Whatever Happened to Yugoslavia?

By Kathryn Albrecht

Part I

September 1999

Part 1 in a 5-part Series, published in The Horsefly, Taos, New Mexico, 1999-2000


Last spring, during the fourth week of the daily bombing of Yugoslavia, I awoke to the horror. Until then, I had assumed, "O.K., we'll stop now, right? Enough already." After all, we had recently only bombed Sudan and Afghanistan for an hour or two. And Iraq -- well, let's not think about Iraq.

But in mid-April, I suddenly woke up! "Oh, my God. Yugoslavia! We haven't stopped bombing! Like Vietnam, we're doing it again!" So I made my perfunctory call to the White House to plead for peace. In May, I sent my condolences to Serb friends -- exchange students America had hosted in better times. In June, my daughter and I marched from the Washington Vietnam Memorial to the Pentagon on the seventy-third day of bombing. There we rallied with hundreds of Serbs and Slovenes, Montenegrins and Macedonians -- all veterans of the disintegration of Yugoslavia -- all certain that NATO's bombing was not the answer for Kosovo.

Now, a year of research has brought me to this conclusion: if the U.S. and the misnamed North Atlantic Treaty Organization do not cease and desist in eastward expansion of armed power toward Asia, we will have provoked the defenses of several nuclear-armed states. And expanding toward the oil-rich Caspian region is exactly what we are up to in the Balkans.

With the supposed end of the Cold War, our country's "peace dividend" was reinvested in a unilateral arms race now costing America $300 billion a year. This is what the new buzz-phrase "Stockpile Stewardship" is all about -- continued R&D, virtual weapons testing, raising the nuclear stakes. The social programs citizens clamor for only wither for want of funding. The Columbine High School killings occurred during the bombardment of civilian Yugoslavia. What hypocrisy that we beg our nation's youth to disarm!


Suppose the actual reason for bombing the Balkans nearly 40,000 times in the past six years was not really "humanitarian intervention"? What if a ruse, designed by capitalist governments and public relations firms and executed by the mainstream media, concealed an entirely different agenda? But are the Serbs not monsters? Have they not raped and pillaged their way across "the former Yugoslavia," dumping bodies into Hitler-esque mass graves as they go?

Let's step back from the spin doctors, lift the old Lace Curtain of slavic Central Europe, and see if there's not another reality worth considering ...

The West's warplanes ceased bombarding Yugoslavia from 30,000 feet early last June. NATO "peace keepers" struggle to police the shattered province of Kosovo, now cleansed of most Serbs, battling a high homicide rate fueled by the KLA (Kosovo Liberation Army). To the north, Serbia bestirs itself to drag out cranes and attempt repairing the effects of 78 consecutive days of missile strikes, without "one red cent" of the reconstruction assistance withheld by President Clinton, who politically conditions any chance of aid on Slobodan Milosevic's ouster. The Danube at Novi Sad now sports the first handhewn wooden bridge to cross her since 1770.

Winter is receding from the northern hemisphere. America has all but forgotten its nervous invigoration over Y2K and is enjoying springtime. But shadowing the national subconscious is a question surfacing a couple of times per week deep in our daily newspapers: What's to become of the Yugoslavia we bombed last year? Only time -- and a lot of international maneuvering, of course -- will tell. But there is another sad question -- actually the more important one -- haunting the Western democracies: "What became of Yugoslavia?"


The second Yugoslavia once hummed along, a tidy federation of six equally semi-autonomous republics: Bosnia-Hercegovina, Croatia, Macedonia, Montenegro, Serbia, and Slovenia. Serbia also contained two autonomous provinces, Kosovo and Vojvodina. Historically, geographic boundaries on the Balkan Peninsula had been periodically redrawn by Ottoman Turks, Austro-Hungarian monarchs, Czarist Russia, plus Britain, France, Germany, Greece, and Italy. However, pan-Slavic unity coalesced in 1918 when the first Yugoslavia, "The Kingdom of the Serbs, Croats, and Slovenes" was formed by the Treaty at Versailles.

During World War II, these and additional nationalities of the Balkans were galvanized by a visceral and triumphant struggle to drive the Nazis and the Fascists out of the peninsula. In 1945, these peoples united to create an expanded Yugoslav federation under Partisan hero, Josip Broz ("Tito"). Tito set about developing a union of diverse but equal states, uninterested in joining the Soviet bloc. Tito would tolerate no Stalinist dissent; the pro-Soviet opposition was jailed. Stalin had Yugoslavia expelled from the Warsaw Pact in 1948. Thus began what many of her former citizens still call "The Golden Age of Yugoslavia."

Political processes within the federation included parliament, assemblies, referenda, and a recognition of the right of self-determination within the republics. Although basically a one-party state, this second Yugoslavia developed peacefully and grew economically for over 40 years. Ethnic tensions ran at a low ebb. In a nation of over two dozen minorities, none held the majority. Even young survivors of the federation recall a pervasive atmosphere of respect for each others' ethnic origins. The United States traded with non-aligned Yugoslavia and tolerated her as a buffer state between NATO and the Warsaw Pact. She was a founding signatory to the United Nations Charter.


Although rigorously socialist in developing her industrial base, Yugoslavia allowed a certain amount of capitalist incursions, in the spirit of pluralism. This openness to western investment, however, sowed the seeds of the federation's demise. Infusions of foreign capital over the years were not minor anomalies in the planned economies of the six republics. Foreign indebtedness acted as a timed-release toxin, gradually corroding the functioning of the state.

Meanwhile, Yugoslavia enjoyed stability and peace. Throughout the 1960s and 1970s, the growth of Yugoslavia's gross domestic product averaged 6.1%. There was 91% literacy and an average life expectancy of 72 years. The state provided housing, health care, education, and child care. Citizens lived well on a per capita income of $3,000 a year (in 1980 dollars), with one month paid vacation, plus a year's maternity leave, if needed. Respect for workers was a central concern of government and society.

But Marshal Tito, who designed, fine-tuned, and ruled this orderly state with a firm hand for 35 years, passed on in May of 1980. Western powers quickly altered their stance toward Yugoslavia. Since the country's socialist core had not precluded financial relationships with the West, indebtedness to foreign banks had been increasing gradually for decades. At the time of Tito's death, the U.S. and other international creditors imposed the first of many "macro-economic reforms" on Yugoslavia. This "debt restructuring" demanded the currency be devaluated. As reported in a World Bank study, Strategy for Restructuring, the economy sputtered and stalled. But that was just the beginning.

Enter Cold Warrior Ronald Reagan. In 1982, Reagan issued National Security Decision Directive 54, a "Secret Sensitive" document. The Directive advocated "expanded efforts to promote 'a quiet revolution' to overthrow Communist governments while reintegrating the countries of Eastern Europe into a market-oriented economy." In 1984, the Reagan administration directly targeted Yugoslavia with NSDD 133, "United States Policy toward Yugoslavia", calling for increased intervention (Covert Action Quarterly, Winter 1992). With Tito gone, the U.S. moved to reorganize this sovereign nation. A successful socialist state outside the Western bloc would not be tolerated.

The International Monetary Fund became the chief weapon used to destroy Balkan unity. Increased ethnic friction, then, can be seen as only a secondary cause of the dismemberment of Yugoslavia. As British economist and political analyst Sean Gervasi has stated, "Foreign intervention was designed to create precisely the conflicts which the Western powers decried."

IMF austerity measures were imposed in autumn 1989. The currency was further devalued, wages frozen, and state industries deemed "unprofitable under structural adjustment" (worker-owned companies) were closed. Unemployment immediately rose 20%. The federal government in Belgrade regularly transferred treasury payments to the republics and autonomous regions. Those payments were now stopped, the funds mandated by the IMF to service foreign debt. As the Berlin Wall was falling, wages in Yugoslavia fell 41%.

At this juncture, Prime Minister Ante Markovic visited Washington and reported worriedly that ethnic tensions were rising in the republics (New York Times, 10/14/89). George Bush convinced Markovic of the wisdom of more debt restructuring. An emergency foreign aid package was negotiated when Markovic promised to return home and liberalize constitutional controls on foreign investments. Markovic's ensuing legislation forced over one thousand by-then insolvent enterprises into bankruptcy. These companies could subsequently be purchased 'for a song' by Western investors.

Next, 650,000 Yugoslav workers struck. Although travail was increasing within the republics due to the precipitous decline, workers united in solidarity across all ethnic lines. It was in this atmosphere that Communist party leader Slobodan Milosevic came to power in the fall 1990 elections, railing against the dire conditions. Milosevic's gravest error was in not building upon worker solidarity at this juncture by appealing for the unity of all Yugoslavians. He lacked either the decency or the diplomacy to address each republic's complaints as the federation groaned and strained under economic duress. At a time when nationalist/separatist tendencies were flaring up in the republics, Milosevic fanned the flames by calling only for a united Serbia.


Meanwhile, the economy plummeted. Eastern European Economics reported industrial production declined to a negative 10% growth rate and the GDP to a negative 7.5%. Then Milosevic took a bold step, one which would irrevocably condemn him in the eyes of Western monetary powers: he halted the IMF and U.S.-mandated reforms. He brought "structural adjustment" to a standstill.

Revenge was swift. One month later, in early November 1990, the U.S. Congress passed Foreign Operations Appropriations Law 101-513. Annual "foreign operations" appropriations facilitate U.S. corporate control of many of the world's economies by granting -- or withholding -- major funding to international financial institutions such as the World Bank and the Asian, African and Inter-American Development Banks. Section 599a of this Act cut off all aid, credit, and loans to Yugoslavia and demanded immediate, separate elections in each of the country's six republics. The U.S. State Department would alone determine the validity of each election and resume aid to individual regions if the victors were deemed "democratic."

Hence, in areas of Yugoslavia already severely destabilized by a dislocated economy, with strains of micro-nationalism fracturing the political and social landscape, a major influx of U.S. dollars went directly to those right-wing secessionist parties who won these cobbled-up elections. This was in Croatia, Slovenia, and Bosnia. The effect of Section 599a was as if deftly placed wedges had been inserted by the U.S. exactly along fissures of nationalism and ethnic identity and a sledge brought down on each. The economy entirely collapsed, recriminations broke out on all sides and, with separatist tendencies ignited by interventionism, the CIA in The New York Times of November 28, predicted civil war in Yugoslavia.

Germany had long been attempting to bring Slovenia and Croatia into its sphere of influence, which would give Germany more power over the Rhine/Danube Canal, where 3,000 ton ships will ultimately pass from the North Sea to the Black Sea. Germany exerted discernible pressures on the increasingly disaffected republics, openly encouraging secessions and, in fact, gave Croatia a $2 billion, interest-free loan which was never reported to the central government as required by law (T.W. Carr, Defense and Foreign Affairs Publications, London).

In March 1991, the Croatian nouveau-fascist party, sporting the old Utasha flag of Nazi-occupied Croatia, called for the overturning of the socialist federation and the expulsion from Croatia of all Serbs, as that ethnicity was associated with the seat of the federal government in Belgrade. Two months later, Croat separatists besieged a series of military bases and, naturally, the federal army was ordered to respond.

On June 25, 1991, Croatia and Slovenia, the wealthiest of the republics, seceded from the federation. Germany was the first nation to recognize their independence. Croatia immediately denied citizenship, jobs, pensions, land ownership, and passports to the large Serb minority. Serbs there began arming themselves, remembering the Nazis' concentration camp of WW II at Jasenovac, Croatia, where nearly a million Jews, Serbs and Gypsies lost their lives.

In Slovenia, meanwhile, Milosevic ordered in the Yugoslav army, the JNA, to resist secession. Croatia's and Slovenia's declarations of independence had violated the Yugoslav constitution, which outlines specific procedures for republics seeking separation from the federation. The JNA, manned by 18-year-old conscripts who serve, after a month's training, for one year, fought for ten days in Slovenia. But the European Union demanded Belgrade let the separatists go their way, or lose all trade with Europe. 60% of Yugoslav trade was with Western Europe. Concurrently, war Mothers-in-Black marched in Belgrade, protesting the deaths of 200 JNA soldiers, beseeching Milosevic to withdraw. While the Yugoslav army was thus dissuaded from preserving its territory, Germany rapidly built up Slovene and Croat forces. Today, Germany owns 30% of industrial plants in these first two "former Yugoslav republics." (E.H. Solano, Media War Against the Serbs, p.64)

These first flurries of civil war came after a decade of Western fiscal and political manipulation had led to utter desperation in the republics. By June 1991, according to a World Bank Industrial Restructuring Study, the Yugoslav economy had "lapsed into a coma." 2,435 socialist industrial enterprises had been liquidated. The Christian Science Monitor reported that, in one year, the GDP had slipped from minus 7.5 to minus 22.5%. Inflation was 200% and 600,000 people had lost their jobs.

Yugoslavia had once been an integrated economy. Now the carefully coordinated and interlocking weave of natural resources, factories, and distribution was completely shredded. With federal political institutions and fiscal structures mortally wounded, militias loyal to secessionist leaders, funded and armed by Western interests, split populations along ethnic lines by committing numerous atrocities. As a rule, workers knew better than to opt for disunion. But labor finally saw their solidarity shatter as U.S. Law 101-135 cut the financial arteries between Belgrade and the republics, sounding the death-knell for the federation.

More secessions were to come. Harsher economic, political, and military sanctions loomed. Yugoslavia had not yet hit bottom.

Part II of "Whatever Happened to Yugoslavia?" will focus on the complex dynamics of the civil wars and clarify the Bosnia/Croatia quagmire. A third Yugoslavia emerges, as do shadowy U.S. military "contractors". The work of public relations firms and the corporate media will be brought to light, for together they so effectively vilified Milosevic and the Serbs as to dehumanize them in the American mind. How else could years of ferocious sanctions and months of aerial bombardment of civilians, rivaled only in Iraq and Vietnam, have been condoned?

-- by Kathryn Albrecht

(educated in the hot-bed of the Sixties
at the University of California at Los Angeles
and now an administrator at The Taos Public Library)

updated 3/2003