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Yugoslavia Table of Contents


Military Budget

In the early 1980s, the military budget of Yugoslavia held steady between US$2 and US$2.5 billion, despite the country's severe economic stringency. The expanded internal security mission of the YPA was probably the compelling factor in higher defense spending in the mid-1980s (see Internal Security , this ch.). Nevertheless, the national economic stabilization program required the YPA to cut expenditures by 5 percent in both 1986 and 1987. The 1987 military budget was US$2.7 billion, with cuts absorbed largely in reduced manpower (see Recruitment and Service Obligations , this ch.). At that time, Yugoslav defense expenditures dropped below those of every non-Soviet Warsaw Pact state and neighboring NATO countries Italy and Greece. In 1988 the military budget increased to US$2.8 billion and to over US$4.4 billion in 1989. Yet these increases failed to match the national inflation rate, and defense spending declined in real terms.

In postwar Yugoslavia the burden of the military budget on the national economy was traditionally a heavy one. In 1952, at the height of spending to meet the Soviet threat to Yugoslavia, 22 percent of the country's GNP was dedicated to fielding a 500,000-man regular army. That figure subsequently decreased, but throughout the Tito years it remained relatively high by world standards.

The military budget as a proportion of federal government expenditures also reflected the high priority of defense. The federal government routinely dedicated 50 percent to 60 percent of its annual outlay to defense. In the 1980s, this ratio was consistently the highest or second highest in the world. In 1987, however, spending cuts temporarily dropped the defense share of total federal expenditures to just under 30 percent. In Yugoslavia this measurement overstated the burden of military spending somewhat because many government expenditures were made at the republic, autonomous province, or commune level, rather than by the federal government. Even considering that factor, however, defense remained the largest component of federal government spending.

Data as of December 1990