(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86S00588R000200180003-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: January 12, 2017
• Document Release Date: June 13, 2011
• Sequence Number: 3
• Publication Date: May 1, 1985
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
~~ w w w.
?WMJK G -, -
PAGE NMERS
'TOTAL NUMBER OF COPIES
6
)P
DISSEM DATE $456 3.?
EXTRA OOPIES
RECORD CWI t
JOB Nt1M .?.cam rl/_ W
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Directorate of t
Intelligence
Yugoslavia:
Five Years After Tito
Seer-
EUR 85-10097X
May 1985
Copy 2 4 3
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Directorate of Secret
Intelligence
Yugoslavia:
Five Years After Tito
This paper was prepared by
Office of European Analysis. Comments and queries
are welcome and may be directed to the Chief, East
European Division, EURA, on
Secret
EUR 85-10097X
May 1985
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Secret
Yugoslavia:
Five Years After Tito
Key Judgments Five years after Tito's death in May 1980, the Yugoslav political system is
Information available plagued with serious and deepening problems but nonetheless is proving
as Qf 8 May 1985 was more resilient than many of its detractors had predicted. The decentral-
used in this report.
ized, collective leadership has managed to provide stability by responding
to competing groups while denying critics a ready target against which to
mobilize opposition.
The system has benefited, moreover, from fairly wide support for the young
nation's survival and independence, from the strong commitment of the
military to preserving unity and order, and from a traditional public
concern over foreign threats-particularly from the Soviet Union. On the
whole, most of Yugoslavia's small constituent republics, afraid from
historical experience of going it alone in the Balkans, see no alternative to
the current federation.
Still, strains over national policy seem inevitable in a system that has
virtually institutionalized a stalemate among the rival ethnic groups and
factions. Continued conflict among overlapping interest groups will almost
certainly hamper serious reform efforts for some time to come.
The 23 million Yugoslavs are sharply divided over what is wrong with their
system and how to fix it. Discussions take place on many planes and with
few common assumptions. The country is split politically between central-
ists and anticentralists, ideologically between hardliners and moderates,
and economically between advocates of market forces and of administra- 25X1
tive methods. The factions do not line up along conventional Communist
patterns and are influenced by ethnic and regional economic concerns.
The leadership system will probably prove too creaky to make dramatic
changes any time soon. But, barring a sharp economic and political
deterioration or intervention by the military-which we do not predict at
the present time-we believe it will be flexible enough to make minor
adjustments that will allow for a halting economic recovery and somewhat
more political efficacy. We expect Belgrade will keep collective decision-
making but may strengthen central authority and at least partially
implement more rational economic practices.
Even with incremental changes, however, we expect little letup in either the
bickering among rival groups or criticism of the leadership's performance,
including that from the military. And we see no easy resolution to the
potentially disruptive ethnic and political conflict in Serbia's Kosovo
province-a major problem that would challenge any system.
Secret '
EUR 85-10097X
May 1985
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
In the near future, outside factors probably will play only a secondary role.
The Soviets may hope to gain from the current strains between Yugoslavia
and its Western creditors as well as from the domestic political fallout of
tough IMF-sponsored austerity measures. Yugoslavia, however, will proba-
bly be able to maintain its independence from both blocs, despite any shifts
in internal policy.
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
Secret
Tito's Legacy
Pressure for Change
The Party Debate on Federalism
5
Soft Support
6
Hard Opposition
7
Openness Versus Orthodoxy
10
Disputes on Economic Legislation
11
Hints of Change
12
Prospects
13
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Secret
Yugoslavia:
Five Years After Tito
We are all in the same choir, with no conductor and
everyone singing in a different key.
Hamdija Pozderac
LCY Presidium member
1984
Post-Tito Yugoslavia has defied the most pessimistic
predictions about its fate but is nonetheless faced with
serious and mounting problems. The economic boom
and inflated expectations of the Tito years are over.
Austerity is the watchword, caused by a hard curren-
cy debt of $19 billion-the highest per capita in
Eastern Europe. In the last five years the average
Yugoslav has struggled with a 30-percent drop in real
income, with wage gains outpaced by inflation now
running at an annual rate of 80 percent. One worker
in six is jobless and many are only marginally em-
ployed.
Longstanding ethnic rivalries remain serious, shar-
pened by the economic pinch and vast and growing
development gaps among the regions. The future
looks particularly troubled in Serbia's autonomous
province of Kosovo, scene of Albanian ethnic disor-
ders only a year after Tito's death. The leadership is
stymied in dealing with Albanian nationalism, which
in turn is sparking a backlash among the Serbs and
thus creating ripples across Yugoslavia's multination-
al map.
Yugoslavia's leaders are in general agreement that
the system they inherited from Tito is not working as
they hoped. But they disagree sharply over how to fix
it. Meanwhile, the public grows increasingly gloomy
over leadership inaction and painful, protracted aus-
terity measures.
role in the Nonaligned Movement, which Tito co-
founded. It continues to defy Moscow by asserting the
independence of all Communist parties and stressing
that Yugoslav partisans-and not the Red Army-
were the main authors of the modern Yugoslav state.
While Yugoslavia also refuses to align itself with the
West, it is increasingly reliant on the IMF, and its
youth exhibits a rowin westward cultural orienta-
tion.
The leadership system, designed to ensure that no one
ethnic group would dominate the others, is a complex
power-sharing arrangement put into force by Tito
before his death. The top federal bodies, with the
exception of the premiership, are composed of repre-
sentatives from each of the country's six republics and
two autonomous provinces according to a set formula.
The party and state heads are more like chairmen of 25X1
the board than actual leaders, and their positions
rotate annually among representatives of the regions.
Tito's intent was to ensure stability and continuity
after his death. He realized that no individual or
group would be acceptable to the country's many
competing political forces. The system by and large
has succeeded in providing stability and preventing
the tensions caused by excessively concentrated pow-
er, such as before World War II when Serbia domi-
nated the country. But it has been done at the expense
of effective decisionmaking and policy implementa-
tion.
Some of the reasons the system is so cumbersome are:
? Limited federal power: The range of issues over
which federal bodies can make decisions is limited,
On foreign policy-one of the few areas on which the
leadership is relatively united-Belgrade continues its
policy of independence that began following Tito's
break with Stalin in 1948. It exercises a moderating
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Yugoslavia: Regional and Ethnic Makeup, 1981
SLOVENIA
1.9M
90.5% Slovenes
0 o% Croats
Montenegrins 2.6%
4.6 M
1%
Romanians
1% Montenegrins
8.2% "Yuaost9Ls'~
\\l
Total Population
1981 22.4 Million
Vojvodina
2.0 M
54.4% Serbs
18.9% Hungarians
5.4% Croats
3.4% Slovaks
j5% ? Montenegrin '
/13.4% Muslims
5.7 M
1.4% Montenegrins
1.3% Albanians
Kosovo
1.6 M l
77.4% Albaniairs d
13.2% Serbs
MACEDONIA
n u
19.8% Albanians
4.5% Turks
2.3% Serbs
2.3% Gypsies
2.1% Muslims
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
Secret
The complex Yugoslav political system was designed
to accommodate the country's patchwork of ethnic
groups, many of them mutually antagonistic. Al-
though the overwhelming majority of these groups
are Slavic, they comprise three major religions-
Orthodox, Roman Catholic, and Muslim-and speak
several languages, Serbo-Croatian being the most
widespread. The northern half of the country is more
developed and central European, having been con-
trolled by the Austro-Hungarian Empire while the
poorer south evolved under Turkish domination.F_
The largest group, the Serbs, constitutes 36.3 percent
of the population and is located in several of the
country s constituent republics. The Serbs are the
object of suspicion by the economically more ad-
vanced Croats (19.8 percent)-with whom they en-
gaged in fratricidal struggle during World War II-
and the even more economically developed and prag-
matic Slovenes (7.8 percent). Mixed into this equation
are a population of Muslim Slavs mostly in Bosnia-
Hercegovina (8.9 percent); a small group of Montene-
grins (2.6 percent); and the Macedonians (6 percent),
who inhabit the southernmost republic. The largest
non-Slavic group is the Albanians (7.7 percent), whose
high birthrate and different cultural traditions have
caused strains among neighboring groups.a
as many areas fall under the competence of the
regions or local bodies, which pursue divergent,
often uncoordinated, policies.
? Consensus decisionmaking: The widespread use of
consensus (unanimous) decisionmaking in federal
bodies allows each region to block action on any
issue, a right the regions feel free to exercise.
? Weak enforcement mechanisms: Few enforcement
mechanisms exist to ensure that federal and region-
al bureaucracies will carry out decisions
A reflection of Yugoslavia's strengths and weaknesses
is its Communist party-the League of Communists
of Yugoslavia (LCY). Despite its Marxist doctrine,
the LCY is organized along almost feudal lines and
operates according to a network of personal ties much
the same as Balkan political organizations in pre-
Communist days. Its officials move in and out of
nonparty organizations, forming local elites that con-
stitute the country's real power centers. The LCY
differs from Soviet Bloc Communist parties in several
key ways. Most of these features were present during
Tito's time but have grown more pronounced during 25X1
the past five years:
? Strong regional power: The regional parties have a
large voice in central party decisionmaking and a
high degree of autonomy. Their leaders are account-
able to their own local base, and efforts by the
central party apparatus to replace them would be
difficult at best.
? Weak central authority: The Communist principle
of democratic centralism-calling for majority deci-
sionmaking and binding the minority to central
decisions-is only nominally in force and no secre-
tariat or other body exists to ensure compliance.
Unanimity is rare at the top because it is rare
among the regional parties. 25X1
? No strong leader: The top party body, the LCY 25X1
Presidium, is a large collective panel whose 23 seats
are allocated to regional representatives according
to a set formula. The top leader rotates annually by
region among the members.
? Limited role in the system: The LCY plays a
"leading" but not commanding role in the system.
The LCY has no officials or bodies that parallel the
work of government organs, as do Soviet Bloc
parties.
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
? Internal conflict: The party tolerates far greater
internal conflict than its East Bloc counterparts, a
tendency that has become more pronounced even in
the ruling Presidium since Tito's death.
? Indirect media control: The LCY has no official
party daily, and the radio, television, and regional
dailies are not directly under party or other central
control. Many media have grown increasingly out-
spoken since Tito's death, acting as a force that
shapes public opinion and identifies issues that
various interest groups want addressed.
? Military role: The military, though a nonpolitical
organization, has more formal representation in the
LCY-and more direct influence in the political
system-than the Soviet Bloc military in their
parties. It has a block of seats in the LCY Central
Committee, some 9 percent of that body, and the
head of the military's party organization is assured
a place on the LCY Presidium.
Like the party, the central government has fewer
powers than most East-or even many West-Euro-
pean governments. Control over key economic levers
such as foreign exchange, banking, tax rates, trade,
investment, and planning is shared with regional
authorities. The federal budget consists mainly of
defense, military pensions, and aid programs to the
less developed regions.
Of the top governmental bodies, the Federal Execu-
tive Council (Council of Ministers) has emerged as the
main economic policy making body since Tito's death,
acting with authority and relative autonomy more
akin to a West European than Soviet Bloc cabinet.
Several factors help account for the FEC's influence:
? The exemption of the premiership from the one-year
rotation, allowing for continuity and a personal
leadership role not given the ever changing heads of
the party Presidium or State Presidency.
? The strong personality and keen political skills of
Premier Milka Planinc, who started her four-year
term in 1982; despite her lackluster record as
Croatian party head through much of the 1970s,
Planinc has won widespread respect and recognition
in her latest post, emerging as perhaps the single
most influential figure in the post-Tito leadership.
Presidium and State Presidency.
? A concentration of economic experts on the FEC
staff, which gives it an edge on economic issues over
the less well organized and more divided LCY
Despite these factors, even the FEC's power has
limitations. Like the central party apparatus, the FEC
depends on the consent and cooperation of the regions
to make and implement policy.
is excessively on the defensive and that its work is
hampered by a weak and inefficient federal adminis-
tration, by personnel policies-based on regional pow-
er sharing-that do not sufficiently recognize merit,
and by a preoccupation with the economy that pre-
cludes more involvement in security, defense, and
foreign affairs. Planinc's strong role has also made her
a convenient target for officials who disagree with her
policies or fear that the FEC is overstepping its
bounds.
The leading state organization, the collective nine-
member State Presidency, has broad powers over
defense, security, and foreign policy as well as the
right to nominate the premier, propose action to the
25X1
25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
Secret
Assembly, and issue decrees in wartime. The current
Presidency is manned by some of the country's most
experienced leaders and has issued pronouncements
on a broad range of issues. However, according to
well-placed Embassy sources, it has fallen short of its
potential, partly because its strong personalities have
tended to cancel one another out. In recent months
several of the more conservative Presidency members
have criticized economic policies identified with Pre-
mier Planinc, reflecting in part, we believe, their
concern over the FEC's strong role.
The bicameral Assembly has grown considerably in
authority and influence since Tito's time. It has
emerged as a leading check on the FEC and, even
more than the LCY Central Committee-which
meets only every few months-an important forum in
which the regions work out their differences. Accord-
ing to US Embassy reporting, the Assembly has been
a vehicle for strengthening the role of the regional
power centers at the federal level and has sometimes
displaced FEC bodies in working out interregional
compromises. One prominent Assembly official pri-
vately said, however, that the Assembly is still very
much in the shadow of the Presidency. Ideologically
conservative leaders seem determined not to let the
Assembly grow too strong since they fear it could
further eclipse the party and usher in the beginnings
of a Western-style parliamentary system. The election
of Assembly delegates, however, is still less democrat-
ic than in most Western countries; they are chosen by
regional elites and not directly by the public. F__1
Pressure for Change
Pressure to evaluate critically the political system
sharpened after the Yugoslav economy was thrown
into crisis and near insolvency following Tito's death.
The prosperity of Tito's later years was due largely to
overinvestment and heavy reliance on foreign loans-
policies that the system Tito bequeathed to his succes-
sors made possible since it lacked either strict use of
market criteria or strong, rational central planning.
To get out of the crisis meant that the economy would
have to improve its performance, and this, in turn,
would require changes in economic policy and perhaps
in the political superstructure.'
The Planinc government responded to the crisis by
pushing through an economic stabilization program in
1983. It called for curbing wasteful, politically moti-
vated investments and introducing more market
forces in investment, pricing, foreign exchange rates,
and other economic decisions. It also implied greater
federal control over some key economic levers, such as
monetary and credit allocation, interest rates, and
foreign exchange usage. Planinc's program was based
on a report issued by the blue-ribbon Kraigher Com-
mission, named for the state president who chaired it. 25X1
If fully implemented, the program would reduce the
role of local bureaucrats in economic decision making
and thus deprive them of political leverage.
The measures received a boost later in 1983, when the
IMF got tough and insisted these policies be enforced
to qualify Yugoslavia for standby loans. Despite the
IMF stipulations, implementation of some measures
has proceeded only slowly and fitfully, as local offi-
cials have sought to keep their privileges and shield
workers from the inflation and plant closings that
these measures might entail.
The government also took another, tentative step
toward reform by authorizing an advisory body to
reevaluate the political system. The project was
prompted by Najdan Pasic, a progressive, federally-
minded Serbian Communist who since Tito's death
had written several tracts on the need for political
reform. A focus of Pasic's concerns has been the
stultifying effect of bureaucracy and the danger of 25X1
overemphasizing parochial interests. The advisory
body began work on its study in October 1983 and
was supposed to come up with recommendations by
April of this year. Media reports suggest that the
body is considering such changes as making the
country's electoral system more direct, encouraging
use of multiple candidates, reducing consensus deci-
sionmaking, and strengthening the federal govern- 25X1
ment. But disputes on these and other issues have
prevented the body from meeting its deadline.
The party, having lost much of its influence as a
unifying force since Tito's death, tried to reassert 25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
itself by authorizing a nationwide grassroots debate
on the political system. The debate was the result of
an LCY plenum on 12-13 June 1984, at which many
delegates demanded an end to leadership ineffective-
ness and vacillation. The leadership of Serbia quickly
moved to set forth its own agenda-to restore greater
federal authority, and implicitly more Serbian influ-
ence-as the focus of the discussions. The merits of
the proposals aside, the Serbians' confrontational
tactics and sometimes sweeping pronouncements led
to one of the most open and heated debates in the
history of the LCY or any ruling Communist party.
The debate came to an inconclusive finish at an LCY
plenum on 5-6 March 1985, several months behind
schedule. The plenum marked a setback for Serbian
efforts to promote institutional changes and at least a
temporary victory for defenders of regional rights and
the political status quo. A final statement papered
over regional differences that had emerged, deferring
discussion on most issues to preparations for the next
LCY congress, to be held in mid-1986. Despite this
stalemate, the debate was important both in focusing
new attention on the party's role and in highlighting
its many divisions.
Serbian Proposals
The Serbian program-elaborated in a series of Ser-
bian party plenums and leadership statements-pre-
scribed essentially federalist remedies to a number of
perceived weaknesses in the system. These remedies
included:
? More central authority: Alarmed over the devolu-
tion of political power to regional elites, the Serbian
program envisaged a return to somewhat greater
central authority. For the party, it called for enforc-
ing the principle of democratic centralism, including
encouraging majority (not consensus) decisionmak-
ing. The Serbian attack on consensus reached a
peak at an LCY plenum on 16 October, when
prominent Serbian conservative Dragoslav Marko-
vic publicly demanded broad use of majority voting
as the most "democratic" method of decisionmak-
ing. Central government bodies would be urged to
act more forcefully, and their staffs would be chosen
more for competence than meeting ethnic quotas. In
one of the more controversial moves, the Serbians
also said that the Constitution should be amended
where necessary to meet current needs.
? Economic reforms: The Serbians at a September
regional plenum urged implementation of economic
reforms already agreed upon, but only partially
implemented, to allow somewhat greater play to
market forces. The goal would be to end inefficient
autarkic practices and restore the "unity of the
Yugoslav market"-again, at the expense of the
regional oligarchies.
? Greater Serbia: Indirectly related to the above
concerns, the Serbians at a November republic
plenum demanded tighter control over their two
autonomous provinces, Kosovo and Vojvodina. The
provinces each have substantial non-Serb popula-
tions and have used their ambiguous legal status to
obstruct Serbia's wishes both within the republic
and in the federation. One Serbian idea, floated late
last year, was to
create a three-member Serbian delegation with one
vote to represent the republic and the provinces in
the LCY Presidium or State Presidency.
The Serbian proposals seem to have been motivated
by an effort to harness a growing spirit of Serbian
nationalism, by an attempt to unite both Serbian
centralists and ideological moderates, and by a genu-
ine belief in many cases that these measures were in
the country's best interests. The timing probably also
seemed right, as the party debate offered a unique
opportunity to advance reforms.
Soft Support
The Serbian leadership quickly discovered that the
broad-coalition of support it hoped for its program
never materialized. Instead, it found itself with only
tentative backing from two traditional allies-the
party leaderships of Macedonia and Montenegro. Two
of the country's least developed republics, Macedonia
and Montenegro have long supported more central-
ized economic authority to gain more access to
northern-generated foreign exchange, development
aid, capital, and goods. At the same time, both
appeared to be taken aback by the nationalist over-
tones of the Serbian program.
25X1
25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
A Resurgent Serbian Nationalism
Growing nationalism among Yugoslavia's largest eth-
nic group, the Serbs, has been a leading motivation of
the Serbian program. Viewing themselves as the
country's ethnic core and main founding group, the
Serbs have become increasingly frustrated with the
country's growing fragmentation, their own economic
decline relative to other regions, and their loss of
influence over the two autonomous provinces-espe-
cially the growing ethnic Albanian domination of
Kosovo, Serbia's historic heartland. To many Serbs,
these trends have been caused by the current system,
in which decentralization benefits the richer northern
regions and aid programs help Kosovo and other
southern regions, but not Serbia.
The following incidents reflect the Serbian national-
ist revival:
? Belgrade authorities in late 1983 allowed the per-
formance of a play about Serbian heroism in World
War I by a leading liberal-nationalist writer; the
play is still running, drawing sellout crowds who
Embassy observers say react strongly to the more
stirring speeches.
? In a country where religious symbols and ethnic
identity are closely linked, the Serbian government,
after 40 years of opposition, in 1984 granted a
permit to resume construction in Belgrade of a
Serbian Orthodox cathedral of mammoth propor-
tions. According to Western diplomatic sources,
some 50,000 Serbs attended the consecration of the
cathedral this May, one of the largest religious
celebrations in postwar Yugoslav history.
? This spring, at a time when Serbian outrage contin-
ues over the desecration of Serbian graveyards and
religious sites in Kosovo by Albanian nationalists,
Serbian students retaliated by breaking windows of
Kosovo economic organizations and Albanian-
owned shops in Belgrade.
Macedonian support for federalist measures seemed
strongest about the time of the June 1984 plenum that
kicked off the debate, but this support waned as the
Serbians pushed their program aggressively in the
fall. A similar pattern took place in Montenegro. At
the June LCY Central Committee plenum, several
Montenegrins aired views close to those of their
Serbian counterparts, warning of party fragmentation
and excessive defense of local interests. Montenegrin
leaders, however, failed to join in the Serbians' fall
campaign, and not until a republican plenum wrap-
ping up the debate on 26 December did they issue
qualified support.
Hard Opposition
The three remaining republics and the two autono-
mous provinces, meanwhile, aired strong opposition to
the Serbian-led federalization measures and put forth
their own views on how to handle the crisis. A
common thread in the opposition was that the central-
ist measures were a thinly veiled attempt by Serbian
nationalists to regain Serbia's influence at the expense
of other regions. But each of the regions also had
other diverse concerns, reflecting the overlapping of
interests that makes Yugoslav decisionmaking so
complex.
Slovenia. Slovenia opposed the Serbian program not
because of its market-oriented measures-the prag-
matic, industrious Slovenes have led the country in
applying market principles-but because the central- 25X1
ization proposals could allow Belgrade to divert even
nian leadership was fairly united in attacking the
Serbian centralization proposals. Some leaders at a 16
October LCY plenum publicly attacked Serbia's Dra-
goslav Markovic for demanding a curtailment of 25X1
consensus decisionmaking. Another Slovene leader,
Stane Dolanc, drew Serbian ire in December when he
simply work harder
visited Serbia's Vojvodina province and urged the
Serbians to stop trying to revamp the system and to
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
(Right) Serbian illustration
suggests that the political sys-
tem is hopelessly immobilized
by consensus decisionmaking,
which allows any one of the
eight regions to block action.
(Below) "The motor is OK!
How about removing the de-
bris!" Croatian cartoon sug-
gests political system does not
need major reform, simply less
bickering and nearsightedness.
Vehicle bears Yugoslavia's ini-
tials, and the number of squab-
bling men, six, is equal to the
25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Secret
Key Players in the Party Debate
Serbia's Ivan Stambolic, mod- Slovenia's Franc Popit, defend-
Serbia's Dragoslav Markovic, Bosnia's Branko Mikulic, ideo- 25X1
conservative Serbian national- logical conservative, regional
ist, centralist rights advocate0 25X1
Macedonia's Milan Pancevski,
qualified supporter of Serbian
Defense Secretary Branko
Mamula wants end to leader-
ship divisiveness, inaction
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
Croatia. The leadership of Croatia opposed Serbia's
program not only because the centralist aspects could
sap the republic's wealth but also because-unlike
Slovenia-it had ideological reservations about mar-
ket-oriented measures. According to Zagreb Consul-
ate reporting, the Croatian leadership, installed after
the 1971 liberal-nationalist disorders, sees itself as a
bulwark of the more conservative aspects of Tito's
legacy. During the debate, several Croatian leaders
took a suspicious view of constitutional changes hinted
at by the Serbians and chastized the Serbians for
creating a "heated atmosphere" of "distrust." While
the Croatians put forth no coherent alternative set of
proposals, they urged a restoration of party orthodoxy
and discipline to prevent what some of them believed
was the LCY's evolution into many semiautonomous
parties.
Bosnia. The leadership of Bosnia-Hercegovina saw in
the Serbian measures a threat to their relatively tight
control over their republic. The Bosnians criticized
the Serbians for attempting to revamp the post-Tito
order and cast doubts on the Serbians' adherence to
Communist ideology. Following the Serbian party's
November plenum, Bosnian strongman Branko Miku-
lic warned against attempts to label as "dogmatists"
people who want to keep the Constitution, and linked
attempts to revamp the system with "reactionary
centers abroad." Another Bosnian leader later in
December similarly called for "harshly settling ac-
counts" with people who want to revamp the political
some provincial officials have sought to have
these issues referred to federal bodies, where they
could hope to secure outside support against Serbia.
Openness Versus Orthodoxy
In tandem with the debates over centralism and
economic reform, the country's political forces locked
horns over the appropriate degree of openness in
public life. The issue, long a point of contention in
Yugoslav political life, pitted two loose camps against
each other:
? A moderate group, urging more political and cultur-
al freedoms as essential to helping the country deal
more honestly and effectively with its problems; this
group ranged from liberal-oriented writers and in-
tellectuals to party moderates, such as Serbian
ideologist Najdan Pasic, favoring more democracy
within the party itself.
? An orthodox group, believing the country had al-
ready strayed too far from Marxist principles and
that a further loss of party control could threaten
their own positions and unleash nationalism and
other destabilizing forces.
system.
Kosovo and Vojvodina. Serbia's two autonomous prov-
inces, Kosovo and Vojvodina, opposed the Serbian
measures because the provisions dealing with intrare-
public relations posed a direct threat to provincial
autonomy. The proposals set off some of the sharpest
open polemics within the republic in recent years. At
a Kosovo party plenum on 4 January, one leader said
that the Serbian proposals have caused "anxiety and
nervousness" and were "not in line with the constitu-
tional system." A prominent Vojvodina official, at a
provincial plenum several days later, similarly called
such efforts to change the Constitution "ill-conceived
and unacceptable." Temperatures remained high as
recently as April, when Serbian and Vojvodina dele-
gates argued over Serbian charges of provincial
Like the political debate, the debate over ideological
issues took on ethnic and regional overtones. While
virtually all regional leaderships contain both moder-
ates and hardliners, the Serbian and Slovenian leader-
ships have become most closely identified with more
tolerant ideological policies, and those of Croatia,
Bosnia, and Vojvodina with hardline tendencies.
These latter leaderships, set back on their heels by the
Serbian offensive for more centralism and economic
reform, sought to throw Serbia on the defensive by
demanding tighter controls-and greater party uni-
ty-on ideological policy.
"autonomism."
25X1
25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Secret
The complexity of decisionmaking in Yugoslavia
reflects the shifting, issue-oriented alliances among
regional elites. Although in Soviet Bloc countries
centralists tend to be ideological hardliners, in Yugo-
slavia some are, but many are not. The debate over
reforming the system has reflected these
crosscurrents.
finding compromise solutions. The following issues
have been particularly troublesome:
? Economic stabilization: Premier Planinc's economic
stabilization measures themselves have come under
growing attack in recent months for a variety of
ideological, economic, and regional reasons. Accord-
ing to media reports, one conservative Croatian
economist at the 5-6 March LCY Central Commit-
tee plenum groused that the option of not paying
back Western loans was never brought before the
Central Committee. According to Embassy report-
ing, other prominent conservatives complained that
measures to free prices, urged by the IMF, were
causing unacceptable inflationary pressures. State
President Djuranovic in a speech carried by the
media later in March similarly argued that high
interest rates, supported by the IMF, are strangling
an economic recovery and that Yugoslavia has been
placed in a "neocolonialist" position. According to a
reliable source, Jure Bilic, Croatian representative
on the LCY Presidium, in December attacked Plan-
inc for pursuing policies harmful to her native
Croatia. A possible replacement for Planinc, Mac-
edonian Premier Dragoljub Stavrev, is said to favor
a tougher line to the IMF.
Greater Central Use of More Tough Controls
Authority Market Forces on Press, Dissent
The contest was played out most vividly at the trial of
six Belgrade intellectuals that concluded in Belgrade
in early February. A uniquely Yugoslav blend of a
Communist-style show trial and Western political
theater, the trial reflected pressures by hardliners for
more discipline, by intellectuals for more freedom of
speech, and by officials outside Serbia to hamstring
the Serbian leadership. The weak evidence against the
accused and relatively lenient sentences meted out
underscored leadership divisions and ineffectiveness.
Disputes on Economic Legislation
While the competing factions deadlocked over broad
political questions in the party debate, they disputed
related issues in discussing key pieces of economic
legislation. So far they have had similar problems in
? Foreign exchange: The Yugoslav Constitutional
Court in February declared unconstitutional the
current foreign exchange law, which allows firms to
keep up to nearly half of the foreign exchange
earned. strong con-
cern by Serbia, Macedonia, and Montenegro that
the law works to the benefit of the more developed,
export-oriented northern regions. According to me-
dia comment and Zagreb Consulate reporting, offi-
cials from Slovenia and Croatia-two of the largest
earners of foreign exchange-have voiced concern
that new moves to centralize foreign exchange
holdings could provide disincentives for their firms
to export and thus undermine the country's ability
to generate an export-led recovery. Premier Planinc
has announced transitional measures to try to ac-
commodate the needs of the various factions, but no
long-term solution is likely to be found soon.
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
? Economic planning, aid to south: A new bill on
planning before the Federal Assembly has caused
renewed strife between Serbia and its two autono-
mous provinces. According to statements carried by
Belgrade media, the bill denies the provinces a
direct say in federal planning, requiring them to
coordinate views first within Serbia. In the mean-
time, Serbia has urged changes to the procedures
through which aid from the richer regions is fun-
neled to the southern ones. According to public
statements, the Serbian proposals would allow Ser-
bia to regulate its own aid to Kosovo. Both measures
have drawn sharp responses from the provinces.
The military, through its own representatives in the
LCY, has attempted to use its influence to urge an
end to leadership divisiveness and inaction. At an
Army party committee plenum on 14 December
reported by Belgrade media, its top leaders revived
many of the open complaints that it has issued since
mid-1983. Defense Secretary Mamula publicly
warned of a "flood of diverging concepts" within the
leadership, and Army party chief Jovicic charged that
leadership statements have created "considerable con-
fusion and chaos." They also indicated that the strains
in society were taking their toll within the military
itself. Mamula warned of "radical and very one-sided
and unacceptable views" appearing in the military,
while Jovicic similarly warned of "radicalism." On
specific issues, the military leadership has shown
support for strengthening central authority, control of
dissent, and implementing the economic stabilization
program
The military appears to be motivated mainly by its
longstanding concern to promote national unity,
order, and fulfillment of agreed-on policies. Parochial
budgetary concerns may be a secondary factor. A
weak economic recovery caused by inefficient eco-
nomic practices could jeopardize the military's fund-
ing, which Army officials publicly complain has
reached a bare minimum
In the eyes of many non-Serbs, however, the military
may be driven partly by ethnic factors. To them, the
large proportion of Serbs in the officer corps raises
suspicions about its leanings, particularly on the issue
of increasing central authority.
The military appears reluctant to play a bigger role in
political decisionmaking.Z
possibility cannot be excluded that the military would
intervene on behalf of a group of united politicians.
Yet a retired general has been cited as discounting the
possibility of a military intervention, at least in part
because of the Army's own internal divisions. Public
statements by top military leaders as recently as April
and May have continued to voice confidence in the
country's ability to emerge from the crisis under the
LCY's leadership.
Despite the signs of stalemate both in the party debate
and over key pieces of economic legislation, there have
been hints that the political forces are working behind
the scenes to tinker with the system. Most of the
changes-if implemented-suggest that the devolu-
tion of authority to the regions has bottomed out and
that the central party apparatus may recoup some of
its lost influence:
? Party authority, discipline:
25X1
25X1
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
Secret
regions and ethnic groups, it so far has failed to turn
these structures into meaningful policy instruments.
The leadership is likely to continue to resist funda-
mental change, thus perpetuating the national contro-
versy over its effectiveness.
public comments in recent months have been some-
what less inflammatory than late last year.
? Media controls:
the government has taken steps to oversee more
tightly the work of the country's many freewheeling
media. A high party official also met recently with
editors, according to press accounts, to stress the
need for more orthodoxy in the media. Embassy
sources, however, suggest continued assertiveness by
journalists toward central authority, and some me-
dia have continued to comment sharply on sensitive
issues, presumably with the backing of higher
officials.
? Strengthening central government: One Yugoslav
media report this spring, providing few details, said
the FEC was taking steps to supervise local invest-
ment decisions more closely. Another brief report in
January said the FEC had moved to improve its own
personnel policies, along the lines suggested by some
Serbian officials, by doing away with nationality
requirements as an "absolute principle" of personnel
policy.
? Regional changes: Several regions are considering
amendments to lengthen the terms of office for
regional leadership posts that are now subject to
frequent rotations. Some regions, including the
more conservative Croatia, have been experimenting
with multiple candidate elections for some posts.
Together, these proposals may strengthen the power
of regional leaders-and allow regional party chiefs
a longer tenure on the LCY Presidium-while
shielding them from complaints of a lack of demo-
cratic competition.
The Yugoslav system, for all its flaws, largely reflects
the complex political realities of a unique, multina-
tional state. Yet, while the system has established a
framework to hammer out accords among the various
Taking a longer view, however, Yugoslav experience
in the postwar period suggests that the system can
adapt successfully when faced with national crisis. 25X1
Following the break with Moscow in 1948, Tito
moved away from the Soviet model toward more
decentralized economic decision making; after the
ouster in 1966 of hardline security chief Aleksandar
Rankovic for political abuses, the country further
liberalized; after the 1971 Croatian disorders, the
party began to reassert its influence while power
flowed more to the regional elites.
Barring a more serious national crisis-which we do
not now foresee-the ongoing debate in Belgrade will
most likely continue to foster a sense of stalemate and
indecision. Even so, we believe that the competing
factions realize the need for some improvements and
will keep on trying to work out compromises that will
at least allow the country to limp along
In foreign policy, we expect Yugoslavia to hold to
Tito's nonaligned course, which occasionally disap-
points Belgrade's Western supporters but which at
times has been a major irritant to Moscow. We
believe Belgrade will keep distinct limits on ties to
25X1
25X1
Moscow even if it tightens central authority or party
control.
While Yugoslavia is not likely to find any panacea to
its problems, it is possible to identify some develop-
ments that would either ease or aggravate chronic
tensions in the system.
? A continued strong role by the FEC in setting
economic policy, despite growing attacks by more
conservative forces and the prospects of a weaker
premier after Planinc's nonrenewable term expires
in 1986.
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86S00588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
? An incremental strengthening of central party au-
thority, while leaving regional bodies as the actual
executors of central decisions. The devolution of
power within the party, while giving new room to
the FEC, has weakened accountability and
enforcement.
? Any movement toward agreement on how the sys-
tem should manage divergent views, both within and
outside official bodies. Different approaches to key
issues by the media, by prominent dissidents, and by
party officials now tend to inflame emotions and
seriously hamper the national dialogue.
Sliding the system toward crisis would be:
? A major downturn in the economy caused by a
recession in the West or runaway inflation, prompt-
ing growing popular outcry over the regime's poli-
cies and demands to scrap austerity measures.
? An upsurge of serious ethnic violence, such as
between Serbs and Albanians in Kosovo, causing
even stronger Serbian nationalism and sharper
strains between Serbs and other ethnic groups.
? An inability of the political factions to come to
terms even on peripheral issues, thus causing the
system to clog up further at the center and tempting
a small group of leaders, with military backing, to
try to take charge.
? A decision by the new leadership in neighboring
Albania to reopen the country to Soviet influence,
thus raising Yugoslav fears of Soviet-backed med-
dling in Kosovo and dividing Yugoslavs as to an
appropriate response.
Secret 14
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
 Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6
Secret
Secret
Sanitized Copy Approved for Release 2011/06/13: CIA-RDP86SO0588R000200180003-6