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Yugoslavia MANAGING THE CRISIS OF THE 1980s
Between 1975 and 1980, the Yugoslav social product fell and
inflation reached an annual rate of 50 percent. When the
international oil shock of 1979 hit, policy makers realized they
could not continue an economic development strategy based on
heavy foreign borrowing and inefficient investment at home. In
1982 the Long-Term Economic Stabilization Program was released by
the Krajgher Commission for Economic Stabilization. The
commission reexamined Yugoslavia's development priorities and
formulated a revised strategy for the 1980s. Self-management
would remain at the center of the system, but substantial
reorientation would occur. Important elements were coordination
of investment between industrial and agricultural sectors,
diversification of energy resources, greater investment in
technical development, and improved incentives for the private
sector, now recognized as the most efficient part of the national
economy. Workers, whose wages had increased faster than their
productivity under the self-management system, would be subject
to wage austerity programs to restore the balance.
Although the party overwhelmingly endorsed the long-term
program, influential conservatives blocked practical application
of Krajgher Commission programs. In 1983 the Federal Assembly
(Skupstina) passed only eight of twenty-five major
legislative proposals; it postponed decision on the remainder,
many of which would have activated parts of the long-term
program. The events of 1983 set a precedent for a new round of
economic bickering and regional finger pointing that delayed
meaningful reform another seven years.
Data as of December 1990
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