Yugoslavia - Self management socialism and the challenges of development (Vol. 4 of 6) : Development issues (continued)

Report No. 1615a-YU DILt: 1u r l Yugoslavia: Self-Management Socialism and the -,I 1A I I ir_jq,ges of I*"qC: l IL (In Six Volumes) VoUlumeI V I Pvutuii !!!:D Irv-irnnt Icenc I 1.45 L. III. * ~% VVI I 1-I~I ILI.)JI March 21, 1978 Europe, Middle East and North Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Before January 23, 1971 1 US dollar = 12.5 dinars 1 Dinar = 8 US cents From January 23, 1971 to December 22, 1971 1 US dollar = 15.0 dinars 1 Dinar 6.67 US cents From December 22. 1971 to July 12, 1973 1 US dollar = 17.0 dinars 1 Dinar = 5.89 US cents S.ince july 12, 1973 sler DwnarU Llsa L)tten J.oatiALLr,g. The rate of December 31,1977 was 1 US dollar = 18.445 dinars 1 Dinar = 5.42 US cents  FOR OFFICIAL USE ONLY - 280 - YUGOSLAVIA: SELF-MANAGEMENT SOCIALISM AND THE CHALLENGES OF DEVELOPMENT PART III--DEVELOPMENT ISSUES V. EMPLOYMENT 5.1 The adequate provision of gainful employment 1/ opportunities remains one of the least tractable problems facing Yugoslavia during the current plan period. Despite an actual decline in the resident active labor force in the past decade and in spite of rapid sectoral shifts in labor use, notably from the private agricultural sector to the social sector, the labor market 2/ in Yugoslavia continues to be characterised by considerable imbalances. First, the market has, and continues to be, divided into a modern, social sector with high productivity and incomes, and a traditional, private agricultural sector with low incomes. Although it is notoriously difficult to define and deter- mine the extent of surplus labor 3/ in the traditional sector, the large productivity differences between the sectors point to a pool of workers that could be more effectively utilized through shifting them from low productivity activities to the modern sector. Meanwhile the large income differentials have created a large demand for social sector employment which has been an imnortant element in the ranid migration from the agricultural sector. Second, the labor market in Yugoslavia has tended to be regionalized. With t-he exception nf o lnuvenia, all Repniihlir have pontckets- of tr2ditional seoror employment seeking modern sector work. This, combined with the cultural differences bet.ween Republics, have tended to restrirt interrepublican migra- tion, resulting in considerably differing employment opportunities between the various Republircs. Thtrd, nfter the 1Q96 reformcs an increasinglV important role was played by external migration in absorbing workers. With the new restrictions placed odn external migra tion in host countries, this vent has not only been closed but has led to a considerable reflux of Yugosla workers, accentuat-th eix_sing iTmh1Incesr Fourth, depnitP the rapid structural changes that did occur in the labor market, there are indica- tions that sections of the working-age popolaion hanv withdrarwn from t-he 1/ This chapter departs from the Yugoslav definition, according to which "employer.t" r.l nntyver recipier.ts of "p-ersnnal incnTome" (in t-ha scriain sector) ar contractual wages and salaries (in the private sector) and incl Ude all thos earnirg 4come as "self-e.mployed". . "w comprises both categories, unless otherwise specified. 2/ Labor market in this chapter is used as a shorthand for labor supply and Tduand. 't 's not use' to Adenote an actual marketplc where labor is Ut_iaii . L L u L _L U L. ~ t ~ ai aL ua -L *. ~ --L . pL L W. -. -o .L' ~ actually transacted, a fact which would run counter to the basic philo- sophical premises ol the Yugoslav systeml. 3/ Labor with zero or very low marginal proauct. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  '0 1 Z-