Foreign Relations of the United States, 1958–1960, Eastern Europe; Finland; Greece; Turkey, Volume X, Part 2

152. Operations Coordinating Board Report⁰

Washington, December 23, 1959.

REPORT ON YUGOSLAVIA (NSC 5805/1)¹

(Approved by the President April 16, 1958)

(Period Covered: December 10, 1958 through December 23, 1959)

1. Independence Maintained. During the past year there has been no basic change in the status of Yugoslav independence, nor has there been any lessening in the Yugoslav Government’s determination to maintain this independence.

2. Threat to Communist Unity. The propaganda campaign which the Soviet bloc initiated against Yugoslavia in the spring of 1958 has been substantially moderated, presumably at the direction of Moscow, and state relations between Yugoslavia and bloc members have, except in the cases of Communist China and Albania, reassumed an air of normalcy. The economic assistance which was suspended by the Soviet Union at the time of the 1958 rift has not been resumed, however, and while both the bloc and Yugoslavia are currently avoiding heated polemics, Moscow has made it perfectly clear that Yugoslavia remains outside the pale and its revisionist practices constitute the greatest single threat to Communist unity. The Soviet bloc campaign launched against Yugoslavia was an integral part of the Soviet effort to reestablish bloc unity and to prevent further revisionist contamination in Eastern Europe. Thus the Soviets, themselves, recognized the threat which Yugoslavia continues to pose to the unity of the Moscow-dominated Communist community. Whether the bloc has been temporarily successful in preventing further revisionist inroads cannot be judged at such short perspective.

3. Opposition to Soviet Imperialism. As in previous years, Yugoslavia during the past twelve months has on international issues more frequently taken positions similar to those of the Soviet Union than to those of the West. One of the most notable in this connection has been the Yugoslav position on Germany. On certain questions, particularly on points of difference between the Sino-Soviet bloc and uncommitted countries, Belgrade has departed radically from the Moscow point of view, however, and there has been no reason to doubt that the Yugoslav Government assumes its various positions in the international field on the basis of its own conclusions as to where its best interests lie. There has been no evidence, and in fact no grounds for any suspicion, that Yugoslavia is cooperating with the Soviet bloc in furthering Soviet imperialism. On the contrary, Yugoslav authorities have continued to maintain that socialism can best flourish in countries free to develop without outside intervention.

4. Useful Diplomatic Activity. During the past year the Yugoslav Government has been particularly active in seeking and developing economic and political relations with the uncommitted and/or newly developing areas of Asia, Africa, and Latin America. Certain of the countries of these areas have evidenced interest in Yugoslav internal policies. By improving its relations with countries of these areas Yugoslavia has strengthened its position vis-à-vis Moscow and, at the same time, has through its own recent history offered persuasive evidence of (a) the political motivation of Soviet assistance, (b) the consequent dangers of becoming overly dependent on Soviet economic aid, (c) the hypocrisy of Soviet assertions of friendship and support for all neutral nations, and (d) the fact that U.S. aid entails no internal interference or compromise of neutrality. However, should it develop that Yugoslavia is encouraging the adoption of internal policies of a Communist orientation in Cuba or other Latin American countries, this would pose new problems for achieving U.S. policy objectives in the area.

5. Increased Contacts With West. Exchanges between Yugoslavia and the United States have continued to grow and, as a result, an increasing number of influential Yugoslavs have become better acquainted with liberal economic practices and a free and democratic society. There have been a number of visits by high-level American officials to Yugoslavia and by prominent Yugoslav representatives in the United States. Western tourist travel to Yugoslavia has increased and an American cruiser with the Commander of the Sixth Fleet aboard paid a highly successful visit to Split.² Yugoslavia has made a real effort to strengthen and improve its relations with Italy and Greece during the past year, and a sound basis of economic cooperation and political understanding appears to be developing between Yugoslavia and these two free world neighbors.

6. Regime Remains Authoritarian. The influence of this gradual increase in contacts with the West cannot be measured in a single year and it cannot be said that the past twelve months have seen the development of a notably more liberal economy or democratic government in Yugoslavia. The Yugoslav regime remains authoritarian and continues to deal strictly with any internal political recalcitrants. It is encouraging, however, that there has been no tendency to reintroduce earlier repressive policies and that the Yugoslav Government has sought further contact with the West rather than the isolation of the Yugoslav people from Western influence.

7. Economic Progress. While Yugoslavia continues to have a large balance of payments deficit and inadequate foreign currency reserves, its economy has made significant progress in the past year, with a notable rise in agricultural production and a steady increase both in industrial production and in export trade. This has been accomplished in spite of the cancellation of the large-scale Soviet bloc credits and is an indication that the heavy investment policy of the Yugoslav regime, together with the assistance it has long been receiving from the United States and other Western countries, has begun to show significant results in the economic growth of the country. The Yugoslav Government has interpreted this progress as justification of its policies of decentralization, workers’ self-management, and non-coercion of the peasants. This would seem to bode well for the continuation of these policies in the future.

8. Maintenance of Armed Strength. After prolonged negotiations the United States and Yugoslavia reached an amicable agreement on the termination of the grant military aid program.³ However, Yugoslavia is permitted to purchase military equipment, materials, and services from the United States. Credit terms of 120 days from date of delivery are available when these purchases are made from the stocks of U.S. military departments. It has purchased 78 surplus F–86E aircraft from the U.S., thus indicating that it has decided to rely primarily on U.S. aircraft for military purposes. This purchase, together with expected spare part purchases in Greece, should halt a general trend toward deterioration of the Yugoslav air force. The purchase of spare parts and maintenance items for Army matériel has been accomplished on a continuing basis through Mutual Security Military Sales and indicates an intent, within resources, to maintain MAP-furnished Army equipment. The Yugoslav military establishment continues to be hampered, however, by a lack of access to the latest types of equipment and by insufficient foreign currency to purchase more than limited amounts of spare parts and replacements. This may pose a problem in the future but for the present Yugoslavia’s armed strength appears sufficient to discourage an attack by any of its Soviet-dominated neighbors.

9. Policy Review. The agencies represented on the Working Group on Yugoslavia have reappraised the validity and evaluated the implementation of the U.S. Policy Toward Yugoslavia (NSC 5805/1) in the light of operating experience. They further believe there is no need for the National Security Council to review the policy at this time and that there are no developments of such significance as to warrant sending a report to the National Security Council.

0. Source: Department of State, OCB Files: Lot 62 D 430, Yugoslavia. Secret. In an undated memorandum attached to the source text, Bromley Smith, Executive Officer of the OCB, noted that the Operations Coordinating Board concurred in this report at its meeting of December 23 and instructed the OCB Board Assistants to prepare a revised Operations Plan for Yugoslavia for the next semi-annual appraisal of Yugoslav affairs.
1. See Documents 120 and 122.
2. The U.S.S. Des Moines, flagship of the U.S. Sixth Fleet, visited Split October 17–20. Vice Admiral George W. Anderson, Commander of the Sixth Fleet, was on board.
3. August 25; see Document 148.