Pewex

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Pewex (short for Przedsiębiorstwo Eksportu Wewnętrznego - Internal Export Company[1]) [pronounced: pehvex] was a chain of shops during the Communist era in Poland that accepted payment only in United States Dollars and other Hard currencies, instead of the country's indigenous currency, the Złoty.[2]

History[edit]

Pewex was created in the 1970s to help combat Communist Poland's foreign currency deficit.[1]

By the late 1960s, it had become apparent that the then socialist centrally-planned economy of Poland was inefficient. The rule of Edward Gierek led to a short period of economic prosperity. With the aid of foreign loans, Gierek instituted a programme to modernise industry and increase the availability of consumer goods. The standard of living increased markedly and for a time he was hailed a miracle-worker. The economy, however, began to falter during the 1973 oil crisis and by 1976 price increases became necessary, mostly to ease the repayment of these loans.

Pekao checks were used in Pewex shops. This is an example of a US$0.02 note.
A Pewex shop.

In order to obtain much needed foreign currency from Polish society, authorities permitted in 1972 the creation of a network of shops under a state-owned bank named Pekao. There, the foreign hard currency could be exchanged for both foreign and domestic goods, many of which were unavailable to Poles at that time. Since ownership of hard currency as cash was forbidden and all dollars and Deutschmarks had to be deposited to dollar bank accounts, authorities introduced Bon PeKaO cheques, which were tied to the U.S. Dollar in a 1:1 ratio and could be used as currency in Pekao shops. Later on the Pekao bank created a separate company, Przedsiębiorstwo Eksportu Wewnętrznego - the Pewex. While the letter x is not present in the Polish alphabet, it was used nevertheless.

During the Communist era, Poles are allowed to possess Dollars, something that is not allowed in other Eastern Bloc states. Many Poles at the time also received remittance from friends and family members in the United States.[3] The US Dollars received by Poles can either be used for foreign travel or used at the Pewex shops.[3]

Pewex shops existed in many Polish locales, even in small towns. Products that Poles would otherwise have to wait a long time and settle for poor imitations can be had immediately by buying it at a Pewex shop.[4]

Pewex offered a large variety of products unavailable otherwise to the Polish population. These included jeans, Coca-Cola, alcohol, sweets, toys, cigarettes, electronics, and colour TV sets.[citation needed] In addition, Pewex offered a number of Polish-made products that were otherwise intended for export only, including vodka and Krakus ham (hence the name "internal export"). Moreover, the Pewex chain was very popular among foreign tourists and diplomats, who could buy Western articles at very reasonable prices (sometimes even as low as 40% of their cost in the West) and tax free.

Post-Communist government[edit]

As part of the peaceful transition of the economic system in Poland after 1989's revolution in Poland, the Polish economy was privatised and the ownership of foreign currency was deregulated. This made the Pekao cheques obsolete and soon afterwards most of the goods that had only been available from Pewex stores started to be sold in private shops as well. In the mid-1990s, the chain was heavily mismanaged, eventually privatised but soon afterwards went bankrupt. The destruction of the Pewex brand, one of the most recognizable in the People's Republic of Poland, is considered a good example of brand mismanagement.[citation needed]

See also[edit]

Further reading[edit]

  • Zlot a lot of dollars. (Pewex stores in Poland), The Economist, May, 1988

References[edit]

  1. ^ a b Oleksiak, Wojciech (23 March 2015). "10 Mind-Boggling Oddities of Communist Poland". culture.pl. Retrieved 19 June 2019.
  2. ^ Diehl, Jackson (21 December 1986). "Poland's Dollar Stores Busy". The Washington Post. Retrieved 19 June 2019.
  3. ^ a b Yuenger, James (26 November 1986). "Say, how much is that in vodka?". Chicago Tribune. Retrieved 19 June 2019.
  4. ^ Lewis, Paul (9 October 1981). "The Lure of a Dollar in Poland". The New York Times. Retrieved 19 June 2019.

External links[edit]