YUGOSLAV 'DEMOCRATIZATION' GAINS MOMENTUM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A005700070003-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 16, 2016
• Document Release Date: November 29, 2004
• Sequence Number: 3
• Publication Date: April 7, 1967
• Content Type: REPORT

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Secret
25X1
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Yugoslav "Democratization" Gains Momentum
Secret
N2 45
7 Apr 1 1967
No. 0284/67A
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YUGOSLAV "DEMOCRATIZATION" GAINS MOMENTUM
The dismissal last year of President Tito'.;
political heir, Aleksandar Rankovic, gave impetis
to the Yugoslav regime's program to decentralize
economic and political authority and to loosen _.he
party's tight control over all aspects of political
life. Since then, the stature of the parliamen=.
has been increased, a trend toward a looser feder-
ation of the country's six republics has gained
ground, and the leaders have been trying to trans-
form the party's role into one of persuasion
rather than dictation.
These changes have unleashed many crosscurrents
which have hampered and in some cases endangered
the achievement of the regime's goals. The question
of a successor to Tito has been deliberately blurred,
and the nationalist frictions and economic riva._ries
among the republics, as well as the ideological
confusion, have presented the regime with a con-
stantly shifting opposition to its policies.
Tito will continue to seek a middle ground
favoring cautious, moderate change. He will, how-
ever, find it difficult to achieve a continuing
equilibrium between party power and the liberaljza-
tion which he has fostered and which cannot eas=ly
be reversed.
Retreat From Orthodoxy
Yugoslavia's expulsion from
the Cominform in 1948 and its
subsequent isolation pushed the
Tito regime into various polit-
ical and economic innovations
which have gradually brought the
country to the brink of political
and economic freedom. In rapid-
fire order and with a zeal matched
only in the drive toward central-
ization before 1948, the Yugo-
slavs, in the 1950s, abandoned
many Marxist institutions pre-
viously considered sacrosanct.
In devising a "new w~iy," Belgrade
undertook a drastic decentrali-
zation of authority in the state
structure and the establishment
of a competitive economic system
based upon workers' participation
in management at the enterprise
level. From these changes, a
process of what could be called
"guided democratizaticn" has
taken hold and gainer a momentum
all its own.
The regime recoanized early
the necessity of enlisting the
active participation and support
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Titograd
Chronology of Decentralization in Yugoslavia
1948 Yugoslav Communist Party expelled from
Cominform.
1950 Workers' councils started in enterprises.
1953 Regime abandons efforts to collectivize
agriculture.
1958 New party program emphasizes self-man-
agement and the guiding role of the party.
1963 New constitution adopted; role of parlia-
ment increased.
1964 Eighth party congress reaffirms the party
program and the Yugoslav way to socialism.
1965 July Major economic reform started.
1966 July Aleksandar Rankovic ousted as party sec-
retary and vice president of Yugoslavia for
opposing the economic reform and plotting
against Tito.
Oct Party reorganization started.
Dec New internal security law curtails the power
of the secret police. Slovenian cabinet re-
signs, starting the first government crisis
in postwar Yugoslavia.
1967 Jan New laws liberalize foreign trade.
April National elections.
BELGRADE (9
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of the population in these ven-
tures. To get this it loosened
restrictions on personal freedom,
took a more liberal attitude to-
ward the Catholic Church, and
permitted the press greater free-
dom. These moves could boomerang
because, by their very nature,
they threaten to end Communist
government in Yugoslavia.
Tito will never willingly
allow a successful challenge to
his one-party system, but a return
to strong central party control--
which party conservatives want--
would equally spell defeat for
his experiment. He therefore is
counting heavily on sympathetic
party members of all nationali-
ties to see that the "democrati-
zation" continues to be "guided"
behind the scenes at the local
level. In this way he hopes to
assuage the party conservatives
and to avert a drive for complete
autonomy for the republics--
historically a problem for the
Yugoslav state because of the
many mutually suspicious nation-
alities which comprise it.
Parliamentary Authority
A striking phenomenon in
Yugoslavia's deviation from Com-
munist orthodoxy is the rise of
parliamentary authority. The
Federal Assembly (parliament)
forsook a rubber-stamp role af-
ter its reorganization in 1963
and, at the behest of the party,
has since engaged in genuine de-
bate on policy and legislation.
It has regularly rejected laws
it believed inconsistent with
broad policy guidelines set by
the party, and assembly representa-
tives have found it Easy to press
their regional interests and per-
sonal ambitions. This has led to
a kind of give and take charac-
teristic of Western-type democ-
racies, and almost certainly will
induce the leaders eventually to
seek the support of groups and
institutions outside the party.
A Slovenian cabinet crisis
last December dramatically illus-
trated the spread of this spirit
of independence, as well as a
divergence of legislative and
executive interest. In an un-
precedented move, the Slovenian
cabinet resigned rather than ac-
cept the rejection by the legis-
lature of a proposed Law. Al-
though the constitution permits
this, the crisis jolted the
country's leaders as they con-
templated the impact of such a
squabble at the federiil level.
Significantly, the regime
did not attempt to c~irtail the
Slovenian cabinet's freedom of
action. On the contrary, it
moved to clarify the cabinet's
responsibility to the legisla-
tive branch and it w=:_11 redraft
the regulations to make explicit
the right of individual members
or the cabinet as a whole to
resign.
Under additional proposed
constitutional amendments, the
only government ministers who
will remain ex officio members
of the cabinet will le the state
secretaries for national defense
and foreign affairs. All other
members of the federal cabinet
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will be elected by the assembly
which can also vote them out.
So far, parliament's actions
have remained well within the
limits intended by the party.
However, this may not always be
so. The groundwork has been laid
for future conflicts, and as the
confidence and independence of
parliament grow, it may not al-
ways come off second best.
April Elections
Freer and politically more
significant elections portend an
even more rapid move toward par-
liamentary rule. The regime has
dropped its restrictions on the
number of candidates for seats
in various governmental bodies.
This has given rise to some hotly
contested nominations, particu-
larly at the local level. The
increasing independence of gov-
ernmental bodies and the regime's
emphasis on local authority have
made elective positions more at-
tractive: to non-Communist intel-
lectuals and technicians.
These factors and the large
number of offices to be filled
lend unusual importance to the
federal and local elections
scheduled for 9 and 23 April.
At stake are the premiership,
the presidency and leadership of
the Federal Assembly, and the
seats of half the deputies. The
elections will also complete
the turnover of executive and
legislative personnel started
by the 1963 and 1965 elections.
The terms of one half of
the office-holders end every four
years and the constitution does
not permit them to stand for re-
election. This rotation system
provides Tito a means to draw
into the hierarchy the younger,
more liberal intellectuals who
support his programs.
With the nominating process
currently in full swing, some
leaders have shown concern over
the number and types of nominees.
They probably fear that free
elections will lead to more chal-
lenge and debate than the regime
is prepared for. Assembly Presi-
dent Kardelj has criticized "hap-
hazard" nominations and party
leader Todorovic has warned that
Yugoslavia is not prepared for
overt political struggle.
The Economy
Changes taking place in
the economy deviate from tradi-
tional Communist methods to the
same extent as those in the gov-
ernment. After years of halting
half steps and setbacks, the
regime began a determined campaign
in 1965 to make profitability
the basis for organizing produc-
tion. It is, however, up against
some practical economic realities
that make the reform program's
success in the near future highly
uncertain.
The government hopes to
rely more on indirect controls,
such as fiscal and monetary
policies, to influence the econ-
omy, and less on direct. central
controls. As the first step,
the banking system was reorgan-
ized to give the banks a greater
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Prices and Wages
(1964=100)
200
Allocation of Investment Resources
(PERCENT)
0
1963
66 (Jon.-Oct.)
1965 1 1966
Balance of Payments on Current Account
(Millions of Dollars)
-213
224
--
Cther
x
1;11.8..
287
1964 1965* 966* 25X1
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Balance on +49,
Noncommodity
transactions**
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role in determining the alloca-
tion of investment. Taxes were
reduced to strengthen the finan-
cial position of the enterprises.
Prices were juggled to reduce
disparities between those for
agricultural and raw materials
and those for manufactured prod-
ucts, and to bring these prices
more in line with the world mar-
ket. The dinar was devalued to
ease a strain on the balance of
payments.
In January a new foreign
trade law freed about half of
Yugoslavia's imports from con-
trols. Measures to allow foreign
investment on a profit-sharing
basis are near adoption.
These moves have had some
of the desired effects, particu-
larly in individual enterprises.
Some of them have been forced to
modernize and others to consoli-
date. Some inefficient plants
have closed and others are near
bankruptcy.
The reform program was con-
ceived at a time of inflation and
balance-of-payments problems.
Faced with these difficulties,
the regime had to accompany the
reforms with an economic stabili-
zation program. Restrictions
were placed on investment, con-
sumption, prices, and the money
supply. As a result, unemployment
has risen and production has
dropped, and the reform has been
less effective than it would have
been otherwise. Nevertheless,
industries affected by the lib-
eralization of imports have com-
plained of the competition and
some parliamentary deputies, in
an antireform move, are demanding
tariff increases and antidumping
legislation.
Yugoslavia is still a back-
ward country economically and
problems of underdevelopment--
inflation, trade deficits, and
shortage of capital---frustrate
progress toward greater decen-
tralization and freer markets.
Implementation of the economic
reform will continue to face many
hurdles and the system which
emerges will probably be some-
thing between Western-style
capitalism and the more highly
centralized economies of orthodox
Communist states.
Party Reorganization
Last year, the reform move-
ment was extended to that for-
merly impregnable bastion--the
party. Official policy as early
as 1958 called for a changed role
for the party but it is only
since the fall of Rankovic last
July that real changes have
taken place. They are intended
to overturn the power structure
and to redefine the party's role.
They have left both the leader-
ship and the party rank-and-file
disoriented and many doubt that
the changes are good for the
country.
Ideologically, the objective
of the reorganization is to change
the party's role from one of
commanding and directing to one
of guiding through persuasion and
example. The party member's
influence at the local :Level is
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envisaged as being no more than
he can bring to bear as an indi-
vidual, and decisions are to be
openly arrived at after open
debate. This idea is at best
hard to communicate and nearly
impossible to implement.
A significant diffusion of
power has, nevertheless, already
been accomplished. An attempt
has been made to destroy the old
hierarchical form of decision
making. The most important poli-
cies are now formulated in the
new, larger presidium where con-
flicting interests and personal
persuasion play an important
part..
These moves have been ac-
companied by equally determined
efforts to increase freedom of
debate within the party. Mace-
donia's party chief, Krste
Crvenkovski, has gone so far as
to justify the existence of a
"loyal opposition." He would
leave opponents of decisions
taken by the majority free to
criticize and withhold support
from policies they oppose--a
direct challenge to the doctrine
of democratic centralism. From
such a point, it is only a small
step to the creation of an em-
bryonic opposition party, sug-
gesting that a multiparty system
under the facade of a one-party
state might eventually emerge.
(SAWPY). Until its reorganiza-
tion last year SAWPY had been a
conventional Communist-front
organization used tc, transmit
regime decisions an(' an instru-
ment to fabricate mess enthusi-
asm. While its new statutes do
not sanction a program independ-
ent of the party, a some SAWPY
leaders have called for, they do
stress the separation of the
party and the Alliarce.
Many leading party and SAWPY
figures have begun to use the
Alliance as a forum to air di-
verse views held outside the
party. They believe the Alliance
in this way can provide a safe
means of broadening public par-
ticipation in the political
process, while keeping debate
within bounds accept-able to the
regime.
Regime leaders have vehe-
mently denied Western press
speculation that SAWPY will be-
come "half a political party,"
revealing their concern that
such a tendency does exist. Tito
has repeatedly denied that he
intends a multiparty system,
and one leading party official
has rationalized that SAWPY
takes the place of such a sys-
tem. Moreover, he revealed some
regime concern by warning that
a multiparty system could evolve
if SAWPY and the party failed in
their tasks.
Mass Organization's New Role
The regime's policies are
already being debated in the
party's mass organization, the
Socialist Alliance of Workers
Growing Trade Union Independence
The Confederation of Trade
Unions of Yugoslavia (CTUY), once
merely an instrument used by
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the party to enforce Communist
policies and to ensure a measure
of labor discipline, has also
moved to reduce its subsidiary
role. Last November, party
presidium member Veljko Vlahovic
suggested that proposed new regu-
lations for the trade unions not
require them to accept the party
program en masse. In his view
the party program should be
binding only for those trade
union members who are also party
members.
In practice, union leaders
already are acting on their own.
They have, for example, increas-
ingly defended union members'
interests against government and
party policies on questions of
pay and working conditions. Local
trade union officials also have
taken the side of the workers in
the many short-duration "work
stoppages" that have swept Yugo-
slavia in recent years.
In standing up for the
workers' demands, Vukmanovic-
Tempo, former CTUY boss, has even
criticized the managerial class
for gaining material advantages
at the expense of the workers.
Decline of Police Power
Yugoslavia's decidedly freer
political atmosphere is due in
large measure to the decline in
the power of the secret police
(SDB). The SDB, which Rankovic
had used to control political
life both within and outside the
party, was stripped of its power
after his fall. Moreover the
new atmosphere was enhanced by
the regime's decision not to
prosecute Rankovic and by the
release from prison of the lib-
eral Milovan Djilas.
Enactment of legislation
now under consideration will em-
power the courts to take over
pretrial investigations previ-
ously conducted by the police.
The rights of the accused to de-
fense counsel will be expanded,
and terms of investigatory deten-
tion further limited. The regime,
however, still will retain ample
means for dealing with its en-
emies.
The Press and Religion
The Yugoslav press is also
gaining ground. While in recent
years it has not been subject to
censorship, inbred self-censor-
ship has been prevalent. The
ideological ferment within the
party now has extended the bound-
aries of permissible public de-
bate. Polemics between newspapers
and regime officials can and do
take place.
The regime's permissiveness
is also noticeable in its rela-
tions with the Catholic Church.
Yugoslavia is the only Communist
nation to have even quasi-
diplomatic relations with the
Vatican. Belgrade saw the re-
newal of relations last June as
an admission by the church that
it must coexist with Communism.
The regime thus no longer appears
to regard the church as a threat
to its own existence, and seems
to acknowledge that religious
beliefs need not automatically
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disqualify individuals from per-
forming important work for the
state, especially in the economic
and scientific spheres. The Com-
munists, however, still insist
that organized religious groups
keep out of political life.
Republic Nationalism
These impressive strides in
liberalization and reform have
been accomplished in the face of
internal dissension, which has
hampered and sometimes blocked
the progress of Tito's program.
The greatest threat to further
implementation of regime poli-
cies stems from a resurgence of
nationalism at the republic level.
Rivalries among the repub-
lics now are mainly economic,
but they reflect deep-seated his-
torical animosities. The core
of the problem is the fear the
other republics have of Serbian
domination. To many Croats,
Slovenes, and Macedonians, fed-
eral rule from Belgrade, the
capital of both Yugoslavia and
Serbia, smacks of Serbian hege-
mony. The more prosperous Slo-
venes and Croats no longer are
willing to slow down their own
economic growth to aid the under-
developed regions of Serbia and
the south. Conversely, many
Serbs feel that since theirs is
the largest republic they right-
fully should lead the federation.
The fall of Rankovic was a heavy
blow to such Serbs, who believed
Serbian interests had been sacri-
ficed. They have not been molli-
fied by Tito's pardon of Ranko-
vic and the appointment of Serbs
to fill his various jobs.
The rivalry surges on the
most trivial issues. only last
month a Croatian lite2ary group
sparked a controversy by alleging
that the Serbo-Croatian language
contained too many Serbian words.
The allegation was co-=)i_ously re-
futed, and Tito himseLf: spoke up
angrily to calm the riffled wa-
ters. Such manifestat.;.ons are
common, and speak volumes about
the unpublicized, behind-the-
scenes friction that pervades
the political atmosphere.
Tito is attempti-ict to deal
with this situation by loosening
the federal structure. One move
in this direction wilL enhance
the power of the Chamfer of Na-
tionalities, which in:-'udes ten
members elected from -3ach of the
six republics and five from each
of two autonomous proiiinces. A
series of constitutioal amend-
ments will make this goody, here-
tofore a useless legislative ap-
pendix, equal to the most power-
ful of the Federal Assembly's
five houses. The approval of
the Chamber of Nationalities
thus would be needed for changes
of government, and the determina-
tion of basic defense, economic,
and foreign policies.
Ideological and "Old-Guard"
Resistance
There is a sizable minority
of Yugoslavs who oppose the many
recent changes for ideological
reasons. Some believe they will
seriously jeopardize the party's
ability to retain control of
the country. There probably are
even greater numbers of older,
less educated ex-partisans who
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fear that economic rationality
and decentralization will mean
loss of jobs and status. These
men have been the hard core of
the party since before World War
II. Efforts to remove party hacks
as factory managers and the influx
of younger men into the party
leadership give the older gener-
ation good cause for alarm.
Tito has had to maintain a
cautious balance between these
conservatives and the liberal-
izers who would push the reform
at the expense of national unity.
Although the balance favors the
reformers, Tito has attempted to
minimize party disunity by not
launching a large-scale purge of
the conservatives in the wake of
Rankovic's fall. Moreover, to
assure them of their livelihood
and status, Tito has promised to
continue their salaries even
after they leave office.
Conservative resistance to
reform, however, may be easier to
overcome than widespread politi-
cal apathy. So far, the diffu-
sion of power within Yugoslavia
has benefited mostly those in the
party and government. The regime
has failed to convince the ma-
jority of citizens that they have
a political role to play.
The Succession Problem
The 74-year-old Tito, still
the final arbiter among conflict-
ing party factions, republics,
and rising interest groups, must
again arrange a succession. Ran-
kovic's fall eliminated the last
individual with the slightest
chance of assuming Tito's full
mantle.
Tito deliberately destroyed
the old line of succession by
abolishing the office of the vice
presidency and the party secre-
taryships. He seems intent on an
arrangement which would deny any
one person the authority he him-
self wields, or that would have
fallen to Rankovic. Apparently,
he intends that his successors
will compete with each other for
the top posts and be subject to
recall by the highest government
and party organizations. Thus,
on Tito's death some form of
collective leadership may be
worked out.
Outlook.
Tito will continue to press
his economic and political re-
forms. By decentralizing au-
thority in the state and party
he apparently hopes to create a
system flexible enough to meet
the problems of building a mod-
ern, industrialized, urban so-
ciety. A looser confederation
will assuage republic national-
ist demands. The stronger par-
liament will provide a legiti-
mate forum for debate and thus
encourage adherence to constitu-
tional forms. Although the
party retains the :Last word, it
more and more will be obliged
to consider the wishes of its
republic components, the dissi-
dents within it, and the non-
Communist public.
Despite the strains these
changes put on the federation,
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it is unlikely that the state
will come close to a breakup.
Both the hierarchy and the popu-
lation probably recognize the ef-
ficacy of the present system as
compared with the near anarchy
of the pre-Communist era. The
army also is a strong force for
unity. It has been unswervingly
loyal to Tito and the regime, and
probably would remain loyal to
Tito's successors.
The timing of Tito's death
or incapacitation is of major
importance. Should he die before
the political and economic changes
have made significant inroads, no
single remaining leader would be
strong enough to continue them
at the present pace. A period
of stalemate might ensue, but
there probably would not be a
reversal of the trends Tito has
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