Foreign Relations of the United States, 1981–1988, Volume X, Eastern Europe

193. Report Prepared in the Bureau of Intelligence and Research¹

161–AR

Washington, June 16, 1981

(U) Soviet-Yugoslav Relations Since Tito

(C) Summary

Yugoslav fears that Tito’s death in May 1980 would prove to be a watershed in Soviet-Yugoslav relations have yet to be realized. High-level contacts have continued; public polemics are rare; and, for the most part, the two sides have downplayed their differences.

Belgrade has demonstrated good will by gradually diminishing its public criticism of the Soviet intervention in Afghanistan.² Moscow, too, has made positive gestures, starting with Brezhnev’s trip to Belgrade for Tito’s funeral.³ More recently, Brezhnev, in his speech at the 26th Soviet Party Congress in February, declared that the bilateral relationship was “making progress” and broached the sensitive “separate paths to socialism” issue positively by referring to Yugoslavia as a nation whose revolution was carried out “in its own way.”⁴

But although atmospherics have improved somewhat, Moscow and Belgrade have made no substantive progress toward resolving longstanding differences. Moscow’s claim to leadership of the “socialist community” and the world communist movement, for example, remains pitted against Belgrade’s determination to protect Yugoslavia’s political independence and national sovereignty. Belgrade also remains sensitive to the political implications of closer economic ties with the USSR, although trade should continue to flourish given the complementary nature of the Soviet and Yugoslav economies.

The civil disturbances that rocked the Yugoslav province of Kosovo in March and April, however, have renewed Yugoslav fears that Moscow might attempt to aggravate domestic tensions in Yugoslavia as a pretext for intervention.⁵ A Soviet intervention in Poland would heighten these fears and elicit Belgrade’s condemnation, although it is unclear how deeply the substance of Soviet-Yugoslav relations—particularly in the economic area—would be affected over the long term.

* * *

(C) Moscow and the Post-Tito Transition

Since Tito’s death in May 1980, Moscow’s tactic vis-a-vis Belgrade has been to work quietly to expand contacts and avoid any activity that might fuel Yugoslav suspicion. Its media coverage of Tito’s death and funeral emphasized the positive aspects of Soviet-Yugoslav ties; the condolence messages to Belgrade stressed Moscow’s desire for improved atmospherics and its respect for the principles of bilateral relations that Tito and the Soviet leadership had proclaimed at various times since 1955. The Soviets were obviously well aware of the widespread suspicion in Belgrade that they would try to influence post-Tito Yugoslavia.

Brezhnev’s presence at the funeral thus served several purposes. Besides being a tribute to a popular leader and providing an opportunity to establish contacts with his successors, the trip served as a demonstration of the importance Moscow professed to attach to relations with Belgrade. In that context, the absence of President Carter gave it added weight, and it served as a counter to the presence of China’s Hua Guofeng.

The gestures did not put Belgrade’s suspicion to rest, however. The new leadership, continuing Tito’s policy of balancing relations with the superpowers, made a point of inviting President Carter to Yugoslavia in June.⁶ Moscow’s subsequent attacks on the visit, implicitly criticizing as they did Belgrade’s judgment in pursuing ties with the US, triggered another round of bilateral polemics. Evidently Moscow moved too far too fast for the new leadership and in the process made a mockery of its own professions of respect for Yugoslavia’s independent policies.

(C/NF) Moscow and the New Belgrade Regime

Since the early transition period, Moscow has maintained a studied silence on the collegial regime’s prospects. The institutional reforms that Tito put in place before his death, as well as the persistence of interrepublic rivalry, have created a collective leadership from which no member has been able to emerge as first among equals. Dealing for the most part with unknowns (a notable exception being Stane Dolanc, a Party Presidium member known for his anti-Soviet views), Moscow has moved carefully while it assesses the overall and individual political postures of the group. Moscow has also refrained from involvement in any wrangling within the Yugoslav leadership, presumably on the assumption that open Soviet support could discredit any figure involved.

There are some figures within the Belgrade leadership, however, for whom Moscow would have a natural preference. Conservative hardliners like Dusan Dragosavac, Presidium Secretary, and Branko Mikulic, Presidium member, for example, advocate stronger party control in Yugoslav society. Furthermore, Dragosavac appears more amenable than most to improved ties with Moscow. Shortly after Tito’s death he reportedly sought to tighten party control of the press after a series of articles critical of the Soviet Union appeared in the Belgrade daily Politika. Dragosavac, increasingly influential in party affairs, headed the Yugoslav delegation to Moscow for the 26th Soviet Party Congress in February.

(C) The Yugoslav Perspective: Continuity in Policy

More than any other person, Tito was responsible for guiding Yugoslavia away from the Soviet orbit. His ability to marshal both domestic and international support gave him unique leverage in dealings with Moscow. His last illness, coinciding as it did with the Soviet move into Afghanistan, understandably rekindled longstanding Yugoslav fears that the USSR might be tempted to exploit an interregnum to destabilize Yugoslavia. These fears receded as the new Yugoslav leadership gained confidence in its ability to deal with the Soviets, and as Moscow more or less honored its announced intention to improve ties with Tito’s successors.

Nevertheless, most Yugoslavs implicitly believe that Moscow harbors designs against their country. Episodes of ethnic unrest regularly revive suspicions of Soviet clandestine involvement: the March–April 1981 Kosovo disturbances are a case in point (see pp. 8–9).

As a result, little has changed in the fundamental parameters of the Soviet-Yugoslav relationship. Tito’s successors are not inclined to deviate from his foreign policy line in favor of genuine rapprochement with Moscow. Viewed broadly, post-Tito Belgrade has sought to:

— protect Yugoslav independence by rejecting any Soviet suggestions that Yugoslav sovereignty is limited or its socialist legitimacy suspect;

— maintain a leading role in the nonaligned movement (NAM), countering Cuban and other “radical” attempts to steer the movement along lines supportive of Soviet foreign policy;

— maintain evenhanded relations with the USSR, the US, and China, in spite of increasing global polarization; and

— condemn on principle outside interference in the internal affairs of sovereign states, accordingly rejecting intervention in Afghanistan and Kampuchea⁷ and warning against such an eventuality in Poland.

(C) Afghanistan: A Lower Yugoslav Profile

Belgrade was seriously shocked by the Soviet invasion of Afghanistan and, in view of its implications for Yugoslavia, especially with Tito gravely ill, went on the offensive. It publicly condemned the action and reiterated Yugoslavia’s determination to resist any foreign interference in its affairs.

More recently, however, the new leadership has refrained from making Afghanistan a cynosure for relations. It has not withdrawn its formal opposition to the Soviet involvement there, but it has gradually replaced its earlier explicit denunciations with low-key, general statements in line with nonaligned principles denouncing all foreign intervention anywhere. This lower profile on Afghanistan was evident at the February 1981 NAM ministerial,⁸ where the Yugoslav delegation allowed other nations to take the public lead in condemning the Soviet intervention. By playing down the Afghanistan issue, Belgrade presumably is intent on:

— preserving the cooperative aspects of its relationship with Moscow;

— channeling its criticism of Soviet activities through the UN and the nonaligned movement and away from the substance of Soviet-Yugoslav relations;

— distancing itself from Western campaigns against the Soviet presence in Afghanistan; and

— keeping its own energies focused on the transition and internal political and economic problems.

Moscow Knocks on Belgrade’s Door

(U) Though wary of Soviet intentions, Belgrade nevertheless has responded positively to Moscow’s overtures by hosting high-level Soviet leaders and maintaining high-level contacts in Moscow. Once the polemical exchanges over President Carter’s visit had subsided, Moscow sent Politburo candidate member Kuznetsov to Belgrade in July, and State Planning Chief Baybakov in September. Baybakov met with Dragosavac and President of the State Presidency Mijatovic and participated in the signing of a 10-year economic and scientific-technical agreement which reportedly provides for a considerable expansion of economic ties.

(C) In January 1981, CPSU Politburo candidate member Ponomarev and Secretariat member Rusakov received Executive Secretary of the LCY Presidium Vlado Janzic in Moscow (a meeting that originally had been set for early 1980, but was postponed because of Afghanistan). Subsequent reports indicate that Ponomarev and Rusakov reiterated Moscow’s usual complaints about anti-Soviet tendencies in the Yugoslav press while Janzic, as expected, defended Yugoslavia’s traditional “principled” positions.

(C) Despite the lack of progress on fundamental issues, exchanges continue. Rumor has it that a visit to Belgrade by Soviet Premier Tikhonov is under consideration. If the visit takes place, Tikhonov will be the first high-level Soviet official in Belgrade since Baybakov, and the highest ranking one since Brezhnev’s appearance at Tito’s funeral. Such a visit would not imply a warming relationship as much as a desire on both sides to make the relationship appear upbeat despite the continuing disagreements.

The CPSU Congress: Gestures, No Substance

(U) The Brezhnev and Dragosavac statements at the 26th Soviet Party Congress in late February reflect the present mutual desire to keep up appearances. Both leaders painted a bright picture of Soviet-Yugoslav ties. Dragosavac mentioned “differences in our international positions,” but conspicuously avoided specific reference to such contentious issues as Poland, Afghanistan, China, and Kampuchea.

(U) In his brief treatment of Yugoslavia at the Congress, Brezhnev:

— declared that the bilateral relationship was “making progress,” and expressed optimism for its future;

— omitted Yugoslavia for the first time from his list of countries that make up the “socialist community”; and

— broached the issue of “separate paths” positively, mentioning Yugoslavia by name as a nation whose revolution was carried out “in its own way.”

(C) Belgrade viewed that treatment as the most positive since the 1961 Soviet Congress. It was particularly pleased by Brezhnev’s omission of Yugoslavia from the “socialist community.” Inclusion in this group is interpreted by the Yugoslavs as a veiled reference to Moscow’s ultimate authority and, therefore, as a limitation on Yugoslavia’s sovereignty. Belgrade was also pleased with the sanction of Yugoslavia’s socialist model implicit in Brezhnev’s stated recognition of the different “forms, methods, and ways of socialist revolution.”

(C) Those favorable reactions were tempered, nevertheless, by characteristic Yugoslav caution. Belgrade observers noted that Brezhnev made no real concessions, appeasing Yugoslavia only in rhetoric. His reference to “different paths” has yet to be borne out by Soviet actions, particularly in Poland, according to Belgrade.⁹

Trade Relations Benefit Both Sides

(C) Trade is an important—though by no means dominating—factor in the Soviet-Yugoslav relationship, given the continuing large share of Yugoslav trade with the West. The USSR’s share of Yugoslavia’s foreign trade has been relatively stable in recent years, accounting for more than one-fifth of Yugoslavia’s exports and about one-seventh of its imports. The USSR is a natural trading partner from whom Yugoslavia can import energy and raw materials in exchange for manufactured products which would not be acceptable on Western markets. For the USSR, Yugoslavia provides industrial and consumer goods superior in quality to Soviet products. Until recently, the trade balance tended to be even or tilted slightly in Yugoslavia’s favor.

(C) Energy prices have altered the balance significantly in Soviet favor. The skyrocketing cost of Yugoslav energy imports from the USSR has required additional Yugoslav deliveries to cover the imbalance in bilateral clearing arrangements. Furthermore, as a result of the sharp decline in oil supplies from Iraq because of the Iraq-Iran war, and a Yugoslav shortage of hard currency for purchasing oil elsewhere, the Soviet Union has become Yugoslavia’s primary oil supplier. Moscow has not made the terms of trade easy for Belgrade, charging world market prices for Soviet oil, but at least it does not demand payment in hard currency.

(LOU) The Yugoslav current account deficit with the USSR still has not been covered, despite supplemental Yugoslav deliveries worth some $600 million in 1980. The Yugoslavs expected to make up the remaining deficit ($209 million) in early 1981. In the process, there apparently has been a significant reallocation of Yugoslav export products to the Soviet market despite the reluctance of many Yugoslav enterprises to export products to the USSR that could bring hard currency on Western markets.

(C) Yugoslav Sensitivity Over Soviet Trade Ties

Belgrade has long been sensitive to the political implications for Yugoslavia’s independence of closer trade ties with the Soviet Union. Following the June 1948 expulsion of Yugoslavia from the Cominform, Stalin imposed a punishing economic blockade, the lessons of which have not been forgotten in Belgrade. Moscow has avoided overt suggestion that it would resort once more to economic reprisals. There was concern in Belgrade in early 1980, however, that Soviet oil price hikes, reductions in natural gas shipments, and refusal to increase coking coal imports collectively signaled Soviet displeasure with Yugoslavia’s outspoken stand on Afghanistan. There is no firm evidence of Soviet political motivation in these specific cases; indeed, the actions appear to be more closely tied to market conditions and production problems in the USSR than to political considerations. Nevertheless, the Yugoslav suspicion of Soviet motives demonstrated an extreme sensitivity to possible Soviet use of the economic lever.

Belgrade is also concerned about a subtle, but more serious, limitation that increased trade places on Yugoslav political maneuverability: the prospect of Yugoslav industry gearing itself to the Soviet market. Although Yugoslavia prefers trade with the West, stiff competition there has favored the export of Yugoslav products to Eastern markets. At a gathering of party and state leaders in March 1981, for example, Vladimir Bakaric, an influential member of the LCY Presidium, complained that Yugoslavia’s “productive capacity” orients it to Eastern markets and that this phenomenon cannot change unless Yugoslavia becomes more competitive. Belgrade regularly appeals to the West to ease trade practices and/or lend economic aid to help Yugoslavia build the advanced technical/industrial base it needs for competition in the world market. Furthermore, healthy trade with the West is essential for maintaining the standard of living demanded by Yugoslavia’s consumer-oriented population.

But Yugoslav dependence on Soviet trade is not likely to change in the near future. Belgrade consistently, and unsuccessfully, appeals to Moscow for even more oil. Thanks to its nonaligned connections, Yugoslavia can find other sources of oil relatively easily (it already imports from Nigeria, Algeria, and Libya, among others), but these would demand hard currency in payment. Furthermore, in the face of foreign indebtedness, high unemployment, rising inflation, and export difficulties in Western markets, Yugoslavia currently needs Soviet trade to keep its economy going and its workers employed.

(C) Military Ties Essentially Unchanged

Soviet-Yugoslav military cooperation appears to have remained unchanged, or possibly even to have lessened. Belgrade still relies in great part on Soviet military hardware, especially combat items. But with the possible exception of a rumored procurement of T-72 tanks, there have been no known major military deals in recent years.

This phenomenon may be tied to economic as well as political circumstances. Although Belgrade is concerned about military dependence on Moscow, it is economically constrained from acquiring available sophisticated Western weaponry by a lack of hard currency, and politically constrained by its reluctance to irritate the Soviets by moving closer to the West. At least two recent military deals with the US have fallen through. Minister of Defense Nikola Ljubicic has voiced his concern that Yugoslavia’s economic troubles are restricting necessary military modernization, but the new regime has shown no willingness to make the hard political and economic decisions necessary to diversify procurement of needed weaponry.

Moscow has remained silent on the Yugoslav military’s modernization needs. T–72 tanks, which have been supplied to only a few nations outside the Warsaw Pact, would seem to be the extent of recent Soviet deliveries, if in fact they have been delivered. (A licensing agreement for coproduction of the T–72 has also been rumored, but nothing seems to have materialized on that score.) In any event, Moscow was never enthusiastic about supplying Yugoslavia with sophisticated arms that could be used against Soviet forces. Such earlier items as MiG aircraft probably were sold to preclude development of Yugoslav military ties with the West. With the present economic situation severely limiting Belgrade’s ability to even consider Western military purchases, Moscow probably feels obliged to do little more than keep its feet in the door on military sales.

The Polish “Wild Card”

(C) The Polish crisis seems to have had little effect as yet on the substance of Soviet-Yugoslav relations, although Yugoslavia has officially pronounced against “outside” (read Soviet) interference in Poland.

(C) For Moscow, relations with Belgrade are less important than finding a solution to the Polish crisis. Belgrade, however, fears that the Polish situation may lead to Yugoslav problems with the Soviets. In the worst case, a Soviet intervention in Poland might bring renewed Soviet pressure on Belgrade to align itself with the Warsaw Pact and would raise the specter of Soviet intervention in Yugoslavia. At a minimum, Belgrade is concerned that a sharpening of East-West tensions over Poland will make it more difficult to balance relations between East and West. For these reasons, Belgrade has approached the crisis cautiously, confining its pronouncements to an insistence that Warsaw be permitted to solve its problems by itself.

(U) An exception was a particularly frank commentary in a Ljubljana daily last October. The article:

— attributed the problems of Poland and the other countries of the “so-called real socialism” to the “bureaucratic-statist structure of power” which, it was hinted, Yugoslavia is free of thanks to self-management; and

— spoke freely of potential motives for Soviet intervention: “the preservation of monolithism,” “the saving of strategic equilibrium,” and “the danger of contamination.”

(C/NF) Similar assessments of the Polish situation privately made by Yugoslav leaders emphasize that:

— The chief causes of the crisis in Poland (and in the world communist movement in general) are Soviet policy and Soviet-style socialism.

— Democratization and the establishment of socialist self-management could save Poland.

— A Soviet or Warsaw Pact intervention in Poland would do more to harm the international communist movement than the Soviet invasions of Hungary, Czechoslovakia, and Afghanistan.

(C/NF) Privately, many Yugoslav officials have been pessimistic about the situation in Poland and consider some form of Soviet interference almost inevitable.

Repressed Soviet-Yugoslav Tensions Reemerge Over Kosovo

(C) Evidence of Belgrade’s deep-seated suspicions of Moscow can be found in the prevalent assumption in Yugoslavia that the USSR has had a hand in stirring up domestic unrest, most recently in Kosovo where Albanian dissatisfactions culminated in violent demonstrations in March and April.

(C) Immediately after the Kosovo riots were quelled, near-allegations of Soviet complicity in them appeared in Yugoslav press and leadership statements; Presidium member Dolanc in a press conference maintained that “Cominform emigres” had organized the demonstrations. (Moscow’s past disavowals of support for “Cominformist” elements never carried much weight in Belgrade.) Rumors are circulating in Belgrade that Moscow supplied the Kosovo dissidents with arms and that the uprising was the work of a Soviet-Albanian conspiracy to destabilize Yugoslavia by inflaming ethnic passions. The authorities apparently have no evidence of Soviet complicity in the unrest, but Belgrade’s distrust of Moscow and its feeling of vulnerability on ethnic issues are so deep that evidence is of secondary import. (Belgrade similarly suspects the USSR of fueling Croatian nationalist sentiments and of encouraging Bulgaria to agitate on the status of Macedonia.)

(U) Moscow’s initial reticence on Kosovo eventually gave way to a retort to Belgrade’s insinuations. Pravda, denying any socialist bloc role in Kosovo, chided the Belgrade daily Borba for equating the peaceful intentions of the socialist community with the subversive intentions of the “imperialist bloc.” “Such scribblings,” Pravda declared, “are certainly to the taste of the enemies of socialism.”

(C) Borba replied with a defense of Yugoslavia’s policy of nonalignment and accused Moscow of pressuring Yugoslavia to take sides: “We do not accept lectures from anyone.” Borba commentator Teslic, whose article set off the exchange, privately observed that the real issue, the one that has “been on the table” since 1948, is Moscow’s acceptance of an independent Yugoslav road to socialism. “The Soviets,” said Teslic, “have really changed nothing.”

(C) Outlook

Poland could be the next flashpoint for Soviet-Yugoslav relations. If the USSR intervened, Belgrade undoubtedly would express outrage and the bilateral atmosphere would chill dramatically. It seems unlikely, however, that Belgrade would be willing to cut its ties with Moscow, both because of the economic cost and because Moscow might retaliate by aggravating the always volatile nationalities issue in Yugoslavia. Historical precedents show that while Belgrade denounced Soviet action in Hungary, Czechoslovakia, and Afghanistan, it quietly maintained Soviet-Yugoslav political, economic, and military links. Yugoslavia’s dedication to nonalignment and the fear of further arousing a newly aggressive Soviet regime would also seem to preclude any dramatic shift to the West. In any event, as happened after Afghanistan, Moscow would most likely redouble its efforts to reassure Belgrade that Yugoslavia was not threatened.

Barring a Polish catastrophe or other crisis, Belgrade probably will adhere to a policy of cautious rapprochement with Moscow, while periodically reaffirming its independence. But further episodes of ethnic unrest would inevitably heighten suspicions that Moscow is clandestinely exploiting Yugoslavia’s inherent instability. These suspicions, warranted or not, are an important force in preserving Yugoslav unity, just as the fear of Moscow after the Afghanistan intervention prompted Belgrade leaders to make greater efforts to close ranks for the sake of domestic stability and unity.

Preoccupied as it is by the Polish crisis, Moscow can be expected to continue quietly encouraging high-level contacts and economic cooperation with Yugoslavia and to avoid polemics that would provoke Belgrade.

1. Source: Reagan Library, Donald Fortier Files, Subject File, DF: Eastern Europe 1981. Confidential; Noforn. Drafted by W. Jackson and Jonathan Bemis; approved by Robert Baraz. Dobriansky initialed the top of the first page of the assessment.
2. Dobriansky highlighted this sentence by drawing a line adjacent to it in the left-hand margin. Additionally, she underlined “diminishing its public criticism.” In December 1979 the Soviet Union invaded Afghanistan. See Foreign Relations, 1977–1980, vol. VI, Soviet Union, Documents 244–248 and 251.
3. Dobriansky underlined “Brezhnev’s trip to Belgrade for Tito’s funeral,” and she drew a tiny number 1 in the margin adjacent to this passage.
4. Dobriansky underlined “at the 26th Soviet Party Congress in February, declared that the bilateral relationship was ‘making progress’” and she drew a tiny number 2 in the left-hand margin adjacent to this passage.
5. Dobriansky highlighted this sentence by drawing a line adjacent to it in the left-hand margin.
6. Carter visited Yugoslavia June 24–25, 1980. See Foreign Relations, 1977–1980, vol. XX, Eastern Europe, Documents 295–296.
7. A reference to the Vietnamese invasion of Kampuchea. See Foreign Relations, 1977–1980, vol. XXII, Southeast Asia and the Pacific, Chapter 1.
8. February 9–13 in New Dehli.
9. An unknown hand placed a checkmark in the left-hand margin adjacent to this paragraph.