it's all falls the hour they say it leaves had its credit rating dropped by one notch by the standard and poor's agency which is also calls a negative outlook on growth the news pushed up at least foreign costs creating yet another headache for its european partners. with the palestinian bid for u.n. recognition just a couple of days away israel and its keepon of the rats in kenya to shame their opposition israeli military forces are all ming and forces on their borders even though officials are calling for the palestinians to resume direct towards. the turkey's presidency it is invalid to discuss immigration journey was born out of

tends to be a full easy member which would allow freedom of movement germany's europe's most ethnically diverse country with a big attack its population but its struggling with multiculturalism. are next in our spotlight segment i'll go to more sits down with the former polish deputy prime minister has earned the title of best performer in the european union. a potential communist economy into a complex market recognizant mechanism how do you stay with us. in the faraway land. where human life is ruled by nature. the past of planet earth is scarcely preserved by the. lie hidden in the permafrost. and for those who deal with them restored

times are still not over. how again i walk i'm just fossil ivy interest. i'm always all of them today my guest is. impose recent history of the country had a little time to convert its communist planned economy into a complex market that. there had been no precedence and the country needed a qualified and charismatic economist to do the job and here lesh about sort of each came up with the idea of shop terror many years later it brought him the title of the best performer in the european union his former polish deputy prime minister

sort of. went communist regimes in eastern europe were close to collapse it was clear there was truth that economies wouldn't stand a chance against the free market the need for reform was clear in poland one of the leading economists and lesson about sororities often a package of shock measures later known as the belts are always planned it was designed to allow the tradition of a state controlled economy to market oriented mechanisms. secretary rice was immense over a million people lost their jobs but very. their appeal private companies which provided jobs one point five million people became the basis of shock therapy plans in other communist economies including russia recently the european enterprise institute described. as the best reformer in the european union. close about wasn't an issue 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 probably positions but what about the public opinion back there in the ninety's were you as popular as you had today initially yes because their expectations and most people wanted to change the system to have low inflation but of course with the passage of time and we turn out they are not on the benefits but also of course. has fallen he was fluctuating but now more and more people realize that it was worse transforming because in problems of problems so so what you just said. makes me think that the most difficult thing about reforms and maybe also in russia at that time was changing the mentality of the people well changing changing their expectations there were not no i think you

have to change the conditions under which people operate and work and you have to do it radical way and then people are just many people just as they have a head start in a new way and some of the just the 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 all good work. for research etc well for us for a journalist and an expert in poland and i i never written actually a lot about problem but for us there that's time was fun i mean great fun i mean poland salad out an arse less well and sour all those crack off and all of those things and so it was i mean real fun real i mean life they have the blood pumping and so on but you know bet you know the conditions you know what was behind

behind these pictures so what were the conditions in pearland was it was in any any similar to what we had in russia during the period strike or when there was garbage on the screen but nothing nothing in the food stores and then we had. to extraordinary periods and problems in recent history the first one ninety eight made to work and there was a first solidarity movement which was unprecedented under communism socialism because of the independent organization. and now as i became a hero about it was surprised by the introduction of martial law in december eighth one and then you had nine rather gloomy years. there was no match for the end of the to know but it appeared and then there was a compromise of negotiations that the round table importance the creation of the new government with the first one comes prime minister those miseries and i was asked to take the responsibility for the economic reforms and cunning feel question

but certainly those in a tonight and russia. three years later we have a very very difficult dramatic economic conditions very very high. production also falling. we have a very heavy rainfall in the. reserves how the exchange was very very little so it was a catastrophic it was also a great opportunity to straddlers and reform the country. it's an interesting thing when you went to school and when i went to school the only option and that's it was it was the same period of time because the coming of communist rule go through russia so the only type of economy we studied was marxist economy and marxist leninist economy so. who were you teaching is how did you get an opportunity to

learn about the transition to learn about how what an economist can do with a crime saving the economy to change it. first of all i was not very good at yukon and political economy. i was always proud of the dead great. and i was interested in. history and laws of. mathematics thirty health certain exact science this offsite is being able to count years to reason to calculate my best advise as well physicists are not a not a synonym for that reforms i never recruited a politician columnist who are educated on the source of the problem is. pollard was it not opened german a former soviet union so he could travel and also the possibility to study in united states that you did. education which is called master of public and station

business and. your converse of that certainly hope when you were when you were pretty i was the youngest. central school of presidents and this is was ok was. i was over this opportunity to say i spent almost two years in new york. did you have an opportunity to complete your reforms well all that there was envisaged by the by the and. his plan was it all done was it all i have been told by my friend because i have severe sedation and they're working for the team so we had advance basic reforms liberalizing the economy started the started of this basically solutions stock exchange starting privatization so i was in a better situation club political 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 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's even in the me there has more in that the. words like inflation or unemployment were very distant from reality for the so that people who 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 biggles and government came up with the so-called shock therapy he also of the ready to grab a dollar remains

a controversial figure for russians in one thousand known to prices were free and the savings of millions of people devalued overnight industries had to adapt to new market economy and the work of states. would lead to massive job losses millions would shift into poverty greater supporters say there was simply no alternative to this type of really cool change to see people only from total disaster and the country from civil war ordinary people had to learn to survive in the new economic reality and some are still unable to be fools to feel cool about the reforms to them it was just two words time in their lives. you might gorbachev in ninety ninety one the first chance i was the first one in politician who came up with the official visit to russia just after this failed coup after the coup. he

said 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 he wasn't crazy about the council how but certainly he said he was very much interested the policy experience he invited me to come later but when i came for the second time it was the same night the windows or the change in russia i talked to i spoke to real soon to hugo gaidar and from steam and we discussed what i was russia at the end 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 stayed in russia but you but you but you chose to go to poland. i thought this was just probably a polite way of expressing his appreciation so little respect and he said but i

never considered this to be more than just a very kind. trying for words certainly we have. imported an interesting conversation. he was at the time in the same. as my own person. asked me what is going to be in facial i bought in russia wants to liberalize i remember i told him higher than for cost but not. as well as the polish experience though. kind of says. the former polish deputy prime minister spot mike will be back shortly we'll continue this insidious awfully short breaks out don't go away stay with us. wealthy british scientists are. sometimes it's the total.

market why not. come to. find out what's really happening to the global economy with my stronger for a no holds barred look at the global financial headlines tune in to kaiser report on r t. s.

that's. not going back to spotlight i'm al green of and just a reminder that my guest in the studio today is the belts around which the former 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 russia the pole and annual growth rate in not in

a nine hundred eighty nine two thousand was only the highest in all post communist economies on the contrary in guiders russia you said you followed by those reforms and you met a guy there and yeltsin gorbachev and the others reformers led to lead 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 kayla's reforms for this recession because a recession was due to documentation of problems under communism distorted economy a bad the standard the nina many people have been have to feel nostalgia for these all ties by this old place could not pay it was a collapsing economy first second as they are the knowledge that they have in

poland possibilities to introduce more reforms russia initially saw always having to do small treatment. economist with problems regular sick patients so you need a treatment if you introduce less treatment and have less effects of certain diseases or problems. and why why did you have this possibility which go there because the country's big words were it was a. huge problem in russia and there was even more that have to have constitutional problems to the public constitution conflict. the problem of the negotiating. borders so i think this was the study's nomarski i'm not blaming it on the line i understand what i see when i was when i was expecting here in the studio i read about your reforms there realized that gaidar copied a lot from what you did but not everything worked as smoothly as with as in poland

. the lessons. of polish and russian if you have high priest station. you have to act it's very dangerous it will be karma and for the people so you have to act very decisively and quickly this is the safest strategy so we can have a good area without much of the writing there was for political reasons grow girls and all day in russia does one difference we have liberalized the crime a much more massive there was threats less liberalization if you liberates less you have less competition and you have oligarchs. less competition we have liberals much more we don't have this problems which is the first to. politically connected all the clocks 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 sort of culture matters on march first of all conditions

in every society you have enough intrapreneur people so far the differences in conditions but then if you have more regulations less freedom less approach omitted you don't use this potential to the same extent as in countries which have introduced more freedoms this is the basic difference you know what some people say they say that they say the euro which introduce shock therapy and the guy they are turned it into shock without their knowing about because more than just. sounds good that's not the president rules the truth is ok the more time listen you are here now this is not in any russian moscow does not mean the russian promise to make is the russian projections are still they still need your advice they still interested in your experience in poland go this is not ny advice personally because they say set aside universal lessons if you have too much space as an owner that's

bad both for the economy and for politics so you have two private eyes between news you get politicized the economy even if you play. since ten percent a year like in russia it's too high so the central bank has to lower inflation that's possible we had even i became the central bank in the year two thousand and one inflation also passed ten percent but in five years time you 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 what what's absolutely crucial is political will to draw to use these universal lessons so you think they are the main problem with russia is that the economy in russia is too politicized we should be politicized. certainly there are problems there usually because of excessive politicization in various ways russia has been a very political country you know you. judge your periods.

it seems to me that when i read your history that you are on the way i donate of naked century early twentieth century to become democratic capitalist a country did something an accident happened and well it didn't work. or call it. now. ok now. there is a good crowd about what you did with your own country. again this parliament proved to be the oh the e.u. country where the current world economic crisis didn't cause an economic slump is it true and what was supposed recipe for success if it's true that we have avoided recession meaning negative grows but we had not avoided a slowdown really the rate of growth two thousand and eight was like percentage has fallen to one point seven but not negative still positive why. so combination of certain sort of practice first we have avoided the credit boom if you have

a credit bull then you will usually have a blast this was the case in the baltics in in spain in russia too there was excessive girls of credit in russia so we have avoided this perhaps because the central bank can produce pretty conservative and be regulations also don't we are russia for example depends in exports. on commodities oil and gas and they and their prices are rising and falling. fortunately we don't press so much natural resources in problem so our economy is much more diversified this is the second i think important reason the third one is that policy can aware need comp when you compare polish economy poland's encounter with the baltics and even hungary polity can and is national 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 the old bailey and i was amazed when they knew they had a lot of oil you have a lot of oil in the air logan yeah and i asked him how come there is so so much oil used to pour and he said you know. when god gave some countries lots of oil they unfortunately didn't give them enough grains and it would mean. the natural resources that he did you cannot patient yeah they are victims as a matter of fact some people say that there are predictions that. for example so it will minister here money said that that given the political situation well well price can go two to two to three hundred dollars and precision wouldn't be very bad for. produce a shock to you porting countries you really want to do with the long. there would

this would strengthen sense of still less dependent on oil in the longer it will not be very good for exporting countries. so for russia this such such prices could be even damaging certain they would weaken incentives to reform what industries are growing today contemporary poland what are the main industries lima bay versified and you could never plan with no try to plan what industries will be successful because this usually face is national champions are national losers and national champions what we do we trade we liberalize but we did not try to define injury so that equal conditions so that you can get the market. they. are acting under competition. shaping the structure so we are exporting bass but also all some of the crony expenditure for several very very

versatile. presidents made very of in russia today lights talk about innovation the skolkovo project he said that innovation is the key to success do you agree do you think that that economic growth should be based and invasion and doesn't the doesn't the japanese example show that it's questionable. oh i think innovation is the most important thing universal source of growth. barbecue is what to do to have regular out you know vacations and for that you need lots of competition. you need a limited state you need a rule of law so that people would have certain confidence trust to invest into research and into investments or you can get innovation basic common if you create the proper. conditions for that. any solution you can propose to the current year is a crisis like like is subsidizing poor countries by countries like germany isn't

the only way out. certain and not the longer term solution. it's useful to stress the eurozone problems are in fact problems resulting from the policies for of certain countless police why we because they where they're expanding their fiscal expenditures they became bankruptcy it is not the fault of europe but because they fought off that policies in greece in spain in current goals are. too much credit generated by the presence of present private sector also they will boom and bust at the fact that their fiscal positions or their main conclusion is that europe in itself is not at fault but your role requires much better policies from the members including most disciplines less bomb. blast and i think the conclusion would be in the respective countries to create better

framework for better policy accidents. i think that this is this is interesting i mean a former soviet country minister trying to teach the idea to do all the. way to teach the europeans to be disciplined this is going to be the most this defeat in europe during this crisis is the baltics of all the ball to see i mean you're also also. guardiola soldiers and also x. so there is a lot to keep teaching each day western 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 shared by several of each of the former coalition deputy prime minister and that's it for now from all this he 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 thank you thanks a lot festive.