Politics and the Prospects for Economic Reform in Yugoslavia
Politics and the Prospects for Economic Reform in Yugoslavia

Summary/Abstract: During the 1980s perhaps no country in Europe, east or west, has experienced more economic stress than Yugoslavia. Between 1980 and 1985 the inflation rate averaged nearly 50 percent per year and real income fell by more than 40 percent. By one estimate, real wage levels in Yugoslavia in 1986 were equivalent to 1967 levels. In 1986 the government admitted to an inflation rate of 100 percent, but some estimates place inflation as high as 120 percent. Interest charges will raise Yugoslavia's foreign debt by $3 billion in 1987 to $23 billion, and unemployment stands in excess of 16 percent. The political consequences of such economic difficulties would be significant in any country, but they are especially troublesome to Yugoslavia. The fragile balance of Yugoslavia's political system has been obvious since the country's inception and maintaining political stability was considered a difficult enough task even under favorable economic conditions. In light of the dismal performance of the economy, one must be even more cautious (indeed, pessimistic) in attempting to speculate about Yugoslavia's political future. [...]

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