ABSTRACT

In contrast to the domestic difficulties, external economic relations developed favorably, the balance on current account in convertible currencies showed a US$ 2 bn surplus in 1989. In 1989 Yugoslavia’s total internal indebtedness was estimated at US$ 13.5 bn. The highest losses were suffered by Yugoslavia’s under-developed regions, particularly in Montenegro, where about 40% of enterprises are on the brink of bankruptcy. The drop in industrial production was mainly the result of the “traditional” liquidity problems of enterprises, as well as of declining domestic demand. An immediate increase of industrial production, as a result of the establishment of private enterprises, cannot be expected in the near future, as most of the newly set up enterprises are trading firms, while only few of them are in the sphere of production. According to Yugoslav estimates the decline in industrial production will continue till the end of 1990, when it will amount to about 10-15% as against 1989.