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November 9, 2016
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December 14, 1998
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November 1, 1946
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IMILUIC0 Approved For Release 1999/09/08 : CIA 1P82-00457R000300650002-9 COUNTRY ibeoalavia CO a4M01...b cotami. Cm-LI CENTRAL INTELLIGENCE GROUP INTELUGENCE REPORT SUBJECT General Economic Situation in Croatia 25X1A6a 25X1X6 25X1A2g 25X1X6 INF0.11 Dia . February 1947 maRAFircorencsi SUPPLEMENT General Economic Situation L. The general economic situation in Croatia continues to deteriorate da114-? Basic factors accountable for this are: (1) the poor harvest; (2) industrial production which is quantitively and qualitatively below expectations; And (3) low purchasing power of the population. 7' 11,0 Food: Of the food supply available to the population, 30% is obtained ..from..7Government-operated enterprises and 70% is supplied by farmare in the free market. Plans for 1947, however, call for 75% of the food supply's being administemilby-the Oovernment on a ration basis, In Zagreb the price index for fbod available on the free market rose from 100 to 225 over the period August through 31 October 1946. In the same period the proportion of food supplied from Government sources dropped from 30% to 17%, Irbil* the price index for goo supplied from such sources, Mee from 100 to 130. This is accounted for by the farmers' withholding their produce from Government procurement agentso The farmers' attitude' is based in part, on the lack of industrial products available for farm conausption. This, in turn, may traced to the increased export to the USSR of industrial products needed for domestic use. B. Evart Trades Besides 30% of the total Yugoslav cement production, other exports to Russia include luMber, textiles, corn copper, and copper sulphide. During the month of 4ptember 1946, Croatia alone exported about 40,000 tons of all products with an official Valais of 320 million dinars. Since export prices to the USSR are frequently considerably-lower than prices to other countries,Ruasians are able to buy imported Yugoslav products at a lower price than Yugoslavia can buy-them domestically. The profit made by Russia on such transactions is supposed to go into a fund for foreign Communist Parties. An example of such transactions is the resale by Russia to Switzerland of hard lumber, originally purchased by Russia from Yugoslavia. Farther, along the same line, _ Yugoslavia refused to sell hard lumber to Italy because of the fear that Italy -would likewise resell it to Switzerland, thus entering into conpetition with the Soviet Won. Document No. OO.- ti LTIAL _17 NO CHANGE in Class. 0 0 DECLASSI7:72) Class. CHAT',_, TS S (!5 DDA Memo 4 Apr 77 Lxtracted by FIR. Auth: DDA 7 09/08 : CIA-R0P82-00457R000300650002-9 Date: .1314graN By; c Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 i. , 1 i --letiffriatThr- CENTRAL INTELLIGENCE GROSP1 g -2- C. Difficulties in Foreign Trade: Special efforts are being made to export to the Netherlands, because the Netherlands offers in exchange seed - which Yugoslavia needs . and electrotechnicel material for the new Slemens factory in Zagreb. Exports to Czechoslovakia include copper, chemicals, and fruit. Through pacts with Czechoslovakia, the Netherlands and Poland the volume of foreign commerce has increased considerably. Principal difficulties are the lack of export products and the prices obtained therefor at the official exchange rate. This to this unfavorable exchange rate between the dinar and foreign currencies, Ingpslav export products are priced disproportionately high and, in retaliation, foreign countries set the prices for their own products at figures considerably above their actual value. IndustWo Situation: A. Textiles: The capacity of the textile industry, in Croatia, which is the most effective of those currently in operation, amounts to about 70% of the pre-war production. However the total cost of the goods (in terms of the resale Price) produced in any given period of time at present will represent 160% of the price charged for the whole production in a similar pre-war period. The industry a profit of nearly 100 million dinars, although, in the opinion of source, this is not actual profit of the year's operations but rather the result of general Government orders that all industries Must show a profit. B. labor: Production of the lueber industry in Croatia amounts to 35% of the pre-war output. Of this figure, 75% is being exported, and the remainder is available for the domestic market. Profits during 1946 are supposed to amount to some 80 million diumi.s. C. Electrotechnical: It is intended that next to lumber the main induatry in Croatia will be the electrotechnical industry. The Siemens factory in Zagreb is being expanded to handle 700% of its pre-war capacity. The necessary buildings are being constructed, and the machinery has been ordered from Csechoslavakia. At present Siemens is building only electric motors up to 4 MI.X. but in the future it is expected that the new plant Will be equipped to build any type of electrical machinery and equipment. To build and finance the new factory, the Croatian Government is investing 200 million dinars and the central Government is appropriating 350 million dinars. (Figures are not yet definite and are still pending approval). The total planned goverment investment in Croatian inchuMalrfor 19h7 is foreseen at about 10 billion dinars. This type co: information is being kept very secret, however, and the official budget may reflect an entirely different figure. -CoNT1l0L 11.S.OFFICIALS ONLY iiraoLDIL Extracted b Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 "Thrtet11616. CITRAL =TOXIC:MRCS CRUM 25X1A2g A. Budget: A reliable appraisal of the financial situation cannot be made until all planned expenditures are? and the budget review is scheduled for 1 January 3.rcried The budget of the Federal Republic of Croatia for 1947 is foreseen as about 23 billion dinars. B. Tames It is anticipated that the budget for Croatia for Mr-win show a deficit of some three billion dinars, which amount is supposed to be made up by a loan from the National Bank. This deficit will probably be a false reflection, however, because all government enterprises were ordered to submit financial statements showing profitable operation, whereas cost of them are artually 25X1 X6 Co' t; The budget ol the Central tioverrnment is equivalent to the combined budgets of the Federal Republics plus the adadnistrativis expenses of the Central Government and plus the eximinditure of Goverrxesat-sponsorod enterprises under Central Goverraent control. By 30 September 1946 taxes collected in Croatia amounted to only 30% of estimated receipts and siere collected mainly from Goverment enterprises, which are almost exclusively non-profit organisations. C. Currency Circulation: The total figure for maw in circulation in Yugoslavia amounted to 9,386,412,000 dinars on 31 October 1946. This represents an increase of three billion dinars over the figure given for 1 Jay 1946 and is accounted for by: (1) the decrease in government revenues due to the stoppage of sales of UNRRA goods, and (2) the decreased purchasing power of the city dwells= accompanied by the accumulation of large sums of =nay in the hands of the farmers, which sums are not being spent, owing to the lack of UNRRA. goods and the poor quality and quantity of Yugoslav industrial products. D. Throat of Inflations Anka Berm, Mance niniater of the ISORMIOZSM'iMernnent, stated before a meeting of Government officials: "Danger exists in the threat of inflation, but in the opinion of the Communist Party, it will not seriously harm the national economy because of rigid price controls and the plumed eomomy. The main danger would be that of certain persons' beaming very rich, which eventuality we must prewent at all costs." B. Bank RO iOnt Effective 1 January 1947 a re- organize n the banking system will take place. Besides the National Bank, only two other banks will exist: one for investments and long-term credits, and the second for short-term credits. The central offices of these banlas will be in Belgrade, and each federal let:obit:: rill have a main branch,, which will operate independently within the adminiotrative framework of the federal republic. Provinaal branches :11111 be established in all communities where Area National Committees (Okrusa Narodni Odbor) are located, and, if necessary, in towns having District National Approved For Release 1999/09/08TluOINNORIMW000300650002-9 NTIL U.S.OFFICIALS " Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 11111113tNtike???? CENTRAL INTELLIOCICE ORnuP 25X1A2g Committees (Noterski Narodmi Cor). All banks are to be financed by the Naticaal Bank independent of the federal budget. Thus the Government aspects to aduinistar its credit system awe efficiently and to check an increase in the amount of mow in circulation. Depending on the nooses of this system, the Government hopes to limit cash transactions to those of salaries, tames, and small- scale purchasing: while a.U. other transactions will be effected thmugh banking /Motions. One drawback to the system is the lack of trained bank personnel, according to Finance 2inistry officials. 14. Agricultural Situations A. Potatoes: The potato crop this year fell seriously etratirthe expected harvest. In all of Yugoslavia five million tons were anticipated whereas only 1,500,000 were delivered, and of these the Goverment purchased 570,000 tone. _ents The actual _total is probably in MOWS of r*500,000 tone, because farmers have withheld as much of their crops as possible. The projected planting of potatoes for Croatia in 1947 i.e 194700 hectares, with an expected harvest of 900,000 tons. The price of potatoes rises steadily; On the black market one kilogram of potatoes costs 15 to 20 dinars, and the official, price was raised from 3.50 to 5 dinars. The Goverment tried to exchange corn for potatoes but was unmoor:WU, not only because of the shortage of corn, but also because the fermem had consumed the potatoes or sold them on the black market. Potato seed requirements for all of Yugoslavia for 1947 total 500,000 tons, E. Corns Due to dry weather in Croatia, the corn harvest ve;rws oar )10% of the supected total, so that the whole or% totaled only 500,000 tons, which is insufficient to supply domestic needs, therefore making it necessary to import corn from Vojvodina. The projected planting of corn for Croatia in 190 is 321,284 hectares, with an expected yield of 1,000 kilos per hectare. Industrial_ Basic Products: Strong emphasis is being placed on tise planting of crops 'which represent industrial rem materials. The harvest in Croatia of these products fell far short of the expected totals for the current season: 25X1X6 Mow beets* Be flenfkmers s Flax Tobacco s 60% below the pre-rear normal 70% below the pre-war normal 40% below the prevr normal Practically no harvest 20% above the pre-war normal S4T-CoNTFOL U.S.oFFICIALS ONLY CIPISAVAL Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 Rap Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 ?6616801,1k? OEM& INTELLD3OCR CROUP 25X1A2g -5- The wet serious difficulty eonnectad with the raising of these crops is the shortage of seed and the resistance of farmers to government contracts *latch require them to plant a specified acreage. The Miming tibia indicates the projected plantings in 1947 of industrial basic commodities. (*Contracted* represents the figure assigned to all farmers collectively for planting: Kincaotracted* indicates the tutticipated number of acres which will be planted on a voluntary basis): Planted amputated Oentracuteul Uncontracted In 1939 Tial....clm.lia. 3,737 Hectares 13,725 Hectares 6,779 900 kg. 14000 II 8,787 ? 10,000 4000 * Scribeeme 400 a .110.11.110ft 5,070 860 sr Omator-oil seeds 400 Chicory 1,200 ? Sunflowers 18,000 ? auger Deets 21,000 * Tobacco 2000 %Wise 0?01101111011Nla 011 Deets Herb (basic ingredient of intaucticide) 576 1111?016111????? isca3 11011.11.111.1111 4111111.111.1111M 165 5,329 0 980 hi* Soo is ? ? D. Vedder: The acute shortage of fodder has made it necessary to slaughter lagra. Exact statistical data are not available because the farmers do not report them, but in all Yugoslavia only forty tons of red clover seed could be obtained. The following table shoes the mmber of hectares planted in 19166 and the yield per hectare in Croatia for each of six fodder crops. Also indicated are the projected plantings of each crop for Isla and the anticipated yield: ?002111DL U.S.OWICLUS ONLY efftmeik Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 aP Grtm lover ned Clover Hay iiuckeheat 25X1A2g ? 1947 t 1%6 140-tieef.arew. 35020 35,000 72,000 650,000 2,000 8,300 per Hectare irojeaea Ple2_2t.lece Yield 2,000 Kilos 2ADO 2,300 600 rt 500 1,200 39,809 49,600 86,100 441,e00 1,806 10,200 3,080 Kilos ft 3,730 tl 3,580 2,214 720 a ft 1,620 core4prsdnese Following figures and estimates were given on fitittiirgrain crops in Croatia: to seteres Grain Planted 19W .389,000 (Yield 600 kllos per ifinc.15046) Projected Expected 357,253 1,000 Kilos Barley 9.2C0 33,852 47,500 7,700 41,400 45,475 lso50 760 1,000 a ft hwies of ?sbeatby the Goverment in Croatia for this year's .05.0. ware estimated to total 180,000 tons, but by 16 November 19146, t50,000 tons had been collects?u 044-ser Grope.* Total Production Croatia 1946 rit ?lung , 839,833 Quintals Apples 430,392 n fears 177,373 wuts 77,000 a Cherries ft 1 06,000 Currants 47,000 Apricots .. . i6s000 Peaches 65,000 a Figs (dried) 101,000 ft chestnuts tT 35,000 Grams 2,581,362 to.-1"-CONTRM U.S.OFFICIALS ONLY Approved For Release 1999/09/0 57R000300650002-9 Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9 OW* km- CENTRAL Itt=MGENCE GROUP 25X1A2g -7- 25X1A6a umonz is t: Source specified *quintals" as the unit of measure. possible that "kilos* vas- interaled. G. _Livestock Situation: Following are comparative figures Of qua1tIe8 of Alres ck in Croatia for the years 1939 and 1914, exclusive of livestock in hands of the Amoy: RE 19146 Horses 3314,000 head 239,000 head Donkeys 38,000 * .300300 " guise. ' IMOD " 9,000 A Cattle976,000 : 692,000 0 Sheep 1,300,000 7150300 * Pigs 791,000 ?" 529,000 0 , H. Unt Productions Following are figures on meat production in Irroatia for Va. Cattle 12,000 Tons (of 'ditch 70% Piga 22500 " (" I' Other 14,00 A Went for Army consumptioni II It tt This doeument sestet= atfeetingthe national flatted States witida the Sepdoesfejiet 32, se imendid the revel: air tin of the inning of 11.8.0. 31 and trananiasba or of its oast** la en unauthorised per.. ted by les. SE+,7T-CGUTROL U.S.OFFICIALS yfrIAL Car Approved For Release 1999/09/08 : CIA-RDP82-00457R000300650002-9