ABSTRACT
By 1965, Yugoslavia had the same post-Stalinist economic shortcomings as the rest of communist Europe in spite of reforms dating back to the early 1950s – the 1961 package in particular, which had been well backed by Western aid. As the price for Yugoslavia’s independence from the Soviet Union, the West had massively underwritten the mismanagement of the country’s economy. Forces had been let loose that Yugoslavia’s federal government could not afford to have unleashed. It was ready to experiment in order to remedy economic ills and make ideological advances – but without giving up its long-term aim of developing heavy industry. Credit and investment continued to be governed by criteria more political than economic. The leadership itself was always hesitant and divided, while all down the line, changes were met with opposition from those concerned with their vested interests. Considerable differences of opinion had developed between the ‘reformers,’ who were economic realists and wanted more decentralization and more economic changes, and the ‘conservatives,’ who were political realists and wanted to tread more carefully. These issues were linked to that of autonomy for regional governments. For good measure, there was also the rise of the emotional question of nationality along with the clash of personalities.
