The richer regions considered that the inefficient bureaucratic management, which had been designed to redistribute resources to the less developed areas, was actually penalizing them. On the other hand, the poorer regions complained that the rich regions were able to export large quantities of goods, and hence earn large amounts of foreign currency, because they were supplying them with cheap raw materials. Another area of criticism was Yugoslavia’s large-scale spending on basic housing and utilities.
As a result, one did not see the development of shanty-towns around its cities. But the enormous expenditure this incurred in the poorest regions of Yugoslavia, meant that a very large proportion of this investment went into these non-productive forms of expenditure. Of course, this is not to take away from the fact that the resources allotted were not always used for the purpose they were meant for, or that there was no corruption. There is another way of understanding the importance of economic issues in the unraveling of Yugoslavia.
If one takes the case of Kosovo, it is seen that as the poorest of the constitutional units of the country, it was also the most exposed to the problems experienced by the Yugoslav nation in relation to overall economic development. For instance, it is possible to find a correlation between the periods of civic unrest in Kosovo and the periods of economic dislocation in Yugoslavia as a whole. The economic reforms of 1965 were followed by the disturbances of 1968. This was when Yugoslavia made its first attempts at ‘market socialism’. Similarly, the riots of 1981, came on the heels of the second 1979 oil shock.
Since the focus of economic development was on industrialization, Yugoslavia’s looked to import energy cheapily because it was a energy deficient nation. Once again Kosovo found itself at the centre of trouble in this field of economic activity. Let it be clear that there is no conclusive answer yet as to why Yugoslavia disintegrated. But the economic rationale given above makes it clear that one cannot attribute it to one single causative factor. But in order to understand the processes, which led to the disintegration, it is necessary to understand the economic factors that underpinned the final dissolution of the Yugoslav state.
The regional problem in Yugoslavia was never a question of economic disparities only. It was interrelated with the national question and the question of the organization of the state. The failure to address the national question in the economic dimension led to the disintegration of the state. It has also been argued that the West in fact, created the conditions within Yugoslavia for its economic disintegration. NATO was also characteristically unprepared to resolve the conflict once it was known that things have worsened. (Kaufman, 2002).
That is to say the US and some European powers created the deep-seated economic crisis preceding the civil war. Prof. Michel Chossudovsky argues that the strategic interests of US and Germany in laying the foundations for the economic disintegration of Yugoslavia, as also the role of external creditors and international financial institutions is often lost in the woods. He observes that it is precisely through the domination of the global financial system that the Western powers, in pursuit of national and collective strategic interests, helped to ruin the Yugoslav economy and stirred its simmering ethnic and social conflicts.
1. Clark, Wesley K. (2001). Waging Modern War: Bosnia, Kosovo, and the Future of Combat. New York: Public Affairs, 2001, p. 419. 2. Dyker, David A. (1996). Yugoslavia: Socialism, Development, and Debt. London: Routledge. 3. Joyce P. Kaufman, Joyce P. (2002). NATO and the Former Yugoslavia: Crisis, Conflict, and the Atlantic Alliance, Lanham, MD: Rowman & Littlefield Publishers, Inc. 4. Roucek, Joseph S. (1948). Balkan Politics: International Relations in No Man’s Land. Stanford: Stanford University Press. 5. Warner, Fred (1958). Titoism in Action: The Reforms in Yugoslavia After 1948. Berkeley: University of California Press.