YUGOSLAVIA: PROSPECTS FOR STABILITY.

YUGOSLAVIAN history, 1945-; NATIONALISM; TITO, Josip Broz, 1892-1980; HISTORY of the Republic of Kosovo; SOCIALISM; EXTERNAL debts; ECONOMIC reform; JOB creation

The article discusses the roots of the Yugoslav dilemma, including the rise of nationalism as an instrument of political struggle. In the six years following Josip Tito's death in 1980, two central issues defined the growing crisis within the country: Kosovo and the faltering economy. The province of Kosovo, the heart of the medieval Serbian kingdom, gained a large degree of autonomy in the 1970s. Tito hoped to use the province--Yugoslavia's least developed region, whose population is 85-90 percent ethnic Albanian--as a means of showing the superiority of Yugoslav socialism in overcoming nationalism and underdevelopment. The deteriorating economy provided another source of discontent. By 1980 the economic system was in need of serious reform, saddled with an $18-billion foreign debt, an annual rate of inflation approaching 40 percent and a jobless rate of 12 percent. Finally, a long-term economic reform program was adopted in 1983. Its main components were a united Yugoslav market, production based on performance criteria and increased reliance on small private enterprises to generate jobs. The result was stalemate. The central party's inability to deal with the deteriorating economy triggered calls from within and outside the party for democratization, pluralism and respect for human rights.