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

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

Belgrade, January 21, 1981, 0749Z

410. USDOCOSOUTH for INTAF, USCINCEUR for Polad, CINCUSAFE for Polad, USNMR SHAPE pass Stoddart SACEUR/SA. Subj: The Post-Tito Transition: An Appraisal at Year’s End. Refs: (A) 80 Belgrade 5851² (B) 80 Zagreb 1190³ (C) 80 RFE RAD BR 1274.⁴

1. (C)-entire text.

2. This message transmits the summary and conclusions of an airgram attempting an analysis of the internal situation in Yugoslavia eight months after the death of Tito.

3. Last July, three months after Tito’s death, we concluded that the transition was proceeding as expected, that is, fairly smoothly. The collective leadership, while hardly brilliant or decisive, was functioning satisfactorily and maintaining outward unity; the political-security situation remained generally stable, despite certain pressures to liberalize and some consequent calls for internal vigilance; Yugoslavia’s serious economic problems were being addressed, albeit with inadequate results to date; and Yugoslavia’s traditional foreign policy priorities remained unaltered—preservation of independence through heavy commitment to non-alignment, stability and balance in dealing with Moscow and Washington, and as good relations as possible with its neighbors.

4. Today, more than eight months after Tito’s death, these judgments remain valid. The situation, however, is anything but static. Indeed, pressures are building—particularly from the troubled economy—which are forcing the pace of change and open debate, posing difficult choices for the collective leadership, and highlighting the issue of where real power should reside in post-Tito Yugoslavia. Among these pressures are:

—The further deterioration of the international situation. When Tito died, Soviet-backed aggression in SE Asia, turmoil in Iran, the Soviet invasion of Afghanistan, and the near paralysis of the Non-Aligned Movement were already weighing heavily on the new Yugoslav leadership.⁵ Since then, the Gulf War, Poland, the threatened collapse of detente, and increased energy and trade dependence on Moscow have put new pressures on the leadership—underscoring Yugoslavia’s heavy commitment to the NAM, and forcing difficult (and no doubt internally contentious) trade-offs between foreign policy principles, smooth relations with Moscow, and the self-interest in preserving socialism.

—Continuing economic difficulties. The economic chickens of Tito-era economics are now coming home to roost and the new leadership is having to foot the bill. The economy, beset by inflation, declining living standards, imbalanced trade, low productivity, and chronic unemployment, thus remains the make-or-break issue for the new leadership, a test of political stability, and a driving force for change throughout society. No longer able to coast along on the momentum of past policies, assumptions, successes, or foreign borrowing, the leadership is having to face the hard and politically controversial economic facts of life. And that has meant admitting the need for austerity, structural change, and more open discussion of the roots of and remedies for present economic ills. This in turn has focused attention on etatist political and economic interests, the Party’s relevance to solving the country’s economic problems, and reformist pressures for a shift of economic decision-making authority upward to the Federal authorities at the macro-economic level and at the same time, outward from the Republics to individual enterprises.

—The quickening of domestic political life. The need to define new power relationships following Tito’s death would in any case have led to an intensification of political life in Yugoslavia, but the urgency of its economic problems and the lessons of Poland have pushed this process further and faster than one might earlier have anticipated. Individual, institutional, and social actors are scrambling to protect or enlarge their piece of the political and economic action as well as to define the future. In the process, a new critical spirit has emerged in all major areas of Yugoslav life. Thus, since Tito’s death, the political landscape has been enlivened by open debate on economic policies, criticism of past leadership errors, calls for more open decision-making, attacks on corruption and mismanagement, petitions for greater political and literary freedom, pressures for reform, and increase assertiveness in the press and cultural field.

5. In short, two broad but closely related debates—one economic, the other political—have emerged between “reformers” who accept the need for change and “conservatives” who fear it. On the economic side, the issue is how to respond to economic challenges and to rationalize economic decision-making without undermining existing authority, self-management concepts, and the delicate ethnic and Federal-Republican power balance. Whether and how to avoid excessive trade dependence on the East is a further issue of growing concern. On the political side, the issue is where to draw the line between constructive and hostile criticism and whether the emerging debate can best be controlled through repression or through participation in it.

6. For now, the “reformers,” centered primarily in the State apparatus, the technical intelligentsia, and academic clearly have the advantages.⁶ They have pushed through an economic program based on greater reliance on market mechanisms and less meddling by local political interests in investment decisions; left an ambivalent LCY with little alternative other than to endorse this approach at the December 15th CC LCY plenum and to accept more open debate and criticism as necessary and healthy; and argued with apparent success for a policy of differentiation between a “loyal” and a “disloyal” opposition. With events on their side, the “reformers” have thus emerged on the offensive and the State apparatus has proven itself more effective than the Party in developing coherent and convincing responses to the powerful and broadly based currents for change.

7. The battle is hardly over, though, and the “conservatives”—a mixture of generally older, more orthodox elements in the Party hierarchy as well as local and Republican elements motivated more by pragmatic considerations of power than by ideology—can be expected to fight back hard. Thus, these conservatives, with LCY Presidency members Dragosavac and Mikulic in the fore, have consistently pressed for a tougher line against “dissidents” and have continued to issue periodic warnings about dangerous “new tendencies,” attempts to change “fundamentals of the (Titoist) system,” ideological backsliding, and reliance on “bourgeois” economic methods.

8. These same forces no doubt were also instrumental in getting the December Plenum to take a stand—calling for “uncompromising rejections” of anti-Socialist and anti-self-management trends—on a process which seemed bent on moving ahead with or without Party consent. Whether this attempt to reassert Party control over the debate will have the desired effect remains to be seen, since the real issue—where to draw the line between acceptable and unacceptable “reformist” criticism—was not clarified. In any case, since the Plenum, Party organs have noticeably stepped up public criticism of opposition elements (Djilas, Mihaljov, and the backers of “Javnost”—proposed magazine of social criticism); the Party faithful have been exhorted to struggle harder against ideologically alien ideas and those who ascribe all present economic ills to the self-management system; and there have been attempts to intimidate the signers of the various petitions for greater political freedom (without, however, noticeable success so far).

9. In a way, the emerging atmosphere of criticism and debate is reminiscent of the political-intellectual ferment of 1970–71 in Yugoslavia—but without the acute nationalistic content present then—but also without Tito in the wings to ensure the debate is kept within bounds. This process has not yet gone very far and the outcome is not all clear. For now, the debate remains relatively restrained, responsible, and focused on reform, “democratization,” and “liberalization” within the Socialist self-management system. Its main protagonists have been in the political mainstream rather than the fringe forces which seek to destroy Tito’s “self-management socialism” or to alter it beyond recognition remain scattered and their programs—where they have formulated them—have yet to find much resonance in society at large. This has obviated the need for more heavy-handed repressive measures.

10. From this we draw several conclusions:

—The level of turbulence in the post-Tito period has been well within the tolerable, although the opening up of the political process has proceeded faster than expected.

—The leadership, despite some dissenting voices and a foot-dragging party, has turned in a credible if somewhat uneven performance, forcing through necessary inter-Republican compromises and on balance responding to pressures for change and to economic necessity with cautious flexibility and even political courage.

—The trend toward more open criticism, debate, and decision-making—in one sense a step toward Karelj’s limited concept of the “pluralism of self-management interests”—is fully consonant with the generally liberalizing (and in our view healthy) thrust of Yugoslavia’s post-war political and economic evolution. It has been animated and legitimized not by Western-style Democrats or “closet” capitalists but by pragmatic Communists who are interested more in problem-solving than ideological abstractions, who believe the Party’s leading role is not historically ordained but contingent on its ability to provide convincing answers to current problems, who believe the Socialist system can and should tolerate a much more open expression of differences, and who see cautious adjustment to pressures for change less risky in the long run than sterile resistance.

—The forces for change are too broadly based and too deeply rooted to be checked easily. Other pressures aside, the generation now coming into its own is a post-war generation less interested in ideology, more pragmatic, better educated and travelled, less ambivalent about Moscow, thoroughly imbued with a post-1948 spirit of proud independence and more realistic about the nature and requirements of Yugoslavia’s Federal system. Nothing illustrates this new climate more clearly than the Party’s own assessment that it can only hope to maintain control over the on-going process by participating in it and endorsing more criticism and debate.

11. That said, there are developments which could alter the pragmatists’s and reformers’ present advantage. First, a prolonged economic downturn or collapse could undermine this group’s confidence in its ability to control the situation while strengthening conservative elements anxious to preserve power through a more “firm-hand” policy, a quick economic “fix” (i.e., greater reliance on Eastern trade, markets, and economic methods), and consequent abandonment in practice if not in name of genuine non-alignment. So far there is no indication that such a negative process is under way. The leadership understands the gravity of the economic situation; has taken politically unpopular steps to turn the situation around; and has had some initial if far from adequate successes in this regards.

12. Second, a shift to a softer Soviet tactical line. Since Tito’s death, the Soviets have waged something of a “friendship offensive” toward Yugoslavia, generally holding their tongue in the face of Yugoslav actions (as the December 12 GOY announcement on Poland) and press coverage (as of Afghan events) which Moscow must find offensive. Should Moscow revive the polemics the Yugoslav leaders would immediately fear this would presage an attempt by Moscow to translate Yugoslavia’s increased trade and energy vulnerability into political gain. This fear of the potential consequences of growing trade with the East has become a pervasive element in the GOY leader’s thinking. For some, overt Soviet pressure, should it occur, could change the calculation of the balance of risk and some fence-straddlers might conclude that more accommodation and tighter internal controls pose fewer risks than further political and economic experimentation.

13. Third, a degeneration of the present more open climate into a nationalistic free-for-all or into a frontal attack on Party prerogatives or power. Either development could well trigger a reaction from the military, as in the 1971–72 “nationalist” crisis when the military strongly urged (and enabled) Tito to crack down on a situation that seemed to be getting out of control. Either a nationalist free-for-all or a too-far, too-fast erosion of Party prerogatives could undercut those arguing that post-Tito Yugoslavia can only find the right solutions, and public support for them, through a process of more open debate, criticism, and decision-making. This is the least clear area of all: the outcome will hinge on the ability of contending groups to handle their differences during a period of economic sacrifice and international tension with political maturity and good sense. So far the post-Tito record has been encouraging on this score.

14. In short, some eight months after Tito’s death and a year after his taking ill, Yugoslavia is entering 1981 with a more open political climate, with its leadership and its commitment to Yugoslav independence and non-alignment intact, with its course set for continuity and cautious change, and with some problems on the way to resolution but many more to be worked out. Economic problems at home, tensions abroad, and liberalizing pressures continue to weigh upon the leadership, inching it toward a limited kind of pluralism, stirring conservative counterpressures, and forcing the pace of change faster than many in the leadership, and particularly in the Party, would like.

15. Thus, while the going will not be easy and the prospect is for more rather than less political turbulence as power relationships are sorted out, we believe that the economy will remain the single most critical factor; that the less doctrinaire elements, who are clearly more in tune with the economic operatives of change, the popular mood, and the thrust of Yugoslavia’s post-war evolution, have the best chance of providing the leadership and answers for Yugoslavia’s economic problems; and that Yugoslavia, despite possible tightening up against some of the more radical regime critics, is likely to remain on a course of cautious, pragmatic and generally liberalizing change in the critical period ahead.

Eagleburger

1. Source: National Archives, RG 59, Central Foreign Policy File, D810030–1032. Confidential; Priority. Sent for information Priority to Ankara, Athens, East Berlin, Bucharest, Budapest, Moscow, Prague, Rome, Sofia, Vienna, Warsaw, West Berlin, USNATO, USUN, USDOCOSOUTH Naples, USCINCEUR, CINCUSAFE, and USNMRSHAPE.
2. In telegram 5851 from Belgrade, July 28, 1980, the Embassy assessed the success of the transition in Yugoslavia three months after Tito’s death. The Embassy concluded that “the leadership has maintained its outward cohesion and unity,” “the serious economic situation is being addressed,” “the political-security situation has remained generally stable,” “Yugoslavia’s diplomacy has been steady and exceptionally active,” and “the U.S. role in promoting a smooth transition by making clear our friendship and support for Yugoslavia remains as important as ever” despite possible challenges down the line. (National Archives, RG 59, Central Foreign Policy File, D800362–0856)
3. In telegram 1190 from Zagreb, November 25, 1980, the Consulate assessed the situation in post-Tito Croatia and Slovenia. “The leaders of these two Republics” the Consulate reported, “are focusing very largely on the problems of stabilization” and are paying close attention to any signs of disaffection or “especially in Croatia—for any signs of a stirring of latent nationalism.” The Consulate concluded: “So far as we can determine the general mood remains quiet.” (National Archives, RG 59, Central Foreign Policy File, D800566–0973)
4. Not found.
5. In telegram 301 from Belgrade, January 15, the Embassy reported Minic’s statement to Eagleburger that the international political situation was most dangerous, and that the relationship between Washington and Moscow was “absolutely critical.” (National Archives, RG 59, Central Foreign Policy File, D810075–0089) Prior to departing from Belgrade, Eagleburger also met with Vrhovec and with Mijatovic to discuss the state of U.S.-Yugoslav relations and the international situation. (Telegram 406 from Belgrade, January 21; National Archives, RG 59, Central Foreign Policy File, D810030–0979; and telegram 408 from Belgrade, January 21; National Archives, RG 59, Central Foreign Policy File, D810030–0945)
6. In telegram 418 from Belgrade, January 21, the Embassy reported Eagleburger’s meeting with Federal Assembly President Dragoslav Markovic. Markovic told Eagleburger that the Yugoslav Government was “determined to press ahead with a democratization of society and to improve economic efficiency.” (National Archives, RG 59, Central Foreign Policy File, D810030–1097)