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The Dilemma of Yugoslav Market Socialism
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14148 |
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CURRENT ISSUES
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1 / 1988 |
3,175 Words |
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Robin Alison Remington
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The specter of widespread bankruptcy is haunting the Yugoslav economy.
In August 1987 the Titograd Construction Enterprise was forced into liquidation. Some 1,600 workers in Montenegro became a part of Yugoslavia's unemployment statistics. They joined an estimated 1.1 million Yugoslavs already out of work, roughly 17 percent of the country's 6.8 million work force.
The liquidation was a result of bankruptcy legislation that went into effect in July 1987. The Montenegrin construction workers were the first victims of Prime Minister Branko Mikulic's determination to establish fiscal discipline on the part of Yugoslav enterprise, which is notorious for running at a loss. The new law put enterprises that could not balance their books on notice that if their finances were not in shape within six months, they would be forced out of business.
No one knows for sure how many enterprises would collapse if this law were strictly enforced. Speculation escalates from the 17 small companies, with some 2,000 workers, currently facing bankruptcy proceedings to possibly 7,000-plus companies, with as many as 1.5 million jobs at stake. If that many Yugoslav workers joined the jobless, the country's unemployment would more than double.
Yet even symbolic bankruptcies designed to frighten Yugoslav managers into more financial self-restraint and Yugoslav workers into accepting Mikulic's proposition that wages reflect productivity raise questions concerning rights of the working class as a protected sector of socialist society.
Ideological struggle
Notwithstanding the wave of media attention focused on East European economic reform efforts in the wake of Mikhail Gorbachev's commitment to perestroika (variously translated as acceleration, restructuring, and radical reform), this is not a new problem for Yugoslav policymakers and economic planners.
The current effort to put into place an economic stabilization program that would make reality out of the fiction of market socialism is another round in a 25-year-old, ongoing tug-of-war between economic rationalizers and opponents of the proposed reforms.
In the early 1960s, Yugoslav economic reformers pushed the idea of increased enterprise autonomy, incentives for profitable investment, and liquidation of unprofitable businesses. Prices were expected to reflect supply and demand. By 1964, the top Yugoslav leadership had clearly swung to the side of the economic rationalizers. The trade unions endorsed the reforms. Tito personally spoke out. The platform was approved at the Sixth Central Committee plenum. It bogged down not for lack of economic merit, but because a socialist market economy would come at a cost too high for many traditionally protected sectors of Yugoslav society.
Once again, ethnic-regional issues are tangled in strategies of economic change. Managers and workers in unprofitable enterprises and underdeveloped regions of Yugoslavia are no more enthusiastic today than those two decades ago. These two oppositional groups are not identical, although there remains considerable overlap in areas
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