8 The Foreign Trade System of Yugoslavia
The foreign trade system of Yugoslavia is increasingly becoming an integral part of the overall economic system, sharing the process of evolution of the economic system as a whole. The balance-of-payments deficit has been one of the most important limiting factors in the process of economic development, and it certainly has influenced the foreign trade system as a whole. Due to the decentralization of the planning and management system, foreign trade firms had to be controlled and managed by the employees and to operate on a profit-making basis. In the area of foreign economic relations, the main objective of the economic reform was to expose Yugoslav economic performance to the more direct influence and direct impulses from the world market. Yugoslavia was the first socialist country to permit the establishment of joint business ventures between domestic and foreign firms. The newly established foreign exchange rate meant at the same time higher incentives for exporters and higher limitations on importers.