NATIONAL INTELLIGENCE SURVEY 21; YUGOSLAVIA; COUNTRY PROFILE

• Document Type: CREST
• Collection: NIS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP01-00707R000200100031-1
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 39
• Document Creation Date: October 25, 2016
• Sequence Number: 31
• Content Type: REPORTS

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NATIONAL INTELLIGENCE SURVEY PUBLICATIONS
The basic unit of the NIS is the General Survey,. which is now
published in a bound -by- chapter format so that topics of greater per-
ishability can be updated on an individual basis. These chapters Country
Profile, The Society, Government and Politics, The Economy, Military Geog-
raphy, Transportation and Telecommunications, Armed Forces, Science, and
Intelligence and Security, provide the primary NIS coverage. Some chapters,
particularly Science and Intelligence and, Security, that are not pertinent to
all countries, are produced selectively. For small countries requiring only
minimal NIS treatment, the General Survey coverage may be bound into
one volume.
Supplementing the General Survey is the NIS Basic Intelligence Fact
book, a ready reference publication that semiannually updates Ivey sta-
tistical data found in the .3urvey. An unclassified edition of the factbook
omits some details on the economy, the defense forces, and the intelligence
and security organizations.
Although detailed sections on many topics were part of the NIS
Program, production of these sections has been phased oast. Those pre-
viously produced will continue to be available as long as the major
portion of the study is considered valid.
A quarterly listing of all active NIS units is published in the Inventory
of Available NIS Publications, which is also bound into the concurrent
classified Factbook. The Inventory lists all NIS units by area name and
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orderirg of NIS units as well as their filing, cataloging, and utilization.
Initial dissemination, additional copies of NIS units, or separate
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The General Survey is prepared for the NIS by the Central intelligence
Agency and the Defense Intelligence Agency under the general direction
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nated by the Central Intelligence Agency.
WARNING
This document contains information affecting the national defense of the United States, within the
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S8 (1), (2), (3). DECLASSIFIED ONLY ON APPROVAL OF THE
DIRECTOR OF CENTRAL INTcLLIGENCE.
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WARNING
The HIS is National Intelligence and may not be re-
leased or shown to representatives of any foreign govern-
ment or international body except by specific authorization
of the Director of Central Intelligence in accordance with
the provisions of National Security Council Intelligence Di-
rective No. 1.
For NIS containing unclassified material, however, the
portions so marked may be made available for official pur-
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provided no attribution is made to National Inte!linence or
the National Intelligence Survey.
Subsectionv. and graphics are individually classified
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GENERAL SURVEY CHAPTERS
COUNTRY PROFILE Integrated perspective of the
subject country 0 Cloronology area brief Sum-
mary snap
THE SOCIETY Social stricture NOL11.1tioll
1 -;abnr health Living conditious Sc. uiml pmh-
lems Religion Education Public Nforillatiou
�Artisticexpre."inn
GOVERNMENT AND POLITICS Political evolu-
tion of the state Govenimenl,rl strength and stability
Structure and function Political dvnamics 0
National policies vireats to stability oe police
ob lntelfigen t acrd security Countersubversilrn
and counterinsurgerrcy ca}iubilitics
THE ECONOMY Appraisal of the ecmoiny a Its
structure--- .kgriculiure, fisheries, forestry, fucis and
/lower, metals and minerals, mauufactming and coo
struction Durncstic trade Economic policy and
development *International economic relations
TRANSPORTATION AND TELECOMMUNICA-
TIONS Appraisal of systerns Strategic mobility
Railroads llighways Inland %v:itvrways Pipe
liues 0 Paris 0 Mercliant onrrine 0 Civil air
Airfields 0Thr telecom system
M1 L ITARY GEOGRAPHY Topagraphy and climate
Military geographic regions Strategic areas 0
Internal routes *Approaches: land. sea, air
ARMED FORCIES The defense- miahiishment
Joint activities 0 Cround forevs 0 Naval fort" 0
Air forces Paramilitary
SCIENCE level of Scientific advancement Organ
iZatioll, hlamliog, and financing of rewarclt 0 Scien-
tific 1- ducation, manpower, acrd facilities Major
rr.eareh fields
This General Survey supersedes Me rare dated Angmt
1969, copies of which ,should he dextroYed.
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Tito's Yugoslavia:
A Turbulent Society
in Transition
Yugoslavia is a country %vith a painful history and a
troubled present. Its territory has been an arena of
conflict between rival empires temporal and
f spiritual �since the dawn of the Christian era. Its
people are for the most part descendants of Slavic
1/ tribes that migrated into the Balkan area some 13 or 14
hundred years ago. But prior to December 1918, when
the Kingdom of Serbs, Croats, and Slovenes was
established on the ruins of the Habsburg and Ottoman
empires, they were never Joined together in a single
state. Centuries of foreign domination and repeated
upheaval hav left them deeply divided by differences
in religion, nationality, language, political experience,
and economic development. (U /OU
Yugoslavia's survival as it multinational state has, in
fact, been one of the minor miracles of our times. Ever
since 1918 the Yugoslays have been wrestling with the
difficult problerns of modernizing their backward
economy, of protecting themselves against pressures
and intrigues horn of the hegemonistic or irredentist
aspirations of outside powers and of forging a united
nation out of people previously separated �and
sometimes set against each other �by geography,
historical circumstance, and cultural influence. In
none of these areas have they been wholly successful.
(U /OU)
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2
GRGUR NINSKI MONUMENT
Split, Yugoslavia
This heroic statue of Gregory of
Nin, a 10th Century Croatian bishop
who fought for the use of his native
language and script in church .serv-
ices, is the work of the late Ivan
Mestrovic, Yugoslavia's most fa-
mous sculptor. It stands outside a
great palace built by the Roman
Emperor Diocletian nearly 16 hun-
dred years ago.
The monument was completed
during the reign of King Alexander
and erected in its present location
by the Tito regime. Its subject and
setting capture the full sweep of the
region's turbulent history and, like
the life of the peasant -born Mes-
trovic (who worked actively for the
creation of a Yugoslav state only to
become one of his country's most
prominent expatriates), the fierce
nationalism which has sometimes
united and sometimes divided the
Yugoslav peoples.
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Birth and Rebirth
The decision to alter the trample\ political geog-
raphv of the Balkans ns in the triune of self-deternnina-
lion presented the headengnered elder st,.tesmen at
the Versail!es Conference \with one of their more
challenging tasks. Tlu� rte\\ c�ouutry \\hic�h emerged
front their endeaynrs it c )it nposed of seven disparate
eietuents: the independent kingdom of Serbia (in-
cludiug that part of Macedonia gained (luring the
Balkan War,i. the indept�tuleni kingdom of Monte-
negro: (:roatia- Slayoniac fort ned a senniautononmus
urea toiler Hum4arian rttlei: \ojyo(lina, plus t\\o
small districts bet \leer( Slovenia and Iluttgar\ (pre
wiousl\ integral parts of I hmigar\ is the Slovene Lords
(long Austrian pro yiuc ^s): Dalnuttia (ant Austrian
provinc-e of predominantly Croatian inhabitants):
and Bosnia imd I lercvigm ina l fornu�rl\ admiuistered
joint(\ b\ Austria mud Ilaungar\ While 110111C\\ hat
outnuntbere(I b\ their partners, the Serbs alone had
an exleusiwe and relatively \\ell developed goyemn-
int-wal N\ stem. I iereel\ proaaci of their role in the
ears \whic�h had free(I the Balkans from fon�ign n-
illation, uu(I moved b\ visions of it greater Serbian
kingdom. the\ managed to mser\e the (lominant role
in the new state for themselves. l� OLI
The vears of the monarch. (U/OL')
AltIm(wh the dreatm of it union of South Slays had
been ga;�iing force among Balkan intelk�clnals and
politicians since the earl\ 19th century, tit(- birth of the
Kingdom of Serbs. Croats, and Slovenes \was anything
but snnooth. Organization of the I I m\ state as it
c�onstilattional monurcb\ tinder Serbian leadership
frustrated thou non Serbs� particularly the
who
Groats hurl hoped to st
pla\ at ore significant
role in provincial and national affairs. Internal
mangling and border disputes with Austria, I lungar\,
Bulgaria. Italy, and AII)auiit delayed pro nntl gat iou rnf
the country' first conslitntion until mid -1931. �The
fledgling parliamentary systenn it created, shaky fronn
the outset at I( operating \within an increasingly heated
political environment, collapsed less than 5 years later.
In January 1939, King Alexander suspended the
constitutinr. and began it period of dictatorship which
lasted until his smlden death in 193 -1.
During his rule, Alexander sought to unify his
troubled country b\ attacking the organizational and
territorial foundations of ethnic particularism and b
intensif\ing efforts to foster it sense of pride in, and
identit \with, the nation as it \w hole. 'To these ends he
change(( the name of the state to the Kingdom of
Yugoslavia and replaced its formei provinces \with nine
regions. which, in ratan cases, colt across eth(tic� and
historical bt:undaries. Ile banned the e\istimg political
parties and ethnic soc�icties as well as all organizations
suspected of opposing the idea of it unitary Yugoslav
state. B\ his order, only the Yugoslav state flag \\'as
permitted for public display. But Alexander's reforms
skirted the key issue of Serbian hegemony. 'Thus,
although he eventually restored it etuasi- parliamentary
swstvw of government, his efforts to impose unite from
above .tit(] to strengthen centralized c�omtrol from the
capital at Belgrade oral\ fueled domestic discontent.
Internal tensions (sire further aggravated by the
impact of falling prices for Yugoslav agricultural
prodttc�e and by the ac�tiyities of various extremist
groups %%ho found sanctuary and support in Ital\,
Hungary, and Bulgaria. B\ 193 -I, Alexander seemed to
he considering some sort of constitutional
accommrnodation with his non Serbian subjects, but his
assassination in Marsville at the hands of Croatian
terrorists ushered in it new period of immobility in
Belgrade. Alexander's son, Peter, only I1 years
old. Prince Paul, dominant member of the regency
council which was established to govern in Peter's
name, maintained that fundamental changes in the
existing system must hc� postponed until the young
prince reached majority. Thus Paul retained the more
repressive aspects of Alexander's tionnestic� policies
\while concenlrating oil strengthening Yugoslavia's
precarious international position. Under his
leadership, Belgrade edged u\wa\ from reliance on the
Little Entente and the Balkan Pact as at defensive
bulwark against the revisionist powers of the interwar
period and sought security ill rapprochement with
Italy, E;erman\. and Bulgaria.
"This c�hangc in foreign police posture was generally
unpopular, adding it new ditrension to internal
discontent. And by the� stnnttner of 1939 tit(- rapidly
deteriorating situation in Europe had convinced Paul
of the urgent�\ of hutting his domestic house in order.
Abandoning its previous insistence on it unitary state,
the Belgrade regime leached an agreement \with
Croatian leader; whereby the regions of Sava and
Cornje Prim orje \were combined into an anttonomotns
Banat of Croatia. "fhc agreement pleased the Groats
but annoyed almost everyone else. In any event, it
cane� too late tit have it salnlary effect. World War II
broke out within a week. Eighteen months later. Paul's,
efforts to stave off disaster by bowing to Ilitler
demand that Belgrade adhere to the Tripartite Pact
3
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The Bosnian town of Jojce, birthplace of
Yugoslavia's post -World War It political order

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rc� icltvd in it coup d*vtat %%hic�h brought the still under-
age Peter to the throne and whic�b precipitated a
German blitzkrieg on Yugoslavia.
Divided and demoralized, the Yugos!a\ army
c�ar� iulaicd after only 11 clays of fighting. Peter and
his ministers fled, first to Palestine and then to
London. and the Kingdom of Yugoslavia disappeared
from the reap. With the blessings of Italy and
G- rrnam, Ante Pa%clic (leader of the Uslaslti, the
Croatian nationalist group responsible for the
assassination of King Alexander) established a
noniioally indeppriclent Croatian state embracing
most ()f the f miter Banat of Croatia plus Bosnia anti
Hercegovin The remainder of the country was
divided up b% Germany. Italy, fliingarN, Bulgaria,
and the Italian puppet state of Albania and was either
annexed outright or administered through(
collaborationist regimes.
As the� Axis powers soon found out, however, the
l ugoslays are it stubborn lot. By mid -19.11 there were
hvo major resistance groups operating against the
invaders: the predominantly Serbian Cltetniks beached
b% Col. Draza `lihaih-ic� (subNequently named by
King Peter as Minister ()f Defense and c�omnander in
chief of the Royal Armed Forcesi and the more
broadly basal Partisans, raised and controlled by the
Yugoslav Communist Part\ under the leadership of
the then unknown josip Broz Tito. But enemy
oc�c�upation, coupled with the brutal campaign of
terror wages! bN Pavelic's minions against the hapless
Serbian minorih in Croatian lands, also released
ethnic hatreds and antagonisms that had been
bltilding up for yeas. The Yugoslays shortly found
themselves engaged on two fronts: in it struggle for
national liberation and ill a blo()cl\ civil vvar.
Of the staggering total of over 1.7 million 'ugoslays
Mm perished in tine %�ears from 1941 to 1945, more
than half died at the hands of their fellow
c�ountr\nurn. During; the course of this bloodbath,
some Chetnik units collaborated with occupation and
cptisling forces in operations against the Partisans,
therebi se\eml\ compromising vlihailovic (an(I
through association, the ro\cd government he
represented) in the eves of much of the population.
"faking advantage of the fact that popular sentiment
was swinging in their favor. the Partisans began active
preparations for iI new push\ %ar political order in
\(\ember 1912. Stalin, fearful of an adverse reaction
in London and Washington, attempted to dissuade
Tito from this course of action. But less than 2 years
later, the Western allies� impressed with the te�nacit\
of Partisan resistance activities and increasingly
disillusioned with \1ihtailmic �threw their full
suppccrt behind Tito and forced Ding Peter to
negotiate an agreement v\ith the Communist leader
that virtually assured file collapse of the� Yugoslav
monarc�In.
In acc:rdance \%ith this agreement, it provisional
government was established in Belgrade in March
1945. It included three members of King Pete-r's exile
regime and fine representatives of prewar political
parties. But Tit() and his lieutenants held all the key
Posts, and their Partisan movement seas in undispittecl
control of the country. Less than 9 months later,
carefull\ managed elections gave 'Tito the popular
mandate he needed to legitimize and consolidate his
position. The royalist representatives were forced out
of the government and placed under house arrest. The
mead\ elected Constituent AssentW\ promptly
abolished the monarch\. proclaimed the
establishment of the Federal People's Republic of
Yugoslavia, and on 31 januar\ 1946 approved a nev\
constitution patterned closely after the existing Soviet
model. Embodying the federal formula which Tito
had advanced more than 2 \ears earlier as the most
promising solution to the� problem of ethnic and
regional rivalries, the 1946 Constitution established six
constituent republics corresponding to traditional
divisions of the country (Serbia, Croatia, Slovenia,
Bosnia and Hercegovina, Montenegro, ;;n(I
Macedonia) as well as an autonomous province
(Vojvuclina) and an autonomous region (Kosovo
Metcrhija) within the republic of Serbia. Yugoslavia
was, in effect, reborn under Marxist rule. And with
this event its people entered it period of rapid change,
experimentation, and uncertainty front which they
have vet to emerge.
Postwar Yugoslavia (S)
Yugoslavia came out of World War 11 as much of a
Balkan backwater as it had been during the early das:s
of Alexander's rule. Three out of four Yugoslays were
still engaged in agricultural pursuits. Illiteracy
rernained high. Such new railroads, highways, and
factories as had been built during the interwar ve:'Irs
had been heavily damaged. Man\ of the country's
most able professional personnel and technicians hacl
been killed or had fled abroad. But what its new
leaders lacked in experience, the\ more than made up
in reyolutionar\ zeal. Fired by memories of wartime�
successes in the face of nearly impossible odds and
burrowing heavily from the rigidly centralized
Stalinist system, the\ sei their sights on transforming
Yugoslavia into it self- sufficient, Industrial, and
thorouglil\ socialist countr\ b\ 1952. In the mistaken
belief that Stalin would hasten both to support their
5
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domestic programs and to defend their interests on the
international front, they reversed Yugoslavia's prewar
Westward orientation and moved to bind Belgrade
economically, politically, and militarily to Moscow.
Indeed, Yugoslavia was one of the West's m acti.e
and brash antagonists during the early days of the cold
war.
The Soviet Yugoslav honeymoon was shortlived,
however. Independent, self- confident, and
understandable proud of the fact that they had come
to power with little help from the Soviet army,
Yugoslavia's Communist leaders reacted sharply to
Soviet efforts to gain control over their country's
political and economic affairs. Moreover, Belgrade
entertained ambitions in the Balkan area which not
only clashed with Moscow's own goals but served as a
constant source of embarrassment in the Kremlin's
dealings :with the Nest. In 1948, Tito's defiant
attitude led to the expulsion of Yugoslavia from the
Soviet bloc. In the face of mounting Soviet economic,
political, and military pressure designed to topple the
Tito regime, Belgrade began to seek new ways to
popular acceptance, to stimulate economic growth,
and to provide for Yugoslavia's security.
In late '.949, Yugoslavia espoused its nov well-
known policy of nonalignment, thereby opening the
way for Western support in times of need while
retaining maximum flexibility in the cnnduct of its
foreign affairs. Shortly thereafter, Belgrade launched a
blistering attack on the Soviet Union's sacred Stalinist
systern and announced that Yugoslavia would embark
on a "separate road to socialism," one which would
relax the harsher aspects of Communist rule and
eventualw ic.J to that ultimate, elusive Marxist goal:
the withering away of th state. Since setting that
course, Yugoslavia has be, an unusual laboratory of
statecraft. It is a Communist state in name and theory,
but in practice it is i t fully independent country which
has rejected most of the "socialist experience of other
states, including the U.S.S.R., and which is
deliberately removing its economy from centralized
controls and freeing its people from arbitrary
authority. Moreover, despite pretensions to it grand
design, it is a state whose political, economic, and
foreign policies have for more than 20 years reflected
mainly improvisation and compromise.
Thanks largely to Tito's firm guiding hand, the
Yugoslav experiment has so far been relatively
successful. The economy, with massive aid from the
West, has shed some of the more cumbersome bits of
Marxist theory, weathered recurrent crises, and
expanded at an impressive rate The country has
b -come increasingly industrialized and urbanized,
6
and fewer than half of its people now work on the
land. The material well -being of most of the
population has been substantially improved. And
despite threats and blandishments from opposing
power blocs, Yugoslavia has retained its sovereignty
and achieved an influence in world affairs far cut of
proportion to its size and power.
Nevertheless, Belgrade's separate road to socialism
has been a rocky one. There has been a persistent
conflict �onu which was highlighted but not resolved
by the ouster of Tito's conservative and ambitious heir
apparent, Aleksandar Rankovic, in 1966 between
those who favor greater political and economic
liberalization and those %rho feel that the process of
decentralization has already gone too far. The
regime's failure to reduce the gap between th richer
and poorer republics or to otherwise create a generally
more egalitarian society has contributed to an
undercurrent of discontent, particularly among
students and workers. The interplay of governmental
reforms, continuing economic prrblems, and a freer
political climate has eroded the solidarity and
authority of the Yugoslav Communist party (the
League of Communists of Yugoslavia �LCY) clad has
led to a resurgence of bitter regional and ethnic
animosities. Time and time again, Tito has had to
bring his awesome personal prestige and authority to
bear in order to prevent his innovative ;vstem from
breaking down.
Against this background, Yugoslavia has moved
deep into a difficult new transition period. Tito �who
celebrated his Roth birthda. in 1972 �has been living
to prepare his country for the day when he will no
longer be around to serve as the ultimate arbiter. Since
September 1970 he has introduced a sweeping new
series of political and economic reforms designed to
anchor his system in constitutional law and formal
institutions. Shaken by the serious challenge to federal
authority which was raised by Croatian leaders in late
1971, he has reorganized the LCY and directed it to
redefine its role within the political system. He has
called on the army, as it truly nationa' institution, to
play an implicitly restraining role in domestic politics
and to serve, if necessary, as the ultimate guarantor of
federal integrity. And faced with it rapidly changing
world scene, he has made repeated adjustments in his
country's international course in hopes of .fostering
greater unity and prosperity at home and of preserving
national security abroad.
But for all that Tito has clone, the uncertainties
which trouble his countrymen and cloud Yugoslavia's
future remain. Tito's political reforms are as yet
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incomplete and subject to periodic shifts in direct,,n.
In any ment they will not be subjected to a true test of
their viability until after his departure. Yugoslavia's
economy, still moving away from bureaucratic
controls and toward a radical decentralization of
authority, faces an accumulation of problems.
Extremist emigree groups have stepped up subversive
and terrorist activities in hopes of exploiting the
confusion of the succession period that is to come. And
despite Moscow's currently friendly posture, the threat
of Soviet meddling in Yugoslavia's internal affairs has
not faded away.
There are, in fact, too many variables �some
domestic, some international �which will bear on the
country's course of development to permit confident
prediction as to whether or not the postwar Yugoslav
experiment will survive more or less intact after Tito
leaves the scene. But Yugoslavia's strengths and
weaknesses� geographic, sociological, political, and
economic �can be cataloged. Its principal problems
can be identified. And all these factors can be
combined with an analysis of current trends and past
performance to yield a rough presuccession balance
sheet.
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Land of Diversity (u/ou)
Yugoslavia is only about the size of Wyoming, but
few countries in the world are as diversified in their
physical, cultural, and economic makeup. It is
frequently, if superficially, characterized as one
country having two alphabets, three languages, four
religions, five nationalities, and six republics. Its
territory, as shown on the Summary Map, is irregular
in shape, trending northwest to southeast along the
eastern shores of the Ad:iatic Sea with maximum
dimensions of about 530 miles in length and
approximately 260 miles in width. Bounded by seven
countries, Yugoslavia is a land of tiny villages and
crowded cities, of superhighways arid horse -drawn
carts, and of symphony orchestras arid blood feuds. It
is L, land where snow still clings to alpine peaks while
surnmer vacationers crowd resorts along the 945 miles
of its California -like coastline and on many of its more
than 700 islands.
In the north, fertile lowlands stretch for some 300
rniles along the Sava and Danube rivers, broken only
by low hills. '(these are the Pannonian plains, so called
because they occupy the site of the ancient Pannonian
Sea which gradually drained away after the Danube
carved the famous Iron Gate gorge and thereby
opened an outlet to the Black Sea. Here the climate
and terrain have favored extensive cultivation and the
development of a dense transportation network which
traces its beginnings to roads built by the Romans in
the first century A.D. But most of Yugoslavia's
territory is dominated by mountain ranges and peaks
that make overland communication difficult and
account for sharp variations in climate.
Elevations reach nearly 9,400 feet in the northwest,
arid throughout Yugoslavia's rugged highlands forest
and scrub covered ridges alternate with narrow steep
sided valleys and scattered level basins. The scenery is
spectacular, but living is difficult. The karst zone, an
area of limestone mountains and plateaus stretching
the length of the Adriatic coast and extending about
100 miles inland, is particularly inhospitable. This dry,
rough region is cut by meandering gorges, pockmarked
by sinkholes aril cracks, and undermined by extensive
caverns. Because of limestone's porosity, a lack of
water is a problem throughout the area �both on the
mainland and on the adjacent coastal islands. Few of
the rivers originating in the interior reach the
and heavy rains disappear without a trace. Largely
barren and unproductive, the harsh terrain of the karst
zone still hampers efforts to overcome the isolation
and backwardness of many of its inhabitants.
The natural corridors through Yugoslavia's
mountain ranges provided by major river valleys have
played an important role in the country's history. But
these are fey in number, and while there Lire some
additional �and tortuous routes which cross the
western mountains over high passes, most of
Yugoslavia's upland country remains relat:.
iaccessible. Development of this extensive regv is
further hindered by the fact that devastating
earthquakes have caused considerable destruction
there in the past and pose a constant threat to life and
to costly engineering projects. Nevertheless, the
highlands are economically impo:tant because of their
resource base. Much of the country's mineral wealth is
mined along the faults which crisscross the area.
Heavy forests which cover the upper slopes of hills arid
mountains almost evervwhere but in the dry western
zone support a well developed woodworking industry.
And in the nonforested areas, meadow and alpine
grasses provide pasturage for grazing.
For a country of its size, Yugoslavia possesses a
relatively large and varied array of natural resources.
It ranks among Europe's leading producers of
antimony, chromium, bauxite, mercury lead, and
zinc. Iron and copper ores are also abundant, as are
reserves of brown coal. Both oil and natural gas exist in
exploitable quantities. 'rhe country's wiuely dispersed
mineral resources also include substantial deposits of
rock salt, calcium rock, and sulfur as well as smaller
quantities of gold, silver, molybdenum, wolfw.i"
cobalt, and uranium. Its forest resources are ample,
and its hydroelectric power potential is considerable.
Yugoslavia's location, its difficult terrain, and the
uneven distribution of its natural resources have all
contributed to the diversity of its people. Little is
known, however, of the original inhabitants of the
area� principally Illyrians. They came under Greek
influence in the fifth centu: v B.C. arid were
incorporated into the Roman Empire some 500 years
later. When Slavic tribes began pushing into the
Balkans from beyond the Carpathians in the sixth and
seventh centuries A.D., many Illyrians were killed or
absorbed by the newcomers while others fled to the
mountains and coastlands. The Albanians are believed
to be descendents of the latter group. Ar d there are
still some Vlachs, descendents of Romam..ed Illyrians
who never adopted the Slavonic language, living as
nomadic herdsmen in the mountains of Macedonia.
But ever since the middle of the eighth century, the
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population of the lands comprising present -day
Yugoslavia has been overwhelmingly Slavic in origin.
When the Slays arrived in the Balkans, they
encountered a frontier that was to play a critical role
in their future development. 1t ran from the Danube
and the Sava in the Pannonian plains down the Drina
river and thence across a mountainous corner of what
is now Montenegn, ,o a point of the Adriatic coast not
far from the current Albanian border. Emperor
Theodosius, who drew this line in A.D. 395, thought
that he was simply splitting 'lie Rowan Empire in half
to stop his two sons front quarrelling. Yet for almost
1,600 nears it has served as a cultural, religious,
linguistic, and at times political boundary between the
Latin Catholic west and the Greek Orthodox east.
Those South Slav groups that settled west of Theo
dosius' line �the Slovenes and the Croats �fell under
the influence of the Holy Roman Empire and its
successor, the Habsburg empire. They adopted the
Latin alphabet, the Roman Catholic religion, and a
Western political outlook. 'Those Slays who settled east
of the line� today's Serbs, Montenegrins, Bulgarians,
and Macedonians �took their Orthodox version of
Christianity, their C\ rillic alphabet, in(] their political
traditions from Byzantium. Then, following the
Turkish victory over the Serbs at the Battle of Kosovo
in 1369, they had to endure five centuries of life under
the Ottoman Empire �a disastrous experience which
the Montenegrins (secure in their mountain redoubt),
most Croats, and all Slovenes were spared. One legacy
of' this period of 'Turkish rude is the million- strong
Yugoslav Muslim communit\ in Bosnia and
1 1ereegovina. Others include the general
backwardness of much of southern Yugoslavia and the
emergence of an Albanian ethnic majority in Serbia's
hallowed Kosovo region.
Thus, despite the common ancestry shared by the
majority of its population, history and geography have
combined to give Yugoslavia the most complex ethnic
composition of any country in Europe. There are five
main Slav "nations Serbs, Croats, Slovenes,
Macedonians, and Montenegrins �and a number of
substantial non -Slav minorities or "national groups,"
of which Albanians and the Hungarians are the
largest. According to the last official survey �taken in
1973 �a little over 12% of the people profess no
religious belief, 42ii are Serbian Orthodox, 32% are
Boman Catholic, 12% are Muslim, and slightly less
than 2`i are Protestants. Different languages and
different a,; habets in which to pyrite common
languages co `inu(- to hinder communication and to
excite national passions.' And despite the best efforts
of the Tito regime, the inhabitants of Macedonia,
Bosnia and Hercegovina, Montenegro, and Kosovo
(now an autonomous province on the same level as
Vojvodina) are still poor and back in relation to
the Croats and Slovenes.
'Belgrade recently granted "equal status" to Ilungarian awl
Albanian and now uses these as well as Yugoslavia's official
languages� Scrl)o- Croatian. Slovenian. and Macedonian �in state
and Communist party publications.
wit it
10
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1
r
Y
The Titoist System
Fc P r nusre tlaui h+o decade.. II if- 1ugc1+1a++ ha%e
Iwrn leelirat; Iheir +u+ Icm.trcl the v%tirlrlirlrraeiat
isl .s trul+ federal decentralized .oc�ialisl -gall-. grad-
11.1 11 di +c .onrr of the� lnorc doc�trin.aire�
tri it Is. of c�etrmnuiokm in I:t+t r of a Irt,er. aIitin
ttp l-n +�lc�tit The atc�ia1 order 11l-lt;1ade IIa, l ael-t.
I iii Iding labele( I "+elf- una;i;agetne�nt' ---i+ incrediI)I%
1 -4 11111 le�N \1:131 of its fe�isturv%. iuclndiras; tho %till in
the pl:etuiing %tage. have ocs lxraailel or prcet,dl-ltt ill
political nr vowi4sttnic� pr,tctirr amMit -re rlit� in the
++isrid Thr 1 iigoda%% thertt+rlc� do rn rel-tal to I1j%e
aM Clear idea of ++here� tl l-t are headiem. arid. in art+
e+ent. till- roam for cmiftasion and error is great
i t 01,
Political features (S)
1 at;osl:a+i,l s (:nrc.titntietar �I he Third letrtnlalaled h.
I}te Tito repiinc .iit ce cotnilit! to lm+er +as
pronctilgated in 1963 and CIM119ecf tile� p:n31ie of the�
c�omitn to the 5oriali%l Federal Repithlir of
11tg0%Ii1%ia SnhuVyul-nth ncoelified b+ .essne 10
:ctetendtrteutS. it pro+ide+ for the� wparFali: tit of till-
meculkv. hv% lati+l-. and judic.A faattc�tioln of
gin vrurm�nI and dl- %igiiIle the th v c�ltaneluur
Ivvi%laturr tlee Ft,de�ral X. ---a+ the %til
organ of political po++ mid pelf tn:uiu#;l-tnl-nt ('1
triir hwits itf ilcmvr. Il se� I.(:) I% ele wrilsrd irn pi% is
till- conratr+", Il-adirat; force. itlecrinvical kliith.. and
itriti.itor of political ,.cli +it} i l'heorrticall+
ruhordinalc let the Ft-cleral Avwmhk. the President,�+
Mill Federal i-.u�culi+r X :F11111 it WiLbim't i are ac�cetrdrd
rci:ali+el+ /:road t i+c� lxmvr, "itltiii the homsds of
federal comprIence
i- centraliiatinn as list Ise+ Ivatore 311 the I tigosia+
IVAitic.al s+ster31 t tatler the� pniqr.trtn enihodied lit till-
2:3 e-etrrtitntiunal ainendtnl-rtts .adopted in 1110.19 1,
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the country is moving toward a loose federation of
nearly autonomous republics. "The authority of the
central government has been restricted mainly to
conducting, foreign policy, providing for national
defense, regulating and maintaining a "unified
national market." channeling funds from the richer to
the poorer areas, and arbitrating regional disputes. All
other functions and responsibilities together with
control of the bulk of the nation's material
resources �have been or are soon to be surrendered to
the republics and province,. The process of
decentralization is to go much further than this,
however. Tito's blueprint calls for the exercise of
considerable autonomy backed by adequate
independent financial resources �at the lowest level of
local government, the commune. A new set of
constitutional amendments giving effect to this
principle is scheduled to be introduced in 1973. Plans
are also afoot for cornpletely revamping the legislative
system.
Increased efficiency is not the only objective of
these projected changes. "Tito must reckon with the
fact that while organized pluralism �the participation
of regional organs, federal bodies, and various interest
groups (youth, labor, professional, and economic) in
Hie process c_: government �has become an
indispensible element in the self- management ethic, it
has combined with the gradual liberalization of the
Yugoslav political climate to release centrifugal forces
which could paralyze the country's federal system.
I lence he hopes that the proliferation and realignment
of decisionmaking centers will complement the other
steps he has taken to contain these forces, to dilute the
power of the republics, and to blur current regional
and national disputes.
Indeed, determined to avoid a crisis of succession,
"Tito has undertaken a radical overhaul of his country's
entire political structure.. He has created collective
executive bodies in both the party and government
(the LCY's eight -man Executive Bureau and the 23-
rnan Presidency) as heirs to his enormous personal
power. He has staffed these bodies (in which genuine
debate and give -and -take have become a standard
part of the decisionmaking process) Nvith outstanding
republican leaders in hopes shat by bringing the
"barons' to Belgrade �and by holstering the power of
the collective presidency in relation to Yugoslavia's
Federal Assembly �he will haute the interrepuhlic
squabbling which reached such alarming proportions
in 1971. In addition, he has streamlined the Federal
Executive Council and established a number of
interrepuhlic coordinating commissions charged with
resolving disputes before they reach a point where they
12
must be referred to the collective Presidency for
decision.
To supplement these moves, Tito has sought
enachnent of an Wray of additional statutory
safeguards designed both to restrain personal
ambitions and to contain regional rivalries. The kcy
elements in this program include rotation of all major
party and government assignments at 2- to .3 -year
intervals, equal rel resentation for the republics in
certain important bodies, and an almost check -and-
balance division of authority both within and outside
the governmental structure. 'The trouble with all this is
that the system which Tito is creating is so
complicated and cumbersome that it could easily
break clown. In fact, Nvere it not for the sobering shock
of the dramatic resurgence of Croatian chauvinism in
late 1971, it might not be functioning as well as it is
right down.
Market socialism (C)
The rudiments of Yugoslavia's current economic
system were established in the years immediate]\
following the country's expulsion from the Soviet bloc.
During the period from 1950 to 1955, the means of
production were transferred from state to "social"
ownership, workers' management councils were
established in all enterprises. agricultural
collectivization was abandoned, the economic
ministries and the state monopoly over foreign trade
were abolished, state financing of investments was
reduced, and obligatory state plans were replaced by
far less detailed "indicative planning." Since then, a
series of major reforms �in 1961, 1965, 1967, and
1971 �have moved the economy ever closer to what
has been termed, for lack of precedent, market
socialism.
As in the political field, decentralization has been
the key element in Belgrade's approach to the
management of the economy. By giving local
administrations, individual firms, and� through
workers councils �the workers themselves greater
authority over their own affairs, and by providing
them with a growing opportunity to reap the rev ails
of their own enterprise, the regime hopes to promote
efficiency, modernization, and long -term growth. It
also hopes to make Yugoslav products competitive in
world markets. Thus, while federal authorities are still
charged with maintaining and regulating an
integrated market and Nvith channeling
money to the country's poorer regions, their direct role
in the econony has been considerably reduced.
Decisions on incomes, output, investment, and
oreign trade are no-.\ left largely in the hands of hanks
and enterprises. Federal funds �aod taxation
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powers beat sharply curtailed. 'Tate republics
ha ve tak over the federal extrabudgetary a
including a number of major investment projects, and
haw. acquired it substantial role in the formulation
and execution of motional economic policy. Steps have
been takers to provide for the protection and gradual
expansion of the private sector of the economy and to
atlr;let foreign investment. rill told, these cllang,t
have created it much freer system, tine .which is
oriented toward Western markets and technology, and
one which has proved difficult to control.
Belgrade has consistently tried to rely primarily on
idirect monetary- credit policy to influence prices,
itnixats, investment. and cit;1MIrnption. But the
decentralized Yugoslav eclnontic system, operating
largely tinder market fortis, has tended to favor the
110111ern republics over [lie l ess developed southern
regions, to generate severe b alunce of payments
d iff iculties, anti to aLc ntuate evclical fluctuations.
These problems have resulted in a very uneven pattern
of growth, both nationall\ and regirtrlull. In the fact
of recurrent lxouts with inflation, high levels of
unentployntent. liquidity crises, and growing
disparitit; the richer and 1 h ,rtrer republics, the
To-giule has heell f orce d to interv i n the operations
of (lie ec'tinnnty� thu�igh price frecres. itnporl
controls, and other "emurgencw ineasures --more
d ire ctly will m ore often thin it hoped would b e the
east'. And despite tile West Was inherent in
1'ligoslavia prtlgrain of t- conomic reform. persisterll
trade intbalance. with hoed curwricy partner. have
%purred efforts to vNiiand crluiplrinrutar cconornic
hridgvs to the E ost
Nonaiignment (S)
This renewed interest in Soviet bloc trade and
credits is illustrative of the delicate balancing act
between East .loci \%last which Belgrade has managed
to sustain for more than 20 years. It has Wt hecn case
The i ugoshrvs have been determined to inaintairl
l ieu independence and freedom of ac tion, to stand as
a model socialist state ire the eyes of the world, and to
play all important role in regional and global affairs.
Thus, while their pxilicy of nonalignment (or, as
Belgrade often cells it, "active peaceful arex�stence'')
requires strict avoidance of moves which could be
construed as linking theist with either NATO or the
Warsaw Pact, it has never meant the sort of passive
neutrality practiced by the Sw�ss. It has, in fact,
proved tc be a re:tnarkahly flexible doctrine, respotisive
not onl to fluctuations in the status of Betbrade's
relatiors with its most worrisome 1xttential adversary,
the Soviet Union, but to a wide range of broader
developments as well.
In the early 1950's, when the threat of Soviet
invasion seem very real B elg rade saw notating
�ualasistent with its newly a d opted posture of
nona in accepting massive loans and grants
from the West, ill equipping its armed forces with
American material, or in signing tripartite agreements
with Jprecc and Turkey "veering both economic and
militant' cooperation But tensions in the Balkans
began to case with Stalin's death, and, even before
Khrudichev inade his famous trip of atonement to
Belgrade in 4tay of 19&5 the Yugoslays had started to
cast their pxwlicy in a less parochial mold and to make
common cause with tsonaligned regimes ill Africa and
As.... Since then, Tito has conic to en joy the reputation
of Toeing one of the world's toosl traveled and most
distinguished elder statesmen. And although self
serving, Belgrade's emphasis on a number of elevated
principlc-s of interutltionai conduct �the obligations of
'rllthoug,h Yul enlas'i+i s gins national pnxlucl (CNPt Ims giawn
at an average rate of ulxart 3.5'i since 195 the tendency of the
regime to set wwerinihitinns targets has crmtrihated lei u litsorn and
hus( Patlear to mid�1972. Yugrnlucla still lxissesud nneof the least
cdevelolxd econnrnim in Fnrolxr Its 1x>r capita GNP was rstirnal(A
Lit almlit LIM 0M.�al nlmt us high a in C reive and Romania, Ing
ronsidemhlq helms the lever :wltieved elsewhem in either the
u�esterrt or eastern sro(m oil 111W rnlltil101t. I7ifferenM in Ievel of
ecnneinrte develupinetit ammig the cowitn s six republic' and too
autotinnwus Ptrsviners ar rr nttich tllelrr Pnrnn1111ent lhrin they ItuJ
Iseen in 1943 In the itnmedkite lxrstwar jcr(od. Slovenia, the richest
republic, eninyed a I1r�r valAta GNP a little murr than thaw times
larger OHM that of f MAM3. the most buckaanl ivKhm to 1972, r}rc
Slncwae% wcrr ncad% siv tfinm richer than their evuntrvnen in
Krwivo. will) it prr capilu GNP n` tiniml $l- i1M? alxmt l4llral tea
thal of -Dario
13
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rich countries toward the poor, the sovereignty anG
equality of all states, the right of each state to conduct
its own affairs without interference from abroad, and
the inadmissability of the us(- of force in interstate
relations �has won Yugoslavia both widespread
respect and a disproportionately influential voice in
international forums.
'I'll(! Yugoslays are probably no more prone than
other peoples to act out of loft' principle when issues
get close to home and affect important national
interests; nevertheless, their behavior has generally
been consistent with the professed objectives of
nonalignment. Their independent assess�nent of
various international developments has often led them
to adopt positions close to thc.s, of Moscow �and
there have been periods when Soviet- Yugoslav
relations have been relatively warm. Sometimes,
indeed, the Yugoslays have seemed all too ready to
give the Kremlin the benefit of the doubt. But
Belgrade has not hesitated to stand in open opposition
to Soviet efforts to consolidate their hegemony in
Eastern Europe or to expand their influence in the
Mediterranean area. Tito's outspoken criticism of
Moscow's behavior, coupled with his refusal to
abandon his heretical domestic course, resulted in
major Soviet economic sanctions in 1956 and in
threats of even more tiire punishment some 10 years
later. Similarly, Yugoslavia's actions in support of
various national liberation movements, its
condemnation of all alleged manifestations of
imperiali.iin and neocolonialism, and its critical
appraisal of "reactionary" developments in the W st
have at one time or another sorely tried the patience of
most of its important trading partners and creditors in
NATO.
Tito has sought to reduce the risks involved in his
assertive foreign police posture by stressing his
country's dedication to the concept of peaceful
coexistence and its consequent desire to avoid letting
occasional quarrels with Communist or non-
Communist states seriously disrupt established
diplomatic and economic ties. (Yugoslavia's action in
breaking off relations with Israel in the wake of the
1967 Arab- Israeli war was a notable exception in the
latter regard. But Belgrade's parallel efforts to bolster
Yugoslavia's precarious position by developing and
dominating a worldwide movement of nonaligned
nations have fallen short of their mark.
In terms of prestige, of course, the roN%ards of
Yugoslavia's diplomatic offensive in the 'Third World
have been enormous. And there have been other, more
tangible gains as well. For example, the� First
nonaligned sutnntit �held in Belgrade in September
14
1961� inspired tit(- subsv(pient formation of it broad,
economically oriented grouping of underdeveloped
countries (both aligned and nonaligned), the so- called
"77." This group, now numerically stronger than its
narne indicates, was the prim(- mover in the� formation
of the United Nations Conference for 'Trade and
Development (UN( �rAD) and continues to yield
Yugoslavia Borne economic and political benefits.
But the hoped -for vast markets for Yugoslav goods
in the )'bird World have failed to materialize.
vlor. over, when the notwiigned chiefs of state
gathered in Cairo in 196.1 for their second meeting,
they were already badly divided by local issues and
the impact of the sharpening Sino- soviet dispute.
Since then, the nonaligned movement has grown in
numbers, but not in cohesion. Most of its founding
members have died or been deposed. In recent years,
Yugoslavia's principal nonaligned partners, Egypt and
India, have become more dependent on Soviet support
than Belgrade would like. Not only did New Delhi
and Cairo fail to join )'ugoslaviu in condemning the
Soviet -led invasion of Czechoslovakia (ana the so-
ca;led Brezhnev Doctrine) but the Indian and
Egyptian regimes subsequently violated Belgrade's
perception of nonalignment by concluding treaties of
friendship acrd cooperation with Moscow.
Disillusioned, the Yugoslays have begun to focus
their foreign policy effort on matters closer to
home �on the rapidly changing political and
economic scene in Europe and on the strate,cally
important Mediterranean Urea �and oil fostering their
promis ng ne%y rapprochement with Peking. While it
has nc t retreated from its established position of
censure with respect to the invasion of
Czechoslovakia, Belgrade has welcomed and
encouraged a thaw in its relations with the Soviets and
their Warsaw Pact allies. Taking advantage of the
general relaxation of tensions in Europe, the Yugoslays
have redoubled their efforts to find ways of
circumventing discriminatory trade arrangements iu
both Fast and West. At tit(- lime time, they have lost
It() opportunity to remind both Washington and Mos-
cow of the necessity of taking the vicys of small na-
tions into account in any nerves aimed ii reshaping the
existing political, military, and economic situation in
aBv tnid- 19117, the fall of such Third World leaders as Sukarno
and Nkrutnah, coupled with a deterioration in Yugoslav relations
with Italy, the coup in Greece, and �mast of all �the Arab Israeli
ssar, had led 'Tito to postulate the existence of an American -led
conspiracy against all "progressive" states. This particular
pa tit it oia- 1) rnbahly never entirely shared by 'rit0
lieutenants� alimptly disappeared when the invasion of
Cevchoslovakia focused Belgrade's attention on a far more tangible
and argent thrt In Yugoslav security.
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Europe. Thus they have emphasized their continued
support of efforts aimed at an early convocation of a
Conference on Security and Cooperation in Europe
(CSCE) within a broad nonbloc framework, and they
have also shown active interest in proposals for
organizing; an em ally extrabloc conference of
Mediterranean countries.
The shift in Belgrade's policy has been one of
emphasis, not substance. Yugoslavia remains an active
and influential member of the still largely Afro -Asian
nonaligned grouping. But its muted performance at the
most recent nonaligned gatherings �tl.e v r 1 Lusaka
summit meeting and the 1972 conference of foreign
ministers i �.:,uyana� stands in sharp contrast to the
vigorous leadership it exerted in earlier years.
All- people's defense (S)
Belgrade has traditionally sought to give the
impression that an invading force, no matter ho%N
strong or from what quarter, would meet .vith fierce
resistance and, even if initially successful, would
encounter prolonged and costly partisan warfare. In
keeping with this strategy, a ith an eye to bringing
the conduct of military affairs into closer harmony
with the concept of decentralizat'on, Belgrade began
to consider plans for the development of sizable
territorial forces and for increased emphasis on
guerrilla warfare in 1967. Originally drafted on the
assumption that Yugoslavia's defenses should be
directed primarily against it possible attack from the
West, these plans were hastily reoriented following the
Soviet -led invasion of Czechoslovakia in August I968.
By November of that year, they had been incorporated
into it draft bill 6)r consideration by the Federal
Assembly, and on I1 February 1969 Yugoslavia's new
Nationwide (or "all- people's I)efense Law was
officially adopted.
Under the new law, Yugoslavia has established a
two- tiered defense system composed of its regular
armed forces (presently totaling about 229,000 rnen
and collectively designated as the Yugoslav National
Armv �JNA) arid territorial defense units. Only the
latter force (no%y said to consist of more than I million
armed citizens) and the larger complementary civil
defense organization are decentralized, with
republican, local, arid factory authorities given
primary responsibility for the levy, training, funding,
and activation of the component units. Rftgional
planning, supervkion, and coordination fall to the
republics, but overall strategy and control remain
in the hands of the Presidency and desig �tted mili-
tary organs in Belgrade.
Yugoslavia's defensive posture is now more clearly
zinc] openly based than ever before on the practical
and deterrent aspects of the concept of a "nation in
arms." Almost everyone between the ages of 16 and 65
is required to undergo training in military tactics, first
aid, use of weapons, and the strategy of collective
defense. Of these, men from 17 to 60 and women from
19 to 50 may be assigned to armed units. If attack
comes, plan, call for a temporary forward defense by
the centrally controlled and more heavily armed
regular forces (assisted, where possible, by the
activities of local territorial units), followed by the
orderly and fighting retreat of these forces into the
mountains. Theoretically, the time gained would
suffice to transport enough government personnel and
records into mountain redoubts to mobilize many of
the country's more than 2 million reservists and to
activate additional territorial partisan units. And once
settled in the mountains, the retreating regular forces
would cooperate with partisan units in continued
operations against the invader.
Impll.mentation of the new defense law has not
been without its p oblems, but Belgrade has
demonstrated its determination to strengthen the
effectiveness of the nationwide system. It has donated
a considerable quantity of military equipment, mostly
light arms, to the program. It has rearranged its
military districts in order to facilitate cooperation
between local JNA commanders and their
counterparts in the territorial forces. It has tested the
system in a number of military exercises, including
one, in the fall of 1971, larger than any staged on
Yugoslav territory since the height of the Stalinist
threat in the early 1950's. In addition, language was
included in tl.e 1971 constitutional amendments which
declares that no one has the right to sign or recognize
the surrender, or occupation, of all or any part of
Yugoslavia or to prevent Yugoslav citizens from taking
up arms against an invader. Such acts would be
punishable as treason.
15
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Kry wlA F c
I.
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Lingering Problems
"Tito has labored hard to insure that it full\ sover-
eign, nonaligned, and self managing Yugoslavia will
survive his passing. But serious problems� including
ethnic and regional rivalries, economic instabilit\,
and foreign meddling �still plague the country and
still continue to do so for years to come. Since many
of these problems are clo,ely interrelated, their reso-
lution is likely to prove more difficult. Yugoslavia's
economic difficulties. for example, both contribute
to and are compounded by its complex nationalities
problems. U OU
The nationalities (C)
No nation in Europe is more burdened with deep
rooted ethnic hatreds than is Yugoslavia. historically,
political assassination and civil war have suggested
that no regime in Belgrade can long maintain effective
national unit-, solely through authoritarian means.
But current efforts to solve the country's problems
through decentralization of authority and the creation
of it relatively open society are by no means assured of
success either.
ri to S leadership and the sheer force of his
personality and prestige kept the problem of ethnic
animosities at hay throughout most of the postwar
period. In recent gars, however, envy and distrust
horn of the growin; disparities in regional levels of
economic development have reinforced old feuds and
suspicions and, in the freer p;nitic l climate whi( h has
accompanied Tito's reforms, have resulted in it
marked resurgence of regional and ethnic self
assertiveness. In trying to cope with this plienotnenoti,
party and government leaders have sometimes gotten
s\vept up in it, becoming partisans on one side or the
other. The situation reached crisis proportions in late
1971 when central party and government organs
proved incapabie of reining in the rationalist- infested
Croatian leadership. "Tito had to inte personally
to set things straight. Before the dust settled, more
than W) Croats had lost their jobs and the most
ouh�poken nationalists among them had been
remanded for trial.
With the Groats at least temporarily in hand, Ti:o
has moved against regional chauvinists throughout
Yugoslavia. 1 ?ven so, the situation remains potentially
explosive. As in the past, the three most volatile
elements are the traditional animosity between Serb
and Croat, the struggle of the Albanians in Kosovo to
free themselves of Serb domination, and the
conflicting interests of he poorer and richer regions.
None of tovse problems is likely to be soon resolved.
The government now admits that its program of
channeling investment funds to backward areas will
require a considerable gestation period before it
produces results. The Serbs will continue to chafe at
the erosion of their traditional status and prerogatives
entailed in the ongoing process of decentralization.
They are likely to be particularly reluctant to grant
further autonomy to Kosovo �or even to live tip to the
spirit of current constitutional provisions pertaining to
the status and rights of that province. As a result, the
Albanians will probably continue to regard themselves
as a repressed minority and may again (as they did in
1963) resort to large -scale disorders. For their part, the
Croats �still smarting from the purge imposed upon
therm by Belgrade �arc likely to remain especially
sensitive to any real or imagined injury to their
political or economic interests for a long time to come.
The party and the army (S)
Tito's plans for pressing forward with political and
economic decentralization called for the hurden of
maintaining nation;-!, unit\� to fall squarely on the
shoulders of the federal organs of the LCY. And it was
here that his system broke down in 1971. In the
charged atmosphere of frank mid open political
discussion which surrounded the preparations for
Yugoslavia's latest round of reforms, regional
nationalism flared and split the rinks of the party. In
keeping with the spirit of the times, the LCY became
something approaching it federation of nine relatively
autonomous party organizations: six republican
plus �on a slightly lower plane�two provincial and
the military. By late 1971, the Croatian party had
virtually ceased to communicate witi: the central LCY
organs in Belgrade.
Beginning with tile: stern measures he employed
against the errant Croats, "Tito has moved to dispel all
thoughts of a federalized party and to restore rigid
party discipline. Among other developments, the
Executive Bureau has announced that henceforth it
will send out "teams" to monitor the activities of local
republican, provincial, and military party units. But
the LCY remains in disarray. Confusion has been
heightened by Tito's highhanded circumvention of
the system he himself had built, as well as by his
failure to set forth any clear -cut directives regarding
the party's futu.t role. In addition, Tito's tough tactics
have revived the old controversy between party
Iibera's and conservatives, and many liberal
17
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leaders including Serbia's competent former party
chief Marko Nikezic �have expressed grave
reservations about the current drive to recentralizc the
IA 1'.
Tito patience with his liberal critics apparently ran
out in October 1972. Late that month, Nikezic and his
second in command within the Serbian party, Latinka
Perovic, were forced to resign. Within 30 days the
President of the Assembly, Belgrade's party boss, the
premier of Slovenia, Yugoslavia's Foreign Minister,
the secretary of the Macedonian party, and three
prominent editors followed him into retirement.
Further purges seem inevitable. It seems likely that
"Tito's vie will ultimately prevail, but the LCY could
well enw.ge from its current troubles as a thoroughly
demoralized and relatively ineffective organization. If
so, the army may temporarily hold the key to
Yugoslavia's future.
The jNA remains a highly centralized
organization �Fhe only true national institution left in
Yugoslavia. Like the party, it has been a mainstay of
the regirne. But, unlike the party, it long remained
outside the mainstream of developments in Yugoslav
society. In recent years, however, Belgrade has sought
to revamp the traditionally aloof military
establishment and to encourage it to take a more
active interest in domestic affairs. To these ends,
changes were made which rid the JNA of its most
conservative officers, restructured and rejuvenated its
part\ organization, and gave it broader representation
in policymaking councils. All this has been reflected in
it marked change in the general attitude prevailing in
top military circles. A new interest in the resolution of
political, social, and economic problems affecting the
country's unity (and thus hearing on military
capabilities) has emerged. And, although the military
establishment's general loyalty to Tito has never been
seriously questioned, ranking military officials now
stress that this loyalty extends to Tito's systenu as well.
At the height of the Croatian crisis, 'Tito sought and
received unreserved military hacking for his move
against the nationalist leadership in Zagreb. Since
then he has emphasized his desire that the military
establishment continue to exert it restraining influence
c�n fractious local part\ and government leaders. But
while amply justified under Yugoslavia's current
circumstances, this open invitation to the military to
take it greater hand in civilian affairs carries certain
risks of its own. It dramatizes Yugoslavia's domestic
problems, adding to the general malaise at horns and
encouraging efforts to neddle from abroad. Moreover,
despite Belgrade's efforts to achieve it better ethnic
balance within the JNA and to give the military
18
establishment a more progressive cast, Serbs and
Montenegrins are still strongly over represented at the
NCO and cornpany officer level and a nunher of top
military leaders still tend toward it conservative
position on the scope and pace of Yugoslavia's
reforms. Hence the prospect of a more active military
role in domestic politics could increase tensions in the!
northern republics. Furthermore, while none of
Yugoslavia's present military leaders seem to entertain
political ambitions, there is always a chance that their
taste for power could grow with experience.
The economv (C)
Yugoslav economic performance in the first half of
1972 was considerably better than in 1971.
Improvement was most marked in the field of foreign
trade where Belgrade's success in resiricting imports
and, thanks to two devaluations of the dinar in 1971,
in stimulating exports raised hopes albeit perhaps
prematurely �that the country might register a
modest current account surplus for the first time in 7
years. (In 1971, it ended up with a US$32.1 million
deficit. But despite encouraging statistics and the
welcome boost provided by some $500 million in new
,conom;c assistance from the West and by two large
investment credits (one for $130 million, the other for
5! -3 billion) obtained from the Soviet Union, the
Yugoslav economy remains deeply troubled.
Although more than 750,000 workers have left the
country to seek jobs abroad, domestic unemployment
still stands at record levels. Import controls are now
beginning to affect raw material supplies, thereby
contributing to a general slowing of industrial growth
and threatening efforts to create new jobs and to
expand exports. In an atmosphere still marked by
sharp regional rivalries, the government's attempts to
stabilize the inflation ridden domestic economy have
been severeiv hampered by the further
decentralization of authority embodied in the 1971
reforms. Despite an extended freeze, consumer prices
were rising at more than double the planned rate as
1972 drew to it close. The cost of living, fueled in part
by a midyear 16 increase in food prices, was
continuing to rise sharply. And Belgrade's efforts to
control the money supply and personal incomes were
still being opposed by the republics and the trade
unions.
At the same time, implementation of some of the
recent economic reforms has been delayed by a lack of
consensus on basic goals and by foot drugging at the
republic level. Creation of a domestic foreign
exchange market, for example, which had been slated
for mid -1972, was postponed for at least 6 months.
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Similarly, steps to restrict in%estrnt�r>ts b% unprofitable
firms have had little effect.
Problems such as these promise to plague
Yugoslavia for a long tittle to come. Neither the
government's controversial stabilization program nor
the most re cent round of decentralizing reforms attack
the basic causes of Yugoslavia's economic instability.
Even if Belgrade succeeds in muting regional rivalries,
its complex and cumbersome ec�ononic system will be
difficult to control. Unless the Yugoslays call
restructure production to increase output of goods
exportable to the west, their balance of pad tents will
again be severely strained when heavv loan
repay items are resurne�d in the mid 1970'x. And unless
Belgrade opts permanently for an industrial growth
rate considerably lower than its current Vi to I()o7j
target, one 11111dest enough to keep both inflation and
imports in check, the 1 110011" and bust pattern of the
1960's is likely to be repeated throughout the 1970'x.
External influences (C)
In any event, Yugoslavia's Motion)ic �and perhaps
political� fortimes will continue to depend to some
degree on external factors over %hich Belgrade call
exercise bolt limited control. As ill the past, Belgrade's
mi .nbership in the World Bank and the International
`lonetarc Fund and its active participation in variuns
progranns administered by the Organization for
Economic Cooperation and Development are likely to
yield both financial and tec�hnic�al assistance. But the
situation with regard to Yugoslavia's principal foreign
trade partners is more prjhlenutic�al. The Yugoslays
htrye long been worried about the hardening East
\Vest ec�ononnic� division of Europe In order to protect
themselves, they obtained observer status in the
Council for Eco11011tic� Mtttual Assistance (CEMA) in
196 -I, became a full member of GATT in 1967, and
negotiated a 3 -year trade agreement syith the
Common Market in 1970. However, the recent
expansion of the Common Market has raised nes\
eluestiotts as to whether the Yugoslays will be +ble to
rnai;ttain a high level of exports to the Nest, .rod thus
accounts in part for Belgrade's interest in increasing
trade and economic cooperatio't with the S
('pion and the other wennbers of EXIA.
In 197 I, ti'eyo,l;ni;c, Ieading trade partners were \Pest
Carat. Itak. and the So%iet t'nioer in that order. About :3.3'; of
Y Igo laviv." 'rade sc:r, conducted with Common Market countries
%emu, 28 with CEMA c�onntrie,, representing ;c
,light ,hift in hr%or of CEMA in c�onyarrkon with the previous %ear.
About ti`; of 1'u oslav tradr �.%a+ with the "nited States. All told, the
iudu+trialieed \%'e,t accounted fur a little over 60 of 1'ugo,hry
trade, and: nether I I" seas Milt developing c�ounlrie,.
Although most welcome, Moscow's generous
response to Yugoslav reyuc�sts for credit draws
attention to another problem That is likely to plague
Belgrade throughout the succession period: foreign
intervention in Yugoslavia's internal affairs. The
Soviets will not he the only culprits, and the threat
from the� Kremlin is not all immediate one. But even
though 'Moscow has learned to live with �and even
grudging1v accept 'fitcrist heres\, the Soviets
have clearly not abandoned hopes cf someday guiding
the Yugoslays hack onto a more orthodox path. "Thus
the Kremlin has used the recent improvement in its
relations with Belgrade to maneuver for a position of
influence ill post -Tito Yugoslavia. In return for their
latest investnte�nt credits, the Soviets obtained direct
access to local enterprises, thereby joining the west in
bcirg aiiomed io bypass fecicri authorities and to
bargain directly with individual firms.
The risk of such all arrangement to Yugoslav
political independence is negligible in the near term.
At present, some 70% of Belgrade's trade is with the
non Communist world. Moreover. in recent years the
Yugoslays have sought and received more than USS2.5
billio: in credits from the Nest. Over the long rum,
however, the Soviets are likely to gain both valcuble
local contacts and an added increment of economic
leverage stemming from the� importance of their
assistance to Belgrade's program for promoting the
development of Yugoslavia's poorer regions.
Dissident elements and emigree groups (S)
YtIgeslavia's hitter nalionalit\ rivalries, together
with the growing eomntltnit} of Yugoslays who are
te rnporaril\ working abroad, provide rich
opportunities for less subtle farms of foreign
intervention. The seriousness of this is difficult
to gage. But hostile elements� including former
political prisoners (primarily the so- called
Cominformists of ti Stalin era), purged part
Ipparatchiks, and, most itttportaiit. ethnic a11t( l
regional chauvinists �do exist in Yugoslavia. .�ir
exact numbers are unkmowil, 1 some have links %%ith
extremist c�rnigrec groups and others inav have lies
With less visible foreign sponsors. This program is
particularly troublesome with respect to the 1111casy
situation in Croatia, for there are more than it dozen
Croatian nationalist emigree organizations� spiritual
heirs of Ante Pavelic�'s Ustashi ntctyctnc'mt scattered
about the globe and enjo\ ing ready aeon�