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Yugoslavia: Credit Where Credit Is Due
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10865 |
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CURRENT ISSUES
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| Issue
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7 / 1986 |
2,282 Words |
| Author
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Scott B. MacDonald
Scott B. MacDonald, a former officer at the Connecticut
National Bank in charge of the international credit unit, is
currently the assistant editor of Times of the Americas and
is the author of a new book on democracy and
development. |
While Poland has consistently had problems in complying with its debt adjustment programs and Romania has taken draconian austerity measures; one nation in Eastern Europe has managed to meet its international repayment commitments while not radically depreciating its standard of living. That nation is Yugoslavia.
Yugoslavia has suffered through a lengthy economic recession in the 1980s, per-capita income has declined moderately, and the government has been forced to reassess its financial policies. With an external debt of $21 billion, there has been some cause for concern among the nation's 23 million people. Despite those factors, the Yugoslav economy, after years of contraction and stagnation, appears poised to expand once again. The same, unfortunately, cannot be said for many other debtor nations such as Poland, Mexico, and the Philippines.
There can be no understanding of the present or the future without an understanding of the past, especially in the case of Yugoslavia's external debt.
As a nation Yugoslavia is relatively new, officially formed on December 1, 1918, from the kingdoms of Serbia and Montenegro and parts of the Austro-Hungarian Empire and the Turkish Empire.
An amalgamation of five major Slav groups and seventeen additional minorities, the Yugoslav "nation" was an arena of often-conflicting ethnic groups. Political violence ultimately culminated in the assassination of the nation's first monarch, King Alexander, in 1934. Under a new and younger king, the monarchy sought to hold the country together until the Second World War, when Yugoslavia was invaded by the Germans, Italians, and their allies.
After World War II and a bitter civil war, communist partisan forces, under Marshal Josip Broz Tito, emerged victorious to shape a new Yugoslavia. Both wars left the nation with an estimated two million dead and an economy in shambles.
Under Tito, a Soviet-style constitution was adopted on January 31, 1946, and a "people's republic" was proclaimed. Despite an initial identification with the new order created by the Soviet Union in Eastern Europe, Tito quickly became disenchanted with Joseph Stalin's attempts to intervene in Yugoslav affairs. Relations between Belgrade and Moscow became strained, and in 1948 Yugoslavia broke with the Eastern
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