Pewex
Encyclopedia
Pewex was a chain of hard currency
shops in communist Poland
. They sold otherwise unobtainable Western goods in exchange for Western currencies
(most commonly the United States dollar
and the Deutsche Mark
) or Pekao bank checks.
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 program 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.
In order to obtain the much needed foreign (hard) currency
from Polish society, the authorities permitted 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, the authorities introduced Bon PeKaO
checks, which were tied to the USD 1:1 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 consonant 'x' is not present in the Polish alphabet
, it was used nevertheless, so that the name would sound somehow exotic and Western-like in the ears of the mostly pro-American society.
For years, the Pewex shops were the most common way for people in Poland to purchase unavailable consumer products. 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. In addition, Pewex offered a number of Polish-made products that were otherwise 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.
During the 1980s' economic crisis, when the state-owned shops for ordinary people offered barely anything, the Pewex shops were sometimes the only places where one could buy basic foodstuffs and other basic articles like toilet paper
. Finally, in the 1980s, Pewex shops became one of the very few places in Poland where cars and flats could be bought without having to wait for several years.
After the peaceful dissolution of the communist
economic system in Poland after 1989, the Polish economy was privatised and the ownership of foreign currency was deregulated. This made the Pekao checks obsolete and soon afterwards most of the goods that had been available only from Pewex 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 Pewex brand, one of the most recognizable in the People's Republic of Poland, is considered a good example of brand mismanagement.
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
shops in communist Poland
People's Republic of Poland
The People's Republic of Poland was the official name of Poland from 1952 to 1990. Although the Soviet Union took control of the country immediately after the liberation from Nazi Germany in 1944, the name of the state was not changed until eight years later...
. They sold otherwise unobtainable Western goods in exchange for Western currencies
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
(most commonly the United States dollar
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
and the Deutsche Mark
German mark
The Deutsche Mark |mark]], abbreviated "DM") was the official currency of West Germany and Germany until the adoption of the euro in 2002. It is commonly called the "Deutschmark" in English but not in German. Germans often say "Mark" or "D-Mark"...
) or Pekao bank checks.
History
In the late 1960s, it became apparent that the socialist, centrally-planned economyEconomy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...
of Poland was inefficient. The rule of Edward Gierek
Edward Gierek
Edward Gierek was a Polish communist politician.He was born in Porąbka, outside of Sosnowiec. He lost his father to a mining accident in a pit at the age of four. His mother married again and emigrated to northern France, where he was raised. He joined the French Communist Party in 1931 and was...
led to a short period of economic prosperity. With the aid of foreign loans, Gierek instituted a program 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
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
, and by 1976 price increases became necessary, mostly to ease the repayment of these loans.
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
from Polish society, the authorities permitted 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, the authorities introduced Bon PeKaO
Bon PeKaO
Bon PeKaO - substitute legal tender, used in the People's Republic of Poland. Polish communist government, desperate for hard foreign currency, used to mandate that the Polish citizens were to exchange foreign currency they had into the notes issued by the Bank Pekao...
checks, which were tied to the USD 1:1 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 consonant 'x' is not present in the Polish alphabet
Polish alphabet
The Polish alphabet is the script of the Polish language, the basis for the Polish system of orthography . It is based on the Latin alphabet, but includes certain letters with diacritics: the line or kreska, which is graphically similar to an acute accent ; the overdot or kropka ; the tail or...
, it was used nevertheless, so that the name would sound somehow exotic and Western-like in the ears of the mostly pro-American society.
For years, the Pewex shops were the most common way for people in Poland to purchase unavailable consumer products. Pewex offered a large variety of products unavailable otherwise to the Polish population. These included jeans
Jeans
Jeans are trousers made from denim. Some of the earliest American blue jeans were made by Jacob Davis, Calvin Rogers, and Levi Strauss in 1873. Starting in the 1950s, jeans, originally designed for cowboys, became popular among teenagers. Historic brands include Levi's, Lee, and Wrangler...
, Coca-Cola
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
, alcohol, sweets, toys, cigarettes, electronics, and colour TV sets. In addition, Pewex offered a number of Polish-made products that were otherwise for export only, including vodka
Vodka
Vodka , is a distilled beverage. It is composed primarily of water and ethanol with traces of impurities and flavorings. Vodka is made by the distillation of fermented substances such as grains, potatoes, or sometimes fruits....
and Krakus
Krakus
Krakus, Krak or Grakch was a legendary Polish prince and founder of Kraków, the ruler of the tribe of Lechitians . Krakus is also credited with building Wawel Castle. The first recorded mention of Krakus, then spelled Grakch, is in the Chronica seu originale regum et principum Poloniae from 1190...
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.
During the 1980s' economic crisis, when the state-owned shops for ordinary people offered barely anything, the Pewex shops were sometimes the only places where one could buy basic foodstuffs and other basic articles like toilet paper
Toilet paper
Toilet paper is a soft paper product used to maintain personal hygiene after human defecation or urination. However, it can also be used for other purposes such as blowing one's nose when one has a cold or absorbing common spills around the house, although paper towels are more used for the latter...
. Finally, in the 1980s, Pewex shops became one of the very few places in Poland where cars and flats could be bought without having to wait for several years.
After the peaceful dissolution of the communist
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
economic system in Poland after 1989, the Polish economy was privatised and the ownership of foreign currency was deregulated. This made the Pekao checks obsolete and soon afterwards most of the goods that had been available only from Pewex 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 Pewex brand, one of the most recognizable in the People's Republic of Poland, is considered a good example of brand mismanagement.
See also
- BaltonaBaltonaBaltona is an enterprise created in 1946 in Poland. Nationalized and subordinated to Polish communist Ministry of Foreign Trade in 1950, it was tasked with resupplying Polish ships, planes, diplomatic posts, airports, seaports, border crossings, and even scientific expeditions...
- CorecomCorecomCorecom was a chain of hard-currency stores during the Communist rule in Bulgaria . Goods were often priced cheaper than in the West, however, they were still inaccessible for most Bulgarians because the national currency, the lev, was not accepted at the stores...
- IntershopIntershopIntershop was a chain of government-run retail stores in the German Democratic Republic in which only hard currencies could be used to purchase high-quality goods. The East German mark was not accepted as payment...
- Shortage economyShortage economyShortage economy is a term coined by the Hungarian economist, János Kornai. He used this term to criticize the old centrally-planned economies of the communist states of the Eastern Bloc...
- TuzexTuzexTuzex, during the period of communist rule in Czechoslovakia, was a network of shops in which it was possible to use hard currency or Tuzex vouchers to purchase foreign, mainly western luxury goods, unavailable at regular stores. The Czechoslovak koruna was not accepted. The name Tuzex is a...
- BeryozkaBeryozkaBeriozka was a twin chain of state-run retail stores in the Russian SFSR that sold goods for hard currency. Beriozkas sold goods that were either unavailable or more expensive in regular shops...
- Eastern Bloc economiesEastern Bloc economiesAfter the Soviet Union's occupation of much of the Eastern Bloc during World War II, Soviet leader Joseph Stalin implemented socioeconomic transformations of each of the Eastern Bloc economies that comported with the Soviet Communist economic model...
External links
Atlantyda Ludowa, czyli jak zmarnowano najlepszą markę PRL-u- Ewa Cander-Karolewska, Painted advertisement for Pewex, 01.08.2007,