248. Telegram From the Department of State to All European Diplomatic Posts1
71654.
Washington, March 8, 1988,
1041Z
SUBJECT
- A Conversation With Milovan Djilas.
- 1.
- Confidential—Entire text.
- 2.
- Summary. Renowned Yugoslav dissident Milovan Djilas shared his views on the future of communism in Yugoslavia, the Soviet Union and elsewhere in a meeting with EUR DAS Thomas W. Simons on March 2. The one-time Tito confidant, and author of such seminal anti-communist works as “The New Class” and “Conversations With Stalin,” was in Washington for a series of lectures. His presence was itself newsworthy. Yugoslav authorities had confiscated his passport in 1970 and returned it to him only last year. Djilas believes that the economic crisis endemic to communism will gradually lead to economic reform and political democratization. Yugoslavia was further along this path than any other communist country. He recommended that the U.S. use positive economic incentives to quicken the pace of reform in Yugoslavia and throughout the communist world. End summary.
- 3.
- Djilas betrayed no bitterness over his years in prison and status as a non-person, and he was surprisingly upbeat about Yugoslavia’s longterm prospects. He began by discussing the current Yugoslav crisis, which he expected to continue. The Yugoslav crisis was merely a variant of the economic and political crisis facing all communist countries. Yugoslavia was further along in this crisis than any other communist country. By this Djilas did not mean that Yugoslavia was deeper in crisis. He meant that Yugoslavia was further along in the crisis than any other communist country, and therefore closer to emerging from it.
- 4.
- Djilas linked the economic crisis endemic to communist countries to the communist political system. The Yugoslav economic crisis, for example, would continue until the political system changed. There was no way out under the current system. Although virtually all Yugoslav officials now say they favor a market economy, the political system remains too authoritarian to permit one. But Djilas was optimistic about Yugoslavia because it had gone further toward changing the political system than any other communist country.
- 5.
- According to Djilas, the old-line orthodox Titoists in the Yugoslav party were now decisively outnumbered by reformist elements. These [Page 733] latter elements represented a number of different currents. They ranged across the spectrum from ethnic nationalist to pro-Yugoslav, and represented varying shades of commitment to democratization. No one had yet embraced pluralism, but the party was in ferment. Developments within the party itself were now more important than developments outside the party. The move toward democratization was most advanced in the Slovenian Party, but Djilas believed that the Slovenian experience would sooner or later be repeated in the other republics, including those in the south.
- 6.
- According to Djilas, the current ferment in the party was itself a reaction to the economic crisis. The future was clear. Either the crisis would endure or the country would democratize. Djilas believed that the crisis would endure for a while, but that sooner or later Yugoslavia would become democratic. Given the fact that Yugoslavia is a nation of separate nationalities, he suspected that its final composition would be confederate rather than federal.
- 7.
- Although he did not address the issue in detail, Djilas clearly believed that the Yugoslav experience would be repeated in the Soviet Union and other communist countries. Perestroika and glasnost—involving both economic and political reforms—were themselves reactions to the Soviet economic crisis. As the Soviet Union liberalized, Djilas believed that ethnic nationalism would come increasingly into play, as had been the case in Yugoslavia. The result would be increasing decentralization, a result which would itself enhance the trend toward democratization.
- 8.
- In an earlier meeting,2 however, he had cautioned against comparing the nationality problem in the Soviet Union too closely with that in Yugoslavia, because of the relative dominance of one nation, the Russians, in the USSR. He also said the movement toward democratization would take longer there, and predicted that Gorbachev would be seen only to have made marginal changes. Gorbachev is too much limited by the system within he must operate to make decisive changes.
- 9.
- Djilas believed that the U.S. should adopt a more activist policy toward Yugoslavia. He believed the U.S. could play an important role in furthering the pace of democratization in Yugoslavia (and, by parity of reasoning, in other communist countries). Political reform could not be influenced directly, but could be influenced indirectly by encouraging economic reforms. This would be done by providing communist governments with economic incentives to institute economic reforms. These reforms, which would reduce government control over the economy, would inevitably accelerate the pace of political liberalization.
- 10.
- In the case of Yugoslavia, Djilas recommended that the U.S. offer a substantial economic aid package in return for Yugoslav implementation of three specific economic reforms: creation of a unified internal market, expansion of the private sector and liberalization of laws on foreign investment. Djilas made clear that the incentives he had in mind were positive ones. The U.S. should offer Yugoslavia assistance it would not otherwise provide, to be delivered only after the Yugoslavs implemented the specified reforms. DAS Simons noted that this was very similar to our current approach toward Poland.
- 11.
- Djilas believed that such positive incentives were very much preferable to negative ones. Threatening to withhold something that would otherwise be given created animosity and tended to cause the side being pressured to dig in its heels. Yugoslavs were particularly inclined to react in this way. For these reasons Djilas believed it was a mistake to hold Yugoslav debt rescheduling hostage to economic reforms. On the other hand, he also opposed giving Yugoslavia a blank check. Positive incentives were the key.
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- Comment: Djilas clearly believes that economic crisis is endemic to communism, and that economic crisis will sooner or later lead to economic and political reform. Thus, for Djilas, paradoxically, communism contains the seeds of its own destruction. While Djilas believes that the U.S. can accelerate the process of reform through the use of positive, as opposed to negative, incentives, he could only express sympathy when told of the difficulties, financial and bureaucratic, to providing such incentives.
- 13.
- Moscow and Leningrad minimize considered.
Shultz