email@example.com (CARLOS BREZINA, UPI Business Writer) (02/07/90)
WASHINGTON (UPI) -- World Bank President Barber Conable Tuesday announced the multilateral organization's first two loans to Poland totaling $360 million and said lending to the country could reach $2.5 billion in the next three years. The bank's lending program will focus on supporting further policy reforms in Poland, including measures aimed at promoting a greater reliance on market forces and the private sector, Conable told a news conference. ``These are our first loans to Poland since it joined the bank'' in July 1986, Conable said. ``Looking to the future, the bank is working with Poland on a lending program which could reach $2.5 billion in new commitments over a three-year period.'' Poland was a bank member after World War II and withdrew from the institution, as well as from the International Monetary Fund, in 1954. The World Bank also may approve a structural economic adjustment loan for Poland by June or July for an amount still under consideration, Conable said, adding that he plans to travel to Warsaw around Feb. 20 to sign the loans that were approved. Conable called the record of the Solidarity-led government of Prime Minister Tadeusz Mazowiecki ``impressive.'' The government ``has boldly begun to deal with the severe distortions that hamper the economy and has started to introduce the major systemic changes which Poland needs,'' he said. Bank officials said that over the next 18 months the bank expects to lend Poland around $1.4 billion in addition to the $360 million approved Tuesday. The organization said a $260 million loan will support a project to improve Poland's trade with hard currency countries in the West by raising the volume, quality and value of industrial exports. The project consists of a $245 million line of credit to the National Bank of Poland to finance export-oriented investments and $15 million in technical assistance to help financial institutions and other agencies adjust to the country's new economic and political environment. The project focuses on chemical, electro-engineering and wood-based industries as well as smaller investments in other industries. Another World Bank loan for $100 million will support a project to assist Poland's efforts to rehabilitate, modernize and expand agricultural-processing industries, easing constraints on sales to hard currency markets. Conable warned that ``others will have to assist Poland, too. Indeed, nothing short of a broad-based international effort is warranted, given Poland's proven commitment to reform and courageous actions to date.'' The World Bank president said he expects further actions from official creditors, who hold three-fourths of Poland's $39 billion debt, to help ease the country's debt service burden. The major industrial countries are providing Poland with billions of dollars in loans to help its transition from an inefficient centrally planned, inflation-ridden economy to a free market system. The bank's sister institution, the International Monetary Fund, Monday approved a $723 million loan to help Poland stabilize its economy. The loan, to be disbursed over 13 months in support of Poland's balance of payments, could be followed later this year by another longer-term loan of up to $2 billion to help Poland in its economic transition.