Foreign Relations of the United States, 1977–1980, Volume XX, Eastern Europe

273. Telegram From the Embassy in Yugoslavia to the Department of State¹

Belgrade, November 23, 1979, 1552Z

8762. Subject: (U) Secretary Vance’s Visit to Yugoslavia—Briefing Materials: Overview.

1. S-entire text

2. This message provides for Secretary Vance our overview assessment of the current Yugoslav scene.²

3. You will find Yugoslav leaders deeply troubled by the current world scene. They see detente in jeopardy, a quickening arms race, a deepening world economic crisis, a widening North-South gap, and unsettling instability in key areas such as Iran. They are concerned by Soviet intentions, the increasing resort to force and military intervention around the world, and what they see as indecisive leadership in the West. Finally, they sense, despite brave public words about the Havana Non-Aligned Summit, that Yugoslav influence in the non-aligned world may have begun a slow decline. The country is in the throes of severe economic problems, including high inflation, excessive industrial growth and a severe trade imbalance, with a substantial rise in imports while exports stagnate. This has been seriously aggravated by the Montenegrin earthquake last spring and floods this fall, and a poor wheat crop plus ever-increasing oil prices. Inflation is running at about 25 per cent, and correction measures have thus far failed measurably to help. Shortages in consumer goods—by no means as severe as elsewhere in Eastern Europe—are causing grumbling, not least, because in this consumerist society the populace is unaccustomed to austerity. Finally, there is the ever-present anxiety about the future after Tito, now exacerbated by unease over the approaching demise of Brezhnev.

4. Yet in many respects Yugoslavia continues to be a rather amazing success story. Robust real economic growth continues at about 7 per cent annually. The people enjoy access to a wide range of consumer goods and seem to find little difficulty in paying the skyrocketing prices for them. Travel to the West—and the input of Western ideas here—is virtually unhindered. Intellectual and academic exchanges with the West grow annually; exchanges with the US are especially valued. There are few barriers to artistic creativity. In sum, the “quality of life” for the average Yugoslav is good, and he expects it to get better. If it doesn’t, a post-Tito regime could find itself facing political consequences. But the converse is true: so long as the standard of living continues perceptibly to improve, this will be an important element of stability after Tito.

5. Tito and the succession. NIE 15–79,³ just published in Washington, gingerly concludes that Yugoslavia is only “marginally” more [garble—likely?] to make it through a transition period without major turmoil. We, too, are guarded in our prognosis—but continue to believe that the centripetal forces in post-Tito Yugoslavia will prevail over the centrifugal. The forces acting to hold the country together include an acutely felt “hang together or hang separately” syndrome; economic imperatives; an experienced, pragmatic—if undistinguished—collective leadership accustomed to brokering regional interests: and the vested interest of the “new class” which has expanded since Djilas’ classic exposition in 1953 to include an acquisitive, consumerist, thoroughly Western-oriented middle class.

6. The greatest danger is nationalism. Despite Tito’s heroics, intercommunal hatreds have not been extinguished in the 34 years since WWII. Small but fanatic and determined emigre extremist groups stand eager—perhaps with KGB help—to foment and exploit internal turmoil. They are too weak, and sympathy for terrorism within the country too slight, to create by themselves a major problem within the country after Tito dies. They could, nevertheless, exploit a deteriorating situation and, with Soviet help, pose a potentially serious problem.

7. Two factors, difficult to predict, will greatly influence the situation when Tito dies: the domestic economic situation, and the international political scene. As indicated, Yugoslavia is now facing serious economic problems, but it has survived similar difficulties in the past. The Yugoslav nightmare is that the Tito and Brezhnev transitions coincide, although Tito seems in much better health than Brezhnev. While the outlook for the latter appears to be dimming rapidly, Tito is still able to function well, but increasingly focuses ever more narrowly on foreign affairs. There is no successor-designate. The collective leadership machinery which Tito will leave behind him is designed to prevent the emergence of any new Caesar. But history indicates that sooner or later, and probably sooner, some faction will emerge to take charge, followed by a rise to pre-eminence of a leader from within that faction. But we cannot at this stage predict who he will be.

8. The United States can influence events here. We support the unity, territorial integrity and independence of Yugoslavia. That support is visible and welcome. If, in the time remaining to us before Tito dies, as well as at the time of the event, the United States is seen as a powerful friend and an effective force for stability in Europe, this will aid the post-Tito leaders enormously. Our objective in the pre-succession period is to weave a web of relationships—political, economic, cultural, and military—which projects the image of a steadfast friend and gives substance to the bilateral relationship.

9. President Tito, at 87, has had severe health problems, but continues amazingly vigorous. Over the past 4–5 years he has progressively shed oversight over day-to-day management of the government and party and has focused on foreign affairs. His is still the last word, however, on major personnel assignments and indeed on any major issue which cannot be resolved at a lower level.

10. The ever-pragmatic Tito continues to tinker with the succession machinery, which now consists of a 24-man party presidency and a nine-man state presidency. Tito heads both for life, and also holds the post of Supreme Commander of the Armed Forces. The composition of both presidencies reflects a delicate national balance between Yugoslavia’s six constituent republics and two autonomous provinces.

11. The two presidencies contain almost all of the most important personalities. In general, they are a tough, able, but not very brilliant group. Most important is a small group of “1941 fighters,” including the Croatian Party Baron Vladimir Bakaric; Serb Minister of Defense Nikola Ljubicic, Serb Milos Minic, Principal Foreign Policy Adviser; Petar Stambolic, Senior Serbian Party figure; and Admiral Branko Mamula, Croatian Serb who has recently been appointed Armed Forces Chief of Staff. The most visible younger men are Slovene Stane Dolanc and Bosnian Croat Branko Mikulic, contenders for day-to-day Party direction.

12. Since Edvard Kardelj’s death last February, no one has been designated dauphin or has seized that position. Tito has seen to that. Speculation about friction between Dolanc and Mikulic, and between other members of the leadership, may have substance, but we have lamentably little hard information on which to make judgments. For the moment, Dolanc’s career has evidently met a check, and this (at least temporarily) has favored Mikulic, but neither can be counted out (or, for that matter, in) over the long run.

13. Yugoslav-Soviet relations: Since late 1976 serious strains have developed in Yugoslav-Soviet relations. They arise out of three broad, interacting processes: A) Widening policy differences over Africa, the International Communist Movement, NAM, and other issues; B) Yugoslavia’s rapidly expanding relations with China; and C) Yugoslavia’s growing economic and political interest in expanded ties with the West and particularly the US.

14. Over the past year, despite the Brezhnev-Tito summit in May, policy differences have sharpened. Soviet support for the Vietnamese invasion of Cambodia, increased tensions with Bulgaria over Macedonia, and continuing Cuban attempts to maneuver NAM into an informal alliance with Moscow have reinforced Yugoslav perceptions of a Soviet challenge to basic Yugoslav interests. Thus, the LCY has reportedly issued guidance identifying Moscow as “enemy number one”, and officials have expressed concern about “Soviet expansionist tendencies” and the possibility of Bulgaria becoming a “Balkan Cuba” or “Balkan Vietnam”.

15. Reinforcing these strains lie deep and growing Yugoslav anxieties over the post-Brezhnev future, the impact of the Soviet succession on the Yugoslav succession, and the possibility that a new, untested, and unsure Soviet leadership could behave in dangerous and unpredictable ways. Despite these apprehensions, Yugoslav options appear limited; Yugoslav-Soviet relations are likely to remain a shifting blend of cooperation and confrontation. Their essentially adversary relationship will continue to be tempered by heavy military supply dependence on the Soviet Union (unless we can do something about this), a burdensome trade deficit with the West, and a consequent increase in trade with the East, residual ideological sentiment, and a prudent geographic and political interest in minimizing tensions where possible.

16. US-Yugoslav relations: In this context, Yugoslavia has increasingly looked to the US to provide balance, diplomatic support, and an alternative source of trade and military supply.⁴ This, as well as the perception of a more favorable US attitude toward the NAM, parallel interests on broad international issues (NAM, Cambodia, China, to some degree Africa), and our own interest in creating a web of relationships which will ease an inevitably difficult transition period, have led to a rapid expansion of our political, economic, military, cultural and academic relations over the past two years. Much yet remains to be accomplished to establish a relationship of mutual trust with the Yugoslav military; bureaucratic blundering on both sides and a residue of suspicion complicate our efforts to broaden the relationship, but progress has been made and our mutual interests require that more be done.

17. Chinese-Yugoslav relations: In the year since Hua’s visit to Yugoslavia and Romania (August, 1978), the drama and expectations have diminished. What remains is a record of solid accomplishment in consolidating and expanding Party and state ties; disappointed (but not abandoned) hopes for increased trade and economic cooperation based on mutual advantage; abiding but less strident Soviet concern and displeasure over Yugoslavia’s role in strengthening China’s diplomatic presence in the Balkans; and mutual recognition of the importance, limitations, and usefulness of their relationship.

18. For the US, the expansion of Yugoslav-Chinese ties is a positive development in that it encourages China’s opening to the world, acts as a marginal restraint on Soviet behavior in the Balkans, and reinforces US-Yugoslav relations and perceptions of shared policy interest. Further steady expansion of their relations can be expected, but the pace and scope will be limited by Yugoslav concern about unduly provoking Moscow, economic realities, and differences in their systems, outlooks, and ultimate political objectives.

19. NAM Havana Summit: The Yugoslavs, having defined the critical issues at Havana to be those of “principle,” returned from Havana claiming victory. The Cubans, on the other hand, played a different game, ignoring ideological issues and promising flexibility while hammering away on the substantive issues with telling, radical effect. Only time will tell who won; whether the condemnation of the Middle East negotiating process and the issue of Egypt’s suspension from the NAM will be rendered moot by negotiating progress; whether Cuban behavior at Havana so irritated the “silent majority” that Castro will not be able to manipulate the movement over the next three years. What seems clear, however, is that Yugoslavia emerged from the summit with diminished influence. Diminished because it chose to fight only on “principle”, ceding the battlefield to Castro on almost all other issues. Diminished, because even on those issues where it did fight, it did not win clear-cut victories, despite the investment of enormous effort and Tito’s personal prestige. Diminished because Yugoslavia, a relatively small, relatively developed, white, European, and northern country has inevitably begun to lose relevance within the NAM. At some point, Yugoslav leaders may begin to reevaluate their heavy commitment to the NAM, but certainly not until after Tito’s passing.

20. Yugoslav expectations from your visit: The Yugoslavs will wish to hear your view on European security issues, above all the prospects for detente. You will have a particularly good opportunity to discuss with them decisions taken at the NATO Ministerial, especially the reasons why theater nuclear modernization is so critical for the maintenance of the European military balance on which peace depends. The Yugoslavs will be glad to exchange views on the situation in China and in SE Asia, where our positions are closely parallel; they may raise Korea, if so, they will tell you the North Koreans have become really quite reasonable and suggest that we try to do a deal with them; on the Middle East, they will urge you to begin dealing directly with the PLO and will be keenly alert for any indications of evolution of our policy in that direction. If there is time, South African issues could come up—Yugoslav support for national liberation movements is virtually unqualified, but they are deeply concerned about Cuban (and hence Soviet) penetration of the continent and will welcome a genuine solution in Zimbabwe-Rhodesia if that indeed appears in prospect.

21. On bilateral issues, they may present their case on the Krsko nuclear power plant project. They will almost certainly urge greater balance in our trade, press for continuing efforts to suppress anti-Yugoslav terrorism, ask that we be more forthcoming in our military sales relationship, and seek a reiteration of our policy of support for Yugoslavia’s unity, territorial integrity and independence. Above all, they will welcome your reassurance that US foreign policy toward Yugoslavia rests on a clear and steady perception of our national interest, that our support for Yugoslavia’s integrity predates the present administration and will continue after it precisely because it corresponds to our most vital national interest—a stable, peaceful, non-Soviet-dominated Europe.

Scanlan

1. Source: National Archives, RG 59, Central Foreign Policy File, D790544–0137. Secret; Priority. Vance was scheduled to travel to Belgrade December 14–15. His trip to Yugoslavia and Romania was canceled after the U.S. Embassy in Tehran was seized by protesters on November 4 and U.S. diplomats taken hostage. See Document 219.
2. The Embassy drafted a list of possible topics of discussions between Vance and the Yugoslav leadership in telegram 8287 from Belgrade, November 5. (National Archives, RG 59, Central Foreign Policy File, D790528–0060) In telegram 8847 from Belgrade, November 28, the Embassy reported that negotiations for a new consular convention between the two countries were complete except for the status of dual nationals. Yugoslavia, which required compulsory military service of all male citizens over the age of 18, had in the past arrested U.S. citizens with dual citizenship visiting the country. The Yugoslav Government informed the Embassy that a new law on military obligations, which was to be adopted shortly, exempted dual citizens from military service under certain conditions. The Embassy recommended an exchange of separate but binding letters on the issue, which, if agreed to by the Yugoslav Government, would allow Vance to sign the convention while in Belgrade. (National Archives, RG 59, Central Foreign Policy File, D790547–0680)
3. See Document 269.
4. On November 16, the Embassy provided briefing materials on the status of U.S.-Yugoslav military cooperation. (Telegram 8556 from Belgrade, November 16; National Archives, RG 59, Central Foreign Policy File, D790527–0346)