Country Listing

Yugoslavia Table of Contents



After World War II, Yugoslav development policy emphasized growth in the industrial sector. All means of production were completely nationalized and remained so through 1990. The high rate of investment in industry in the First Five-Year Plan followed the slogan "Heavy Industry at Any Cost." The cost was a serious imbalance in economic development that the Yugoslav government was still trying to rectify in 1990 (see fig. 9).

Postwar Policy

Between 1949 and the late 1970s, the fastest growing industrial branches were oil and gas extraction and refining and manufacture of machinery for electric power generation, transport equipment, chemicals, and electric power. These branches received high priority because their production levels were very low at the end of World War II. Other priority branches that were already better developed in the late 1940s--such as mining of coal and ferrous and nonferrous metals--expanded output significantly, but growth rates were considerably lower than those of the top-priority industries. Several nonpriority branches, such as furniture, paper, raw materials for construction, and the traditional food and beverage industries, expanded faster than the overall industrial average (see table 13, Appendix).

After the war, industry was concentrated in the traditional manufacturing regions of northern Yugoslavia. Beginning in 1961, industrial policy stressed locating new manufacturing facilities closer to sources of raw materials (see fig. 10). This meant greater national investment in the underdeveloped economies of Montenegro and Macedonia, which in turn caused discontent in Slovenia and Croatia, the much richer northern republics required to contribute large shares to the national investment program (see Regional Disparities , this ch.).

The 1976-80 plan promoted primary production: development in all energy-producing sectors accelerated, and domestic oil and gas exploration was intensified to reduce Yugoslavia's dependence on imported fuels and minimize the effect of the oil crises of the 1970s. This step was also a prerequisite for further growth in industries with high energy consumption such as iron and steel, nonferrous metallurgy, and chemicals. In the late 1970s, a renewed commitment to self-sufficiency in ferrous and nonferrous metallurgy was based on exploitation and processing of domestic raw materials. Greater attention also went to machine building industries that produced capital equipment necessary for the development of heavy industry.

The Sixth Five-Year Plan (1981-85) continued the industrial strategy of the previous plan. Priority industries for investment were metallurgy, base chemicals, and machinery. At the same time, the plan limited expansion of production facilities in other manufacturing industries.

Data as of December 1990