Politburo meeting. Arkhipov reports on the cost of supplying Poland with oil, gas, iron ore and the problems of the Polish economy. [R 26 March 1981, Politburo, para 5]
[page one of two]
MEETING OF CPSU POLITBURO
26 March 1981
Comrade K.U. CHERNENKO
Comrades in attendance:
Yu.V. Andropov, M.S. Gorbachev, V.V. Grishin,
A.A.Gromyko, A.P. Kirilenko, D.F. Ustinov,
P.N. Demichev, V.V. Kuznetsov, B.N. Ponomaryov,
I.V. Kapitonov, V.I. Dolgikh, M.V. Zimyanin
5. Results of discussions with a delegation from the Polish People’s Republic
ARKHIPOV. […] With regard to the economic situation in Poland, Comrade Jagielski [Polish deputy prime minister] informed us that the plan for 1981 will be some 20 percent lower than the plan for the preceding year, 1980. The Poles are having particular difficulties with coal production and their coal, as you know, is exported and is a means of earning hard currency. Instead of 180 million tons, as envisaged in the plan, they will at best produce 170 million tons. The production of meat is falling by 25 percent, and sugar by 1.5 times. Instead of 1.5 million tons of sugar, they’ll end up with 950,000 tons at the most.
Now it is being suggested in Poland that supplies of bread and flour must be rationed.
As concerns the financial situation, Poland’s debts, owed mainly to the capitalist countries, amount to 23 billion dollars, of which 9 billion were guaranteed by the States involved. The remaining credits were provided to the Poles by private banks. All told there are 400 banks involved. Our Polish Friends faced a situation in which they must buy various goods abroad for roughly 9.5 billion dollars. All of this will be purchased on credit. Exports will only come to a total of 8.5 billion. Western countries are doing all they can to put off a decision on whether to provide new credits to Poland. The Poles need to pay off 1.5 billion dollars now. This is mainly interest on their previous debts. They’re asking us to give them 700 million dollars. Of course, we can’t possibly come up with such a sum. We are currently providing Poland, without delay, with oil, natural gas, iron ore, etc.
During our conversation the Polish friends asked whether they should impose a moratorium on further credits or join the International Monetary Fond and request additional credits from Western countries. Of course, in either case it will be a concession to the Western countries and will not provide any kind of boost to the economy. The Poles themselves are divided on this matter. They’re asking us to give them additional cotton and artificial fibre and we have decided to make a certain increase in those supplies.
[Gromyko expressed a certain frustration with “the Polish comrades” who emphasized how acute the problem was with imported goods, because they now had no way of paying for these goods, while failing to appreciate that every scrap of cotton, all the iron and oil they received came from the Soviet Union. Somehow they considered that issue “a trifle”.]
ARKHIPOV. We are supplying 13 million tons of oil to Poland at 90 roubles a ton. Bearing in mind that the world price for a ton is 170 roubles, we are subsidizing the Poles at 80 roubles for every ton. We could have sold all this oil for hard currency, and our earnings would have been enormous. […]