Iraj Hashi
The Disintegration of
Yugoslavia:
Regional Disparities and the
Nationalities Question
● The end of the First World War and the break-up of the
Austro-Hungarian and Ottoman empires witnessed the birth
of a number of new states in Europe. The Kingdom of Serbs,
Croats and Slovenes, as Yugoslavia was originally called, was
one of these new states which came into existence in 1918.
Sanctioned by the peace treaties of St. Germain, Neuilly and
Trianon, its western and southern constituent parts separated
from the former territories of Austria, Hungary, Bulgaria and
Turkey and joined the kingdoms of Serbia and Montenegro
which had existed as independent states before the War.
Economically, socially and culturally the new state was one
of the most diverse and heterogeneous countries of Europe: its
population was made up of eight major and about twenty
minor ethnic groups (Serbs being the largest group, followed
by Croats), speaking four languages (Serbo-Croatian,
Slovenian, Macedonian and Albanian), practicing three
religions (catholic and orthodox Christianity and Islam),
writing in two scripts (Latin and Cyrillic), and displaying
massive social, cultural and economic differences. These
differences played a major part in subsequent events and
41
42 Capital & Class ● 48
contributed to the growth of rivalry and rift between different
nations and regions.
In the inter-war period, Yugoslavia was governed by Serbdominated governments under the Karadjordjevic dynasty.
The rightful aspirations of other nations for some form of selfrule and autonomy were disregarded and seeds of national
discord sown. The monarchist period, or the ‘first’ Yugoslavia,
was brought to an end in April 1941 by the occupation of
most of the country by Nazi forces and their allies and the
formation of the Nazi puppet ‘Independent State of Croatia’
The Socialist Federative Republic of Yugoslavia
AUSTRIA
HUNGARY
Slovenia
Ljubljana
ROMANIA
Zagreb
Croatia
Vojvodina
Belgrade
Bosnia-Herzegovina
Serbia
Sarajevo
AD
Montenegro
RI
AT
Kosovo
IC
SE
A
Skopje
Macedonia
ITALY
ALBANIA
GREECE
The disintegration of Yugoslavia 43
(the Ustasa regime) where appalling atrocities were perpetrated
against Serbs, Jews and other minorities.
But not before long the ‘second’ Yugoslavia, this time
socialist and federal, was being built on the ruins of the ‘first’.
With the rise of the Yugoslav Communist Party to political
power, the ‘nationalities question’ was brought to the forefront
of the political and economic agenda. The nationalities
question, in this period, was closely bound with the economic
problem of bridging the regional development gap and
enabling the poorer regions of the country to grow rapidly.
‘Regional development’ policy, aimed at reducing regional
disparities, became a major feature of economic policy in
‘socialist’ Yugoslavia.
From 1950, Yugoslavia embarked on her own unique
development strategy based on workers’ self-management and
the increasing use of the market mechanism. The ‘second’
Yugoslavia was associated with rapid transformation of a poor
and predominantly rural society to a modern industrial
country. But despite all her achievements, she did not succeed
in closing the regional development gap and resolving the
nationalities problem. The 1980s witnessed worsening
economic conditions, mounting dissatisfaction with the
national and regional policies, and the outbreak of civil strife.
The increased democratisation of the Yugoslav society in the
mid-eighties and the weakening of the League of Communists
of Yugoslavia (LCY) created the conditions for the revival of
opposition political parties, including the extreme nationalist
organisations, in all parts of the country. This was followed by
the election of non-communist governments in Croatia and
Slovenia in Spring 1990 which had campaigned on nationalist
platforms (particularly extremist in Croatia). The unilateral
declaration of independence by Slovenia and Croatia in June
1991 sparked off open armed conflict which, by the beginning
of 1992, brought the ‘second’ Yugoslavia to an end.
A comprehensive analysis of the roots of this conflict and
their evolution must involve the unravelling of intertwined
economic, political, historical and ethnic factors which have
developed over most of this century. The purpose of this
article is to highlight the impact of the uneven economic
development and widening regional disparities on the evolving
relations between Yugoslavia’s constituent regions. In
particular, we shall analyse the nature and instruments of the
v
44 Capital & Class ● 48
government’s active regional policy in the ‘socialist’ phase and
assess the effectiveness of these policies. 1 Although the
conflict between Serbs and Croats has been at the centre of
recent developments, the present paper is concerned with the
wider issue of the relations between all nationalities and
regions.
The paper is divided into four parts. The first section is
devoted to the discussion of the roots of national discord.
These are traced to the events surrounding the formation of
Yugoslavia and their development in the inter-war period as
well as during the Second World War. In the second section,
we shall concentrate on the nature and instruments of regional
policies of the post-war socialist government which were
aimed at resolving the so-called ‘national question’, bridging
the regional disparities, and accelerating the development of
the less developed regions. In the third section, the LCY’s
attempts at creating an ethnic balance in the hope of solving
the nationalities problem will be discussed. A number of
concluding remarks will be offered in the final section.
I. THE ‘FIRST ’ YUGOSLAVIA: ROOTS OF THE CONFLICT
The serb-croat conflict has its roots in the formation of
Yugoslavia in 1918. Before that, the two peoples had been
separate from each other for centuries and there is little
evidence of serious strife or animosity between them. 2
Slovenia and Croatia had been, respectively, part of Austria
and Hungary for nearly a millennia. Slovenia was never an
independent state while Croatia, which had been a kingdom
in the early middle ages, had gone into voluntary union with
Hungary in 1102 and had been ruled from Hungary ever
since.3
Serbia, on the other hand, had been a major empire in the
medieval period, ruling over most of the present day BosniaHerzegovina, Montenegro and Macedonia, and reaching its
zenith during the reign of Emperor Stefan Dusan (13311335). But by 1463, she had been completely conquered by
the Ottoman empire. With the weakening of the Ottoman
Empire, Serbia and Montenegro gained their independence
during the 19th century and formed their independent
kingdoms in 1878 and 1919, respectively. Austria annexed
v
The disintegration of Yugoslavia 45
Bosnia-Herzegovina in 1908, thwarting the Serbian desire of
uniting all Serbs, including those under Turkish and AustroHungarian rule, in one state.4
The idea of a state unifying all South Slavs was initially put
forward by the Croatian, Slovenian and Serbian intellectuals
of the ‘Illyrian movement’ in the middle of last century.5 The
outbreak of the First World War gave the intellectuals and
politicians, from the territories ruled by the Austro-Hungarian
empire, a renewed hope of realising their aspirations of a
unified state. In April 1915, in Paris, the Yugoslav Committee
(Jugoslovenski odbar) was set up to campaign for the unification
of all South Slavs in a Yugoslav state.6 The Committee entered
negotiation with the Serbian government-in-exile towards the
end of the War and on 20 July 1917 the ‘Corfu Declaration’
was signed. The Declaration proclaimed the determination of
Serbs, Croats and Slovenes to form an independent,
constitutional, democratic and parliamentary state headed by
the Karadjordjevic dynasty. It also recognised, at least formally,
the equality of the three ‘tribes’, three religions and two
alphabets.7
The events surrounding the formation of the new state
profoundly affected the Serbo-Croat relations. Serbia, which
had fought a long war, was now part of the victorious Allies;
Croatia was associated with Hungary’s vanquished camp. The
nationalist elements in the Serbian government, headed by
prime minister Pasić, wanted a reward for Serbia’s part in the
Great War. Italy’s claim to parts of Istria and Dalmatia further
increased the pressure on the Croat and Slovene leaders to
work with the Serbian government and participate in the
peace negotiations as one team. They therefore hurriedly
joined Serbia and agreed on the formation of the new state on
largely Serbian terms.8 The union neither clearly expounded
the relationship between the nationalities nor did it provide
legal guarantees for their rights and duties. The Kingdom of
Serbs, Croats and Slovenes formally came into existence on 1
December 1918.9 In October 1929, the new state formally
adopted the informal name of Yugoslavia (Jugoslavia, meaning
the land of South Slavs) as its official name.
It is important to point out that economic factors did not
play a major part in the formation of Yugoslavia. Of course,
one could envisage the potential advantages of a wider market
or the complementary nature of the industrialised and
v
46 Capital & Class ● 48
agricultural regions. But these advantages were not used as
justifications, or even important reasons, by the proponents of
the idea of Yugoslavia in either the Illyrian movement or the
Yugoslav Committee. For the Serbian government, of course,
the access to the Adriatic and the control over the industrially
developed areas of Croatia and Slovenia, must have
constituted important considerations.
The elections for a Constituent Assembly were held in
November 1920. With the exception of the Yugoslav
Communist Party ( YCP ), 10 all other parties had a strong
regional base and nationalist orientation. The YCP
campaigned for economic, political and social reforms in all of
the South Slav lands and won the third largest number of seats
in the Assembly. But before the Constituent Assembly could
meet, the Government issued a special decree banning all
communist organisations. In June 1921, in an atmosphere of
hysteria and anti-communist witch-hunt, the new pro-Serbian
Constitution was marginally passed by the Assembly.11 This
Constitution concentrated the power in the hands of Serbdominated central government and denied any autonomy to
other nationalities and regions. The mistrust created in the
process of formation of the new kingdom was now reinforced
and suspicions of the ultimate Serbian desire for hegemony
became stronger. The mistrust between Serbs and other
nationalities was further intensified by the population
resettlement which followed the government’s limited Land
Reform programme in 1918. Through this programme, many
Serbian veterans of the First World War, as well as volunteers,
paramilitary groups and poor peasants, were given land and
settled in territories outside Serbia, particularly in Croatia,
Bosnia-Herzegovina and Macedonia where large tracts of land
were expropriated from Hungarian, Turkish and local feudal
landlords. This internal migration was supported by the Serbdominated Army, with the resettled population being
perceived as the instrument of Serbian rule in non-Serb
areas.12
The economic situation deteriorated badly in the post-war
period. The infrastructure and national capital, particularly in
Serbia and Macedonia, suffered massive damage during the
War. The value of fixed assets and national income did not
reach pre-War levels until 1923. Rapid inflation and the
widening price scissors (indicating the relative prices of
The disintegration of Yugoslavia 47
agricultural and manufacturing goods), together with the
monopolistic concentration of industrial and financial capital
in a few largely foreign hands, resulted in a sharp decline in
the real wages of workers and government employees.
Standards of living of the bulk of the population declined,
falling well below the subsistence level.13
There was strong opposition to government economic and
nationality policies led by the YCP , the Croatian Peasant
Party,14 trade unions and various sections of the population.
But the opposition was met by more restrictive legislation and
more repressive measures which contributed further to the
deepening of national discord. Then, in January 1929, King
Aleksandar declared a personal dictatorship abandoning any
pretence to parliamentary democracy. The suppression of the
opposition particularly the YCP and trade unions was
intensified.15
In October 1934, as he arrived in Marseillaise on a state
visit, King Aleksandar was assassinated by a member of IMRO
(the International Macedonian Revolutionary Organisation)
hired by the Croatian ultra-nationalist organisation Ustasa,
dedicated to the setting up of a ‘racially pure’ Croat state.
Anti-Croat, anti-Italian and anti-Hungarian demonstrations
broke out in Yugoslavia. Another wedge was driven between
the two main nationalities, pushing them further apart.
On the eve of the Second World War, with mounting
international tension and domestic discontent the Serbian
government embarked on forming a coalition government
with the political opposition. They signed the famous
Agreement of August 1939 (Sporazum) with the Croatian
Peasant Party headed by Mac ek, setting up a broad-based
government with Macek as Deputy Prime Minister. For the
first time, the Belgrade government yielded to the Croatian
people’s demand for some form of autonomy and agreed to a
Croatian parliament in Zagreb.
The coalition government of Cvetković and Mac ek
retained Yugoslavia’s neutrality until 25 March 1941 when
they joined the Axis powers. Mass demonstrations broke out
in many cities (though not in Zagreb) and on 27 March a
group of air force officers organised a coup d’état, ousting
Prince Regent Paul and the Prime Minister. A new
government was set up and the 17-year old King Peter
assumed power as the sovereign. Hitler, furious at the air force
v
v
v
v
48 Capital & Class ● 48
coup, ordered the invasion of Yugoslavia and a particularly
barbaric bombardment of Belgrade on 6 April 1941, causing
massive destruction and loss of life. On the same day, the
German armies, supported by Hungarian, Bulgarian and
Italian armies invaded Yugoslavia. Within ten days, the
Yugoslav government and King Peter had fled and on 17 April
their representative signed the capitulation documents.16
Thus the ‘first’ Yugoslav state ended in defeat, occupation
and disintegration with relations between its nationalities
badly damaged.17 Most of Slovenia was annexed by Germany
which also occupied most of Serbia and put her under the
administration of a puppet ‘Serb’ government headed by
General Milan Nedić; Hungary took over northern Serbia;
Italy occupied the rest of Slovenia, the Dalmatian coast and
Montenegro; and Bulgaria occupied Macedonia. But, in terms
of national relations, the worst development took place in
Croatia. Under German and Italian protection, an
‘Independent State of Croatia’ was declared in Zagreb on 10
April, covering Croatia and most of Bosnia-Herzegovina, with
its eastern borders extending to Zemun on the outskirts of
Belgrade. The Ustasa leader, Ante Pavelić, until now a fugitive
in Italy, returned to Zagreb on 15 April and took charge of the
new state under the new title of Poglavnik (the headman).18
With the blessing of the Croatian Catholic church and its
Archbishop Aloysius Stepinac, 19 Pavelić immediately
embarked on the establishment of a racially pure, Catholic
state in Croatia. He began passing anti-Serb and anti-Jewish
laws through the Croatian parliament from May 1941, barely
three weeks after taking power. Serbs and Jews first lost the
right to own radio sets (16 May), and were then dismissed
from public offices and obliged to wear distinguishing insignia
(22 May). The campaign of terror, mass arrest, detention,
deportation and extermination began in Summer 1941.20 The
targets of this campaign were primarily Serbs of Croatia and
Bosnia but also included Jews, Gypsies and political
opponents of the regime. For Serbs, the Ustasa policy was to
eliminate or expel as many as possible and convert the rest to
Catholicism by force. In the Jasenovac concentration camp (or
the Croats’ Auschwitz, as Dedijer called it), which was
established along the lines of Nazi extermination camps and
manned by Ustasa guards, tens of thousands of Serbs and
other detainees were murdered. Tens of thousands more were
v
v
v
The disintegration of Yugoslavia 49
deported to other extermination camps in Germany and
Poland. It is estimated that between half a million and one
million people, largely Serbs, perished at the hands of the
Ustasa regime of Ante Pavelić.21 These atrocities left their
enduring mark on the Serb-Croat national relations. It would
be true to say that the Serbs never forgot, and never got over,
their sufferings in this period. After the war, many of the
Ustasa leaders (though not Pavelić himself ) were arrested,
brought to court and punished.22 But, for a variety of reasons,
neither was the scale of atrocities publicised sufficiently nor
were the Croatian people expected to confront, discuss and
deal with this short but awesome period of their history.
Whereas in Croatia the German invasion paved the way for
the puppet Ustasa regime, in other parts of Yugoslavia the
Germans faced hostile opposition. The principal opposition
was organised by the Communist Party, which had moved its
centre of activity from industrial areas to the mountains of
Bosnia, Herzegovina and Montenegro and, from there,
embarked on partisan warfare. 23 The YCP was the only
political organisation in Yugoslavia committed to the principle
of federal unity and the equality of all nationalities. The
crimes committed by Germans in their occupied territories
and by the Ustas i in Croatia and Bosnia resulted in an
increasing number of people, mainly from the country-side,
joining the ranks of partisans as the last hope of saving their
lives and their dignity. The YCP, with Tito as its leader, turned
Yugoslavia into a major theatre of war in the Balkans and
engaged a larger and larger number of German forces. It
survived large scale German offensive campaigns aimed at its
annihilation and, with the Allies’ support, fought the German
armies during these campaigns as well as in their retreat.
In addition to the YCP, other political organisations were
also active in different parts of occupied Yugoslavia. Amongst
these groups, the ultra-nationalist Serbian groups, known as
C etniks, should be mentioned.24 The C etniks, who operated
mainly in Southern Serbia, Montenegro and parts of Bosnia,
were committed to the idea of uniting all Serbs in one nation
state and were prepared to resort to ethnic terror in achieving
their aim. They committed brutal acts of violence against the
Croat and Moslem population in Serbia and BosniaHerzegovina and played a major role in the intensification of
national discord in Yugoslavia. Not before long, though, it
v
v
v
v
v
v
50 Capital & Class ● 48
became clear that they considered partisans as their main
enemy and collaborated with the Nedić government and
Germans. Britain withdrew her military personnel and ceased
further supplies to Cetniks in December 1943.25
v
II. SOCIALIST YUGOSLAVIA: AFFIRMATIVE ACTION FOR
NATIONALITIES AND REGIONS
By the end of 1944, Yugoslavia, was almost completely
liberated from the occupation forces. The Constituent
Assembly, elected in November 1945, formally deposed King
Peter and declared the formation of the Federal Peoples
Republic of Yugoslavia. The YCP now faced not only the uphill struggle of re-building a war-torn economy but also the
much heavier task of national reconciliation.26 The victims of
the Ustasi, in particular the Serbs, were now the victors and
demanded retribution. But although many Ustasa (and Cetnik)
leaders and activists were arrested, tried and punished, these
trials could not encompass every supporter, sympathiser, petty
informer or minor official of the ‘Independent State of
Croatia’. Nor could they include all the Croatian population
who silently observed the Ustasi atrocities. Wishing to make a
fresh start and hoping for national reconciliation and healing
of the wounds, the government severely discouraged any
manifestation of nationalism or seeking of revenge
(particularly by Serbs). 27 The legal framework for the
improvement of national relations was laid by the
Constitution of 1946. From the start, the equality of all
nationalities and their right to use their own language, and
develop their cultural heritage and identity on the basis of
their own conditions, were guaranteed under Article 13 of the
Constitution. The six constituent republics were given an
equal position in the Federation irrespective of their size,
population, wealth or level of development.28
As in the period following the First War, there was a strong
population migration comprising of partisans (mainly poor
peasants of Serb, Montenegrin and Bosnian nationality)
moving into the land confiscated from churches, foreign
(mainly German) landlords, and collaborators. In 1945, the
Serbian National Committee declared that the resettled Serbs
should seek their political future with the people of the
v
v
v
v
The disintegration of Yugoslavia 51
regions where they had settled. With the population migration
following the two wars, the nationalities were dispersed widely
but unevenly throughout the country. In most regions, in
addition to the majority nation, there were significant
minorities of other nationalities. The uneven distribution of
population remained largely unchanged during the post-war
period. Table 1, representing the ethnic origin of the
population in different parts of Yugoslavia, shows the complex
mixture of population in most parts of the country. In
particular, with the present hostilities in everyone’s mind the
composition of population in Bosnia-Herzegovina, Croatia,
Vojvodina, Kosovo and Serbia should be highlighted.
Table 1
Ethnic Origin of the Population of Different Regions %
Year Serb
Croat Moslem Slovene Albanian Macedonian Montenegrin Hungarian Yugoslav
Yugoslavia 1953 42
1981 36
23
20
*
9
9
8
4
8
5
6
3
3
3
2
6*
5
1953 44
BosniaHerzegovina 1981 32
23
18
*
40
°
°
°
°
°
°
°
°
°
°
31*
8
1953 15
1981 12
80
75
°
1
1
1
°
°
°
°
°
°
1
1
°
8
Croatia
Macedonia 1953
1981
3
2
°
°
°
2
°
°
12
20
66
67
°
°
°
°
°
1
Montenegro 1953
1981
3
3
2
1
*
13
2
°
5
7
°
°
87
68
°
°
1*
5
1953
1981
1
2
1
3
°
1
97
90
°
°
°
°
°
°
1
°
°
1
Serbia (All) 1953 74
1981 66
2
2
*
2
°
°
12
14
°
°
1
2
6
4
1*
5
Serbia
Proper
1953 92
1981 85
1
1
*
3
°
°
1
1
°
°
1
1
°
1
1*
5
Kosovo
1953 24
1981 13
1
1
*
4
°
°
65
77
°
°
4
2
°
°
1*
°
Vojvodina 1953 51
1981 54
7
5
*
°
°
°
°
°
1
1
2
2
25
19
1*
8
Slovenia
° Less than 1%
* Moslems were not classified as a separate nation at this stage; they were included under Yugoslavs.
Sources: SGJ (1960) pp.32-33; SGJ (1970) p.320: SGJ (1973) p.351; SGJ (1987) p.441; Yugoslavia 1945-1964, p.45.
52 Capital & Class ● 48
The initial enthusiasm of the YCP, boosted by the idealism
of its victorious partisan cadres, had created the hope that in
the new Yugoslavia, socialist relations would soon develop and
would supersede and replace the relations and attachments
based on nationality. The ‘nationalities’ problem, however, was
now closely intertwined with the ‘regional development’
problem. The disparities in the level of social and economic
development of different regions in 1947/48 are illustrated in
Table 2.
Table 2
Some Indicators of Regional Disparity in Yugoslavia in 1947/1948
Yugoslavia Slovenia Croatia Serbia* Vojvodina Bosnia-Herz. Macedonia Montenegro Kosovo
National income
100
per capita, % of
national average
Share of population % 100
Share of social
100
product %
Share of fixed
100
assets % (1952)
Share of industry in
25
social products %
Share of agriculture
45
in social products %
Share of population
67
in agriculture %
25
Illiteracy % **
Dependents per 100
97
active population
Natural increase
14
per 1000 population
Infant mortality
102
per 1000 births
Inhabitants per
2.6
physician (1952) in 1000s
Inhabitants per
277
hospital bed (1952)
175
107
96
110
84
62
71
52
9
24
26
11
16
7
2
5
15
25
26
11
14
5
2
2
20
28
23
9
13
4
1
2
36
30
20
17
21
20
10
20
30
39
53
67
41
55
52
66
44
62
72
68
72
71
72
81
2
16
27
12
45
40
26
63
76
87
79
97
126
127
150
179
9
9
13
9
22
21
22
26
81
112
91
130
126
136
41
133
1.7
1.9
2.1
5.7
3.3
4.3
4.5
8.5
188
202
300
300
448
339
241
606
* Republic of Serbia excluding the autonomous provinces of Kosovo and Vojvodina.
** Share of illiterate population in total population over the age of 10.
Sources: Jugoslavija 1945-1964, p.87; Yugoslavia 1945-1985, pp.197-218; Mladenović (1965) p.3004.
The disintegration of Yugoslavia 53
The party believed that the nationalities question would
persist in Yugoslavia as long as these wide disparities persisted.
It was feared that these disparities would result in regional
rivalries and give rise to nationalist tendencies. Interestingly, it
was no longer Serbs and Croats, but the more and the less
developed regions, who were on different sides of a divide.
Slovenia and Croatia, the area north of the river Sava, became
the economically more developed region (MDR) of the new
state. Bosnia-Herzegovina, Macedonia, Montenegro and
Kosovo formed the less developed region ( LDR ) of the
country. Serbia, and its constituent Autonomous Province of
Vojvodina, with an average level of development, roughly
constituted the middle ground.29
It was clear from the beginning that, even with radical social
and economic policies, the development of the less developed
regions could not be achieved by reliance on local resources
alone. Additional resources were needed in both short and long
term in order to improve the economic capabilities and public
services in these areas. The Federal government had to pursue an
active regional development policy in order to make the faster
development of the less developed regions possible.30 Only
then would the working and living conditions of people across
the whole country begin to converge and pronouncements on
the ‘equality of nationalities’ would be meaningful. The rest of
the community, therefore, agreed to assist these regions and
the principle was enshrined in the Constitution.31
We shall now discuss the evolution of regional policy in the
post-war period. An assessment of the effectiveness of these
policies will be provided later in this section.
II.1. THE EVOLUTION OF REGIONAL POLICY 1947-88
From the early post-war period to the late eighties, the Yugoslav economy went through three major stages: the central
planning phase (1947-52), the market-based system of workers’
self-management (1952-1974), and the period of re-assertion
of collective control through the concepts of ‘associated
labour’ (udruz eni rad) and ‘social compacts’ (drus tveni
dogovori) (1974-1988). In each stage, with the change in the
Federal government’s ability to mobilise and deploy resources,
the method of intervention also changed.
v
v
54 Capital & Class ● 48
1947-1952:
The Central
Planning Period
From 1947 to 1952, the Yugoslav economy was organised and
administered along the lines of the Soviet model with the
strict subordination of economic units to central planning
authorities. Prices and quantities, wages, employment,
investment, foreign trade, etc. were all determined at the
central level. Each enterprise was, effectively, another layer in
the administrative hierarchy of a ministry. All enterprise
profits and taxes went into the collective ‘kitty’, the Federal
Budget. In return, the Federal Budget acted as the main source
of funds for social and public services as well as for investment
in different enterprises, sectors and regions.
In terms of regional policy, in this period, the Federal
government had full control over development funds and was
in a position to channel these funds as it saw fit. The control
of investment and other resources, particularly of those
earmarked for LDRs, had enabled the Federal government to
pursue an active ‘regional policy’. But, of course, resources
were not unlimited and the demand for development funds
outstripped their supply. The intense competition between
different regions for these resources, backed up by political
pressure and influence, resulted in a final distribution which
was neither satisfactory to any of the LDRs, nor willingly
accepted by the MDRs.32
By the early fifties, the Yugoslav leaders decided to
abandon the central planning strategy and devise their own
model of socialism based on workers’ self-management. The
main factors contributing to this decision were: the
disappointing performance of the economy under central
planning; the emergence of a powerful bureaucracy; the
apparent contradictions between Marxist theory and economic
and political practice; the expulsion from the Cominform; the
desire to receive American aid; and, last but not least, the
adverse impact of a system of unified economic management
on regional and national autonomy.33 The last point is of
particular relevance to our present discussion. The imposition
of centralised control on the six constituent members of the
Federation was thought to be in conflict with the long
standing commitment to regional and national autonomy.
The diversity of the six republics required different approaches
to economic construction in different areas— something for
which a unified system of economic administration was ill
equipped.
The disintegration of Yugoslavia 55
The system of workers’ self-management was instituted in
Yugoslavia between approximately 1952 and 1974 by means of
a number of major economic reforms (notably in 1952, 196061 and 1965). These consisted of a comprehensive programme
of transformation of both the mechanism of resource allocation
and the locus of decision making power. The essential idea of
the new system was to develop autonomous enterprises with
independent decision making power which were managed by
their workers (through elected workers’ councils) and linked
together through the market mechanism. The workers’
councils were to decide on issues such as: the management
structure; the division of revenue between employees’ incomes,
reserves and investment; wages and bonuses. The state would
guide the economy by means of a system of non-compulsory
indicative planning and provide for social services and the
infrastructure. Most prices were liberalised and allowed to find
their free market levels. Investment decisions were gradually
transferred to enterprises and so did the burden of investment
financing. The Budget ceased to be the source of investment
resources given to enterprises freely. Funds were allocated to
enterprises as ‘credits’ and on a competitive basis through the
General Investment Fund (in the fifties) and the banking
system (from 1963 onwards). The allocation of credit was to be
based on the borrower’s credit worthiness and other purely
economic criteria. The coordination between different
enterprises and different industries and the matching of
production to the consumption requirements of the population
was to be achieved by the ‘market mechanism’.
In this period, the Federal government’s ability to direct
resources for regional development purposes was weakened.
Investment resources, separated from the Federal Budget in
the early fifties, were provided as loans by a newly established
General Investment Fund. During the fifties and early sixties,
annual and five-year social plans earmarked a certain amount
of resources (as guaranteed bulk appropriation) from the
General Investment Fund for allocation to enterprises in the
LDRs on preferential terms.34
Following the abolishing of the General Investment Fund
in 1963 and the transfer of its resources to the banking system,
the mechanism of allocation and the amount of resources for
the specific use of LDRs had to change too. Eventually in 1965,
after much dispute and discussion, the Federal Assembly passed
1952-1974:
The period of
market-based
workers’ selfmanagement
56 Capital & Class ● 48
a law to create the Federal Fund for Crediting Economic
Development of Less Developed Republics and Regions.35
Since then, this Fund has been the main instrument of regional
policy and the vehicle of inter-regional transfer of resources.
The Fund is managed by an independent board consisting of
eight members, one from each region. Its resources are formed
by an obligatory contribution imposed on all enterprises in the
socialised sector of the economy in the form of a percentage of
their total social product. The level of contribution (which was
initially set at 1.85%) as well as the distribution of the Fund’s
resources between the LDRs were to be decided every five years
by the agreement of all republics and provinces.
In addition to the Fund, which is mainly concerned with
the provision of investment resources for LDRs, the Federal
government has always been required by the Constitution to
provide additional resources for the financing of social services
in LDRs.36 This requirement aimed at ensuring that all Yugoslav
citizens, irrespective of their place of residence and work,
enjoyed a reasonable minimum level of social services. This type
of assistance takes the form of a subsidy paid to LDRs from the
Federal Budget in order to supplement their own revenues and
enable them to provide social services similar to average Yugoslav level. The level of this contribution is also decided every five
years by the agreement of all the eight republics and provinces.
The crucial feature of Yugoslavia’s regional policy,
particularly in the fifties and sixties, was the way the Federal
resources earmarked for LDR s were utilised. The regional
development policy in Yugoslavia was dominated by the
concept of ‘rapid industrialisation’, generally associated with the
Soviet model of socialist construction. Not only a continually
high proportion of national product was spent on investment,
but also investment resources were channelled into building
large power stations, coal mines, raw material and metal
extraction and processing plants, iron and steel complexes,
chemical works, etc.37 What is more, the emphasis was on the
setting-up of a comprehensive, vertically integrated industrial
base in every region. This latter aspect, of course, corresponded
to the underlying desires for economic independence present in
all republics and provinces. A glance at Table 3, showing the rate
and growth of investment in different parts of the country,
confirms this high investment strategy which dominated the
policy maker’s thinking for over forty years.
The disintegration of Yugoslavia 57
Table 3
Rate and Growth of Investment* in Different Regions
Share of Investment in
Social Product (%)**
Yugoslavia
Bosnia-Herzegovina
Croatia
Macedonia
Montenegro
Slovenia
Serbia***
Kosovo
Vojvodina
Increase in Investment Expenditure (%)
1952-65
1966-75
1952-75
36
37
30
64
75
29
40
53
26
30
37
27
38
49
25
31
58
25
513
305
563
480
321
601
378
1333
1698
* Based on constant 1972 prices.
** Social sector only.
*** Republic of Serbia excluding the autonomous provinces of Kosovo and
Vojvodina.
Sources: SGJ (1990) p.413; Yugoslavia 1945-1985, p.202.
Table 3 shows that, firstly, a high rate of investment was
sustained in all areas of the country throughout this period.
Secondly, while in Croatia and Slovenia the rate was 25-30%
(quite high by international standards) in the LDRs the rate
was even higher. Thirdly, the actual volume of investment, in
real terms, increased significantly over the period under
consideration: by 4-7 times in most places and by 14 times in
the least developed region of Kosovo.38
The development strategy based on high investment,
however, failed to satisfy the high expectations of policy
makers and, also, disappointed all those who had argued for
the ‘preferential treatment’ of LDR s in terms of access to
investment resources. Two factors account for this failure.
Firstly, the regional desire for a comprehensive economic base
overshadowed the reality of the small size of the Yugoslav
market. Secondly, in the midst of rivalry for obtaining
resources to finance large scale projects, the availability of
other relevant resources and complementary economic
activities was disregarded. Scarce resources were wasted on
prestige projects and ‘political factories’ to satisfy regional
considerations; the gestation period of investment projects was
much longer than expected; the location of industrial plants in
relation to raw material and markets was not always properly
58 Capital & Class ● 48
considered; and sufficiently skilled manpower to run these
projects was in short supply.39 The maintenance of fixed low
prices for raw materials, energy, agriculture and transport,
prevalent before 1965, benefited enterprises in the MDRs and
adversely affected the LDR s which concentrated on these
activities.
The performance of the self-management system, on the
whole, was somewhat mixed and, in terms of the aspirations
of the Yugoslav leaders, certainly far from satisfactory. It is true
that the Yugoslav economy grew very rapidly in this period
(for a while at one of the highest rates of growth in the
world). 40 A predominantly agricultural country was
transformed into an industrial nation with a wide and modern
industrial base. Standards of living grew fast. Health,
education and other social services improved and reached
levels which could match those of other medium developed
European nations.41
But along with these achievements, some unplanned and
undesired features and tendencies began to emerge too. By the
late sixties, when the system of market-based workers’ selfmanagement was fully established, these undesirable
tendencies had become serious trends in the system and soon
began to dominate it. These developments are briefly
mentioned here.
Firstly, as the size and technological complexity of
production units increased, the decision making power was
increasingly concentrated in the hands of the technicalmanagerial elite of each enterprise, and the influence of
ordinary blue-collar production workers weakened. This gave
rise to increasing labour turnover, worker absenteeism, work
stoppages and strikes.42
Secondly, given the small size of the Yugoslav market,
liberalisation resulted in the strengthening of oligopolistic
tendencies with adverse implications for employment and
price levels. 43 Inefficient oligopolies could hide their
inefficiencies by charging higher prices and offering their
workers higher personal incomes. At macroeconomic level,
this tendency was one of the main causes of the rising
inflation and unemployment.44
Thirdly, given that conditions of demand, resource
endowment, technology, and access to markets varied widely,
the performance of enterprises was bound to be widely
The disintegration of Yugoslavia 59
different too. As ‘performance’ became the main determinant
of the enterprises’ ability to attract investment credits and pay
higher incomes, inequalities amongst enterprises and
employees (and regions) expanded too. In particular, being
more efficient and technologically advanced, enterprises in
more developed regions were able to attract better quality
human resources and more investment credits, and perform
even better. Thus was generated a centrifugal force which
widened the gap between different regions.
These unexpected consequences of self-management and
market socialism caused much concern, disillusion and protest
across the country. The demand for curtailing the increasing
income differential came not only from the striking workers
and LDRs but also from protesting students (of the 1968
student movement) which had thrown into the open the
question of the LCY’s political legitimacy.45 The Yugoslav
government and party leaders had to come to terms with these
unwanted and unexpected developments. While the economic
consequences of the ‘market socialism’ were at the forefront of
the protesters’ minds, the party bureaucracy was primarily
concerned with the preservation of the LCY’s political power.
Their answer, after a period of discussion in the late sixties and
early seventies was the 1974 Constitution which formally
restored the ‘social authority’ and ‘guiding role’ of the party,
and reasserted the primacy of collective interests over those of
individual economic units. It reinforced the position of the
LCY and its involvement in social and economic affairs, and
increased the authority and control of local governments over
enterprises in their area.46
The 1974 constitutional changes ushered in the principles of
‘associated labour’, ‘social compact’ and ‘consensus’. Most
enterprises were divided into smaller sub-units, called the
Basic Organisation of Associated Labour (BOAL), the smallest
unit which was technically and economically identifiable.
BOALs, with their own organs of self-management, became the
basic decision making unit, empowered to decide on all of
their affairs. In terms of our earlier discussion, this provision
aimed at reducing the size of the unit and enabling the
workers to realise their self-management rights.
1974-1988
The period of
‘associated labour’
and ‘social
compacts’
60 Capital & Class ● 48
The relationship between the BOALs of an enterprise, as
well as between enterprises, was to be governed by negotiated
binding contracts called ‘self-management agreements’.47 On
all important issues, the constituent BOALs had to reach a
‘consensus’, effectively giving the workers’ council of each
BOAL the right of veto over the decisions and wishes of other
BOALs. Wages and bonuses were to be regulated by ‘social
compacts’—agreements negotiated between enterprises, their
associations, trade unions and the relevant governmental unit.
Market forces were relegated to a secondary position,
superseded by surrogates such as ‘self-management
agreements’ and ‘social compacts’. The coordination of
economic activity was to take place, not ‘by the blind forces of
the markets’, but through these surrogates.48 The net effect of
all this was the creation of a cumbersome and slow decision
making process with a detrimental effect on enterprise
efficiency.49
In the context of the present discussion, an important
aspect of 1974 constitutional changes was that the republics
and provinces obtained the greatest degree of independence in
Yugoslavia’s short history. The powers of the Federal
government were severely restricted. Major decisions relating
to the Federation (such as the conduct of fiscal and monetary
policy, taxation, public expenditure, the social plan of the
Federation and the level of contribution to the Federal Fund
for the Development of LDRs) had to be reached through
social compacts and agreements which required the consent of
all eight republics and provinces. 50 Decisions on the
development programme and the methods of utilisation of
development funds were transferred to the LDRs themselves—
a decision which proved controversial later. The principle of
solidarity, of course, remained unquestioned, at least until the
mid-eighties, and in addition to the two types of resources
mentioned earlier (the regional development fund and
subsidies from the Federal Budget) additional measures,
aiming particularly at Kosovo, were also taken. These included
the priority allocation of the bulk of credits from the World
Bank and IMF; exemption from customs on the import of
production equipment; higher than average export subsidies;
refunding part of their contribution to the Federal Budget;
assistance with the repayment of their loans as well as
additional assistance from the budget.51
The disintegration of Yugoslavia 61
The size of contributions to the Fund for the Accelerated
Development of LDRs and the subsidies from the Federal
Budget, as well as their distribution amongst the LDRs, were
decided upon every five years through hard negotiations. It
must be pointed out that these contributions remained at
relatively modest levels. The contribution to the Fund varied
between 1.56% and 1.97% of the social product of enterprises
in the social sector. The subsidies from the Federal Budget, to
support the provision of social services, varied between 0.53%
and 0.85% of Yugoslavia’s national income.52 Of course,
despite being modest, the resources of the Funds for
Accelerated Development of LDRs account for a major share
of total investment (18-33%) in most of these areas and up to
95% in Kosovo.53
By the mid-eighties, it had become apparent that the
system of BOALs, and all that was associated with the 1974
Constitutional changes, had created more problems than they
had solved. The ‘associated labour’ extension of selfmanagement had not resolved the basic problems faced by all
socialist economies: incentives for workers and enterprises,
innovative activity and efficiency, and meeting the aspirations
of the poorer regions. Macroeconomic policy had become
much more problematic because of the enhanced possibility of
political intervention in economic affairs. 54 Inflation,
unemployment, falling productivity. increasing poverty
particularly in some LDRs,55 and rising foreign debt were
some of the manifestations of the economy’s poor
performance. The system was badly in need of reform and
preparations began for a new phase in the development of the
Yugoslav model of socialism. The outcome of discussions and
consultations was the 1988 Constitutional Amendments IXXLVIII. The ideas of ‘associated labour’ and consensus were
abandoned. Market forces were to replace the ‘compacts’ and
‘agreements’ and to become the main mechanism of economic
coordination, reminding the seasoned observers of conditions
prevailing in the post-1965 period. The legal and
constitutional conditions for the gradual evolution of a social
market economy, one based on mixed ownership, private
initiative and state regulation, were prepared by subsequent
laws.56 But with the separation of Croatia and Slovenia and
the ensuing civil war, these plans were completely disrupted.
62 Capital & Class ● 48
II.2. THE ASSESSMENT OF REGIONAL POLICY
The active regional policy involved the transfer of a large
volume of resources to LDRs in order to make up for the
shortage of their own resources, stimulate their faster
economic development, and ensure the provision of social
services in these areas. But what were the effects of this active
inter-regional transfer of resources? How did the economies of
LDRs respond to the additional resources provided in aid or
grant by the Federation? The answer to these questions are not
unambiguous and straight forward and, depending on the
criteria chosen, conflicting results may be obtained. It is
beyond dispute that in the post-war period, the economic and
social conditions of the LDR s improved significantly. All
measures of social and economic progress (indicators of health
education, care of the young and elderly, participation of
women, social security, economic growth, employment and
others) have grown significantly and testify to the great
improvement in the living conditions of people in the LDRs.57
But these achievements are overshadowed by the slow pace
of change in LDRs in comparison with the rest of the country,
particularly with Croatia and Slovenia. It is equally beyond
dispute that the gap between MDRs and LDRs has widened
and the relative position of the latter increasingly deteriorated.
More significantly, the gap between the extremes of the two
groups, Slovenia and Kosovo, has particularly widened. Table
4 shows the change in the relative per-capita social product of
different parts of Yugoslavia during the post-war period.
It is clear that while the position in Slovenia and Croatia
has improved significantly in relation to the Yugoslav average,
that of the LDR s, especially Kosovo, has continually
deteriorated. The position of Serbia (which is a contributor to
the regional assistance efforts but not a recipient) has remained
roughly around the Yugoslav average.58 This is a particularly
stark observation in the light of four decades of active regional
policy. The successive reforms of the economic system, while
paving the way for the operation of market forces and the
process of decentralisation, failed to improve the ability of
LDRs to break out of the ‘vicious circle’ of underdevelopment
despite a significant investment effort by the Federation. Many
factors contribute to the persistence of this vicious circle,
amongst them the high rate of population growth, low labour
The disintegration of Yugoslavia 63
Table 4
Social Product per capita in Different Regions
as % of Yugoslav Average*
1947 1953 1965 1975 1988
Yugoslavia
Slovenia
Croatia
Serbia**
Vojvodina
Bosnia-Herzegovina
Macedonia
Montenegro
Kosovo
Slovenia as a proportion of Kosovo
100
163
104
101
100
86
70
94
49
3.3
100
161
116
97
100
86
68
75
46
4.1
100
183
120
96
113
71
67
76
36
5.0
100
205
124
97
115
66
68
69
34
6.1
100
208
128
101
119
68
64
74
27
7.4
* Based on constant 1972 prices.
** Excluding the autonomous provinces of Kosovo and Vojvodina
Sources: SGJ (1989) pp.421 & 424; SGJ (1980) p.406.
productivity, low efficiency of investment, and the impact of
the market mechanism deserve specific mention.
Firstly, the rate of growth of population in the LDRs has
been significantly higher than that of the MDRs throughout
the period under consideration, thus reducing the impact of
the growth of output. Between the 1981 and 1991 census, for
example, the natural growth of population was 6.5 per
thousand for Yugoslavia as whole, ranging from 3.4 for
Slovenia, 2.9 for Serbia, 1.9 for Croatia and 0.6 for Vojvodina
to 9.9 in Bosnia-Herzegovina, 10.8 in Montenegro, 12.2 in
Macedonia and 24.3 in Kosovo. More importantly, while in
the post-war period the rate of growth of population dropped
significantly in all regions, it remained almost unchanged in
Kosovo. As a result, Kosovo’s share of total population
increased from 4.6% in 1948 to 8.3% in 1991.59
The high population growth results in a high level of
dependency on active population and high rate of unemployment. The expenditure on health, education and other services,
partly supported by subsidies from the Federal Budget, will be
stretched with adverse effect on the quality of human resources.
Similarly, the investment resources from the regional development Fund will be partly redirected to areas such as housing,
transport and communication which are directly affected by
the population size.60 In short, the rapid growth of population
64 Capital & Class ● 48
has, to some extent, undermined the development efforts and
contributed to the vicious circle.
The second factor explaining the widening gap is the low
factor productivity in the LDRs: low efficiency of investment
and low productivity of labour. Efficiency of investment is
measured by the increase in social product resulting from 100
dinars of investment; labour productivity by output per
worker in the industrial sector of the economy. These two
indicators are shown in Tables 5 and 6 respectively.
Table 5
Productivity of Investment* in Different Regions
as % of Yugoslav Average
Yugoslavia
Slovenia
Croatia
Serbia**
Vojvodina
Bosnia-Herzegovina
Macedonia
Montenegro
Kosovo
1952-65
1966-75
1976-83
100
119
111
101
143
80
63
43
77
100
135
108
97
109
77
87
50
65
100
109
89
117
105
103
90
82
44
* Change in the social product per 100 dinar investment (in social sector).
** Excluding the autonomous provinces of Kosovo and Vojvodina.
Source: Yugoslavia 1945-85 p.203.
Table 6
Labour Productivity in Industry* in Different Regions
as % of Yugoslav Average
Yugoslavia
Slovenia
Croatia
Serbia**
Vojvodina
Bosnia-Herzegovina
Macedonia
Montenegro
Kosovo
1952
1965
1975
1988
100
105
98
106
87
95
105
137
88
100
117
102
105
89
93
78
103
79
100
125
108
96
101
84
77
89
77
100
126
105
98
111
85
86
88
71
Measured by social product in industry per worker (in social sector only),
based on constant 1972 prices..
** Excluding the autonomous provinces of Kosovo and Vojvodina.
*
Sources: SGJ (1990) p.405; and Yugoslavia 1945-85 p.204.
The disintegration of Yugoslavia 65
The efficiency of investment in all LDRs was well below the
Yugoslav average throughout the period under consideration
(with the exception of Bosnia-Herzegovina’s slightly above
average figure for 1976-83). The difference was particularly
large in Montenegro and Kosovo. Similarly, labour productivity in LDRs was below the Yugoslav average, in most periods,
and also declining over time. The nature and quality of investment projects (referred to earlier), the availability of suitable
inputs (especially management) and complementary activities
account for the low levels of efficiency of investment. The
work force’s lower levels of skill and qualification and a shorter
experience of an industrial culture in LDRs account for labour
productivity trailing behind the rest of the country. At the
same time, the deployment of more modern production
technologies, the availability of complementary economic
activities, higher levels of education and skill attainment,
better housing, health and other social services in the MDRs
have also contributed to the growing factor productivity gap.
The low levels of factor productivity, in turn, result in low
levels of industrial output, income and demand, and given the
higher rate of growth of labour force, produces higher levels of
unemployment too. The ‘vicious circle’ of underdevelopment
is completed by the lower standards of living, lower public
expenditure on social services and lower labour productivity.
Table 7 shows the extent of unemployment, measured by the
number of job seekers per 1000 employed, in different regions
of Yugoslavia since the early fifties.
Table 7
Unemployment*
Yugoslavia
Slovenia
Croatia
Serbia**
Vojvodina
Bosnia-Herzegovina
Macedonia
Montenegro
Kosovo
1952
1965
1975
1989
26
19
29
25
30
15
67
33
26
65
17
59
79
47
50
156
54
179
113
15
58
143
119
128
267
168
297
175
35
86
183
156
260
283
294
583
* Measured by the number of registered job seekers per 1000 employed.
** Excluding the autonomous provinces of Kosovo and Vojvodina.
Sources: SGJ (1990) pp.408 and 467; Yugoslavia 1945-85 pp.199-200.
66 Capital & Class ● 48
It is clear that the LDRs, particularly in the latter half of the
period under review, have been suffering from much higher as
well as increasing rates of unemployment. Slovenia and
Croatia, on the other hand, have always had lower than
average unemployment rate which has also been falling in
proportion to the national average. The Slovenian unemployment rate was about 70% of the national rate in 1952 and
dropped to 20% of the national average by 1988.
Finally, the differential impact of the decentralisation
process and developing market relations on different regions
should be highlighted. Regions such as Slovenia and Croatia,
were less damaged during the war, started with a better endowment of resources, a more educated and skilled work force, and
a more diversified economy. Enterprises in these regions were
more efficient, and with developing market relations, became
more profitable, could raise more internal funds for expansion,
and attract even more from the banking system. They gained
from their advantageous position in the Federation and
prospered rapidly. The less developed regions, on the other
hand, started from what can only be described as backward
economic conditions, suffered serious damage during the war,
had poor endowment of resources, insufficient technical
know-how and lower levels of education. Their enterprises
were less efficient and could not compete with those from the
MDRs. Their profitability was lower, their internal resources
and those raised from the banking system were limited, and
they had to rely heavily on outside assistance. 61 But the
available support from the Federation, in the amounts
provided, could not transform their position significantly.
As mentioned earlier, during the post-war period, the
emphasis on the faster development of LDRs has focused the
observer’s attention on the relation between richer and poorer
regions and nationalities, thus overshadowing the Serb-Croat
relation. The richer regions made their contributions to the
LDRs under much pressure and, in the latter years, under great
duress. It is certainly true that, as the following Table 8 shows,
the bulk of transferred resources came from the contributions
made by enterprises outside the LDRs. But it is also important
to note that Serbia (excluding Vojvodina and Kosovo), whose
position throughout this period remained about the Yugoslav
average, made a major contribution, often higher than Slovenia
and Croatia, to the transferred resources.
The disintegration of Yugoslavia 67
Table 8
Contributions of Different Regions to the Fund for
Accelerated Development of LDRs (% of total)
MDRs
Slovenia
Croatia
Serbia*
*
1982
1983
1984
1985
1986
1987
1988
1989
75
13
23
27
78
19
26
24
74
16
27
21
76
15
25
27
79
18
23
21
73
18
24
18
77
20
24
26
77
24
26
19
Excluding the autonomous provinces of Kosovo and Vojvodina.
Sources: SGJ (1988) p497; SGJ (1990) p.496.
To sum up this assessment, it has to be pointed out that
both sides of the regional divide became increasingly unhappy
with the evolution of the regional policy. On the one hand, a lot
of resources had been allocated to, and spent on, the development of LDRs. Some results had been obtained but they were far
from sufficient and satisfactory, leaving LDRs frustrated and
suspicious. They resented the expanding regional gap and the
insufficient help from their better-off neighbours. The more
developed regions, on the other hand, felt that the LDRs were
not using their increasing autonomy to direct the Federal assistance effectively.62 In their eyes, scarce investment resources were
being transferred from their more efficient enterprises with
higher productivity to enterprises in LDRs with lower productivity, thus retarding the development of MDRs. They wanted
better application of economic and profitability criteria. They
also wanted to have a say in how the transferred resources were
being utilised and wished to encourage inter-regional joint
ventures, in the hope of influencing the utilisation of these
resources.63
The leaders of the more developed Croatia and Slovenia,
continually complained of the slow pace of economic reform.
They saw their future in further decentralisation, the extension
of market-based economic reforms, and the limitation of the role
of central authorities. They believed that further extension of the
market mechanism and depoliticisation of resource allocation
would force enterprises in LDRs to become more efficient and to
base their decisions on profitability and other economic criteria.
The LDRs, however, felt that their enterprises were not at
the same technological and efficiency levels as those of the
MDRs and could not easily compete with them. The growing
68 Capital & Class ● 48
autonomy of regions under self-management was seen to be
condemning them to a perpetual ‘poorer partner’ position
with a slower rate of growth. The LDRs, with a preference for
an active interventionist policy, became associated with
opposition to reforms. The notion of ‘progressive northwest’
versus ‘conservative southeast’ found increasing usage.64
Regions resorted to restrictive practices and autarkic
measures, remnant of the sixties, which effectively barred many
enterprises from operating outside their own regions. Selfmanagement agreements and social compacts were used as
means of closing the market to ‘non-domestic’ producers and
workers. Each region, therefore, had to resort to hard bargaining
in order to establish a workable (if not ideal) economic relation
with other regions. The field of economic policy was the most
fertile ground for political and economic horse-trading, an
ultimately unsatisfactory state of affairs. Economic disputes
gradually were expressed in regional and national terms and
took nationalistic tones, thus contributing to the rise of
nationalism and the degeneration of national relations.
The argument between the two groups was essentially
based on regional self-interest. The richer regions had been
campaigning, since the sixties, to move rapidly towards a
market economy. They did not wish to be held back by the
slower moving regions. Nor did they believe in continuing the
inter-regional transfer of resources to these regions. With the
disintegration of the LCY, the only mechanism for imposing
some form of socialist solidarity had disappeared, creating
conditions for Croatia and Slovenia to speed up their
campaign for either a loose confederation or separate states.
Two points need to be emphasised before we end this
section. Firstly, that for nearly forty years, the MDRs operated in
an environment where product markets were largely liberalised
but input markets, particularly raw material, energy and
minerals were subject to controls. This benefit has never
appeared in the loss-gain balance sheet of the relation between
regions. Secondly, the magnitude of the transferred resources,
though considerable, should not be exaggerated. The overall
resources contributed to the Fund for the Development of LDRs
and to the subsidies from the Budget remained in the range of
2-3% of the social product of each region—and declined in the
last decade too. The claim that this contribution has held back
the MDRs is rather strong and unjustified.
The disintegration of Yugoslavia 69
III. THE PARTY, THE NATIONAL QUESTION AND SERBIAN
DOMINATION
The Yugoslav Communist Party was always aware of the
existence of national and regional prejudices which developed
in the inter-war period and intensified during the Pavelić’s
regime. But its own war-time experience had strengthened its
deep belief in the possibility of peaceful development of
relations between nationalities. The re-publication of
Kardelj’s pre-war essay on The Development of the Slovenian
National Question in 1958, drew public attention to the
nationalities question again.65 For a time, particularly in the
fifties, the Party believed that with the development of selfmanagement, the conditions would be created for the
emergence of a ‘Yugoslav’ identity, which would supersede
the narrower national or regional identities. The idea of
‘Yugoslavianism’ (Jugoslovenstvo) was promoted and attempts
were made to identify and spread a ‘Yugoslav’ culture, and
develop a new consensus about the relations between
nationalities. 66 However, the federal structure and the
importance of regions in national affairs meant that the
notion of nationality would survive all this.67 The idea of
‘Yugoslavianism’ was eventually dropped at the Eighth Party
Congress in 1964. From then on, the Party focused on the
idea of ‘parity of representation’, trying to ensure that regions
and nationalities were represented in the national decisionmaking process.
With the liberalisation of the Yugoslav society, however,
public manifestations of nationalism (and even chauvinism)
became possible. In the fifties and sixties, Serb and Croat
writers and historians were in dispute over their cultural
heritage, the status of Croatian as a language separate from
Serbian, and the position of the Croatian Communist Party
over the 1939 Sporazum.68 More serious was the struggle in
the early sixties with an anti-reform group, headed by
Aleksandar Ranković, the de facto leader of the Serbian Party
and the most powerful member of the leadership after Tito.
Although the struggle revolved around the direction and pace
of reforms and Ranković was aligned with many representatives from the LDRs, Serbian nationalism became the focus
of criticism which culminated in the removal of Ranković in
1966.
70 Capital & Class ● 48
In the late sixties and early seventies, when most of
Yugoslavia was concerned with the consequences of marketbased socialism (discussed earlier), the Croatian and Slovenian
parties were pressing for greater autonomy and faster reforms,
drawing an angry response from other parts of the country.
The Serbian cultural organisation Matica Srpska, the Serbian
Orthodox Church, the Serbs in Croatia and their organisation
Prosvjeta, as well as the Croatian cultural organisation Matica
Hrvatska and organisations of economists, writers and
students, all actively took part in these exchanges. It was in
this period that ideas such as a Croatian Republic, a separate
Croatian Army, and a Serbian autonomous region in Croatia
were publicly floated. This time, Croatian nationalism was the
focus of criticism and resulted in large scale resignations,
purges and arrests. The criticism was also used to strengthen
the LCY ’s political power and pave the way for the 1974
Constitutional amendments.69
Despite these occasional outbursts of nationalism, the
relation between nationalities improved significantly during the
‘socialist’ phase of Yugoslavia’s history, albeit with the exception
of Kosovo. The nationalities policy was, on the whole,
successful and received public support. Incidents of public and
open hostilities towards any nation were extremely rare. The
evidence from research work in the fifties, sixties and seventies,
in Yugoslavia and abroad, indicated strongly that the ‘ethnic
distance’ had narrowed down, the political incorporation of
different regions into Yugoslavia had been accepted, and their
political cohesion had been enhanced.70 This improvement in
national relations should be seen in the context of the rising
economic prosperity and the prestige enjoyed by Yugoslavia in
the international community. It is not by pure coincidence that
by the late eighties, when the economy was in serious crisis, the
national relations had deteriorated too.
The only significant instance of violent confrontation
between nationalities, prior to the recent events, occurred in
Kosovo in 1981 and then 1988-89. The relation between
Kosovo’s Albanian nationality and the Serbian and Federal
governments deteriorated sharply during the eighties resulting
in large scale mass demonstrations which were violently
suppressed by Federal troops. The problem of Kosovo, where
Albanians gradually became the largest and most dominant
nationality in an area which had been inhabited by Serbs for
The disintegration of Yugoslavia 71
centuries, remains one of Yugoslavia’s most complex problems.
This problem, however, has been more about the demands of
the Albanian nationality for greater autonomy (including the
status of a republic) and much less about the relation between
Albanians and Serbs. Although the Serbian government has a
lot to answer for the escalation of tension in the Province, all
members of the Federation must share the blame for the
decision to declare a ‘state of emergency’ and deploy Federal
troops on the streets of Pristina and other towns, and its
disastrous consequences. The Kosovo problem can not be
discussed in the context of the present paper for lack of
sufficient space.71
The events of 1990 and 1991, leading to the break-up of
the ‘second’ Yugoslavia, have to be studied separately and in
much greater detail. Suffice to say that the situation is
particularly worrying in Croatia and Bosnia, with serious
violation of the rights of ordinary citizens. The little that has
become known, does not justify any confidence in future. The
Serbs in Croatia have witnessed many atrocities in the past
year, and so have the Croats in Croatia and all nationalities in
Bosnia. But, what is more serious, is the systematic violation of
the rights of minorities in Croatia which is tolerated by the state.
The new Croatian Constitution declares that Croatia is the
land of Croats; the use of the Cyrillic alphabet for official
communication is banned (even in areas where Serbs are in a
majority). The insignia and flags resembling the Ustasa’s are
reappearing. The hidden agenda seems to be to change the
history of 1941-45. Against international protest by the victims
of the holocaust, the ‘Victims of Fascism’ Square in Zagreb was
renamed the ‘Croatian Heroes’ Square. The site of the former
extermination camp at Jasenovac is to become a national park.
The Croatian parliament, at this moment, is discussing the
rehabilitation of Archbishop Stepinac. Arbitrary arrests,
disappearance of Serbs and unlawful killings are now
happening again. Reports by Amnesty International and other
human rights organisations are appearing regularly and indicate
a deteriorating situation.72 The EC recognition of Croatia,
under pressure from conservative forces in Europe,73 despite an
unfavourable report on the rights of minorities by Judge
Robert Badinter, the president of the French Constitutional
Court, may prove to have been a mistake (particularly as it
failed to stop further escalation of violence).74
v
v
72 Capital & Class ● 48
One particular aspect of national relations which deserves
some clarification is the issue of Serbian over-representation in
the party and state institutions. This is an issue which has
received much attention in the context of the present
hostilities. It is certainly true that under the pro-Serb governments of the ‘first’ Yugoslavia, state institutions were
dominated by Serbs, giving rise to strong feeling of subjugation
by other nations, particularly Croats and Slovenes.75 In the
immediate post-war period, too, Serbs and Montenegrins were
heavily over-represented in the army and state administration.
But the reason for this was entirely different from that of the
inter-war period. The post-war political elite in Yugoslavia has
its roots in the partisan and the relatively small communist
movements. Serbs (and mainly Croatian Serbs) and Montenegrins were the most numerous ethnic components of the
partisan movement. All historians of the movement have
pointed out that, the Serb-populated areas of Croatia were the
first areas to engage in armed uprising against the Pavelić
regime and Germans. For these Serbs, the partisan movement
was almost the only alternative to death or conversion to
Catholicism at the hands of Ustasi armed gangs.76
The crucial point, however, is that, starting from the heavy
over-representation of Serbs (and also Montenegrins), the
party and the government made conscious attempts to change
the status quo during the period of the ‘second’ Yugoslavia.
The notion of ‘national parity’ was the vehicle by which these
attempts were promoted.77 At the higher levels of decisionmaking, the ethnic balance was certainly changed and some
form of parity obtained. Republics and Provinces were well
represented at the leading level of almost all Federal institutions.78 But at lower echelons of Federal institutions, the cadres
and technical staff, the change was much slower, with Serbs and
Montenegrins retaining their more-than-proportionate presence.
The change in the ethnic composition of two particularly
important institutions deserve a brief mention. These are the
LCY and the Army. The membership of LCY has undergone
much change in the post-war period. The total party
membership increased steadily from a mere 161,000 in 1945
to over 2 million in 1983 when it started to decline slowly.
The increase in membership, of course, was not homogeneous
in different parts of the country. Table 9 represents the ethnic
composition of the LCY since the mid-fifties.
v
The disintegration of Yugoslavia 73
Table 9
National Origin of Members of the League of
Communists of Yugoslavia 1957-1988
Nationality
in percentages
1957
LCY Population
Serb
Croat
Slovene
Montenegrin
Macedonian
Moslem
Albanian
Hungarian
Yugoslav
Others
v
54.5
19.0
7.7
6.7
6.4
n/a
2.4
1.1
n/a
2.2
1971
LCY Population
41.7
23.5
8.7
2.1
5.2
n/a
4.5
3.0
5.9
5.4
49.4
17.4
6.4
6.4
6.2
4.6
3.4
1.1
3.8
4.3
41.7
22.9
8.6
2.4
5.6
6.9
4.7
2.7
1.4
3.1
LCY
44.2
12.6
4.8
5.5
7.5
7.6
4.7
1.2
10.6
1.3
1988
Population
38.4
20.5
8.0
2.5
5.9
7.8
5.6
2.2
5.6
3.5
v
Sources: Boris Vus ković (1985) p.121; Izdevac ki centar komunist (1989) p.57; Jugoslovenski
Pregled, July-August 1964, p.294.
The table clearly shows that, between 1957 and 1988, the
extent of over-representation of the Serb and Montenegrin
nationalities gradually declined, though not eradicated. At the
same time, the representation of Moslems, Albanians,
Hungarians and particularly ‘Yugoslavs’ has gradually
increased. The Croat and Slovene under-representation,
however, has somewhat increased, mainly because of a general
drift away from the LCY in these two republics during the
eighties.
The ethnic composiTable 10
tion
of the Yugoslav
Ethnic Origin of the Officer
Corp in the Yugoslav
National Army (JNA) also
National Army (1991)
went through a similar
process in the post-War
Nationality
Army
Population
period. From a predomi% share
% share
nantly Serb and MonteSerb
60
36
negrin army, it was transCroat
13
20
formed to an army in
Slovene
3
8
which other nationalities
Montenegrin
7
3
Macedonian
6
6
were also represented,
Moslem
2
9
though the Serbian overAlbanian
1
8
representation has persistHungarian
1
2
ed. This is illustrated in
Yugoslav
7
5
Table 10, showing the
Others
2
3
ethnic composition of
Source: Vreme, 15 July 1991
the JNA.
74 Capital & Class ● 48
From a very high level in its early days, the overrepresentation of Serbs in the JNA reached 70% of the officers’
corps in 1971,79 and then slowly reduced to some 60% shown
above. But the representation of other nationalities, though
improving, never reached the proportions warranted by their
share in total population. Again, as in the case of the LCY itself,
there was a process of change towards greater representation of
other nationalities but the process was too slow. Of course, as
long as the League was in control of the Army, it was
reasonable to expect that the army would be essentially
concerned with its primary task: the defence of the territorial
integrity of the Federation. But with the rapid disintegration of
the League in 1990-91, the army gradually turned to an
autonomous organisation fighting for its own interest. The
present size of JNA as well as its human and material resources
could be justified only in the context of a 23-million strong
nation. With the separation of four republics from the
Federation, the JNA has to shrink to a much smaller size—not
a welcome prospect for the JNA leaders.
IV. CONCLUDING REMARKS
In this paper, some of the causes of the deterioration of
national relations in Yugoslavia have been discussed. In
particular, the role of regional development policies in the
escalation of conflicts has been highlighted. The pro-Serbian
policies of the inter-war government resulted in
disappointment amongst those intellectuals and politicians
who had campaigned for the unification of South Slavs, and
in disharmony and rancour between Serbs and other
nationalities (particularly Croats). The Second World War
created conditions in which Croatian nationalists could realise
their aspirations for an ‘independent’ state, even though
delivered by Nazi invaders. They, then embarked on a policy
of genocide against Serbs and other minorities in Croatia and
Bosnia-Herzegovina. Some apologists of the Ustasi regime,
have tried to reduce the weight of these crimes by
counterposing them to the hegemonistic policies of the
Belgrade government in the previous twenty years. 80
However, it has to be emphasised that the open, large scale
and systematic anti-Serb policies of the Croatian rulers
v
The disintegration of Yugoslavia 75
between 1941-45, are without any parallel in Yugoslavia’s
modern history.
The ‘socialist’ phase in Yugoslavia’s history, witnessed
significant improvements in the relation between nationalities.
Although the policies of the new state did not bring about full
equality of representation and political power amongst its
constituent nationalities and regions, it went a long way in
that direction. Given the largely Serb and Montenegrin makeup of the partisan movement and the party, the subsequent
gradual change in the ethnic balance of the Party, the Army
and state institutions were the result of a conscious effort by
the leaders of the ‘second’ Yugoslavia. During this phase, the
nationality question was linked to the uneven economic
development of different regions. It was thought that only
with economic convergence of different regions would
national rivalries and disputes diminish and, eventually,
disappear. The achievement of rapid economic growth in the
LDRs, therefore, became the key to the nationalities question
and the cornerstone of government policies. Throughout this
period, the government pursued an active regional policy
involving the redistribution of investment and budgetary
resources in favour of the LDRs. As a result of these policies,
there was significant economic progress in the LDRs.
But regional policy and policy instruments were themselves
directly influenced by Yugoslavia’s overall development
strategy: the establishment of a system of market-based
workers’ self-management. This system, by its emphasis on
market allocation of resources, decentralisation and granting
of unprecedented autonomy to regions, weakened the Federal
government’s ability to mobilise resources for inter-regional
transfer. Decentralisation and the market mechanism gave
regions and republics increasing autonomy over their affairs,
thus retaining and even expanding their differences. They also
generated centrifugal forces which could not be weakened by
the regional policy instruments used.
The ‘high investment’ strategy employed for the rapid
development of LDRs was, on the whole. unsuccessful. This
was partly because of the concentration of investment in
capital intensive heavy industries and partly because of low
labour productivity and low efficiency of investment in LDRs.
The subsidies from the Federal Budget, aimed at improving
the provision of social services, were insufficient to counteract
76 Capital & Class ● 48
the effects of high population growth rates. Over time, despite
the continued involvement of the Federation and the
acceptance of the need for active regional policy by all
concerned, the gap between the less developed and the more
developed regions widened. The inter-regional transfer of
resources satisfied neither the LDRs nor the MDRs. The LDRs
believed that the resources provided by the Federation were
not sufficient to improve their relative position. The MDRs,
however, maintained that any improvement should come from
better utilisation of these resources and not from their
expansion. Serbia’s position over this on-going debate was of
particular relevance. While itself not one of the MDRs, Serbia
supported the redistributive efforts of the Federation and
played a major part in providing supplementary resources for
LDRs. It is difficult to see if, in return, Serbia derived any
special economic advantage during the life of the ‘second"’
Yugoslavia.
The generalised crisis of the Yugoslav economy during the
1980s, manifested by high rates of inflation, unemployment,
inefficiency, rising foreign debt, poverty, etc., resulted,
amongst other things, in the reduction of resources allocated
to the development of poorer regions, precisely at a time when
more resources were needed. The richer regions, notably
Slovenia and Croatia, were unhappy with the contributions
they were making to the less developed regions. The less
developed regions, on the other hand, felt left out, unassisted
and exploited. Either a new solution to the problem of
regional polarisation and dispute had to be found or, the rapid
deterioration of the situation was to be expected.
It may seem that the recent conflict in Yugoslavia has been
more about the assertion of the right to statehood and the
dismantling of the ‘socialist’ state than about regional
disparities and growing polarisation. Economic factors,
nevertheless, played an important role: Slovenia and Croatia
did not wish to continue to ‘subsidise’ the less developed parts
of Yugoslavia and be slowed down by their pace of growth.
Had regional policies been more successful and the gap
between different regions narrower, the economic justification
for separation would have been weaker.
______________________________
The disintegration of Yugoslavia 77
v
I am grateful to many friends and colleagues, particularly to Mis a
Crnobrnja, Gabi Herbert and George Potts, for their comments on
an earlier version of this article.
Acknowledgement
______________________________
1. Other aspects of the ‘nationalities problem’, which have contributed to the unfolding of the present tragedy, have been left
out because they are beyond the scope of this paper.
2. For relations between Serbs and Croats in the 19th century, see
Jelavich (1962) pp.31-37.
3. Ostović (1952) pp.4-13. Hungary’s rule in Croatia had been particularly oppressive and brutal, giving rise to Croatian nationalism long before Serbs were a major factor on the scene. See Crnja
(1962) esp. pp.248-255.
4. For details see Banac (1984) pp.31-41 and Ostović (1952)
pp.4–13.
5. See Shoup (1968) pp.7-8.
6. Ostović (1952) pp. 54-60; and Banac (1984) p.118.
7. Ibid, pp.123-4. The question of ‘nationhood’ of Montenegrins,
Macedonians and Bosnian Moslems was shelved at this stage.
8. As it turned out, France and Great Britain, had already (secretly)
promised the disputed areas including the major ports of Trieste,
Fiume (Rijeka) and Zadar to Italy by the London Treaty of 1915.
Under pressure from Allies and other neighbours, the Yugoslav
delegation finally signed the Peace Treaty conceding the Italian
claims. Most of these areas (though not Trieste) were recovered
after the Second World War. For details, see Ostović (1952) p.59.
Macedonia and Southern Serbia (including Kosovo) were returned
to the new state at this stage—despite Bulgarian protestation.
9. While some 700,000 of its potential citizens were left outside its
borders (more than half of them in Italy), the new State was also
‘assigned’ more than a million minority citizens of Magyar,
Romanian and German origin through various peace treaties.
The national composition of the 12 million strong population at
this stage was: 39% Serb; 24% Croat; 9% Slovene; 6% Bosnian
Moslem; 5% Macedonian; 4% Albanian; and 17% other
nationalities including Germans, Hungarians, Austrians,
Romanians, Turks, Jews, Italians, and other Slavs. See Lederer
(1963) p.309; and Banac (1984) p.58.
Notes
78 Capital & Class ● 48
10. The Socialist Workers Party of Yugoslavia was formed in 1919 by
the progressive elements of the Serbian, Croatian and Slovenian
social democratic parties, other leftist groups and the returnees
from the Russian front who had come in contact with the
Bolshevik Revolution during the War. It was renamed as the
Yugoslav Communist Party (YCP) in 1920 and the League of
Communists of Yugoslavia ( LCY ) in 1952. See Avakumović
(1964).
11. For a full discussion of the 1921 elections, see Ostović (1952)
p.102; Auty (1970) p.48; and Cohen and Warwick (1983) ch.4.
Given the extent of opposition, it is useful to point out that had
the YCP not been banned, the 1921 Constitution would not have
been passed by the Assembly.
12. See Bićanić (1973) p.16 and Banac (1984) pp.148-153. For a
brief survey of the Serbian domination of the Police, the Army and
the civil service in this period, see Ostović (1952) pp.122-130.
13. For a discussion of the economic conditions in the twenties, see
Bićanić (1973) ch.1.
14. The Croatian Peasant Party boycotted the Assembly until 1925.
Later, in 1928, when the party leader Stjepan Radić was
assassinated in the Parliament by another deputy in June 1928,
the Party withdrew all its deputies from the Parliament again and
refused further cooperation with the government until just before
the Second World War. See Macek (1957), especially p.105.
15. For the role of the YCP in this period and the disastrous influence
of the Comintern on its policies, see Auty (1970) pp.59-81; and
Shoup (1968) pp.35-36. For Tito’s account of his own relations
with the Comintern, see Dedijer (1953) ch.7.
16. For details of the social conditions at the outset and in the early
months of the War in Yugoslavia, see Hoptner (1962), Kingscoat
(1942) and Ristić (1966).
17. In a recent article in the pages of this journal, Magas has blamed
Serbian nationalism, and not Nazi occupation and Ustas i
collaboration, for the disintegration of the ‘first’ Yugoslavia
(Magas , 1992). In this article on ‘lessons of history’, there is not a
single reference to the Ustas a regime and its role in shaping the
nationality relations in Yugoslavia.
18. Pavelić had left Yugoslavia in 1929 when he had failed in his
attempt to mobilise an ultra-nationalist party in Croatia. He
developed contacts with Italian and Austrian fascists and set up
training camps for his Ustas a movement in these countries. He
was wanted by the Yugoslav police in connection with terrorist
activities including the murder of King Aleksandar. He was also
tried, in absentia, and condemned to death by a French court for
his involvement in the King’s murder. See Maclean (1957) pp.61-3.
19. In a Circular Letter to his priests, dated 28 April 1941, Stepinac
called the setting up of the new state ‘momentous events, …the
culmination of an ideal long cherished and desired by our people’
v
v
v
v
v
v
The disintegration of Yugoslavia 79
and appealed to the faithful to ‘fulfil (their) duty’ by working for
the preservation of the young ‘independent Croat state’. For the
full text of the letter, see Pattee (1953) p.84. After some time,
Archbishop Stepinac became wary of the increasing scale of
atrocities and moderated his public support for the regime,
though never condemning Pavelić or the Ustasa.
20. The accounts of Ustasi crimes do not come from Yugoslav sources
alone. Outsiders like the British military and intelligence officers
parachuted to Yugoslavia, the New Zealand surgeon Rogers, the
Jewish organisations and many others have given detailed account
of the most barbaric cruelties (including shooting, drowning,
hacking, burning, and throwing en masse over precipices)
committed in the ‘Independent State of Croatia’. For detailed
accounts, see Colaković (1962) pp.157, 167 and 180-3; Davidson
(1946) p.80; Dedijer (1951) pp.163-5; Dedijer (1953) pp.139
and 152; Lowenthal (1957); Maclean (1957) pp.123-4 and 161-4;
and Rogers (1957) p.46.
21. Cohen and Warwick (1983) p.58 and Davidson (1946) p.331.
The precise number, of course, will always remain a secret
because, as with Nazi extermination camps, no systematic record
of arrests, deportations and killings were kept.
22. Archbishop Stepinac was brought to justice and after a much
publicised trial, was sentenced to sixteen years imprisonment. For
details of the trial and the documents presented as evidence, see
Pattee (1953). Pavelić and many of his henchmen, though, fled
from Yugoslavia and with the help of the Catholic church, the
Vatican and even the Allies, they reached Argentina. There, he
reorganised his Ustas a movement, even publishing the journal
Hrvatska Revija (Croatian Review). The Ustas i, in exile,
continued to organise terrorist activities against Yugoslav
government officials. They have been responsible for scores of
bombings at Yugoslav embassies and the murder of a number of
Yugoslav diplomats around the world. The documents on the
flight of Nazi war criminals to South America after the end of
World War II, released by the new Argentinian government in
February 1992, points the finger of accusation for complicity at
the Vatican (Guardian, 15 February 1992).
23. For the activities of the YCP in this period, especially its attitude to
Nazi Germany before the invasion of the USSR, see Shoup (1968)
pp. 44-50; Auty (1970) pp.150-4 and Frankel (1955) pp.51-2.
24. The Cetnik leader Draza Mihailović, a colonel in the Serbian
army during the First World War, was appointed as the Minister
of War by the exiled ‘Royal’ Yugoslav government in London and
his Cetniks began receiving military support from Great Britain.
25. For more details on C etnik activities, see Tomasovich (1975)
p.261 and Ostović (1952), esp. pp.219-228. For observations by
the British Liaison Officers, see Davidson (1946) pp.82-5;
Lawrence (1947), Maclean (1957) pp.176-7 and 263-4 and
v
v
v
v
v
v
v
v
v
80 Capital & Class ● 48
v
Rootham (1946). For reports by Yugoslavs, see Colaković (1962)
pp. 207, 234-5 and 243-5 and Dedijer (1953) pp.253-6.
Mihailović was finally arrested in March 1946, tried and
condemned to death in July of the same year. For a sympathetic
treatment of the Cetnik movement, see Lees (1989).
26. While the party’s basic line remained one of national reconciliation, the opposition from some reactionary sections of some
nationalities (often with religious overtones) was severely put down.
There were violent confrontations with the Albanian minority in
Kosovo reaching the point of an armed uprising in 1944 with
scores of deaths. The relations with the Catholic church in Croatia
and with the Islamic Religious Community in Bosnia, became very
tense. For a detailed discussion of the Party’s relations with
minorities in this period, see Shoup (1968) ch.3, esp. pp.102-118.
27. According to a Law passed soon after the War, any incitement to
hatred on the basis of nationality, religion or race was made a
criminal offence. Sluzbeni List DFJ (Official Gazette) No.36, 1945.
28. The decision to make Bosnia-Herzegovina a separate republic and
the sixth unit of the Federation was taken, after much debate, at
the second session of AVNOJ (Anti-Fascist National Liberation
Council of Yugoslavia) in November 1943. For details of the
discussion leading up to this decision, see Colaković (1962)
pp.283-5. The status of Bosnian Moslems as a separate nationality, however, was not settled at this stage but had to wait until
the early sixties. For details, see Shoup (1968), Ch.6. From then
on ‘Moslem’ has denoted a nationality rather than a religion.
29. The designation of various regions as ‘economically less developed’
has changed a number of times, affecting the flow of development
funds. However, since 1965, the areas designated as such have
remained unchanged. See Ocić (1986) pp.9-15. The position of
Serbia was of course particularly crucial: though it was not a
developed region, it contributed to development funds heavily but
not being a less developed region, she did not receive any of the
funds (more on this later).
30. The rapid development of the less developed regions has been one
of the objectives of all five-year social plans since 1947. See
Bićanić (1973) p.61.
31. The Constitution of SFRY , 1974, Basic Principle III, p.15.
Similar pronouncements were made in earlier Constitutions.
32. The scarcity of resources for regional development and the
competing claims of different regions for these resources was,
furthermore, compounded by Yugoslavia’s expulsion from the
Cominform in 1948. This resulted in serious disruption of
external trade and diversion of resources from civilian to military
industries. The associated dislocation meant that the scarce
investment funds had to be allocated to those regions and projects
with higher productivity of investment. This, in general, meant
the more developed regions and their industrial projects.
v
v
v
The disintegration of Yugoslavia 81
33. For details of the development of the idea of workers’ selfmanagement, see Djilas (1969), esp. pp.157-8; Horvat (1971)
pp.75-7 and Milenkovitch (1971) pp.62-5. For the dispute with
Cominform, see Clissold (1975); Claudin (1975) and Freedman
(1970).
34. In addition to these resources, enterprises in LDRs could also
apply for investment credits directly to the General Investment
Fund. These applications were to be given preferential treatment
subject to profitability considerations. See Mladenović (1965)
pp.3000-3001; and Bićanić (1973) p.187.
35. Sluzbeni List SFRJ, no.35, February 1965.
36. Article 258, section 4 of 1974 Constitution. A similar article
existed in the previous Constitution.
37. By the mid-fifties, 40-50% of total investment was being allocated
to manufacturing and mining (of which 30-40% was spent on
metallurgy and chemicals and only 5-10% on food processing and
drinks) and only 6-8% of the total was going into agriculture.
Statistic ki Godis njak Jugoslavije (1960) (hereafter SGJ) p.233.
From 1947 to 1962, e.g. metallurgical industries accounted for 13%
of total investment in MDRs, but 25% in LDRs; durable consumer
goods accounted for 16% of industrial investment in MDRs, but
5% in LDRs. For more details, see Mladenović (1965) p.2998-9.
38. Given that the Yugoslav economy has had a relatively high rate of
inflation throughout the period under consideration, these real
increases in investment take an even more significant dimension.
39. Gregory (1973) p.228 and Milenkovich (1971) p.181.
40. Between 1952 and 1960, total social product, industrial
production, investment and personal incomes grew at annual
rates well over 10%, and agricultural production at 9% (all in real
terms). Jugoslavija 1945-64, pp.87-9.
41. For data on the achievements of this period, see Hashi (1979)
p.233.
42. Stanković (1981) pp.16-18, basing himself on the work of
Yugoslav sociologist Neca Jovanov, talks of ‘several thousand’
strikes between 1958 and 1978. See also Benson (1974), Kavc ić,
Rus and Tannenbaum (1971), Obradović (1975), Rus (1970),
–Zupanov and Tannenbaum (1968).
43. See Estrin (1978).
44. The tendency to restrict employment is one of the main features
of various versions of the theory of the labour-managed firm.
45. The most well known protests took place at Belgrade University,
where students demanded the sharing of the burden of reforms
by all sections of the society and the curtailing of the power of the
‘red bourgeoisie’. For details, see Fejto (1977) pp.209-10 and
Stanković (1981) pp.16-18.
46. Articles 129-131 of the Constitution. See also Fejto (1977)
p.507; and Prout (1985) pp.77-81.
47. Article 70, 1974 Constitution, p.59.
v
v
v
v
v
82 Capital & Class ● 48
48. Preamble to the 1974 Constitution, p.16.
49. Two examples of the magnitude of bargaining involved in this
period would be sufficient to illustrate this point. The first
example concerns the decision on the allocation of investment
resources involving many participants. For the 1976-80 social
plan, the investment expenditure in each industry and region was
decided through simultaneous negotiations between enterprises,
their industry chambers, trade unions, socio-political
communities of all levels, which eventually resulted in 240 social
compacts, 30 in each republic or province. For details, see Prout
(1985) pp.73-4. The second example describes the situation in
one firm alone. The Rakovica Motor Works, which was made up
of 10 BOALs (one engaged in producing chassis. one for engines,
another for transmissions, another in sales, and so on) with ten
workers’ councils. There were 78 self-management agreements
negotiated to regulate inter-enterprise arrangements. It is
estimated that some 18,000 man-hours were taken to negotiate
these agreements. In 1987, they decided to abolish the ten BOALs
and have just one organisation for the whole enterprise. For
details, see The Wall Street Journal, 25 March 1987.
50. The principle of ‘equality of all nations’, therefore, gave Montenegro with half a million population, exactly the same powers on
the top decision making body as Serbia with over seven million,
and an effective veto power.
51. Yugoslavia, 1945-8. p.195; Mladenović (1978) p.68 and
Mladenović (1982) pp.15-17.
52. Mladenović (1978) pp.63 and 66; Mladenović (1982) pp.14-16
and –Durd–ević (1987) pp.23-4 and 38-9.
53. Yugoslavia, 1945-85, p.192.
54. The intervention of the LCY in the process of formulation and
implementation of the government’s macroeconomic policy, e.g.,
led to the resignation of at least two prime ministers (Milka
Planinc in 1985 and Branko Mikulić in 1988). See Gapinski,
Skegro and Zuehlke (1989) pp.93 and 232-3.
55. According to research conducted at the Institut ekonomski nauka,
between 1978 and 1989, the proportion of population below the
poverty line increased from 17.2% to 23.6%. The variation
across the regions was even more startling: 2.9% in Slovenia and
81.9% in Kosovo. For details, see Posarac (1991) p.95-97.
56. The Enterprise Law, sanctioning the plurality of forms of ownership; Foreign Investment Law; Financial Operations Act; Law on
Banks and Other Financial Organisations; Law on Securities;
Money Market and Capital Market Laws and a number of other
related laws were enacted to make these constitutional changes
operational. For details, see Jugoslovenski Pregled (1989a),
(1989b) and (1990).
57. For a recent statistical survey of achievements in LDR s, see
Federal Statistical Office (1986), ch.7.
v
The disintegration of Yugoslavia 83
58. Using a variety of analytical methods (cluster analysis, regression
method, etc), Gregory (1973); Ocić (1986) and Flaherty (1988)
also have reached the same conclusions.
59. Yugoslav Survey, No.3, 1991, pp.7-10. Even forty years of
socialist policies could not reduce the high rate of population
growth resulting from the interaction of economic, social and
cultural (especially religious) factors.
60. In fact if the population size is taken into account, the ‘high
investment’ regions of Table 3 will mostly change to ‘low investment per capita’ regions.
61. During the 1964-72 period, for example, when the market-based
self-management system was in place, the share of internally
generated resources in total investment in Slovenian and Croatian
enterprises was 36-47%, that of bank credits 40-52%; in Kosovo
these shares were 10-15% and 13-30% respectively. The share of
investment provided by social funds, however, was almost zero in
the former regions but 50-70% in Kosovo. SGJ (1966) p.471; and
SGJ (1973) pp.477-81.
62. Thus the accusation (sometimes well founded) that the LDRs were
directing these resources to prestige projects, massive buildings in
their capital and higher education institutions which concentrated
not on science and technology but on literature and history of the
particular regions.
63. From 1976 onwards, part of the contribution of enterprises to
the Fund for Accelerated Development of LDRs was to be made
in the form of ‘pooling of labour and resources’ of BOALs in
MDRs and LDRs, i.e. joint ventures arranged between BOALs
themselves. See –Durd–ević (1987) p.23. But this type of collaborative effort, which might have had beneficial effect in terms of
transfer of technology or know-how, was not particularly
successful partly because of the non-transferability of property
rights in Yugoslavia and partly because the LDRs regarded this as
an infringement of their independence.
64. The most important example of this unity is the alliance supporting Aleksandar Ranković in the early sixties which actually
succeeded in forcing the postponement of major economic
reforms until 1965. For details, see Shoup (1968) pp.248-255. In
the late-eighties, a similar alliance was formed around Milosević
in order to thwart Slovenia and Croatia’s dash for a loose
confederate state. For some of the documents of the Federal
Presidency, see Yugoslav Survey, No.4, 1990 and No.1, 1991.
65. Kardelj (1958). In this essay Kardelj argued that ‘nations’ would
continue to play an important role until the realisation of socialism.
66. The concept of a common core of ‘Yugoslav’ literature and
history, to be covered in school text-books, was discussed and
cultural cooperation between different nations was encouraged.
From 1963, it became legally possible to declare one’s nationality
as ‘Yugoslav’ on official forms. By 1981, some 5% of the
v
84 Capital & Class ● 48
population, spread in almost all republics, chose to describe
themselves as Yugoslavs (see Table 1).
67. The tendency amongst local officials to focus on their own
narrow economic interests accentuated this process. See, e.g.
Djilas (1957) p.101.
68. For details, see Shoup (1968) pp.190-198.
69. See Burg (1983) pp.100-160; Fejto (1977) pp.505-508; and
Drachkovitch (1972) p.106.
70. For details, see Frankel (1955) p.59; Pantić (1967) pp.16-24; Zanninovich (1971) pp 68-9; and Cohen and Warwick (1983) p.89.
71. For an in-depth analysis of this problem, see Horvat (1987).
72. The Amnesty International Report, EUR 48/26/91, November
1991; Helsinki Watch report, Guardian 15 February 1992; and
Index on Censorship, No. 5, 1992, p.35.
73. In an interview with Croatian Television, Margaret Thatcher, for
example. referred to the dispute as a fight between communism
and democracy and criticised the British Government for not
actively supporting Croatians (including sending them arms).
The Times. 23 November 1991.
74. The Economist 18 January 1992 and Guardian, 17 January 1992.
75. During the inter-war period, Serbs (together with Montenegrins
and Macedonians), accounted for some 44% of the population
but constituted 70% of the officers’ corp, 87% of generals rank,
56% of judges of regular courts, 67% of prosecutors, and 69% of
ministerial positions in Belgrade. The Croats, on the other hand,
accounted for 24% of population but 16% of officers corps, 9%
of generals, 31% of judges, 22% of prosecutors and 18% of
ministerial positions. For details, see Cohen (1989) pp.128 and
263; and Banac (1984) pp.58 and 217.
76. Davidson (1946) p.95; Dedijer (1953) p.152, Maclean (1957)
p.168; Colaković (1962) pp.317-320; and Cohen and Warwick
(1983) p.60. The First Proletarian Brigade, the core of the
National Liberation Army, formed in December 1941, was also
made up of mainly these two nationalities: 62% Serbs and 31%
Montenegrins. Ibid., p.71. A study of the ethnic origin of the
surviving veterans of the partisan movement, showed that, even
in 1977, Montenegrins, Macedonians and Serbs from Croatia,
Bosnia, Vojvodina and Kosovo constituted a higher percentage of
the veterans than of the population. The Croats of Croatia,
Bosnia-Herzegovina and Vojvodina, on the other hand, were
under-represented in the veteran population. See Savzni zavod za
statistiku, Statistic ki Bilten, 1174, April 1980.
77. The notion of ‘parity of representation’, of course, is one that has
aroused much emotion in Yugoslavia and has contributed to the
rise of nationalism everywhere. Serbia is the largest republic and
Serbs constitute some 40% of the population. But they have not
had the same proportion of the leading posts in Federal
institutions. The Montenegrins, who constitute less than 3% of
v
v
The disintegration of Yugoslavia 85
the population, have occupied a much greater proportion of
leading positions. ‘Parity’, for Serbs, has meant that, in many
areas of social and political life, they would carry less weight than
their numerical strength in the Federation warranted. This
became a particularly thorny issue in the recent period and was
heavily relied on by the nationalist forces and groups.
78. The Federal Presidency had one representative from each republic
and province, with the office of the President of Presidency
rotating amongst members each year. The Presidium of the
Central Committee of the League had three representatives from
each republic and two from each province.
79. Dr. Vladimir Bakarić in an interview with Frankfurter Rundschau, December 17, 1971.
80. Tudjman (1981) p.164.
____________________
Amnesty International. Yugoslavia, EUR48/26/91, London,
November 1991
Auty, Phyllis (1970) Tito: A Biography, Longman, London.
Avakumović, Ivan (1964) History of the Communist Party of
Yugoslavia. Aberdeen University Press, Aberdeen.
Banac, Ivo (1984) The National Question in Yugoslavia: Origins,
History, Politics. Cornell University Press, Ithaca.
Benson, L. (1974) ‘Market Socialism and Class Structure: Manual
Workers and Managerial Power in the Yugoslav Enterprise’ in
Parkin, F. [ed.] The Social Analysis of Class Structure. Tavistock
Publications, London.
Bićanić, Rudolf (1973) Economic Policy in Socialist Yugoslavia.
Cambridge University Press, Cambridge.
Burg, Steven L. (1983) Conflict and Cohesion in Socialist Yugoslavia.
Princeton University Press, Princeton.
Claudin, Fernando (1975) The Communist Movement. Penguin,
London.
Clissold, Stephen. (1975) Yugoslavia and the Soviet Union 19391973. Oxford University Press, London.
Cohen, Lenard J. (1989) The Socialist Pyramid: Elites and Power in
Yugoslavia. Mosaic Press, Oakville.
Cohen, Lenard J. and Paul Warwick (1983) Political Cohesion in a
Fragile Mosaic: The Yugoslav Experience. Westview Press, Boulder.
Colaković, Rodoljub (1962) Winning Freedom. Linclolns-Prager
Publishers, London.
Crnja, Z. (1962) Cultural History of Croatia. Zagreb.
Davidson, Basil. (1946) Partisan Picture. Bedford Books, London.
Dedijer, Vladimir. (1951) With Tito Through the War 1941-44.
Alexander Hamilton, London.
__________ (1953) Tito Speaks. Weidenfeld & Nicolson, London.
v
References
86 Capital & Class ● 48
Djilas, Milovan (1957) The New Class: An Analysis of the Communist
System. F.A. Praeger, N.Y.
__________ (1969) The Unperfect Society: Beyond the New Class.
Methuen, London.
Drachkovitch, M.M. (1972) ‘Yugoslavia’ in Staar R.F. [ed.] Year-book
on International Communist Affairs 1972, Hoover Institution
Press, Stanford.
–Durd–ević, Ivanka (1987) ‘Development of Underdeveloped Republics
and Kosovo Province 1981-85 and Development Policy 1986-90’.
Yugoslav Survey, No.4.
Estrin, Saul. (1978) ‘Industrial Structure in a Market Socialist
Economy’, Discussion Paper no.7717, University of Southampton,
January 1978.
Federal Statistical Office (1986) Yugoslavia 1945-85. Beograd.
Fejto, Francois (1977) A History of the People’s Democracies. Penguin,
London.
Fisher, Jack C. (1966) Yugoslavia: A Multi-National State. Chandler
Publishing Co., San Francisco.
Flaherty D. (1988) ‘Plan, Market and Unequal Regional Development in Yugoslavia’ in Soviet Studies, January 1988.
Frankel, J. (1955) ‘Communism and the National Question in
Yugoslavia’ in Journal of Central European Affairs. April 1955.
Freedman, R.O. (1970) Economic Warfare in the Communist Block.
Praeger, N.Y.
Gapinski, James H., Borislav Skegro and Thomas W. Zuehlke (1989)
Modeling the Economic Performance of Yugoslavia. Praeger, N.Y.
Gregory, Mary (1973) ‘Regional Economic Development in Yugoslavia’ in Soviet Studies, October 1973.
Hashi, Iraj (1979) ‘Yugoslavia’s Labour-Managed Firms and LabourManaged Economy in the Post-War Period’, Ph.D. dissertation,
University of Keele, 1979.
Hoptner, Jacob B. (1962) Yugoslavia in Crisis, 1934-1941. Columbia
University Press, N.Y.
Horvat, Branko (1971) ‘Yugoslav Economic Policy in the Postwar
Period: Problems, Ideals, Institutional Development’ in American
Economic Review, June 1971 (Supplement).
__________ (1987) ‘The Kosovo Question’ in Labour Focus on
Eastern Europe, July-October 1987.
Izdavacki centar komunist Beograd (1989) ‘Sta pokazuju istazivanja
SKJ’. Vanredni Kongres SKJ, 20-22.1.1989, Beograd.
Jelavich, Charles (1962) ‘Serbian Nationalism and the Question of
Union with Croatia in the Nineteenth Century’ in Balkan
Studies, Part V, 1962
Jugoslovenski Pregled (1989a) Investing in Yugoslavia (The
Enterprises Law and the Foreign Investment Law), Beograd.
__________ (1989b) Financial Reform in Yugoslavia (a collection of
various new laws on: Financial Operations Act, Law on Banks
and Other Financial Organisations, Law on Securities, and
v
v
v
The disintegration of Yugoslavia 87
Money Market and Capital Market Law), Beograd.
__________ (1989c) The Constitution of the Socialist Federal Republic
of Yugoslavia. Beograd.
__________ (1990) Liberalization of the Foreign Exchange Regime in
Yugoslavia (a collection of various laws on: the Foreign Exchange
Law and the Free Trade and Customs Zones Law), Beograd.
Kardelj, Edvard (1958) Razvoj Slovenac kog nacionalnog pitanja, 2nd
ed. Kultura, Beograd.
Kavcić, B., V. Rus and A.S. Tannenbaum (1971) ‘Control, Participation and Effectiveness in Four Yugoslav Industrial Organisations’
in Administrative Science Quarterly, March 1971
Kingscoat, Flavia (1942) Balkan Exit. Geoffrey Bles, London.
Lawrence, Christie (1947) Irregular Adventure. Faber, London.
Lederer, Ivo J. (1963) Yugoslavia at the Paris Peace Conference: A
Study in Frontiermaking. Yale University Press, New Haven.
Lowenthal, Zdenko [ed.] (1957) The Crimes of the Fascist Occupants
and Their Collaborators Against the Jews in Yugoslavia. Federation
of Jewish Communities of the FPRJ. Beograd.
Macek, Vladko (1957) In the Struggle for Freedom. Robert Speller,
N.Y.
Maclean, Fitzroy (1957) Disputed Barricade. Jonathan Cape, London.
Magas , Branka (1992) ‘Lessons of History: War returns to Yugoslavia’.
Capital & Class 47, pp.25-32.
Milenkovitch, Deborah (1971) Plan and Market in the Yugoslav
Economic Thought. Yale University Press, Newhaven.
Mladenović, Mihailo (1965) ‘Post-war Development in Economically
Underdeveloped Republics and Areas’ in Yugoslav Survey, Vol. 6.
__________ (1978) ‘The Policy and System of Stimulating Faster
Development in Economically Underdeveloped Republics and
the Autonomous Province of Kosovo in the Period 1979-80’ in
Yugoslav Survey, No.1, 1978.
__________ (1982) ‘Development of Economically Underdeveloped
Republics and the Autonomous Province of Kosovo’ in Yugoslav
Survey, No.2, 1982
Obradović, Josip (1975) ‘Workers’ Participation: Who Participates?’
in Industrial Relations, February 1975.
Ocić, Caslv (1986) Nacionalna ravnopravnost i regionalni razvoj.
Institut economski nauka, Beograd.
Ostović, P.D. (1952) The Truth About Yugoslavia. Roy Publishers,
N.Y.
Pantić , Dragomir (1967) Etnic ka Distanca u SFRJ. Institut
drus tvenih nauka, Beograd.
Posarac, Aleksandra (1991) ‘Poverty in Yugoslavia, 1978-1989’ in
Sudosteuropa, Heft 2, 1991.
Prout, Christopher (1985) Market Socialism in Yugoslavia. Oxford
University Press, Oxford.
Ristić, Dragisa (1966) Yugoslavia’s Revolution of 1941. Pennsylvania
State University Press, University Park.
v
v
v
v
v
v
v
v
v
88 Capital & Class ● 48
Rogers, Lindsay (1957) Guerilla Surgeon. Collins, London.
Rootham, Jasper (1946) Miss Fire: The Chronicle of a British Mission
to Mihailovich 1943-1944. Chatto & Windus, London.
Rus, V. (1970) ‘Influence Structure in Yugoslav Enterprises’ in
Industrial Relations. February 1970.
Savezni zavod za statistiku (1965) Jugoslavija 1945-64. Beograd.
__________ (various years, 1955-1990) Statistic ki Godisnjak Jugoslavije.
Beograd.
Shoup, Paul (1968) Communism and the Yugoslav National Question.
Columbia University Press, N.Y.
Stanković, Slobodan (1981) The End of the Tito Era: Yugoslavia’s
Dilemmas. Hoover Institution Press, Stanford.
Tomasovich, Jozo (1975) The Chetniks. Stanford University Press,
Stanford.
Tudjman, Franjo (1981) Nationalism in Contemporary Europe. East
European Quarterly, New York.
Vusković, Boris (c.1985) ‘Temeljna demografska i socijalna oblijezja
c lanstva Saveza Komunista Jugoslavije’ in Marksistic ki Centar
Konferencije SKJ Z O Split, Struktura i dinamika c lanstva Saveza
Komunista. Saveza komunista Hrvatska Z.O. Split.
Zaninovitch, M. George (1971) ‘The Case of Yugoslavia: Delineating
Political Culture in a Multi-ethnic Society’ in Studies in
Comparative Communism, No.2, April 1971.
Zupanov, J., and A.S. Tannenbaum (1968) ‘The Distribution of
Control in some Yugoslav Industrial Organisations as Perceived
by Members’ in Tannenbaum, A S. Control in Organization,
McGraw Hill, N.Y.
v
v
v
v
v
v
v
______________________________