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

250. Memorandum of Conversation¹

Washington, May 6, 1988, 10:15–10:41 a.m.

SUBJECT

• The President’s Meeting with Yugoslav Presidency Member Josip Vrhovec

PARTICIPANTS

• U.S.

  • The President
  • Secretary of State Secretary George Shultz
  • Howard Baker, Chief of Staff
  • John D. Negroponte, Deputy Assistant to the President for National Security Affairs
  • Thomas W. Simons, Jr., Deputy Assistant Secretary of State for European Affairs
  • John Scanlan, Ambassador to Yugoslavia
  • Stephen Danzansky, Sr., Director, International Economic Affairs, NSC
  • Rudolf Perina, Director, European and Soviet Affairs, NSC

• Yugoslavia

  • Member of the Presidency Josip Vrhovec
  • Ambassador to the U.S., Zivorad Kovacevic
  • Dusan Strbac, Assistant Secretary for Foreign Affairs
  • Pavle Jevremovic, Director for International Relations

After exchanges of greetings, the President expressed appreciation to President Vrhovec for the Yugoslav expulsion of the Palestinian terrorist leader, Colonel Hawari, from Yugoslavia. The President said that this was a positive step in the fight against terrorism. The two men then chatted privately as the press was brought in for the photo opportunity.

After departure of the press, the President said that President Vrhovec must know the United States well because he served as a journalist here. He asked President Vrhovec if there were any specific items he wished to talk about.

President Vrhovec replied that he wished to convey the best wishes of the Yugoslav Presidency and people to the President and the American people. Vrhovec said he knew the President was busy, but all Yugoslavs hoped he could sometime visit their country. The President said he would like to make such a visit.

President Vrhovec said he had had a good discussion of bilateral and international issues with Secretary Shultz.² He had told the Secretary that Yugoslavia strongly supported U.S. efforts to improve relations with the USSR and to make progress on arms control. Yugoslavia wished these efforts well. Yugoslavia also wanted to continue its good bilateral relationship with the United States, which was appreciated.

President Vrhovec said that much of his discussion with the Secretary focused on economic relations. Yugoslavia wished to increase its economic ties with the U.S., not just in the area of trade, but also in industrial cooperation, technology, and investment of capital. Yugoslavia was implementing a major economic reform to move toward a more market-oriented economy and also to develop ecologically. The country could not enter the 21st century otherwise. To succeed, however, the government realized that a process of democratization was also necessary, and it was pursuing such a process.

President Vrhovec said he hoped that the United States would support Yugoslavia’s efforts. Yugoslavia had reached an agreement with the IMF, and the first stage of implementing this agreement would be the hardest, when the most support was needed. There would be significant liberalization in the areas of prices, imports, and foreign exchange, and Yugoslavia would need more credits to succeed in this stage. President Vrhovec said he had asked Secretary Shultz for U.S. understanding and support, and the Secretary had promised cooperation. This was appreciated.

Turning to the international scene, President Vrhovec said that Yugoslavia continued to follow a policy of non-alignment and sought in this way to make a positive contribution to making the world more secure. That was also why Yugoslavia supported the President’s efforts to improve East-West relations.

The President congratulated President Vrhovec on Yugoslavia’s agreement with the IMF and said that we would work together with the Paris Club to provide as much financial relief as possible. We would support efforts to help Yugoslavia out of its problems.

With regard to international relations, the President recalled that after a recent speech in Chicago, in response to a question, he had speculated how the world would react if suddenly threatened by invaders from another planet. All countries would probably unite together against the enemy, and our current problems would appear very small.

The President noted that General Secretary Gorbachev had recently visited Yugoslavia. The President said he recalled that during an earlier visit Gorbachev had visited Yugoslavia and acted like a top official, even though he had not yet become General Secretary. The President asked how this last visit had gone.

President Vrhovec said it was an important and significant visit. Gorbachev was a man with new ideas, but also with big problems because perestroika was not going well. On the eve of Gorbachev’s departure, an article had appeared in the Soviet newspaper “Sovetskaya Rossiya” which challenged Gorbachev’s reforms and defended Stalinism. It was good that things were now being clarified as a result of this article because perestroika was in the interest of the whole world, and Soviet reform efforts were certainly preferable to a return to Stalinism.

President Vrhovec said that a Soviet-Yugoslav declaration was signed during the Gorbachev visit which had some new positions, especially on the 1948 Soviet-Yugoslav conflict. President Vrhovec said it was noteworthy that Gorbachev had admitted that there had been wrong on the Soviet side in this conflict. The admission was not just for the sake of courting the Yugoslavs, but also related to Gorbachev’s own objectives within the Soviet Union. President Vrhovec said that Gorbachev wanted a dialogue with the U.S. to be as successful as possible because he needed successes. Otherwise, he faced the danger of being pushed back by his opponents.

The President said Gorbachev seemed different from previous Soviet leaders. He faced enormous problems, resistance from the bureaucracy, but he was really trying to bring some changes to the Soviet Union. At the same time, he believed a lot of the propaganda about our own country on which he had been raised.

President Vrhovec agreed that Gorbachev faced a lot of resistance, especially from the apparatchiks whose positions were threatened. The President said he had learned that just one of the reforms proposed by Gorbachev would cost more than 400,000 officials their positions.

Secretary Shultz said he had had an interesting discussion with President Vrhovec about Poland and suggested that President Vrhovec repeat some of his views to the President. President Vrhovec said that Poland had terrible economic problems. Yugoslavia did also, but those were at least manageable. Poland was also a very neuralgic part of Soviet interests. President Vrhovec said he did not believe the Soviets would intervene in Poland if there were no outside interference, but Gorbachev’s new policies might be tested, hopefully in a positive way. Even in Yugoslavia, Gorbachev had shown new attitudes—not insisting on a monopoly of power but wanting unity on a different basis. The Poles thus had a chance to resolve their own problems. If there was any way the U.S. could help them, this would be good.

The President noted that there had been no new developments that morning in the Gdansk shipyards. President Vrhovec said he could only hope there would be no violence. He said he knew the U.S. had a great interest in human rights. Yugoslavia was also interested and realized that in this area more could always be done.

The President said that he approached human rights with Gorbachev by stressing that the U.S. would not take credit for improvements, and that improvements were in fact in the Soviets’ own interest. This was also the line he would take at the Moscow Summit.³ President Vrhovec said human rights were very important in Yugoslavia but also potentially very divisive because the country had so many different religions and nationalities.

President Vrhovec concluded by saying that he had been present when the President gave a 1981 speech in Vancouver in which he advanced ideas of free trade. It was a correct argument which others were not supporting. President Vrhovec thanked the President for the opportunity of the meeting, which ended at 10:41 a.m.

1. Source: Reagan Library, Rudolf Perina Files, Subject File, Yugoslavia—Substance 1988 (1). Secret. The meeting took place in the Oval Office. Presumably drafted by Perina. Perina sent a copy to Paul Schott Stevens under a May 13 cover memorandum, requesting that he “review and approve” the memorandum “for record purposes.” (Ibid.)
2. No memorandum of conversation of this meeting was found.
3. Reagan and Gorbachev met in Moscow from May 29 to June 1. See Foreign Relations, 1981–1988, vol. VI, Soviet Union, October 1986–January 1989, Documents 155–164.