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Yugoslavia Regional Disparities
The substantial autonomy given subnational governments in
managing their own economic development prevented the six
republics and two provinces from developing cross-boundary
economic relationships, and the political fragmentation of
Yugoslavia's uniquely loose federal structure stymied efficient
exchange of goods and services. Stark economic disparities among
regions remained unmitigated throughout the 1980s despite
numerous federal programs to redistribute wealth by integrating
the natural wealth of poorer regions (such as the coal and
minerals of Kosovo) into the national economy.
The three northern republics, Slovenia, Croatia, and most of
Serbia, emphasized high technology in building production
capacity and attracting foreign investment. By contrast, the less
developed southern regions, especially Kosovo, Macedonia,
Montenegro, and southern Serbia, stressed traditional, laborintensive , low-paying economic activity such as textile
manufacture, agriculture, and handicrafts. This contrast produced
sharp differences in employment, investment, income potential,
and social services among the eight political units of the
federation. For example, in the late 1980s average personal
income per social sector worker in Macedonia was half that of a
similar worker in Slovenia. Especially in Kosovo and Macedonia,
poor economic and social conditions exacerbated longstanding
ethnic animosities and periodically ignited uprisings that
threatened civil war.
(see Regional Political Issues
, ch. 4)
Meanwhile, the federal government continued to divert the
earnings of prosperous Slovenia and Croatia into its Fund for
Underdeveloped Regions in the late 1980s. The Slovenes, who
contributed 25 percent of Yugoslavia's hard-currency export
earnings in 1989, were especially irritated by the requirement to
pay as much as 20 percent of the republic's income to subsidize
nonproductive enterprises in other republics; this issue fueled
the drive for Slovenian secession. In 1990 Slovenian leaders
announced curtailment of their contribution to the Fund for
Underdeveloped Regions because they had lost hope that the
mismanaged central government would ever invest their earnings
profitably, and because the local economy was declining. Croatia
threatened similar action if the federal government did not make
concessions. By this time, economic autonomy and membership in
the EEC had become attractive and plausible alternatives for
Slovenia and Croatia
(see Slovenia;
Croatia
, ch. 4).
Data as of December 1990
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