Yugoslavia: A History of its Demise - Indymedia

14 FATEFUL WEAKNESSES
sets and washing machines—discarded by returning Gastarbeiter who were
unable to pay the import duties.
A visit to Slovenia a short while later revealed an angry mood. Certainly, the
Slovenian ministers in Belgrade and the Slovenian deputies had themselves
approved of these federal measures, but this did not earn them any prestige back
home. High functionaries in Ljubljana now admitted that they had not been clear
about the consequences of these measures; they had simply gone along with the
new laws out of solidarity and a feeling of duty, Now, however, confronted with
the practical consequences of these measures, they had the feeling of having
fallen into a “Balkan trap”. Slovenia was now, for all practical purposes, cut off
from its Western neighbors. The “customs raid” against the Gastarbeiter was due
to a mistake; three days later, the Ministry of Foreign Trade in Belgrade, headed
by Serb Milenko Bojanić, had to allow that most of the Gastarbeiter would have
been allowed to bring their confiscated goods into the country under normal
procedures. 25 The deposit for the right to cross the border lost its edge when
inflation drove down the value of the dinar, but it was only finally abolished at
the end of 1984.
The political debacle was emphasized when the Republic of Croatia also felt
itself affected by the economic measures. The Zagreb leadership of that day had
an anti-national and politically reactionary orientation, but in economic matters it
had to take into account the interests of the republic. Croatia had not only
absorbed a large part of the foreign credits in order to build up its tourist industry,
but had also taken out short-term loans abroad, again chiefly for investment in
the tourist sector. 26 In consequence of all the restrictions, Gastarbeiter held back
remittances to a significant extent, hurting Croatia’s economy. Yugoslav Finance
Minister Jože Florijančič explained that the obstructive measures of autumn 1982
had reduced the outflow of cash by a billion dollars, but the country lost almost
as much by reduced remittances from Gastarbeiter abroad.
In the following period, nothing much changed. Outlays to service the debt
had long ago reached the critical threshold of 25 per cent of hard currency
intake; with such a ratio it was practically inconceivable that the economy could
once more be restored to health. Payments and interest per year amounted to
more than $5 billion, against overall exports which brought in between $10 and
$15 billion. Since this was too much, Yugoslavia tried, from 1984 onwards, to
reach an agreement with the World Bank and its creditors on a long-term
regulation of its debts, in practice a permanent moratorium, but found little
enthusiasm for this idea. 27 On the contrary, in March 1984, the International
Monetary Fund energetically demanded, for the first time, the adoption of
serious reforms as a precondition for a new agreement on debts. At first, some
Yugoslav functionaries sat on their high horses: Yugoslavia, so they said, would
not permit any “interference” in its internal system. But a little while later, they
gave in, and in March 1984, important steps in the direction of a market
economy were taken in execution of the debt conversion agreement, such as the
elimination of price controls, a restoration of hard currency reserves, and a return