Between 1975 and 1980, the Yugoslav social product fell and inflation reached an annual rate of 50 percent. When the international oil shock of 1979 hit, policy makers realized they could not continue an economic development strategy based on heavy foreign borrowing and inefficient investment at home. In 1982 the Long-Term Economic Stabilization Program was released by the Krajgher Commission for Economic Stabilization. The commission reexamined Yugoslavia's development priorities and formulated a revised strategy for the 1980s. Self-management would remain at the center of the system, but substantial reorientation would occur. Important elements were coordination of investment between industrial and agricultural sectors, diversification of energy resources, greater investment in technical development, and improved incentives for the private sector, now recognized as the most efficient part of the national economy. Workers, whose wages had increased faster than their productivity under the self-management system, would be subject to wage austerity programs to restore the balance.
Although the party overwhelmingly endorsed the long-term program, influential conservatives blocked practical application of Krajgher Commission programs. In 1983 the Federal Assembly (Skupstina) passed only eight of twenty-five major legislative proposals; it postponed decision on the remainder, many of which would have activated parts of the long-term program. The events of 1983 set a precedent for a new round of economic bickering and regional finger pointing that delayed meaningful reform another seven years.
Data as of December 1990