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Yugoslavia Guest Workers and Tourism
Beginning in the 1960s, Yugoslavia earned considerable hard
currency income from so-called "invisibles": remittances from
Yugoslav guest workers working abroad, and from tourists visiting
from countries whose currency was convertible into dinars. These
remittances were important to the Yugoslav budget, particularly
in the mid-1970s when they bridged the gap in the import-export
balance and produced surpluses in the balance of payments.
Beginning in the early 1970s, changes in financial laws
encouraged Yugoslavs working abroad to deposit foreign currency
savings in Yugoslav banks. Remittances, which averaged US$2
billion in the late 1970s, became the richest source of hard
currency income for the Yugoslav economy. In the late 1980s,
unofficial hard-currency income played a visible role in
stimulating activity such as construction of private housing.
Through 1990, about 375,000 workers had invested in Yugoslav
firms after returning, and another 160,000 had started private
business.
Yugoslavia was already an exporter of surplus labor before
World War II. The Tito government actively discouraged that
practice until the early 1960s, however, when growing
unemployment altered official policy. Beginning with the reform
of 1965, government policy encouraged workers to go abroad. In
1981, there were 875,000 Yugoslavs working abroad, mostly in West
Germany and Austria
(see Guest Workers
, ch. 2).
Generally speaking, heavy reliance on tourism is not wise
policy for a developing country, because that industry is highly
sensitive to seasonal fluctuations and uncontrollable economic
and political events. But from 1961, when one million tourists
visited Yugoslavia, the figure increased steadily to over nine
million in 1988, under government support for the tourist
industry that began in the early 1960's. Besides its monetary
contributions to the national balance of payments, tourism
produced a quick return for those employed in the hotel,
restaurant, and service industries. In real terms, income in
those industries increased by about 1.7 times between 1965 and
1988. Tourism also stimulated the building, transportation, food
manufacturing, and handicrafts industries.
Data as of December 1990
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