YUGOSLAVIA'S POLICIES AND PROSPECTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP98-00979R000400420001-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 23, 2016
• Document Release Date: July 10, 2013
• Sequence Number: 1
• Publication Date: June 11, 1957
• Content Type: NIE

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N I E 3 1-5 7
11 June 1957
N? 311
NATIONAL INTELLIGENCE ESTIMATE
NUMBER 31-57
YUGOSLAVIA'S POLICIES AND PROSPECTS
Submitted by the
DIRECTOR OF CENTRAL INTELLIGENCE
The following intelligence organizations participated in the
preparation of this estimate: The Central Intelligence Agency
and the intelligence organizations of the Departments of
State, the Army, the Navy, the Air Force, and The Joint Staff.
Concurred in by the
INTELLIGENCE ADVISORY COMMITTEE
on 11 June 1957. Concurring were the Special Assistant,
Intelligence, Department of State; the Assistant Chief of
Staff, Intelligence, Department of the Army; the Director of
Naval Intelligence; the Director of Intelligence, USAF; and
the Deputy Director for Intelligence, The Joint Staff. . The
Atomic Energy Commission Representative to the IAC, and the
Assistant Director, Federal Bureau of Investigation, abstained,
the subject being outside of their jurisdiction.
!IP
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CENTRAL INTELLIGENCE AGENCY
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YUGOSLAVIA'S POLICIES AND PROSPECTS
THE PROBLEM
To review Yugoslavia's internal situation and external policies, and to estimate
probable developments in these respects.
CONCLUSIONS
1. The Yugoslav Communist dictatorship
remains strong and apparently cohesive.
Although there are chronic economic
difficulties, widespread anti-Communist
? sentiments among the populace, and an-
tagonistic attitudes among various na-
tionality groups, these do not now pose a
threat to political stability. The regime
? has successfully resisted Soviet pressures
and maintained Yugoslavia's independ-
ence on the international scene. A se-
rious challenge to its control is improb-
able unless party unity should break
down, and this development appears un-
likely except possibly in the event of Tito's
death. (Paras. 7, 9-10, 32, 34-37)
2. We believe that Yugoslavia will con-
tinue to maintain its independent foreign
policy, avoiding alignment in the East-
West struggle. While continuing to crit-
icize the inflexible attitudes which it per-
ceives in the two blocs, Yugoslavia will
nevertheless continue to recognize the
bargaining power it gains from the
struggle and would view with anxiety any
drastic changes in the power balance.
(Para. 44)
3. Barring the improbable event of sub-
stantial new Soviet concessions to Yugo-
slay views on national independence, the
Yugoslays are unlikely for some time to
develop relations with the USSR as close
as those prevailing in the 1955-56 period.
However, they will continue to moderate
public expression of differences and will
seek opportunities to expand economic
and political contacts with the Sib-.
Soviet Bloc, hoping to exercise some in-
fluence toward the emergence of national
Communist regimes. (Paras. 46-47)
4. In the face of Moscow's campaign to
impose ideological orthodoxy on the Sat-
ellites, the Yugoslays are giving particu-
lar attention to their relations with Po-
land and Communist China. Tito will
continue to cultivate these and any other
Bloc states that demonstrate some ability
to determine policy without complete
Soviet dictation. He will also seek to es-
tablish special relations with the neutral-
ist powers and with a wide variety of
Socialist parties and organizations in the
interest of his personal prestige and in.
an effort to make Yugoslavia a leader of
political forces uncommitted to either
Bloc. (Paras 30, 50, 53)
5. Yugoslavia's continuing need for out-
side economic aid and political support
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will make friendly relations with the
West, and particularly the US, an impor-
tant concern, though cooperation with
the Western powers in the military sphere
will remain limited. Present levels of US
aid enable the Yugoslays to carry on de-
velopment programs that they would be
loath to abandon. Were US aid to be
curtailed, the Yugoslays would be recep-
tive to greater assistance from Bloc
sources, though not at the price of sur-
rendering their independent position.
(Paras. 54-56)
I. BACKGROUND AND CURRENT
SITUATION
6. There is no figure of Tito's stature to
replace him, and a crisis in party leader-
ship could arise after his death, partiG-
ularly if this coincided with an interna-
tional crisis or major internal difficulties.
However, we believe it likely that there
will be a relatively peaceful emergence of
a national Communist successor regime
which will continue the policy of nona-
lignment rather than risk a renewal of
domination by the Soviet Union. (Paras.
37-43)
DISCUSSION
Internal Position of the Regime
7. The power of the Yugoslav Communist
dictatorship in the country remains intact.
It retains the basic features of a Communist
regime ? one party rule, police controls, a
planned economy, and continued allegiance
to its own version of Marxist-Leninist ideology.
Tito still holds dominating authority; and,
despite some individual apostasy, the Commu-
nist leadership appears to have remained co-
hesive and free of serious factionalism. One
important element in the domestic strength
of the regime has been its success in resist-
ing Soviet pressures.
8. Nevertheless, Tito's regime continues to
face chronic popular discontent, particularly
among the peasantry, who comprise about 60
percent of the population. There have also
been some signs of dissatisfaction with the
regime's policies among youth. The depar-
tures from Soviet administrative patterns
which were introduced gradually after the
break with the USSR were largely directed at
overcoming domestic apathy and hostility. In
an attempt to broaden popular support, Tito
abandoned forced collectivization and gave to
factory workers' councils limited participation
in the direction of enterprises and distribu-
tion of surplus profits. Changes in the ecb-
nomic plan for 1957 give greater weight to
consumer goods production, apparently in an
effort to increase popular support.
9. The regime has made considerable efforts
to modify the traditionally strong and divisive
antagonisms between the various national-
ities, granting to the six Republics equal par--
liamentary rights and a certain degree of
local autonomy. While it has succeeded for
the time being in containing nationalist and
separatist forces, they have not been elimi-
nated. The policy of building up the eco-
nomically backward Republics has stimulated
discontent in relatively more advanced Croatia
and Slovenia; the fear of Serb domination,
historically prevalent among the other na-
tionalities, has probably not lessened; and in
Croatia and Macedonia there are still sepa-
ratist sentiments. Nevertheless, there is no
indication that the chronic nationality prob-
lem represents a serious threat to the re-
gime under present circumstances.
10. A more pressing problem for the regime
is posed by Yugoslavia's basic economic back-
wardness. Ideologically committed to build-
ing a strong modern state, Yugoslavia has
little heavy industry or native investment
capital; many essential raw materials are in
short supply; and there is a chronic trade
deficit. The country is accordingly dependent
on foreign grants and credits. Since 1950,
most of these (some $714 million in economic,
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aid and $650 million in military aid) have
come from the US. Crop failures have been
frequent, and Yugoslavia has become a net
importer of grain even in good years. Worker
productivity remains low, and although the
institution of the workers' councils was de-
signed to provide incentives for greater out-
put, it has sometimes tended to impede tech-
nical progress.
11. The fact that the industrial base was
small and that considerable effort has been
made to build increased plant capacity has
permitted Mdustrial production to increase
in recent years at an annual rate of about
10 percent. In agriculture, however, no such
progress has been made; the average annual
production of wheat in the 1948-1956 period
was only 87 percent of the average in the 1930-
1939 period, that of corn only 77 percent, and
the trend has been downward. Moreover, the
regime has acknowledged that, since 1954,
the real wages of urban workers have declined
by 10 percent.
12. The regime considers its major economic
problems to be low living standards in the
urban areas, low labor productivity, inade-
quate agricultural production, and a chronic
trade deficit. Current policy calls for a slow-
down in the expansion of heavy industry in
order to produce more consumer goods and to
increase agricultural investment. An export
drive is also planned. However, requests for
a long-term aid agreement with the US in-
dicate that Yugoslavia is unwilling and largely
unable ? without causing confusion and dis-
affection in the party ? to make changes in
internal economic policy sufficiently drastic
to end dependence upon foreign assistance.
13. Yugoslav army and navy capabilities have
not been materially affected by developments
during the last year; but air f9rce combat
effectiveness has declined due to a variety of
reasons, one of which is the US deferment
of the delivery of jet aircraft. The Yugoslays
have emphasized their desire to reduce mili-
tary expenditures (which continue to be about
nine percent of national income) and have
publicly stated that they seek no more foreign
military aid from the West except such re-
placement parts and backlog deliveries as the
3
US has recently agreed to send them. The
Yugoslays would strongly resist any invader.
The armed forces are probably capable of
effective defense against any one of the neigh-
boring Satellite forces. If the Soviets inter-
vened with strong forces, the Yugoslays, unless
provided with very substantial outside sup-
port, would be forced to cease all organized
military resistance and to resort to guerrilla
operations.
14. The Tito regime, in spite of developments
of the past year, has probably not 'altered
its basic defense plans against Bloc attack.
These plans appear to emphasize two major
objectives: (a) an initial vigorous defense
of all national areas by the Yugoslav armed
forces, and (b) a withdrawal, in maximum
strength if required, to the "central mountain
redoubt" in order to assure continuity of the
regime and take advantage of possible West-
ern military assistance. Except perhaps for
Greece, the regime has continued to avoid
being pinned down by the West on matters of
mutual military defense, such as joint plan-
ning, cooperation, or coordination.
Foreign Policy
15. Yugoslavia's foreign policy reflects: (a) a
strong desire to maintain national independ-
ence, (b) the Marxist-Leninist ideological
predilection of its leaders, (c) the necessity
of preventing European hegemony of any one
great power, (d) the strategic need for friendly
neighbors, (e) the continuing requirement
for foreign economic aid, and (f) the unique
political position of a Communist country out-
side the Soviet Bloc. These factors have pro-
duced a foreign policy of maneuver and non-
commitment which seeks to use Yugoslavia's
special situation to extract concessions from
both sides.
16. The original break with the Cominform
and subsequent fluctuations in Soviet-Yugo-
slav relations were largely the result of So-
viet policy rather than Yugoslav initiative.
From 1948 to 1953 the USSR submitted Tito
to unrelenting economic and political war-
fare. Relations were partially normalized
during the next two years at Moscow's behest,
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and became increasingly close after Bul-
ganin's and Krushchev's dramatic pilgrimage
to Belgrade in June 1955. The high water-
mark of Soviet-Yugoslav rapprochement was
reached during Tito's visit to the USSR in
June 1956, when the Soviet leaders treated
him to a triumphal tour and formally ac-
knowledged the equality of the two Commu-
nist parties and the validity of "separate roads
to socialism."
17. In endeavoring to remove the hostility
between themselves and Tito, the Soviet
leaders intended to promote and exemplify
their general policy of coexistence. They
hoped at least to loosen Yugoslav ties with
the West; they may also have believed that
a loose working agreement with Yugoslavia
could be gradually transformed into an ef-
fective realignment with the Bloc by means
of frequent consultations, strengthened tech-
nical and economic ties, and continued cau-
tious modification of Stalinist practices in
Eastern Europe. The Soviet leaders appear
not to have foreseen the political and ideo-
logical effects in the Satellites of restoring
Tito to good standing in the Communist
world.
18. On their side, the Yugoslays welcomed
these evidences of a changed Soviet attitude as
removing the continuing threat of Soviet hos-
tility and as affording them the opportunity
to attain a position of influence in the Sat-
ellites. Accordingly, they accepted increased
policy consultations with the USSR and other
Bloc countries. They also expanded economic
relations with the Sino-Soviet Bloc. The Bloc
share of Yugoslav total trade rose from about
10 percent in 1955 to 23 percent in 1956.
Yugoslavia accepted promises of $464 million
in Bloc credits including a $175 million So-
viet-East German credit for the Yugoslav
aluminum industry.
19. Although the Yugoslays have apparently
consistently urged the USSR to modify its
controls in Eastern Europe, they also appear
to have sympathized with the Soviet position
that reforms must be cautious and gradual
in order to avoid chaos and insure continued
Communist rifle. In late June 1956 there were
some indications of accommodation to So-
viet policy in Yugoslavia's initial endorsement
of the Soviet line on Western involvement in
the Poznan riots.
20. The extent of the Yugoslav-Soviet rap-
prochement was always limited by the Yugo-
slays' refusal to subordinate their policy-mak-
ing independence in any substantial way to
the dictates of the "socialist camp headed by
the USSR." But it was Soviet misgivings
about the course of events in the Satellites
that brought about serious strains in the
relationship in the second half of 1956 and
led to renewed attempts to isolate Yugoslavia
from the rest of Eastern Europe.
21. The Soviet-Yugoslav rapprochement, par-
ticularly as manifested in Tito's visit to Mos-
cow in June 1956 and the subsequent com-
munique, further stimulated popular pres-
sure within the Satellites for a relaxation of
Soviet controls. In these circumstances, the
USSR attempted to apply one standard to
Yugoslavia and another to the Satellites.
Public Soviet statements on the dangers of
"national communism" in the early summer
of 1956 were followed by a circular letter to
the Satellites in September, which reportedly
warned against close affiliation with Yugo-
slavia and implied that Soviet collaboration
with Tito did not signify an endorsement of
his policies but was merely a tactical move
to bring him back into the fold.
22. The extent and nature of the proposals
made to the Yugoslays during the exchange
of top level Soviet-Yugoslav visits in Septem-
ber 1956 are unclear. Yugoslavia continued
to sustain a friendly posture towards the
USSR, apparently hoping that developments
in Hungary following Rakosi's removal and
the reluctant Soviet acceptance of the new
Gomulka regime in Poland meant that na-
tional Communist regimes were in any event
coming into being in Eastern Europe.
23. The Hungarian revolution initiated a crit-
ical period in Soviet-Yugoslav relations. The
Yugoslav leaders were disconcerted by the
initial use of force in Hungary, but were also
distressed by the temporary success of anti-
Communist forces. Thus, the Yugoslays ap-
peared relieved that Soviet action had saved
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Communism in Hungary. Though they crit-
icized certain aspects of Soviet conduct and
continued to urge reforms in Hungary, they
justified the second Soviet intervention as a
"necessity" and backed the Kadar govern-
ment.
24. The USSR and the Stalin-installed Satel-
lite leaders, nevertheless, began privately to
blame Yugoslav influence for Soviet troubles
in Eastern Europe. These criticisms soon
came into the open when Pravda reprinted
an Albanian attack on Yugoslavia. Tito
answered in an important speech on 11 No-
vember, which placed the blame for condi-
tions in Eastern Europe on Stalinist survivals
within the USSR and the Satellites.
25. A controversy ensued which, though ideo-
logical in form, was in fact concerned with
the conflicting national interests in Eastern
Europe of the USSR and Yugoslavia ? the
former anxious to re-establish solidarity in
its Satellite empire, the latter seeking a lesser
measure of Soviet control which would en-
hance Yugoslav security and potential in-
fluence in the area. Despite Yugoslav efforts
to keep the controversy on an ideological level,
the USSR in mid-February 1957 shifted its
campaign to what was in effect a direct at-
tack on Yugoslav governmental policy, warn-
ing that the favorable development of Soviet-
Yugoslav state relations depended on a change
in Yugoslav attitudes. This threat was fol-
lowed by Soviet postponement for five years
of major deliveries under the developmental
credits promised to Yugoslavia in 1956 and
blunt accusation that the Yugoslays had
given practical support to Imre Nagy and the
revolt in Hungary.
26. By April 1957 Belgrade's relations with
most of the East European states were at their
lowest point since the post-Stalin rapproche-
ment began in 1954. Although the Soviet
agreement to continue trade through 1960
indicated that the USSR did not intend to
return to the virtual economic blockade of
1948-1952, Kadar's recent equation of national
communism with fascism was reminiscent of
the polemics of that period. In one respect
Albania went even further than in the 1948-
5
1952 period by hinting at irredentist claims on
Yugoslavia's Albanian-populated territory.
27. In reaction to the latest Soviet attacks,
the Yugoslays have reasserted their opposi-
tion to blocs, their refusal to join the "social-
ist camp," and their determination to defend
their "road to socialism." They contend that
socialist forces are moving ahead in so many
places and ways as to make obsolete the
USSR's concept of irreconcilable struggle be-
tween two world power blocs, one wholly so-
cialist and the other wholly capitalist. Never-
theless, the Yugoslays have been anxious not
to cut themselves off from more orthodox
Communists. They are committed to the view
that Soviet policy is still in a state of flux,
and that. they must preserve their capability
for influencing developments within the orbit.
Despite unremitting attacks on Tito by the
Stalinist French Communist Party, the Yugo-
slays recently welcomed a delegation from that
party to Belgrade. Their guarded increase
in friendly gestures toward the West has been
accompanied by patient rationalizations of
Soviet behavior, blaming hostile actions on
Stalinist elements rather than on the Soviet
regime as a whole.
28. The sudden gestures of friendship toward
Yugoslavia emanating from Moscow at the
recent Soviet-Albanian talks were loaded with
conditions which Tito quickly rejected in an
important speeCh on 18 April. Tito made
clear that he would stick to his ideological
guns, but affirmed his optimism that the
Soviet leaders would recognize Yugoslavia's
nonalignment policy and agree to live with it.
29. At the same time Tito warned the press
to avoid further criticism of the USSR. By
mid-May his efforts to end ideological polemics
appear to have borne fruit. The Soviet press
began writing about Yugoslavia in a more
friendly tone; the Soviet leaders sent birthday
greetings to Tito; and in mid-May the Kremlin
reportedly sent a circular letter to the Satel-
lite parties urging them, at least as a tempo-
rary measure, to improve relations with Yugo-
slavia despite ideological differences. The
June visit by the Yugoslav secretary of na-
tional defense to the USSR raised the pos-
sibility of further steps toward a Soviet-
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Yugoslav rapprochement such as the resump-
tion of the suspended Soviet development
credits. However, there continued to be no in-
dications that either side had given in on
the important issues separating them.
30. In the face of Moscow's campaign to im-
pose ideological orthodoxy on the Satellites,
the Yugoslays have concentrated their hopes
and efforts on Poland and Communist China.
The latter has never given the Yugoslays much
encouragement, while the Polish Communists,
after initially expressing public agreement
with many of the Yugoslav contentions in
the ideological debate, have recently adopted
a more reserved attitude. Nevertheless, the
Yugoslays see support for their position in
Poland's and Communist China's general ab-
stention from the anti-Yugoslav campaign and
in their frequent references to equality among
Communist parties. The Yugoslays also claim
to have detected, in the restrained tone used
by Rumania in echoing the USSR's anti-Yugo-
slav line, signs of growing sympathy for the
Yugoslav approach among leaders of that
country.
II. PROBABLE DEVELOPMENTS IN YUGOSLAV
DOMESTIC AND FOREIGN POLICY
Internal Stability
31. The stability of the Yugoslav state has
in recent years rested to a large degree upon
the cohesion of the Communist Party leader-
ship under Tito. There is little prospect of
any split in the leadership over fundamentals
or of serious disaffection among the party
rank-and-file. Although the party has de-
clined in numbers in recent years and appears
to have had little success in imparting its
ideals to the postwar generation, its basic
unity and hold over the population do not
yet seem to have suffered seriously. Indeed,
the fact that the Yugoslav Party is again pur-
porting to defend the true principles of Com-
munism in the face of renewed Soviet pres-
sures may serve to revive much of its original
esprit de corps.
32. Nevertheless, considerable evidence exists
that during and for some time after the Hun-
6
garian revolt confusion prevailed within party
ranks over both internal policies and the at-
titude to be taken toward the USSR and
the West. Differences of opinion over eco-
nomic plans arose between Kardelj, Tito's of-
ficial deputy in the government and the party,
and Vukmanovic-Tempo, the chief economic
planner. These were resolved by a revision
of the 1957 plan accepting Kardelj's recom-
mendation to lay greater stress on invest-
ment in agriculture and production of con-
sumers' goods. Conflicting influences were
brought to bear on Yugoslavia's foreign policy
by Soviet and Satellite pressures on the one
hand and by the attitudes of its own populace
and the West on the other. Within Yugo-
slavia, some fears arose that, with Western
attention focused on Hungary and Poland,
the West might be less inclined than earlier
to compensate Yugoslavia for its renewed hos-
tility to the USSR and less likely to view aid
to Tito as a priority concern.
33. Although recent events are thus likely to
produce in Yugoslavia some questioning of
the country's ability to sustain its interna-
tional position indefinitely, the party leader-
ship will almost certainly continue to agree
with Tito on the value of Yugoslavia's inde-
pendent policies. Although elements favoring
more concessions to Moscow almost certainly
exist in the Yugoslav party, they are unlikely
to be able to affect Yugoslavia's international
orientation.
34. The Yugoslav leadership appeared to be
seriously concerned about popular disaffec-
tion during the Hungarian rebellion. The re-
gime took precautionary security measures,
and there were no overt manifestations of
discontent. Popular discontent is unlikely to
acquire decisive political significance as long
as the party machine remains unified, though
the regime's control would probably be placed
under considerable strain were Communist
rule to be brought to an end in any East
European state.
35. Although regional loyalties and pressures
will remain a problem for the regime, rivalries
between the nationality groups will continue
to work against the formation of any unified
opposition. Nationality grievances will prob-
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ably be expressed principally in disputes over
the distribution of economic benefits.
36. The regime will probably succeed in rais-
ing urban living standards over the next
two years, if present policies and foreign eco-
nomic aid continue. However, economic dif-
ficulties will continue, since the regime is un-
likely to solve the basic problem of agricul-
tural production in the near future. Further
complications would arise if the regime were
later to re-emphasize rapid industrialization.
Although economic grievances will in many re-
spects parallel those in other East European
states, they are unlikely to lead to politically
significant popular unrest unless the leader-
ship loses its unity or its resolution in main-
taining Yugoslav independence.
Post-Tito Prospects
37. Much of the domestic and international
success of the regime has been dependent on
the strength and prestige of Tito, and there
is no figure of comparable stature to succeed
him. His death or incapacitation would al-
most certainly bring to the fore a number of
problems that have heretofore been kept under
control rather than solved, and would thus
introduce a new element of uncertainty into
Yugoslav policies and prospects.
38. Possible developments in the wake of Tito's
passing include:
(a) a period of crisis in which traditional
nationality rivalries would reassert themselves
and the unity of the Yugoslav state would
break down.
(b) the emergence of a liberalized non-Com-
munist regime as a result of extreme popular
pressure, possibly with some such figure as
Milovan Djilas serving as a political rallying
point.
(c) the continuance of a Communist re-
gime, with pro-Moscow elements gaining con-
trol of the party and government, probably
after a period of internal crisis.
(d) the relatively peaceful emergence of a
national Communist successor regime, either
under a collective leadership or under a single
figure such as Kardelj or security chief Ran-
kovic.
7
39. The possibility of (a) rests on the fact
that, while Tito has successfully manipulated
the Serb-Croat rivalry during recent years
and divided top government and party posi-
tions among these and other nationalities, it
will become more difficult when he dies to
maintain the balance against the pressure of
traditional Serb dominance.
40. The possibility of (b) rests on the fact
that the majority of the populace continues
to be anti-Communist and that economic
conditions remain unsatisfactory. Moreover,
Djilas' call for freedom of thought and a
liberalization of political institutions, drama-
tized by his expulsion from the party leader-
ship and subsequent imprisonment, almost
certainly reflects widely felt desires which
could become politically important under con-
ditions of crisis.
41. The possibility of (c) stems largely from
the chance that the popular demand for a
non-Communist government coupled with
confusion in the party might force the Com-
munist leaders to look to Moscow for support.
42. The likelihood of any of these three alter-
natives does not presently appear to be great.
In view of the strength and apparent loyalty
of the armed forces and the cohesion of the
leadership, it seems improbable that either
divisive nationality pressures or anti-Commu-
nist popular pressures could acquire decisive
political importance except possibly in the
case of a serious breakdown of Communist
controls in neighboring countries. Anti-re-
gime pressures will probably continue to be
blunted by popular acceptance of the regime's
claim to be responsible for the emergence of
Yugoslavia as an important national state and
fear of causing a swing back toward Moscow.
The chances for (a) or (b) are likely to in-
crease only if the unity of the partisan-hard-
ened core of the Yugoslav Communist party
declines sharply. Alternative (c) appears
unlikely, since no top leader or group of mili-
tary or police officials can presently be identi-
fied as favoring a return to the Bloc. Any
future move by pro-Moscow elements to gain
control would almost certainly encounter
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powerful opposition within the party leader-
ship as well as extreme popular antipathy to
Soviet domination.
43. We believe that a post-Tito national Com-
munist regime (d) is the most likely alter-
native, and that such a regime would seek to
continue a policy of non-alignment rather
than risk a renewal of domination by the
Soviet Union. The leaders who would suc-
ceed Tito have worked together for a long
time and almost certainly recognize the dan-
ger of a struggle for power. They helped
devise Tito's non-alignment policy, are pub-
licly committed to it, and have found it to
bring satisfactory results. Accordingly, we
believe they would not change this policy
unless confronted with a combination of seri-
ous internal and external pressures.
Probable Foreign Policy
44. We believe that Yugoslavia will continue
to maintain its independent foreign policy,
avoiding firm alignments in the East-West
struggle. While continuing to criticize the
inflexible attitudes which it perceives in the
two blocs, Yugoslavia will nevertheless con-
tinue to recognize the bargaining power it
gains from the East-West struggle, and would
view with anxiety drastic changes in the power
balance. On ideological grounds and in the
interest of its own internal stability, the Yugo-
slav regime cannot wish to see serious reverses
for the Communist system in Eastern Europe;
on the other hand, since the Soviet Bloc is
the main threat to Yugoslav security and
national independence, Yugoslavia sees its
national interest served by the continued
strength of the Western defensive system.
45. Tito almost certainly continues to believe
that participation in general war would be
disastrous for his regime. In the event of
general war, Yugoslavia would probably seek
to remain neutral, at least in the early stages.
Toward the USSR
46. In the present state of affairs, Yugoslav
policy toward the USSR will continue to be
largely a response to Soviet policy toward Yu-
goslavia and the Satellites. If, as appears
8
likely, basic Soviet-Yugoslav differences con-
tinue for some time to come, the Yugoslays
will probably seek to Continue friendly rela-
tions with the West. Such a policy would be
motivated: (a) partly by economic consider-
ations, since expectations of investment aid
from the USSR have been disappointed, (b)
partly by defense considerations, since the Yu-
goslays do not wish to risk isolation in the
face of Soviet hostility, and (c) partly by
ideological and political considerations, since
the Yugoslays consider that Western Euro-
pean socialists have an important role to play
in bridging the differences between the rival
camps.
47. At the same time, the Yugoslays will be
alert for opportunities to cooperate with the
USSR in avoiding public airing of differences,
in sustaining trade with the Bloc at a high
level, and in increasing other possible forms of
interchange. The Yugoslays will continue to
support many Soviet policies and to claim vin-
dication whenever even slight modifications
of hard policies occur in the USSR and East-
ern Europe. Since there will probably be a
growing desire to decrease Yugoslavia's high
defense expenditures, the Yugoslays will be
anxious to find signs of hope in Soviet policy
and to explore the possibility of special rela-
tions with Communist China and certain
other Bloc countries.
48. Nevertheless, for some time the Yugoslays
are unlikely to develop relations with the
USSR even as intimate as those prevailing
in the 1955-1956 period. The Yugoslav leaders
have been subjected recently to harsh Soviet
accusations; on several occasions Yugoslav
counter-attacks have been equally sharp and
have brought welcome popular support to the
regime. The Yugoslays have apparently con-
cluded from the sudden postponement of
major deliveries under the development loans
extended to Yugoslavia in 1956 (including the
$175 million credit for the aluminum indus-
try) , that Soviet promises of aid are too closely
tied to political objectives to serve as the basis
for long-term economic planning.
49. The conciliatory Soviet gestures that have
been extended during and since the Soviet-
Albanian talks of mid-April 1957 are unlikely
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in themselves seriously to affect basic Yugo-
slav policies. Substantial new Soviet conces-
sions to Yugoslav ideas on national independ-
ence would be required to reopen the court-
ship as it existed in the 1955-1956 period.
Since the USSR is unlikely to feel able for
some time to return even to the partial ap-
proval of Yugoslav ideas which it expressed
in June 1956, the Yugoslays will probably not
receive such concessions. In the absence of
these, prospects of expanded trade or economic
aid from the East would probably not have
substantial impact on Yugoslavia's non-align-
ment policy.
Toward other Bloc States
50. Tito will continue to cultivate special ties
with Communist China, Poland, and any other
state within the Bloc which demonstrates
some ability to determine policy without com-
plete Soviet dictation. The Yugoslav leaders
will hope for a resumption of the cautious
loosening of direct Soviet controls through-
out Eastern Europe. Although shaken by the
demonstrations of anti-Communist feeling in
Hungary, the Yugoslays almost certainly con-
tinue to believe that some kind of national
Communist order remains possible in East-
ern Europe, and they will not wish to cut
themselves off from future opportunities to
help bring it about. For reasons of security,
Tito will devote particular attention to en-
couraging wherever possible a more friendly
attitude toward Yugoslavia on the part of the
neighboring Satellite regimes.
51. Although apprehensive about some of
Gomulka's internal policies and somewhat jeal-
ous of his sudden international prominence,
the Yugoslays feel their own interests are
involved in Poland's efforts to assert and main-
tain a more independent policy. Consequent-
ly, the Yugoslav regime will continue unob-
trusively to support Gomulka, taking care not
to prejudice his position in relation to the
USSR. An overthrow of his regime or a dras-
tically increased restriction on its ability to
determine its own course would be regarded
by the Yugoslays as a blow to their policy of
national Communism in Eastern Europe. If
an overthrow were Soviet-sponsored, the Yu-
9
goslavs' sense of security would probably be
disturbed by their belief that Soviet pressures
on Yugoslavia would probably also increase.
52. The Yugoslav leaders will make serious
efforts to discourage any renewed violence in
the Satellites, fearing that a major outbreak
there would confront them with grave un-
certainties and might lead to domestic unrest.
The Yugoslav reaction to any large-scale Sat-
ellite uprising would depend on the location
and international context in which it took
place. If such an uprising acquired a pre-
dominately anti-Communist rather than an
anti-Soviet character, the Yugoslav leaders
might abandon their anti-Stalinist propagan-
da and seek, at least temporarily, to cooperate
with the Soviet Bloc in preserving Communist
rule. But, since any outbreak for some time
to come would probably lead to renewed Soviet
accusations against the Yugoslays, they would
be more likely to find themselves in a contro-
versy with the USSR.
Toward the Free World
53. Tito will continue and perhaps even in-
crease his efforts to cultivate special relations
with Nasser, Nehru, and other leaders of the
Afro-Asian bloc. To satisfy his prestige and
his ideological pretensions, Tito desires a grow-
ing group of uncommitted states in which he
can play an influential if not dominant role.
54. Yugoslavia's continuing need for outside
economic aid will combine with a desire foi
bargaining power with the USSR to make
friendly relations with the US an important
concern. The Yugoslays will seek long-term
development aid from the US and from West-
ern Europe, which already provides most of
Yugoslavia's industrial imports. They will
probably also seek closer ties with Western
European economic organizations, though
they will continue wary of close association
with NATO.
55. The Yugoslav interest in expanding rela-
tions with the non-Communist world is un-
likely to extend to the sphere of military co-
operation. The military aspects of Yugo-
slavia's only alliance, the weak Balkan Pact
with Turkey and Greece, will probably remain
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almost comp'letely inoperative, unless the
likelihood of Soviet aggression against Yugo-
slavia sharply increases. The informal bi-
lateral military exchanges with Greece will
probably continue primarily as part of an
effort to develop a broadening community of
interests with that country, although they also
serve as an indirect link to NATO.
56. Increases or cuts in the level of US aid
would not in themselves induce Tito to align
himself definitely with the US or with the
USSR. However, the contrast of recent Soviet
cancellations with the relative constancy of
10
US aid during the past six years has appar-
ently produced a growing feeling among Yu-
goslav leaders that self-interest dictates the
maintenance of friendly relations with the
West for some time to come. Were US aid to
be curtailed, the Yugoslays would be compelled
to cut back some of their development pro-
grams and would probably be confronted, at
least for a time, with seriously increased econ-
omic stringencies. Under these circumstan-
ces, they would be more receptive to assistance
from Bloc sources, though not at the price of
surrendering their independent position.
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? t.