THE CURRENT SITUATION IN YUGOSLAVIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP98-00979R000100070001-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 23, 2016
• Document Release Date: May 2, 2014
• Sequence Number: 1
• Publication Date: November 21, 1950
• Content Type: NIE

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COPY NO. 204
FOR THE CHIEF,CONTACT DIVISION,00
CRET
2)..142 .110-friA06")
NATIONAL INTELLIGENCE ESTIMATE (
244
THE CURRENT SITUATION
IN YUGOSLAVIA
N I E - 7
Published 21 November 1950
" MIME MINT
REIM TO NW MTV,
Ins 1E-41 His.
CENTRAL INTELLIGENCE AGENCY
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?
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NATIONAL INTELLIGENCE ESTIMATE
THE CURRENT SITUATION IN YUGOSLAVIA
N I E - 7
In order to meet an immediate need, this estimate has been
published in advance of a more comprehensive estimate of
the Yugoslav situation which is in preparation. The intelli-
gence organizations of the Departments of State, the Army,
the Navy, and the Air Force participated in the preparation
of this estimate and concur in it. This paper is based on
information available on 16 November 1950.
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THE CURRENT SITUATION IN YUGOSLAVIA
THE PROBLEM
1. To estimate the effect of the current eco-
nomic crisis in Yugoslavia on the stability and
orientation of the Tito regime.
CONCLUSIONS
2. The Tito regime in Yugoslavia, the only
Communist regime not subservient to Moscow,
has steadily, although cautiously, improved its
relations with Western governments. This
trend represents mainly an attempt at self-
preservation rather than any basic change in
political philosophy, and reflects the apprecia-
tion of the principal Yugoslav Communist
leaders that they cannot heal the breach with
the USSR and be sure of continuing to hold
power.
3. In order to widen its support among the
Yugoslav people, the overwhelming majority
of whom are opposed to Communism, the Tito
regime has inaugurated a number of ostensi-
bly liberal changes in the political and eco-
nomic system. These changes, however, have
not changed the basic structure of the Tito
regime, which remains an anti-democratic,
dictatorial and repressive Communist regime
dependent on its police power for continued
existence.
4. The USSR's objective in Yugoslavia is the
elimination of the Tito government and its
replacement by a regime subservient to Mos-
cow. Soviet policy for the time being seems
to call for the continuation of economic,
political, psychological, and subversive pres-
sures short of open military action either by
Soviet Satellites or by the USSR.
5. Without substantial outside logistic sup-
port the Yugoslav armed forces would be un-
able to withstand a combined Satellite attack,
and even if given such support their capacity
for sustained, resistance would be questiona-
ble. They could not in any circumstances
withstand a serious Soviet attack.
6. The extensive drought of the summer of
1950 materially reduced Yugoslav agricultural
production and contributed to an economic
crisis that may threaten the stability of the
Tito regime. Substantial outside aid is essen-
tial to meet the basic requirements of the Yu-
goslav people until this crisis is past.
7. The USSR will spare no effort to exploit
this crisis by increasing the efforts of its
agents in the related fields of espionage, sub-
version, sabotage, fomentation of labor unrest,
and possibly attempted assassination of Yugo-
slav leaders.
8. For several months at least, the Yugoslav
security police probably will be able to main-
tain internal control even if the economic cri-
sis is not alleviated by Western aid.
9. While it is impossible to make a firm esti-
mate of the longer-term effects under these
circumstances, the probability is that Tito's
? police regime can survive the period of crisis,
although in weakened condition.
10. In this event a softening of Yugoslav de-
fensive capabilities and will-to-resist might
occur and might be a factor in bringing on a
direct military attack. This factor alone,
however, will not be decisive in Soviet strategy,
which will be dictated mainly by the Soviet
estimate of the world balance of power and of
Western reaction to an attack on Yugoslavia.
11. If Tito should obtain substantial aid from
the West, his position both as party and na-
tional leader would remain comparatively se-
cure.
12. The current Yugoslav economic crisis has
provided an opportunity for the United States
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to seek further gains in exploiting the Yugo- US aid would create a situation favorable to
slav-Soviet break in behalf of the West. In effecting more active Yugoslav support of the
addition to the opportunity to strengthen Ti- aims of the western world.
to's position as 4 deviationist, the granting of
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DISCUSSION
I. ORIENTATION OF THE TITO REGIME
International Position.
13. Since 1949 the Yugoslav Government has
steadily, although cautiously, strengthened its
economic, cultural, and political ties with
Western governments. This trend represents
above all the desire of the Tito regime to pre-
serve its rule in Yugoslavia. It does not sig-
nify any basic change in the political philoso-
phy of the Tito regime, but reflects the appre-
ciation of the principal Yugoslav Communist
leaders that they cannot heal the breach with
the USSR and be sure of continuing to hold
power. Consequently, since his rule would be
definitely jeopardized without foreign support,
Tito has been forced to turn to the West. Al-
though many of Tito's recent statements must
be read against the background of Yugo-
slavia's critical need for economic assistance
at the present time, the outlook for the future
is that the Tito regime will continue to im-
prove its relations with the West.
Internal Position.
14. The Yugoslav Government has for some
time shown a concern to widen its support
among the people, the overwhelming majority
of whom are opposed to Communism. To this
end the Government has inaugurated a num-
ber of ostensibly liberal changes in the politi-
cal and economic system. These include am-
nesty for large numbers of political prisoners,
toleration of some popular criticism, relaxa-
tion of travel restrictions, easing of some pres-
sure on religious groups, reduction of special
privileges of favored groups (primarily Party
members), virtual abandonment of the drive
for collectivization of agriculture and reduc-
tion of some pressures on collectivized peas-
ants, modification of plans for rigid adherence
to a forced industrialization program, and a
program of economic and governmental de-
centralization. While these several changes
have doubtless been of importance, they have
not resulted in a change in the basic structure
of the Yugoslav Communist system. Over-all
Tito's government remains a dictatorial and
repressive Communist regime ,whose contin-
ued existence is based primarily on the effec-
tiveness of its police power.
II. IMPORTANCE OF YUGOSLAVIA TO THE WEST
Strategic Importance.
15. The strategic importance of Yugoslavia to
the Western Powers lies in the following: its
position as a vital link in the defense of the
Eastern Mediterranean, and the Near and
Middle East; its inclusion in the bloc that
forms a potential threat to the southern flank
of a Soviet attack on Western Europe; and its
importance as a key member of a potential
Balkan - Near and Middle East bastion of
Western-oriented States from which the Com-
munist Satellites and the USSR can be at-
tacked directly. Yugoslavia is of strategic
importance to the Soviet bloc as an approach
for attacks into Greece and Italy, and as an
important integral part of the area that the
USSR would have to bring under its domina-
tion to control the Eastern Mediterranean, the
Black Sea and the Adriatic.
Economic Importance.
16. Yugoslavia is of only secondary economic
importance to the West. It provides a con-
venient outlet for German, Italian, and Brit-
ish manufactures and is capable of supplying
limited quantities of strategic non-ferrous
metals. The volume of the transactions in-
volved, however, is and will continue to be
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small and will have little effect on the eco-
nomic situation of the Western countries.
Salient in the Soviet Ideological Front.
17. The continued survival of the Tito gov-
ernment as the only Communist regime not
subservient to Moscow is a source of concern
to the Kremlin. The Soviet leaders have al-
ways insisted that the USSR alone is the leader
of the world Communist movement, and de-
spite their efforts to deny that Tito is a Com-
munist, their claim is contradicted so long as
Tito remains independent of the Soviet Union.
Although Moscow's control over the world
Communist movement has not yet been en-
dangered, the fact alone that it has been suc-
cessfully challenged occupies Soviet leaders
with an additional problem whose importance
perhaps only Communists can accurately esti-
mate. Both the Kremlin and Tito appear to
estimate that the potential effects of the split
may be especially significant in Asia. Corn-
inform propaganda has warned against the
efforts of the Yugoslays in Asiatic countries.
The Yugoslays apparently hope that nation-
alist tendencies within the Chinese and other
Asian Communist Parties will conflict with
Soviet attempts at domination and are trying
to encourage splits which would end Yugo-
slavia's isolation in the Communist world.
The Soviet campaign against Tito has already
brought Moscow into conflict with fellow-trav-
elers in various parts of the world. The Yugo-
slav defection has also disrupted the Soviet
efforts to use Pan-Slav sentiments in Western
countries to gain support for Soviet policies.
These movements have been torn by internal
divisions along Moscow-Belgrade lines, and
their effectiveness as Soviet instruments has
been reduced.
Base for Political Warfare in the Balkans.
18. The US diplomatic mission in Belgrade
represents the one US post in southeastern
Europe where few restrictions are now im-
posed and travel is relatively unhampered.
Consequently, Belgrade is a potential center
for US intelligence reporting for the whole
area. The presence in Yugoslavia of large
numbers of Albanians, Macedonians, Hun-
garians, and Rumanians affords the Yugoslays
af large potential for the waging of political
warfare in the Balkans. Subversion, sabo-
tage, guerrilla warfare, and propaganda are
all within the range of accomplishment of
these groups.
III. SOVIET INTENTIONS TOWARD YUGOSLAVIA
19. The USSR's objective in Yugoslavia is the
elimination of the Tito government and its
replacement by a regime subservient to Mos-
cow. Apparently unwilling to launch a mili-
tary attack against Yugoslavia either by its
Satellites or by itself, Moscow has applied
strong economic, political, and psychological
pressures short of war in an effort to weaken
the Yugoslav regime and isolate it from the
Soviet orbit. Although the possibility of a
Soviet and/or a Satellite attack against Yugo-
slavia cannot be dismissed, Soviet policy for
the time being seems to call for the continua-
tion of all previously used pressures against
Yugoslavia, either separately or in concert.
IV. MILITARY SITUATION
20. Yugoslavia cannot logistically support its
armed forces in sustained operations for any
extended period of time.
21. Any Satellite attack upon Yugoslavia will
be directed and logistically supported by the
USSR.
22. The effective defensive capabilities of the
Yugoslav armed forces would vary with the
scale and nature of possible attack, as follows:
a. The Yugoslav armed forces are capable
of containing and defeating any one of the
Satellite armed forces.
b. Without substantial outside logistic sup-
port the Yugoslav armed forces would be un-
able to withstand a combined Satellite attack,
and even if given such support their capacity
for sustained resistance would be questiona-
ble. If Yugoslavia were to be overrun, how-
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ever, Yugoslav forces would be committed to
guerrilla warfare, which could be extremely
effective if given outside support.
c. The Yugoslav armed forces could not in
any circumstances withstand a serious Soviet
attack. They would be forced to withdraw
into the mountains. Continued organized re-
sistance in this mountain area would require
major and prompt materiel assistance from
the outside.
V. IMPACT OF THE CURRENT ECONOMIC CRISIS ON THE STABILITY
OF THE TITO REGIME
23. Prior to the current economic crisis in
Yugoslavia, the Tito regime had attained a
degree of political and economic stability that
appeared adequate to insure its survival so
long as it was not subject to outside military
attack. Although a large majority of the pop-
ulation remained fundamentally opposed to
Communism, the effectiveness of Tito's state
apparatus was adequate to keep dissidents
under control. Moreover, by 1950 opposition
to the Communist regime had become some-
what tempered by feelings of nationalism
aroused by Soviet-Satellite pressures and by
Tito's firm stand against them. The Yugoslav
economy as of mid-1950 had made a strong re-
covery from the effects of World War II and
had made the essential readjustments re-
quired by the break with the USSR.
24. The extensive drought of the summer of
1950 materially reduced agricultural produc-
tion and contributed to an economic crisis
that may threaten the stability of the Tito re-
gime. Substantial outside aid is essential to
meet the basic requirements of the Yugoslav
people until this crisis is past.
25. The USSR will spare no effort to exploit
this crisis by increasing the efforts of its
agents in the related fields of espionage, sub-
version, sabotage, fomentation of labor un-
rest, and possibly attempted assassinations of
Yugoslav leaders. For several months at
least, the Yugoslav security police probably
will be able to keep these activities in hand,
even if the economic crisis is not alleviated by
Western aid. However, in the absence of
Western aid, a prolonged crisis would increase
the difficulty of maintaining control in the
face of internal discontent and Cominform-
directed subversive pressure. While it is im-
possible to make a firm estimate of the longer-
term effects under these circumstances, the
probability is that Tito's police regime can
survive the period of crisis, although in a
weakened condition.
26. A softening of Yugoslav defensive capa-
bilities and will-to-resist might occur and
might in the course of the next year be a fac-
tor in bringing on a direct military attack by
the USSR or, more likely, by the Satellite
states bordering on Yugoslavia. This fac-
tor alone, however, will not be decisive in So-
viet strategy, which will be dictated more by
the Soviet estimate of the world balance of
power and of Western reaction to an attack
on Yugoslavia than by the internal Yugoslav
situation.
27. If Tito obtains substantial aid from the
West, his position both as party and national
leader will remain comparatively secure.
28. The current Yugoslav economic crisis has
provided an opportunity for the US to seek
further gains in exploiting the Yugoslav-So-
viet break in behalf of the West. In addition
to the opportunity to strengthen Tito's posi-
tion as a deviationist, the granting of US aid
would create a situation favorable to effecting
more active Yugoslav support of the aims of
the western world.
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ENCLOSURE
SUPPORTING DATA
I. IMPORTANCE OF YUGOSLAVIA TO THE WEST
Yugoslav Orientation.
1. International. The Yugoslav Government
has steadily, although cautiously, strength-
ened its economic, cultural, and political ties
with Western governments. This trend rep-
resents above all the desire of the Tito regime
to preserve its rule in Yugoslavia. Since it is
axiomatic with Communist, no less than other
dictatorial rulers that ideological considera-
tions must bow to the supreme objective of
maintaining their monopoly of power, Yugo-
slavia's turning to the anti-Communist West
does not signify any basic change in political
philosophy of the Tito group. Instead it re-
flects their appreciation of the realities of the
present situation. They cannot heal the
breach with the Soviet Union and remain as-
sured that they would continue to hold power.
Consequently, since their rule would be defi-
nitely jeopardized without foreign support,
they have been forced to turn to the West.
Although many of Tito's recent statements,
with their over-tone of assurance, must be
read against the background of Yugoslavia's
critical need for economic assistance at the
present time, the outlook for the future is that
the Tito regime will continue to improve its
relations with the West.
Whether Tito will ultimately modify his po-
sition as a "sincere Communist" either to im-
press his Western benefactors or to extend his
base of power within Yugoslavia, is still a ques-
tion for speculation. Current developments
do not provide sufficient evidence to reach
even a tentative conclusion, although they do
show a willingness to break with some phases
of the Soviet version of Communism.
a. Economic. In contradistinction to the
situation before June 1948, when Belgrade had
become a party to a series of interlocking
agreements with the USSR and the Comin-
form countries and about half of total Yugo-
slav trade was with the East, trade with the
Soviet orbit, as a result of the Soviet and Satel-
lite boycotts, has been discontinued. On 11
October 1950 it was announced that Belgrade
would supply a major share of its strategically
important non-ferrous metals (copper, lead,
and zinc) to the US through the end of 1951.
This is expected to total between $15 and $20
million. Trade pacts have been concluded
with the UK, France, Belgium, Western Ger-
many, and many Scandinavian, Near Eastern,
and South American countries. On the other
hand, the Cominform countries have main-
tained a rigid boycott against Yugoslavia, and
Yugoslav trade with them has been discon-
tinued.
TABLE 1
YUGOSLAV TRADE TURNOVER, 1947-49
1947 1948 1949
Million Per- Million Per- Million Per-
of dollars cent of dollars cent of dollars cent
Soviet Sphere
171
51
287
46
60
12
Non-Soviet World
167
49
331
54
424
88
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b. Cultural. The Yugoslav Government
has been revising the trend toward Russifica-
tion that was so strongly pressed during 'the
period 1945-47. The Central Committee of
the Communist Party of Yugoslavia (CPY)
in January 1950 adopted a resolution on edu-
cation in which the Russian-language study
priority in Party and other schools was termi-
nated. Russian now becomes one of the lan-
guages which might be studied along with
English, French, and German. The resolu-
tion also presaged the replacement of Russian
textbooks, particularly in the social sciences.
The bi-monthly Yugoslav publication Kom-
munist said in August 1950 that one of the
main courses at the Party school, the "History
of the Communist Party in the Soviet Union,"
would be removed from the curriculum. The
course will be replaced by the "History of the
International Workers' Movement" which is
organized so as to dispute the right of the
USSR to claim total credit for the progress of
world Communism. A public showing of the
works of Mica Popovic opening in Belgrade 23
September marked the first time that a non-
Communist artist has been permitted to ex-
hibit since the Tito regime came to power.
Moreover, the Popovic- authored brochure for
the exhibit contained a six-page comment on
"Yugoslav Art Since the Liberation" that pre-
sented a strong attack on totalitarian control
of artistic expression. Moreover, the organ
of the Belgrade Peoples Front, 20 Oktober,
made the comment (unusual for a totalitarian
country) that "some of Popovic's statements
are not correct, but no one will deny his right
to express them." The anti-Soviet trend in
cultural relations is further reflected in the
Yugoslav decision to except the US from the
January decree curtailing the activities of rep-
resentatives of other countries, especially
those of the Soviet orbit, and in scathing
propaganda attacks on the "Stalin cult"
which debunk the efforts of Soviet leaders to
instill a "feeling of religious love, fear and re-
spect of Stalin" in all Communists.
c. Political. The break with Stalin, to-
gether with the intensity of Soviet efforts to
supplant the Tito regime with one more fa-
vorable to Moscow at a time when the Soviet
Union was talking of peace in international
forums, appears to have convinced the major-
ity of even the more doctrinaire Yugoslav
Communists that association with the West
was virtually necessary if not only Tito but
the bulk of the Party hierarchy were to sur-
vive. Yugoslav leaders, however, proceeded
slowly, always showing the gravest concern
that neither their national independence nor
their purity as true Marxists was compro-
mised. Nevertheless their alignment with
the West has steadily grown in scope and
depth. This is reflected by:
The improvement in relations with
Italy, Greece, and Austria.
The virtual cessation of recrimination
on the Trieste and Carinthia issues.
The cessation of propaganda attacks
against the US and other Western gov-
ernments and the fair and impartial
treatment given major developments
featuring the US struggle against So-
viet expansionism.
Tito's 10 July 1949 decision to close the
Greek border, bringing about the vir-
tual cessation of the Greek civil war
and providing increased opportunity
for the economic and political stabili-
zation of the Athens government.
Publicity given by the Yugoslav Gov-
ernment to the aid that the US is giv-
ing Yugoslavia to combat the present
crisis.
Withdrawal of Yugoslav 4th Army
troops threatening the security of
Trieste and the Italian border areas.
The Yugoslays have shown themselves
increasingly friendly towards US mili-
tary attaches and have permitted close-
hand observance of Yugoslav troop ma-
neuvers and training exercises.
Marshal Tito's decision to permit the
basing of the US Embassy plane in Bel-
grade and the Marshal's concurrence
in American Ambassador Allen's sug-
gestion to settle difficulties arising out
of individuals' possessing dual citizen-
ship by joint concurrence on an indi-
vidual basis.
Evidence of a decision to buy arms in
the West, a development that would
automatically lead to a large measure
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
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of military dependence on the West.
Tito's conversations with US Congress-
men included the subject of the pur-
chase of jet planes. Tito has conferred
with a French official on the problem of
obtaining arms through France, and
Yugoslavia has attempted to purchase
a cartridge plant in Belgium.
More impressive than these several changes
in Yugoslavia's relations with particular West-
ern nations has been the shift in the Yugoslav
position in the UN. Yugoslavia has succes-
sively moved from active support of the USSR
to neutrality between the USSR and the West,
and, most recently, to increasing support for
the West.
Until June 1948 Yugoslavia was a faithful
mouthpiece of the Soviet Union in all UN pro-
ceedings. Even after the break with Moscow
in June 1948 Yugoslavia was slow to abandon
its automatic support of Soviet UN proposals.
Yugoslav delegates acted independently of the
Soviet bloc for the first time at the General
Assembly in September 1949, when Foreign
Minister Kardelj announced that Yugoslavia
would adopt an "independent" attitude on all
issues.
The Korean crisis, particularly since Com-
munist China's intervention, has forced the
Yugoslav Government to abandon its position
of neutrality and proclaim its support of UN
action against aggressor nations. Thitherto
Yugoslavia had refrained from supporting UN
action against the North Koreans, had urged
mediation of the dispute, and had urged that
the UN grant North Korea and Communist
China a hearing on the Korean dispute. How-
ever, in September 1950 Kardelj compared the
North Korean action to the Cominform cam-
paign against Yugoslavia and by November
had moved even closer to the US position on
the Korean crisis. Yugoslavia's representa-
tive on the Security Council participated in
the 10 to 0 decision to place the US complaint
against Chinese intervention on the agenda
as the first item of business, and Marshal Tito
told New York Times correspondent Sulz-
berger on November 6 that his country would
abide by any decision taken by the UN on
Chinese Communist aggression in Korea.
But he added his belief that the dangers
which face Yugoslavia make it unlikely that
Yugoslav troops would be called upon to fight
against any aggressor outside of Southeast-
ern Europe.
Yugoslavia's shift on the Korean issue is of
course not the result of altruism but is a sim-
ple reflection of a policy of supporting meas-
ures which the regime feels will enhance Yu-
goslavia's own security and interests. Chinese ?
Communist intervention in Korea has appar-
ently made the Yugoslays more fearful that
the Soviet bloc might be willing to risk the con-
sequences of aggression against Yugoslavia.
Accordingly, Belgrade wants to have its record
clear on opposing aggression so that there
would be no impediment to its asking UN sup-
port in case of attack on Yugoslavia. Thus
Yugoslavia supported the seven-nation "unit-
ing for peace" resolution in the General As-
sembly and submitted proposals of its own
along the same line.
In UN questions having to do with tradi-
tional Communist "causes" not related to ag-
gression, Tito's delegates still maintain the
old line. This, however, is clearly for the pur-
pose of maintaining an "ideologically correct"
record and not to give aid and comfort to the
Kremlin. Thus Yugoslavia opposed the lift-
ing of the diplomatic blockade against Franco.
In the Trusteeship Council, Yugoslavia has
opposed the Western Powers on various issues
that constitute "colonial imperialism" in the
orthodox Communist view.
2. Internal. On 22 January 1950 when US
Ambassador Allen presented his credentials to
Yugoslavia, Foreign Minister Kardelj told him
that although every revolutionary movement
must be ruthless at the beginning, it would
have to move towards genuine democracy or
lose its popular support. The Foreign Min-
ister's statement appeared to reflect Bel-
grade's growing concern to widen its strength
among the people, the overwhelming majority
of whom are opposed to Communism, but sup-
port the government in its stand for the main-
tenance of national independence. Now that
it is apparent that the present drought pre-
sents a pressing problem, the Yugoslays ap-
pear to have increased their efforts to make
the regime appear more "liberal." Develop-
ments in this connection are as follows:
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(1) The Ministry of Interior announced 1
January 1950 amnesty for 7,304 politi-
cal prisoners, to be effective immedi-
ately. According to usually reliable
sources those affected were mainly anti-
Communist elements who had been im-
prisoned for "re-education." Tito in
his 7 November interview with the cor-
respondent of the New York Times said
another "extensive" amnesty would
soon take place.
(2) Increasing evidence of the ability of the
common people to speak out against the
regime without fear of reprisal. This
has been reported by a variety of for-
eign visitors to Yugoslavia during the
past year and is dramatically illus-
trated by the Popovic brochure referred
to above and by 20 Oktober's comments
on it.
(3) Relaxation on travel restrictions in the
case of both native and foreign ele-
ments. In striking contrast to the
Satellites, Yugoslav students, writers,
engineers, scientists, and sports teams
have been increasingly allowed to travel
to Western countries since the end of
Soviet domination.
(4) Easing of some pressure against the
Roman Catholic, Orthodox and Protes-
tant Churches. The Roman Catholic
Bishop of Mostar, and Father Janez
Janko, vicar-general of Belgrade, have
been released from prison and permitted
to return to their native villages. Four
Lutheran churches in Slovenia and Bos-
nia have been returned to church au-
thorities, and allowed to reopen. The
oldest theological seminary in Serbia,
formerly used as a barracks for troops,
has been returned. The first consecra-
tion of a Roman Catholic bishop since
the war recently was allowed in the dio-
cese of Pazin and more consecrations
are expected to be permitted in Dalma-
tia and Croatia. The Orthodox Pa-
triarch Vikontije has won from Tito
a promise that social insurance will be
extended to cover priests and their fam-
ilies, and Tito has also promised to con-
sider returning some of the frozen funds
9
of the Orthodox Church. In primary
schools there is evidence that the gov-
ernment is relaxing its efforts to pre-
vent religious instruction, and the re-
gime no longer makes a conscious effort
to schedule political and military events
on Sunday in order to keep the faithful
out of the churches. That there are
definite limits to the new "soft" policy
on religion is evidenced in a number
of ways, however. The Catholic Arch-
bishop of Zagreb, Aloysius Stepinac, has
not been released, nor has the out-
spoken Orthodox Bishop Varnava Nas-
tic. Some 350 Roman Catholic priests
and a lesser number of Orthodox are
still believed imprisoned. The govern-
ment is making efforts to attract ele-
ments of the Catholic clergy in Slov-
enia, Croatia, and Bosnia-Hercegovina
by forming a St. Cyril and Methodius
Society which is directly under the in-
fluence of the regime. Recently three
Catholic priests were excommunicated
for joining this organization and lend-
ing themselves to the cause of Tito.
In short, although concrete progress
has been made recently, there remains
great room for improvement in church-
state relations. In Cominform coun-
tries, on the other hand, the position
of the churches has steadily deterior-
ated.
(5) On 15 October 1950 the government
published a decree wiping out the
special privileges, patricularly in food
and housing, enjoyed by high state and
party officials, army officers, and other
members of the hierarchy. The act,
which broke the pattern followed in all
Communist countries, was aimed at
placing all citizens, regardless of rank,
in the same category in the face of the
difficulties created by the drought. The
order does, however, list a number of
exceptions. The main purpose ap-
peared to be to allay internal dissatis-
faction with the openly privileged po-
sitions of the Army, CP members,
UDBa, and government officials, and to
create propaganda ammunition in the
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ideological battle with the Cominform.
Under the provisions of the law no one
could receive more food than miners
and forestry and railroad workers.
(6) The drive for collectivization of agricul-
ture has been virtually abandoned, and
the lot of peasants already included in
collectives .has been somewhat eased.
In most collective farms in the Vojvo-
dina, instead of the collective's being
obliged to deliver a fixed quantity of
produce, quotas are on a percentage
basis. Equally important is the pro-
vision that Yugoslav collective farmers
may do as they please with the produce
from their own private plots and pri-
vately-owned domestic animals.
(7) Yugoslav visitors to the US Informa-
tion Center in Belgrade have continu-
ally increased in the course of the past
few months, suggesting that the pres-
sure and threat of pressure formerly
used against any Yugoslav attending a
US-sponsored event is no longer in
force.
(8) In an interview 12 November with a
West German news agency Tito stated
that "there will be no second five year
plan similar to the first five year plan."
He said that Yugoslav economy will em-
phasize increased consumer goods pro-
duction, for "above all we must raise
living standards in the next few years."
Tito added that the nationalization of
small craft industries adopted in imita-
tion of the Soviets was a mistake, and
that some will be returned to private
ownership.
In June 1950 a "program of de-
centralization" was inaugurated with
the establishment of workers' councils
in each factory to share management
with government-appointed managers.
Workers' councils, according to the for-
mula laid down in the law of 26 June,
will assist in the formulation of policy,
in production, and in all matters affect-
ing the operation of the plants. Yugo-
slav leaders have claimed that through
this change the factories have been
handed over to the workers in the full
(9)
sense of the word. These claims are
obviously extreme, however. Yugo-
slavia is a peasant country and indus-
trial workers have little or no training,
many of them being illiterate. Under
such backward conditions it is clear
that workers could not actually be en-
trusted to "manage" a factory, even if
the government desired it. Moreover,
since the essence of socialism is plan-
ning, workers' councils could not be left.
to do as they please in the matter of
production, working conditions, pric-
ing, wages, etc. Apparently the Yugo-
slav leaders understand this, for the
text of law provides that the power re-
mains in the hands of the manager, not
the workers. The real objective of the
workers' council appears to be to serve
as a propaganda device for the promo-
tion of labor and production efficiency.
While these several changes have doubtless
been of importance, they have not resulted in
a change in the basic structure of the Yugo-
slav system. Over-all Tito's government re-
mains a dictatorial and repressive regime
whose continued existence is based primarily
on the effectiveness of its police power.
Strategic Importance of Yugoslavia.
A Western-oriented Yugoslavia could be ex-
tremely useful in protecting the southern
flank of Western Europe, in preserving Allied
control over the Mediterranean lines of com-
munication and in securing the Near and
Middle East. The entrance to the Black Sea
from the West is controlled by the combined
military potential of Yugoslavia, Greece, Tur-
key, and Albania. Furthermore, Yugoslavia
guards the eastern shores of the Adriatic and
thus denies short-range air attacks and trans-
Adriatic amphibious attacks on Italy from
the east. Under certain conditions, Yugo-
slavia might become the key strategic country
in these areas.
In considering possible land campaigns in
Eastern Europe, Yugoslavia is strategically im-
portant. The best land approach into Greece
from the Iron Curtain countries, and the ap-
proach successfully used by the Nazis, is
through Yugoslavia via the Vardar Valley.
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This approach flanks and penetrates the rear
of the Metaxas Defense Line. The Julian Alps
in northwestern Yugoslavia guard the ap-
proach to Northern Italy from the east. A de-
fensive line through the rugged Julian Alps
would extend the defenses of northern Italy
some 100 miles eastward beyond the Piave
River line.
One of the greatest potential threats against
Soviet security actually exists in the Balkan-
Near and Middle East area. Yugoslavia has
33 divisions; Greece, 8; Turkey, 19; Iran, 10;
making a total of 70 divisions. Perhaps these
are not excellent divisions by US standards,
but they are divisions, nevertheless. These are
the forces which are estimated to resist if
attacked or if seriously threatened by the
USSR. If in the eyes of the USSR they were
so strong that they could not be attacked with
profit, the Soviets probably would avoid
attacking this area, and if these countries
were actively allied with the West a Soviet
attack against Western Europe might be fore-
stalled.
Therefore, by making the Balkan-Near and
Middle East area, with its 70 divisions in being,
a defensive bastion, there will be created a
threat against the Soviet flank of ultimate
aerial and of later land and sea penetration of
the USSR in the event of Soviet military ag-
gression. It is here that military actions
would hurt the USSR immediately and most,
and hence, however unlikely such offensive
action by the Allies may be, the threat would
require the continued diversion of major So-
viet forces.
In the mountainous areas of the Balkans
and the Near and Middle East, the greatest
security can be obtained with minimum forces.
If the Balkan-Near and Middle East bastion
should be made sufficiently strong, it would
eliminate the necessity for a close-in defense
of the Cairo-Suez area. The line of defense
for the Eastern Mediterranean and the Near
and Middle East is through Yugoslavia, Tur-
key, and Iran. Furthermore, the backbone
of this defense possibly could be composed of
indigenous troops.
? If the Balkan situation should deteriorate
and the Soviets regain control over Yugoslavia,
it must be expected that the Soviets will not
stop with the elimination of Tito, but will es-
tablish a regime in Yugoslavia which will not
again defect. Therefore, should the Yugoslav
question be resolved in favor of the Soviets, it
must be expected that the Soviet Armed Forces
will push on to the Adriatic, thereby effectively
piercing the Western line of defense and pos-
ing an immediate threat to Italy and Greece
and to Western security in the Central Med-
iterranean.
Economic Importance.
Yugoslavia is of only secondary economic
importance to the West. It provides a con-
venient outlet for German, Italian and British
manufactures and is capable of supplying lim-
ited quantities of strategic non-ferrous metals.
The volume of the transactions involved, how-
ever, is and will continue to be small and have
little effect on the economic situation of the
Western countries.
Salient in Soviet Ideological Front.
There is no question that the continued sur-
vival of the Tito government as the world's
only Communist regime not subservient to
Moscow is a source of grave concern to the
Kremlin. The Soviet leaders have always in-
sisted that the USSR alone is the leader of the
world Communist movement, and, despite
their efforts to deny that Tito is a Communist,
their claim is contradicted so long as Tito re-
mains independent of the Soviet Union.
Although Tito has made no concerted effort
to develop an international following among
foreign Communists and fellow-travelers, his
ability to preserve a national Communist re-
gime clearly raises the prospect that in time
other Communists may reconsider their re-
lationship to the Kremlin. Thus far, there
is no evidence of any significant COmmunist
group's dropping its pledge of unquestioning
loyalty to the USSR, yet there are indications
that both in the Satellite states and in foreign
Communist parties the requirement of obedi-
ence to the Kremlin is a source of friction. If
the Soviet Union, as it has since Tito's defec-
tion, increasingly insists on even more rigid
obedience from its foreign supporters, and at
the same time Tito achieves greater success
both internally and internationally, this fric-
tion is likely to increase. Thus, although Mos-
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cow's control over the world Communist move-
ment has not yet been endangered, the fact
alone that it has been successfully challenged
occupies Soviet leaders with an additional
problem whose importance perhaps only Com-
munists can accurately estimate.
The extent to which this is true is testified
by the fact that the Rajk trial in Hungary, the
Kostov trial in Bulgaria, the Koci Xoxe trial
in Albania, the removal of Gomulka in Poland,
all came as a result of Moscow's mistrust of
possible nationalist-minded leaders in the
ranks of Eastern European Communists. Al-
though the ensuing party shake-ups have in-
creased Moscow's control, they have not re-
duced the Kremlin's suspicion of the continued
existence of nationalist elements.
The concerted Soviet propaganda effort to
brand Tito as a "fascist" represents an effort
by Moscow to take the rift out of the context
of an intra-party quarrel and cast it in terms
which do not so pointedly call Moscow's su-
premacy into question.
Both the Kremlin and Tito appear to esti-
mate that the potential effects of the split may
be especially significant in Asia. Cominform
propaganda has warned against the efforts of
the Yugoslays in Asiatic countries. Marshal
Tito's August interview with an Indian So-
cialist journalist portrayed the USSR as act-
ing contrary to the interests of the peoples
involved in both Korea and China. The Yugo-
slays apparently hope that nationalist tend-
encies within the Chinese and other Asian
Communist Parties will conflict with Soviet
attempts at domination and are trying to en-
courage splits which would end Yugoslavia's
isolation in the Communist world. So far
Belgrade's efforts in the Far East have not
met with any success. Tito has been unsuc-
cessful in obtaining any responses to his over-
tures to Mao and Ho Chi Minh in Indochina.
His only diplomatic representation is in New
Delhi.
The Soviet campaign against Tito has
brought Moscow into conflict with fellow-trav-
elers such as Zilliacus, 0. John Rogge, Jean
Cassou and others who have hitherto sup-
ported Soviet front organizations. The Corn-
inform communique of 29 November 1949
railed against the efforts of the Yugoslav "im-
perialist agents and splitters of the ranks of
the international working class movements."
Belgrade has made great efforts to court the
so-called "progressive elements" in the West,
particularly in France and Italy. Mosha Pi-
jade, veteran Politburo member and one of
the leading Yugoslav theoreticians, made a
trip to France and Western Europe last sum-
mer presumably to discuss the Yugoslav po-
sition with leading persons of left-wing ori-
entation. In Italy the Yugoslays have en-
deavored to split the Italian Communist Party
and to curry favor among the Nenni Socialists
and other leftist parties.
Marshal Tito recently spoke in Belgrade to
a delegation of former Italian Partisans and
members of the wartime Norwegian resistance
movement. After stating that the situation
of Communist parties which are not in power
is different from those which are in power be-
cause their functions are so disparate, Tito
said that the former "fights for the improve-
ment of social conditions of work and life of
the working classes; it is in opposition to the
ruling class in this or that country and fights
for authority. Directives which a party re-
ceives from some center are more or less of a
general character. Even this type of party
must consider the needs and specific condi-
tions of the working class which it represents."
"But", said Tito, "a Communist Party which
already has authority in its hands has much
larger tasks and must pay more attention to
the general needs of the peoples of the land.
It must carefully approach the solution of
certain problems and it is absolutely impos-
sible for it to receive directives from the side
where the concrete situation of the country in
question is not at all known."
Veljko Vlahovic, a member of the Central
Committee of the CPY on 28 November 1949
recognized the limited results and immediate
prospects when he explicitly denied the exist-
ence of, or Tito's intention to create, a "Titoist
international" as charged by the Cominform.
This was not the first such denial, but it was
the most explicit. This does not mean, how-
ever, that the Yugoslays will not continue to
seek support abroad, but rather that they
are not ready or able to organize a formal anti-
Cominform movement. In this connection
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the disproportion between Moscow and Bel-
grade in resources, prestige, and techniques
obviously acts to the detriment of Belgrade.
Finally, the Yugoslav defection has dis-
rupted the Soviet efforts to use Pan-Slav senti-
ments in Western countries to gain support
for Soviet policies. These movements have
been torn by internal divisions along Moscow-
Belgrade lines, and their effectiveness as So-
viet instruments has been reduced.
Base for Political Warfare in the Balkans.
The US diplomatic mission in Belgrade rep-
resents the one US post in southeastern Eu-
rope where few restrictions are now imposed
and travel is relatively unhampered. Con-
sequently, Belgrade is a potential center for
US intelligence reporting for the whole area.
In addition, Yugoslavia's defection from the
Soviet bloc has heightened the geographical
isolation of Albania and increased the pressure
on the Hoxha government. If Albania is
eventually forced out of the Soviet bloc, the
way would obviously be opened for the forma-
tion of an anti-Soviet bloc composed of Tur-
key, Greece, Albania, Yugoslavia, and possibly
Austria or Italy. The presence in Yugoslavia
of large numbers of Albanians, Macedonians,
Hungarians, and Rumanians affords the Yugo-
slays a large potential for the waging of po-
litical warfare in the Balkans. Subversion,
sabotage, guerrilla warfare, and propaganda
are all within the range of accomplishment
of these groups.
II. SOVIET INTENTIONS TOWARDS YUGOSLAVIA
The Soviet Union's objective in Yugoslavia
is the elimination of the Tito government and
its replacement by a regime subservient to
Moscow.
Moscow has shown that the elimination of
Tito remains a constant goal. The Soviet
radio at present devotes more time to broad-
casts to Yugoslavia than to any other country.
The only Cominform meeting held since the
expulsion of Tito in June. 1948 was convoked
in November 1949 to announce the tactics to
be used against Tito and against any Titoism
in the world Communist movement.
Apparently unwilling thus far to launch a
military attack against Yugoslavia either by
its Satellites or by itself, Moscow has applied
strong economic, political, and psychological
pressure short of war in an effort to weaken
the Yugoslav regime and isolate it from the
Soviet orbit. The USSR and its Satellites
have established an economic boycott against
Yugoslavia, and have inspired and encouraged
sabotage and subversive activity against the
Tito regime. The Soviet bloc countries have
renounced their mutual assistance treaties
with Yugoslavia, virtually suspended diplo-
matic relations, and harassed and intimidated
Yugoslav diplomats abroad. The Yugoslays
also complain that their national minorities
in Rumania, Bulgaria, Hungary, Czechoslo-
vakia, and Eastern Germany have suffered in-
timidation and discrimination. Moscow has
maintained a constant threat of military oper-
ations by means of border incidents and a
military buildup in neighboring countries, and
through repeated charges of Yugoslav aggres-
sive intentions against the Soviet bloc coun-
tries. The USSR has secured the expulsion of
Yugoslays from international Communist
front organizations and has maintained an in-
tense propaganda campaign to prove that the
Tito regime is "fascist" and subservient to the
West.
Although the possibility of a Soviet and/or
a Satellite attack against Yugoslavia cannot
be dismissed, Soviet policy for the time being
seems to call for the continued application of
all previously used pressures against Yugo-
slavia, either separately or in concert. Mos-
cow undoubtedly is trying to exploit a situ-
ation, such as the present serious drought,
which gives it the opportunity for increased
political leverage both among the masses of
the people and the hierarchy of the Party.
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III. THE ECONOMIC CRISIS
The Yugoslav economy as of mid-1950 had
made a strong recovery from the effects of
World War II and had demonstrated its ability
to make the essential readjustments required
by the break with the USSR. Production in
the three principal segments of the economy?
agriculture, forestry, and non-ferrous met-
als?was above prewar levels. Output of fer-
rous metals, ferro-alloying elements, coal, elec-
tric power, petroleum, chemicals, textiles, and
machine tools had reached, and in many in-
stances surpassed, prewar levels. Production
in most lines was continuing to expand, and
the transportation system was supporting
more than twice the prewar volume of traffic.
Still, as of mid-1950, the margin of safety in
the political and economic stability of the Tito
regime was not great, deriving for the most
part from the efficiency of the internal se-
curity system and popular inertia rather than
from solid support by the population.
Magnitude of the Current Economic Crisis.
During the summer of 1950 an extensive
drought materially reduced agricultural pro-
duction in Yugoslavia and brought an eco-
nomic crisis that may threaten the stability
of the Tito regime unless outside aid can be
obtained, primarily in the form of foodstuffs.
Over-all grain production in 1950 will amount
to 5.2 million tons, or approximately one-third
less than the 1949 production of 7.6 million
tons. In addition, there are substantial short-
ages of potatoes and other vegetables. Grain
shortages and burnt-out pasturage are forc-
ing the excessive slaughter of livestock, de-
droying the long-term prospects for meat
supply. During the course of the winter, de-
ficiencies in agricultural products will cause
Pxtreme hardship and some outright starva-
'ion in the absence of substantial imports of
'-todstuffs.
The effects of the current economic crisis
will be felt primarily by the urban population,
but belt-tightening will be necessary through-
out the country. Existing government stocks
of grain and other foodstuffs probably will have
to be reserved for the armed forces. Conse-
quently, the Yugoslav people can expect a crit-
ical deterioration in their standard of living.
Food prices on the free market will continue
to rise, and stringent food-rationing will be es-
sential. Loss of agricultural exports will
cause a reduction of total 1950 exports by ap-
proximately one-fourth ($50 million) and in
turn will require a substantial cutback in the
importation of consumer goods and raw ma-
terials for light industry. As a result, there
will be a serious inflationary threat.
With or without inflation, Yugoslavia is in-
capable of financing emergency food purchases
from the West because its foreign exchange re-
serves, including the increments from US and
other Western financial aid, are nearly de-
pleted by purchases and commitments for im-
port. A cutback in the basic Five Year Plan
of economic development would provide only
limited funds for the purchase of foods. Noth-
ing short of substantial Western assistance
can alleviate the strain on the Yugoslav
economy.
The following imports are estimated to be
essential to meet domestic requirements until
a near normal harvest becomes ' available:
grain for food and feed 1.1 million tons, beans
30,000 tons, fats 20,000 tons, sugar 20,000 tons,
and potatoes and vegetables 300,000 tons.
The official Yugoslav Government request for
foodstuffs in amounts roughly comparable to
these is estimated to cost about $70 million.
In addition, to alleviate an acute shortage of
consumers' goods which has seriously reduced
the incentive to work, particularly on the part
of the peasants, cotton and wool purchases
from abroad for use in clothing will be needed
in the following amounts: 24,000 metric tons
of cotton ($20 million) and 3,000,000 pounds
of wool ($2,300,000).
Internal Effects of the Crisis.
As a result of the effects of the drought on
the Yugoslav economy, the stability of the
Tito regime has encountered serious pressure.
Peasant hostility toward the regime has al-
ready resulted in a number of violent local dis-
orders. If the level of rural living conditions
declines further under the impact of the
drought, and if local authorities exert increas-
ing pressure to extract food quotas, as seems
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inevitable in the absence of considerable out-
side aid, it is possible that local disorders will
spread and become more difficult to control.
A sharp decline of the already low living stand-
ards will also undermine the morale of the
labor force, diminishing its efficiency and out-
put. The high level of absenteeism and labor
turn-over evident during the past year al-
ready has slowed down Yugoslavia's economic
reconstruction and development. Western
observers have reported during the past few
weeks that criticism of the regime's failings is
general and outspoken. While there are in-
dications that some of this criticism stems
from the ranks of the Yugoslav Communist
Party, particularly in Slovenia and Crotia, and
charges of Cominformism were recently lev-
eled at three members of the Croatian Repub-
lic Government, there is little evidence that
Comminformist sentiment is widespread with-
in the Party or that discontent with the regime
springs from this source. The cause of cur-
rent criticism is simply the apparent failure
of the Tito Government to deal with the pres-
ent economic crisis.
Nevertheless, despite the economic crisis,
the Yugoslav security forces probably are
strong enough and efficient enough to main-
tain internal order during the next few
months. Still, if the hardships brought on by
the economic crisis are not alleviated by out-
side aid, the maintenance of internal security
will place an increasingly heavy material and
psychological burden on the Yugoslav govern-
ment.
The Cominform will attempt to take advan-
tage of the crisis to increase the efforts of its
agents in the fields of espionage, subversion,
sabotage, the fomenting of labor unrest, and
possible attempts to assassinate Yugoslav
leaders. Although underground penetration
of Yugoslavia by Cominform agents presents
exceptional difficulties, there is some evidence
that a limited clandestine traffic across the
Yugoslav frontiers has existed for some time,
and there are in neighboring countries a num-
ber of camps engaged in training Cominform
partisans for operations in Yugoslavia. There
is the possibility that some of the recent os-
tensibly spontaneous peasant uprisings may
have been directed by Cominform agents. Al-
though anti-Soviet feeling among the Yugo-
Slav peoples is so strong as to make unfeasible
the conduct of Soviet-sponsored guerrilla ac-
tivities, the USSR can increase its efforts to
exploit Yugoslav popular discontent, national
antagonisms, and separatist tendencies.
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