bass at the fact that their fiscal positions are the main conclusion is that europe in itself is not at fault. but you don't acquire knowledge about the policies from the members meaning to the mall discipline there is bomb and polish balls and i think the conclusion would be in the respective countries to create better framework for but the polish vote accidents this is this is interesting i mean a former soviet country minister trying to teach salvia to get on the. bus or

subway to teach the europeans to be disciplined this is a little bit of the blogger who is the most disappointed in europe during this crisis the baltics above the baltic sea diving are also also. guardian soldiers and also ex so there is a lot to keep teaching each day west conference ok thank you thank you very much for being with us it was fun talking to you just a reminder that my guest in the studio today was less shark bites at all which in the form of polish deputy prime minister and that's it for now from all of us here will be back with more first time comments on what's going on in and outside russia until then stay on our team and take you thank you thank you president.

israel calls for a resumption of bilateral peace talks with palestinians seen by many as a last ditch effort to prevent them from asking for recognition on the world stage . as the sixty six of the session of the united nations general assembly gather school force in new york city russian foreign minister sergei lavrov told his first official meeting with u.s. secretary of state hillary clinton find out all the latest details ahead in the program. the euro zone's third largest economy takes a hit below the belt as italy's credit ratings downgraded sparking fears of an even deeper financial crisis across europe. and multiculturalism under the microscope the turkish president visits berlin trying to break down a wall of issues facing immigrants in germany.