Yugoslavia - Current economic position and prospects (Vol. 1 of 2) : Main Report

RESTRICTED Report No. EMA-48a This report is for official use only by the Bank Group and specifically authorized organizations or nersons it may not be nublished, anoted or cited without Bank Groun authorization The Bank Group does not accept responsibility for the accuracy or completeness of the report. T%Yarlna%T i ?TrkT A T D A XTT tND OCIfltTC 'DTT TAT A XTT% TNIC17T tltkTXrr T1TT"n%T A TTflKT A T T1MA7T tlDA:3kTX A CQtf4T A TT/%kT CURRENT ECONOMIC POSITION AND PROSPECTS OF YUGOSLAVIA tin tuin un1iirn e VOLUME I MAIN REPORT May 26. 1972 Europe, Middle East and North Africa De-partme.-nt UUKFAuCY EQUIVALEMTS 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 Since December 22, 1971 1 US dollar = 17.0 dinars 1 Dinar = 5.88 US cents *All conversions of 1971 data into dollars in this Report have been made at this exchange rate. This report is based on the findings of a mission which visited Yugoslavia during October/November 1971. The mission consisted of the following: Vinod Duey Chief of Mission Montek Ahluwalia Fiscal Economist Sudhir Anand Migration and Employment Boris Blazic-Metzner National Accounts Graham Donaldson Agriculture Franz Heidhues General Economist Ian Hume Employment C. J. Martin Constitutional Change and Planning Martin Schrenk Industry Gunther Weinschenck Agriculture (Consultant)  TABLE OF CONTENTS Volume I Page No. MAPS BASIC DATA SUMMARY AND CONCLUSIONS .................................. i-iv I. INTRODUCTION ........................................ 1 Constitutional Change......................... Changes in Enterprise Structure ......... 2 II. RECENT ECONOMIC DEVELOPMENT ............... ............ 3 Growth and Fluctuations ............... ....... Prices ...... .......................... 4 External Trade and Payments ........ ..... 5 Population and Employment ...................... 6 Agriculture ....................... .... Industry ............................ 8 Regional Development ....................... 8 III. SHORT-TERM ECONOMIC MANAGEMENT ............ ......... 9 Excess Demand and Stabilization Policy ......... 9 Fiscal Policy and Demand Management ............ 11 Prospects for Fiscal Policy .. ..... ..... 12 Monetary Policy .......... 13 Reform of the Banking System ................... 14 IV. RESOURCE MOBILIZATION AND ALLOCATION ............... 16 Resource Mobilization .........o..o......... 16 Resource Allocation and Ecnnomic Efficiency e... 18 V. EYTERNAL TRADE AND FINANCE .......... 19 External Trade .-.......o.. 20 Capital Flows .............. o ............... 22 VI. DEVELOPMENT PROSPECTS ............ . ... ....... .. 24 Short-Term Prospects . . . ... ....0. .0..0 . .... . 24 Medium-Term Prospects.. . ................ 25 The 1971-75 Social Plan ...... 25 ExenlDb &JMangmn omU5UC* ..... - ....o 2 ANNEX: Constitutional Charge STATTSTICAL ANNEX Volume II Appendix 1. Resource Mobilization and Allocation Appendix 2. Enplment Problems and Prospects Appendix 3. Reo<ninal Dpvelönment Appendix 4. Agavricultu11re AppendIx 5. TAidustry ^F L ý --------- A U 5 T R l A -H u N G A R y 7>R u M A N l A ? - . RAR EV ì s C  UST-RIA H U N G A R Y Alritudes in meters 0-400__ L9 EN d -' aOi __ (c -, /~'o - .-'--- 400-1500 - L./ Suboico 1500-3000 GRIEB TRIEST Ko*ier, Karlova Ssa oI AC R 0 .. T A V O J V O D I N A Nov' Sad RoVinj Pula Pulo J BELGRAD \.B 5 I l\A H E E 0 -o A p jÉodar ~-EV C 'k4C '3\ -ibenmk blý ca , -, 5 C' A MO N I E Dubrovnik K k 0 T TOGRAý - YUGOSLAVIA 3>i - ---- -- Intenational bouidaries Bar r - - - Republics boundaries 3 Autonomovs provinces c N"A N-- 0 64, 60 so , o ( J Y GREECAI JANUAýRY 197-2 lO 37  BASIC DATA Less Developed Developed Yugoslavia Regions* Regions* Area: (square kilometers) 255.804 154,263 101,541 Ponulation: (1971 census - million) 20.5 13.3 7.2 PrIniit.inn arowth rAtA. 1971 (nercent): 0.9 0.5 1.6 n)nncty m-- qniarA kil nmpter. 1971 2 80 86 71 pp, r.!nvi+.n fl-n_q.- Mnt.arial PrMunirt.. 1 969t (current U.S. dollars) 522 634 310 Gross Material Product by Branch, 1969: Agriculture, Forestry and Fishing 21.3 20.3 24.8 M41i4- -A M36df4O+ny*no (7 -).8 . Construction 9.6 9.2 10.9 TLrano.++4-ti WnA rnmMUnia+4tio 7-R 7. 7.8 Trade and Catering 19.5 20.2 16.9 Communal Activities _050250. Ino 100.0 10 a 100.0 m. --.& -4sN . I1CA0 1 07n 1 UluOO u4wOMM.ILC CrvUUoU kauy current &aLUuL %A7oU/6 t.4 - LI- Iotal1 kuotp UXJL1±±U1I) . _L'-* Rate of Growth (%) (constant prices) 9.3 5.7 8.0 rer capita GNr (current p1%±%U?, UO uLJ.1s0J_-, ou W ineten -n 0-4- -P--f- l l. 1070 1 0.1QO7n ro-onai .LLvu ulii-, U U JL .L!O p l vu .L U r 6 " - /-I-- National Savings 25.7 28.8 Savings Gap 3.0 1.2 * The terms "Less Developed Regions" or "Less Developed Republics", used interchangeably in this repor, comprie to= L%pu%Jo Xs 0 o. 1 4n Hercegovina, Macedonia, Montenegro and the Autonomous Province of Kosovo. The terns"Developed Rggions" or "Developed Republics0" coMpriSs the Republics of Croatia, Slovenia, Serbia (proper) and the Autonomous Province of Vojvodina. a! Calculated according to World Bank Atlas methodology. Figure for l-o^ from World Bank Atlas; data for 1970 and 1971 estimated by applying GDP per capita growth rates. - 11~ - MAney and rradlf171 (areq Sr-) P+m -r + - Mr; all 1 N96_9 1970 1971Jan-Sept.) Tim and restricted deposits Short-term credits 74.5 14.3 16.8 ~a (4 ~1971 y4 nd Rent.lA Prices (retail) 7.3 9.5 1.9 Public Sector Finance 1290 (ctuals) 1971 Growth rate (percent) So 107A Budgetary receipts 33.8 35.7 13.7 2.. T---+m-+ne A4+a 1 j1. 3- f )- I. _) C_ -L-j E 0 5 _ Balance 2.3 1.5 -25.0 1831 Balance of Payments (US $ million) 12LIA/ Increase (p.a.) 1966-1971 Conm1dity exports (f.o.b.) 1,817 8.1 % n~19 1- .2 X.\-9 In 0 A Net Invisibles (including transfers) 1,117 28.0 % Puli ecorFnac 190 atuls 1 Grwh atnpecet Net Capital Inflow 3.3e71726232 Lfuugoase Juyamuv ofic*--" rW**-U-*-VVWe8 Ujrobs UonvurTllule ae5rvea k~uo ip MLL.OnJ) ___Y (U-pIL 1> (end of year) (end March) Total 2.3 1 142 1 4 In months of commodity imports r roo the convertible area 0.6 0.7 11E Position ( S $ million) March 31, 17(2 Quota 225 Drawings outstanding 115 Bank Position (US $ million) March 31, 1972 Total loans 586 Repayments 7i Total loans outstanding(including non-effective) 7 of which undisbursed (including non-effective) 2 1 Total disbursed and outstanding 2M of which: to Bank 283 to others 1 a! Estimate. b/ National Bank onv. Total External Deb#(US $ million) (convertible ana non-convertibice areas) Total debt outstanding as of December 31, irt0 (including undisbursed) 2,977 Estimated debt service payments (1971)2/ S> Ratio of debt service to gross foreign exchange earnings (1971,percent) h/ 17 External Debt Position (US $ million) (in convertible currencies only) Total debt outstanding on December 31, 1970 (including undisbursed) 2,579 Estimated debt service payments (1971)b/ 50 Ratio of debt service payments to gross convertible currency earnings (1971,percent) h2 a/ 1holuding public and private b/ Balance of payments data - iv - SOCIAL AND RELATED INDICATORS 1960 10 Less Less A',wwmsv u w vyou D a1DevelopDuU v e vo p LeU Yugoslavia Regions Regions Yugoslavia Regions Regions Birth rate (per 1000 population) 23.5 1.1 34. 17.u . a. infant mortality (per 1000 live births) 87.7 65.8 100.0 55.2 34.9 78.1 Dependent population (% of total population)& ).L*. 4(*.5 * . Population in settlements of more than 1000 inhabitants (% of total population). * * .. 2-.54 27.1 21.0 Literacy rate (% of adult population)-a/ 80.3 85.2 68.9 84.8 88.3 77.3 Primary school enrollment (% of school age population) 82.0 .. .. 93.0 Population per hospital bed 223 195 314 187 163 259 Average daily caloric intake (calories) 2,939 *** .* 3,141 ... ... Economically active population (% of total population) / 47.5 48*3 38.2 43.0 47.4 34.8 Distribution of farm land/ Social sector 14.6 15.0 13.4 14.4 15.7 11.1 Private sector 85.4 85.0 86.6 85.6 84.3 88.9 Expenditure on Education (% of GDP) 2.7 ... ... 4.3 ... Expenditures on Socifl Services (% of GDP)/ 37 4.4 Expenditures on defense (% of GDP) .. 5.2 a/ Data for 1961 and 1971. T/ nat-q for 1965. c/ Data for 1961 and 19b9. /1 nQn fnr 1 960 And 1969. SUMMARY AND CONCLUSIONS i. Yugoslavia has been moving progressively from a centrally planned economy rrxiaraR a dPrcntrali7Pd markPr-orfAntPd Pronomic svstem based on workers self-management and increased exposure to international competition And fradp. r.nnttintion1 qmPndmPnfR adontd in July 1971 mark thp maior step in this evolution since the Economic Reform of 1965. The six republics and tin r%rnnnms pravinc% nnwj have morp arnnemir rAnnnihi11tHPq Pne- cially in the fiscal field, while the authority of the Federal Government has hoon nar-red and rdef Mateed. ina1 dafance intearnal necurity and foreign policy, as well as the Fund for underdeveloped regions, continue to he Fedral ranana4h414t4oa The aAnaantn alat vD-atna avat-tivxa -nrl e-n- ordinating functions for monetary policy, foreign exchange policies, certain tax and expenditure policies and price control for basic conmodties and services. The ability of the Federal government to maintain the unified VugoslavIa market s, horever, 1 -4mll. 14M t-f4tA nar th ,oPcaty f-n ca ura agreement of the republics and autonomous provinces before measures are u.ndertan. ~4 Thr 4- a coriatin committee and f -.~~,s 4ive4~..v,s,s1 committees to help reach consensus among the republics. It is too early to say howt. sothl C1.- syste fo enurn intr-epuli cosn-u -an co-OLr-A-4-Lt.L*att...~t nation will work. At the moment it appears that the process of reaching agreement. is stll someL.£4 *iLwh5 at c.umbersome.~L aIt an 4slw afll. th*Ceret ma1y4 be tendnc for delays and recourse to ad hoc and temporary measures. However, to some extce tine amenum-nto forumalize a sILuatncu nat- nau alradsy existed. - conciliation of republic interests and aspirations had been increasingly a IHajoL LULUL in1 fLCed UeciUsi1lnak-i LUoL sIC L-ine. 1.I. Since o L["te ecuuy was cuaracterizeu vy a rapJU aucame ±u production (averaging 8 percent per year during 1969-71), the emergence of serious 11u-iaionary pressures and increasing balance of paym1eL: UViL:.Lj. Growth of industrial output averaged over 10 percent per year while agri- cu1tural output fluctuateu with the weather, wit'l output ueclinuiug vy 51 percent in 1970, and increasing 9 percent in 1971. The ratio of investment to DP has continue co lbe very high, averaging 29 percent. Tle savings ratio declined from 31 percent in 1965 to about 26 percent in 1970, but is still very high compared to other developing countries. Employment increasCd at an average rate of about 5 percent in the last three years. The first results of the 1971 census Indicate that during 1961-71 the growth of the labor force was significantly lower than previously assumed. With an aver- age growth of social sector employment of 2.7 percent a year duUg Lte decade, and the large migration of workers abroad, it would appear that for the econoiy aS a whole, laor surpluses nave been significantly reUuced. Iv. InflaLionary pressures refiect excess aemand as well as CoSL pu:[n factors. Personal incomes in the social sector increased at an average rate of 19 percent per year during 1969-71. Although about half of the prices are controlled and attempts were made in October 1970 to freeze producer's - ii - prices the cost of living increased by 11 percent in 1970 and about 15 percent in 1971. As a temporary measure to halt inflation, the government introduced a price freeze on all goods and services in November 1971. v. A restrictive monetary polciy has been followed since the second half of 1970 and more stringent steps were adopted in July 1971 following a new standby agreement with the IMF which replaced one concluded in January 1971 when the dinar was devalued by 20 percent. However, present instru- ments for demand management are not very effective. Decentralization of the fiscal system has weakened fiscal policy-making both on the expenditure and the revenue side. At the same time monetary restrictions have been to some extent bypassed by enterprises not paying their debts. A major legislative reform was recently adopted which is expected to impose financial discipline and increase the effectiveness of monetary policy. vi. An incomes policy is also being developed in the form of guide- lines which will influence the allocation of net income of enterprises be- tween investment funds and personal incomes. Incomes policy guidelines will be established for each republic as a whole by so-called "Social Agree- ments" between the regional government, the chamber of economy and the trade unions, while details will be worked out by each branch of activity to take account of peculiarities affecting the branch. It is too early to say how successful the proposals for imposing financial discipline and the introduc- tion of self-management social agreements on the distribution of enterprise incomes will be, but they could significantly strengthen the effectiveness of demand management. vii. The aggregate savings rate has declined since the Economic Reform of 1965 but is still very high. The share of public savings in total savings fell off, as intended by the Reform, and that of household savings rose, while the share of the enterprise sector did not change significantly. The declining importance of public savings is likely to continue. It will need to be offset by increased personal and enterprise savings if the aggre- gate saving rate is to be maintained. The income policy guidelines being developed can be expected to help in maintaining and possibly increasing en- terprise saving rates. The main institutional channel for mobilizinf house- hold savings is the banking system through time and sight savings deposits. At present there are few other financial assets available to savers. The interest rate ceiling (of 8 percent) has recently been abolished and interest rates on time and sight saving deposits have been raised to 9 percent and 7.5 percent respectively. viii. Improvements in the mechanism and criteria for resource alloca- tion are neRsnary. With the decline in Federal Government control of invent- ment the role of the government in mobilizing and allocating resources was 1nrelv fnken nver hv the hanks. The failure to uqe apnrnrito rritrin for project selection is a major shortcoming, though much thought has been given to this p-roblem in Y pant years- The legal Palling on Interest rnae as weoll as weakness in financial control have also encouraged inefficient use of cap- i ta. These~ Problmsar~e widy4A, rec-gniZe -a and i -It- i hop"e,d the new n-aMf policy and the implementation of laws relating to the financial responsibility of Pnt-Prnri.eq will have an imnart on resource allocation. ix. THe disparity between incomes in the more and the less developed regions of Yugoslavia has tended to increase. Regional development policy has relied on encouraging growth in the less developed regions by a substantial transfer of resources through the Federal Fund for the Accelerated Development of Underdeveloped Regions. Less attention has been given to ensuring effective use of these funds and to the transfer of enterprise know-how and capital from the more developed regions. Moreover, inter-regional linkages for integrated growth of the national economy and inter-regional migration of labor have been insufficiently stressed. x. The balance of payments situation has been a major constraint to accelerated development. The rise in imports associated with rapid growth has been accentuated by inflationary pressures, the structure of the economy and liberalization of foreign trade and payments. Even though exports of goods and services have been increasing at a fast pace, the current account deficit rose from $108 million in 1969 to $340 million in 1970 and is esti- mated to be about $320 million in 1971. The situation was aggravated by the poor harvest of 1970 causing agricultural exports to decline and imports to increase. Tight monetary policy also induced enterprises to shift from do- mestic to imported items because of the availability of more favorable fi- nancing. In order to neutralize the effect of the inflationary pressure on the balance of payments the government has resorted to a more flexible ex- change rate policy. After a long period of fixed rates following a major devaluation in 1965 the dinar was devalued by 16.6 percent in January 1971 and, in effect, by another 19 percent in December of the same year. The favorable effect of the first devaluation on the foreign trade situation became evident in the second half of the year, and was strengthened by the second devaluation. xi. Total net inflow of medium- and long-term capital averaged about $210 million during 1966-1970 of which two-thirds was medium-term suppliers credit. Long-term government loans, which dominated the capital inflows in the first half of the 1960's declined in importance and had to be supplemented by private suppliers and financial credits on commercial terms. This has led to an unfavorable change in the structure of debt and a rapid increase in the debt service burden. The debt service ratio on total guaranteed and unguaranteed external debt in convertible currency increased from about 22 percent in 1968 to around 25 percent in 1971. xii. The draft five-year plan, 1971-76, projects a growth in social product of 7.5 percent per year with gross investment rising at the same rate and private consumption somewhat slower. Exports are projected to grow at about 11-13 percent per year and imports at 9-11 percent per year. The achievement of Plan targets will depend primarly on the efficiency of the new system of decision-making based on consensus among the republics in implementing and adopting required economic policy measures. These include: controlling inflationary pressure through the improvement of financial re- sponsibility and an effective incomes policy; improvement in the balance of payments situation and a significant reduction in the import elasticity with respect to growth of social product; improvement in resource allocation, es- pecially in the less developed regions. - iv - AAAA*. Jrulnt exteral Aut managemnut policy Is a.lso necesocary. Al 1L1. UUi U L AL.Z LJ U P . .L _LL L L .LaW L ~ a Il rapid increase in private external borrowing made possible by liberal ..1-sJ---~~~1- I-- - J - C s J n k o n, a n - __ -- - a w 4- .1- kJ- reguLdLaUos cnnUllC )g LLQg LULALL UWJLL%W.LLI)S 11CU UC=LL UILC LLLLU5 ALL Lil1 IIAgil elasticity of imports with respect to GDP in recent years. Following the standby agreement with the International MUnetary Fuund, ugoavia adopte limits on short--term as well as medium- and long-term borrowing, to which JL II S aUlCLe. A sy LiL 1r regitLLLng AL CALCLkA adito Wr "LIn LLIw ING tional Banks has been instituted and is expected to make it easier to regu- LaLe H ColLLU ALLLId UUxLLenl UWAIboe A DyDLI UiL UIarL Upusi quiLLieunts, with the deposits varying inversely with the maturity of the loan incurred, L. - - - - - - - - 7;-,. __ _ 11as bCeeA annUUllCCU* LL is pctU LU UodioUULage ALeLLlal UULIUW.LIQ. ULL ULI- favorable terms. xiv. Despite recent difficulties, prospects for continued economic growth are good. The endowment of natural and human resource, demonstrated pragmatism in overcoming economic difficulties, the readiness to undertake changes in response to the need for a mue efficient institutional framework, and the general commitment to an open market-oriented economy support a LHVULUle appdrL U L UCVe.LUpIIL pLUDpLet. I. INTRODUCTION Constitutional Change 1.1 Yugoslavia has been moving progressively from a centrally planned economy with production targets and direct controls on employment, prices and investments, towards a decentralized economic system based on workers' self-management of enterprises, and aiming at the establishment of an econ- omy opened up to international trade. The Economic Reform of 1965 marked a maior step in this evolution. Developments since the Economic Reform pointed up certain weaknesses in the system resulting in serious inflationary and balance of payments problems. These weaknesses have recently led to efforts to reorganize and strengthen the economic system through a series of 23 new amendments to the Yueoslav constitution approved by the Federal Assembly in 1971. 1/ To implement the principles elaborated in the amendments a large number of new laws must be orenared and passed by the and of 1972, both at the federal and the republic level. In the interim there is some lack of clarity on the prosnective working of the oronosed economic system. 1.2 The rnnStitutional ampndmintR rpnrpRpnt a further sten in Yucoslavia's progress towards economic and political decentralization and an elaboration of the nrincinlp of self-manaement. The rantthlirQ and ait-onnmon nrovinces now have more economic responsibilities, while the authority of the Federal Government has bon narrved and re-AfIned Mainr arnnnmir (narticularlv fiscal) responsibilities were transferred to the republics and autonomous prvines. atin1 Aldfenae inernal security and fnrian nnliPV aS WPll aS the Fund for Underdeveloped Regions continue to be Federal responsibilities. The Federal Government also retins executve and coordinatino funct1ons r monetary policy; foreign exchange policies; the control of prices of basic commodities and sservices; and certain tax- and expenditure policies. The extent of federal competence in these fields is, however, normally limited by the necessit- to secure agreement of the republics and autonommus provinrcs before new measures can be undertaken by the Federation. 1.3 Since important matters cannot be decided without the approval nF fll rpnihlie-z nnd nrrnvinceQ fiveg3 Tnt-ar-Ranihtlit-n rnmmjttP.q hque hPn established to deal with (a) development policy, (b) foreign trade and foreign currency systems, (c) the- -a*e, syteA() InterYnal moat maotters: ndt (e) Financial matters. Each committee is chaired by a member of the Federal Coernment. The,~re is also a Coordination Commtte consstima of the President of the Federal Government, the presidents of the Governments of the r.n,,h l4c A an utnnamnoi nrawinv a oA f4u members of the Iadra1 Government. There are intricate rules for approval of legislation where there is dIsagrement, amn.h-rpbI Adt allow for the i-nnniity of government while discussion continues. 1/ These amendments also changed the political framework of Yugoslavia. (see Annex on Constitutional Change). - 2 - 1.4 it is too early to say how efficiently and smoothly the system for ensuring inter-republic coordination will work particularly since the first few months of its operation were beset by a major political dispute. Since the system relies on consensus, every republic has, in effect, the power of veto, and at the moment it appears that the process of reaching agreement on policies and solutions is somewhat cumbersome and slow, and there may be a tendency for recourse to ad hoc and temporary measures on difficult issues while consensus is being hammered out. The Yugoslavs are aware of the dif- ficulties, both short-term and long-term, that are implied by the progress of decentralization, but they would rather face these difficulties and search for their solutions than abandon the basic objective of self-management and de- centralized decision-making, towards which the transfer of responsibilities to the republics is only one step. It must also be remembered, in this con- text, that the recent constitutional amendments to a certain extent only for- malize a situation that had gradually emerged. Reconciliation of republic interests and aspirations had already become a major factor influencing federal action. Changes in Enterprise Structure 1.5 The constitutional amendments and proposed implementing legislation also include basic changes affecting enterprises that are likely to have significant effect in the long-run. An enterprise will henceforth have the right to invest funds in another enterprise and claim in return a part of the surplus. This could eventually have far-reaching implications for the mobility of capital, mergers, and the emergence of conglomerates. Joint ventures among domestic enterprises may become more frequent in the future. On the other hand, a sub-unit of an enterprise may invoke the right of self management and constitute a separate organization provided it does not violate contractual obligations. In a further effort to attract foreign firms into joint ventures with Yugoslav firms, the constitution states that the rights of foreign partners cannot be diminished by changes in legislation enacted after a joint venture contract has been finalized. To the extent that foreign firms have been inhibited during the past by uncertainties about their legal status this may help to increase joint ventures. 1.6 It is hoped to offset some of the potentially less desirable conse- quences of decentralization by a system of social "agreements" and "self- management agreements", intended to provide guidelines regarding distribution of net income, to which individual enterprises would be required (or induced) to adhere. 1/ Agreements on such guidelines, if effective, would mark a major modification of the trend towards enterprise autonomy and could provide a valuable tool for influencing development of personal income, aggregate demand and resource mobilization and allocation. 1/ For discussion of proposed incomes policy, see Appendix 1 Volume II and para. 4.5. - 3 - 1.7 The Yugoslavs point out that one of the advantages of the recent changes giving explicit recognition to the views of the republics, is that policy decisions, once made, would reflect an agreement and are therefore more likely to be implemented than in the past. The delays in arriving at policy understandings would, in their view, be more than comnensated by the greater certainty of the eventual outcome. It is also argued that as the republics are now responsible for many facets of development thev can tnka decisive steps more speedily to resolve their own specific problems. II. RECENT ECONOMTC DEVET.OPMPNT Growth and Fluctuations 2.1 Economic growth has been fairly rapid during the past decade, averaging some 4 Dercent per canita npr annum htween 1960 and 1970. However, there have been wide fluctuations in the growth rate, reflecting inability to sustain high rates of growth without runniny inf-n narinive hanen of payments difficulties. Following the recession of 1966 and 1967, which was a2gravated by a derline of Prononmir nct-r4t in unaern Europe, enomic recovery began in 1968 and gained momentum during 1969 when GDP rose by 9.3 narrnt (Table 11- This momentum milA ot howver, be maintained. Ts net import of goods and services increased substantially in 1969. Pressure on the balancn nf naments PnnrintidaA h,41A ... A..4 0on .-A A90a ds - decline in the rate of growth to 5.7 percent, the current account deficit innreasd to A14n million from the 1969 level f $108 -4114on. Balance o payments difficulties continued in 1971, notwithstanding the devaluation in n,2i0ry anmillion is etiat 14t4gethe with GDP grwt of abou 8 percent. about $1,320 million is estimated together with GDP growth of about 8 percent. The Ainn-r t.aa deAlued1,m -4- In Decemb.er 10-71 Table 1: MAJOR ECONOMIC VARIABLES - 1965-1971 (Annual growth rates in percent) 1965 1966 1967 1968 1969 1970 1971- GDP (constant 1966 prices) /a 1.4 5.0 0.9 3.5 9.3 5.7 8.0 Industrial Output (constant 1966 prices) 8.1 4.2 -0.2 6.3 11.3 9.1 11 Agricultural Output (constant 1966 prices) -7.1 15.3 -1.5 -3.7 9.3 -5.1 9 Investment (gross) (constant 1966 prices) -6.5 11.7 -6.4 -1.9 10.3 12.3 8-9 Consumption (constant 1966 prices) 0.1 4.6 5.2 5.4 7.6 9.1 8 Employment (social sector) -1.5 -2.6 -0.7 0.6 3.9 3.9 6 Cost of Living 35.0 22.4 7.3 5.7 7.5 10.0 15 Current Account (million dollars) 73 -35 -82 -106 -108 -340 -365 /a Estimate. Prices 2.2 Strong inflationary pressures have resulted in price increases significantly higher than Yugoslavia's major trading partners. Although price controls cover about half of total sales, the cost of living index increase averaged 15 percent a year during 1965-71 with a slowdown during the recession of 1967 and 1968. Industrial producer prices have been rising by 7 percent per year, retail prices by 13.5 percent, and agricultural producer prices by 13 percent annually during 1965-70. In 1971 prices have risen by about 15 percent reflecting continued excess demand, rapidly rising personal incomes, a shortage in agricultural supplies due to a poor harvest in 1970, and the rise in import prices after the devaluation in January 1971. The authorities are aware that to maintain international competitiveness and prevent further pressure on the exchange rate and the balance of payments, more effective stabilization policies have to be implemented. As a tempo- rary measure to halt inflation, the government introduced a price freeze covering all goods and services in November 1971. These measures will be in effect until agreement on a longer run stabilization program has been reached. External Trade and Payments 2.3 During 1971, commodity imports increased by 13 percent and exports by 8 percent as compare LO an InCrUae UL JJ pCLUCL anU V. yCL.Cu. L=oyC%- tively in 1970. The picture during the first half of the year was particu- larly unfavorable, with imports more than 30 percent above, and exports slightly below, the levels attained during the first half of 1970. This resulted partly from the inability to control the domestic inflationary pressure. The situation was, however, aggravated by a poor harvest in 1970, causing agricultural exports to decline and imports to rise, and by specula- tive build-up stocks of imported goods in anticipation of a more restrictive import policy. Moreover, the tight monetary policy induced enterprises to shift from domestic to imported items because financing was more easily avail- able abroad. Developments during the second half of 1971 were significantly more favorable than during the first, with exports about 16 percent higher and imports about 2 percent lower than the levels or a year earlier. I/ The improvement reflected partly the dying down of speculative imports and the return of agricultural imports to more normal levels. However, the devalua- tion of January 1971 and the restrictive domestic policies, intensified in the second half of the year, also contributed. In the course of the recent international currency realignment, Yugoslavia devalued again on December 22, 1971, by 18.8 percent against gold and by 11.8 percent against the dollar. The favorable export and import trends have thus far continued during 1972. 2.4 Even though the widening trade deficit has been offset by a rapid increase in earnings from invisibles (workers' remittances, tourism and transportation services), the current account deficit has averaged about $330 million during 1970-71. It has been met largely by private capital in- flows on commercial terms. The reserve position has been weak with official reserves being equivalent to about one month's import in the last two years. The recent favorable developments in the balance of payments have been ac- companied, however, by a substantial increase in foreign exchange reserves. Bilateral balances have decreased progressively as a result of a policy of encouraging imports with the bilateral area during the recent balance of pay- ments difficulties. 2.! The large balance of payments gap resulted in substantial external borrowing, mainly of medium-term suppliers' and financial credits. Yugoslavia has had reduced access to official bilateral long-term loans since 1967; new commitments of these loans decreased from $275 million in 1967 to only $3 million in 1970. IBRD loans have been the main source for long-term capital in convertible currency since 1968. (Annex Table 3.11). 2.6 Gross inflows of medium-term commercial credits from the convertible currency area have increased from $250 million in 1967 to some $500 million in 1970, accounting in the latter year for 73 percent of the country's total 1/ Admittedly, imports were running at an abnormally high level and exports were relatively low in the second half off 170 becaus o. Lhe reCLe expectation of devaluation. This expectation materialized in January, 1971. -6- the United States, Germany, Switzerland, Italy, France and the United Kingdom. Unguaranteed credits, iL.e. those not carrying a guarantee of the 1N1ational Bank or the Government have become increasingly important. While in 1967, 40 percent o tne net iuflow oU suples' an financial c eiUs was publicly guaranteed, there was a net outflow of guaranteed capital of $20 miion in 197/. 1 L.L L U ILJ.Vo&V UWLLuW.LLAug on conuecls a" tcerno ala considerably worsened the debt structure and led to a rapid increase in Yugoslavia's debt uervice oblgations.tal u um- anu long-term external debt (excluding undisbursed) rose from $1.3 billion in 1967 to $2.0 billion at the enu OL s1/U. nowever, because UL Le rapdu rise in foreign exchange earnings, the debt service ratio for total guaran- teed and nonguaranteed debt was 15 percent in 195 and about 10 percent in 1971. The service ratio for debt in convertible currencies increased from about 22 percent in 10oo to around 25 percent in 19,.. .1 - 2/ Population and Employment- 2.7 The population growth rate has averaged 1.0 percent per year during the last decade with growth in the less developed Republics being more than twice as fast as in tne aeveloped Republics - 1.u peret nU 0.1 pecenut per year, respectively. The economically active population, which in 1971 accounted for 43 percent of the total population, increased by 5.7 percent during 1961-1971, or less than 0.6 percent per year. 2.8 The employment of the Yugoslav labor force is divided roughly between private agriculture (43 percent), the social sector (47 percent), and migrants abroad (10 percent). The rate of growth of social sector employment, while fluctuating widely from year to year, averaged 2.7 percent per year during the last decade. The difference between growth of total labor supply and social sector employment growth reflects a considerable shift of labor from mostly private agriculture into the social sector. Social sector employment declined during the 1966-67 recession, but increased by nearly 4 percent in each of 1969 and 1970 and an estimated 6 percent in 1971. Industry absorbed about 37 percent of the increase, and construction, transport, communications and trade and catering accounted for about 50 per- cent. 2.9 The employment situation has improved markedly during recent years, due both to rapid employment growth domestically and workers' migration abroad. Yet under-employment in private agriculture has probably remained a problem particularly in the less developed regions. There is little open unemployment. Registered unemployment is high (averaging 6.7 percent in July 1971) but the bulk of it represents people who have registered in the 1/ Basea on Dalance o payments Uta. 2/ See Appendix 2, Vol. HI. -7 - hope of finding a better livelihood than that available in the family work- sharing type of occupations in the rural sector. There is some evidence of a growing regional and occupational imbalance of labor demands and supplies. This results from low labor mobility between less developed labor surplus regions and labor-scarce developed regions and a growing discrepancy between RkillR nppdpd in a fant nhanvin Prnnnmy And Rnnelied by the current education system. 1/ Agriculture- 2.10 Agricultural production increased at an average annual rate of 2.2 percent during 1965-70, though thee wwe y4Aa fliittint4nna frnm yor to year. The overall upward trend in output has derived from increased yielSO. fl5e area unAJC er L creal *as tende A to deln nd thtude nusra crops to increase. Livestock production, particularly beef and pork, has LC A A ut 4.n%....o FL A L* * LLVC UL&.L 0 -1.. 4 .ne.l.a m weather conditions (affecting feed availability), and the market situation. rue bulk1 o'F the agricultural productlon Isintedvlpdrubcs ad Vojvodina in particular has a dominant position in cereals, sugar beet and OfloIwer. eS..sI LLuc DuPL.1has L Doi L L W. ILL I J UL CH ILA U a av n aum V y u of the agricultural labor force accounts for 29 percent of agricultural proutionUI andL 44 percent UA of I t ULhe totalLI~~ marketed. output. (ec AIgpOU sold by individual farmers in local markets). Social sector production has -nteaeaeinC-S-2d -- Z -----A #-. - -1 on LUC VEIALEGUH OL alUUUL U CLEGUH CCL& &O as ULIJ&oscu %L = 510WA rate of about 1 percent in private sector agriculture. The sectors are rather more compleMentary tlan CUmpeLILIVe witn re5pec LU LIne w1ousanLC.u u demand with the notable exception of the production of pig meat and poultry products, in which a sharp competitive situation is likely to arise. aor- intensive cash crops like vegetables and tobacco are almost exclusively produced in the private sector, which also owns 95 percent of the cows and 90 percent of the sheep. The social sector dominates the market production of cereals. About 30 percent of all private farmers cooperate with the social sector in one way or the other, with 15-20 percent having firm contracts. Such arrangements are mainly found in the more developed fer- tile parts of the country. 2.12 There has been a trend towards increased integration among social sector enterprises and their number has declined While the average size increased. At the same time, in the private sector fragmentation increased and average farm size has tended to decrease. However, the proportion of income from non-farm employment is increasing in private agriculture. Since the proportion of non-tarm incomes is higher on small farms it seems that income distribution within the private sector of agriculture is becoming more even. 1/ See Appendix 4, Vol. II. -8- 2.13 Theb avmth ^~f JnAiiatrixil nrntillf-tinn i2e-alairitexti fvnm~ ; 'A pe"rcent- in 1968 to an impressive 9-11 percent during 1969-71, with chemicals, non metall4 m4neals, elen1il nninment and pnoer onin n 4nificantly above average rates. The bulk (over 80 percent) of the increase in production resulted from increaseoutputu "AoV L?^rvav 2. 14 Capita -- --- ---------------------*a #44.-"Afgva~inAaU--^"n --tie and regions. In the investment goods sector particularly, where credit sales are important, the tight- 14n,4A4f-,u 1nat4nha hanflA pnna^4-,.*44ot The Export Credit Fund has, to some extent, provided finance for export of nn4iment A" 44ha A^man-4^ market- knuave Vuaalwman nm- avonve are unable to compete with foreign suppliers on credit terms, and this has led to inchrears imports-. of equipnt wile A---nmt4- p nr...n4- --nh,54 4- 4. .-A---. utilized. 2.15 The trade balance for industrial goods has deteriorated. The share L impULLs in LULa UUmCOL.L#- DUJkO. A A%UDLLULt.L 1VUD, &. AIH 17-;,UJg fell to 19.9 percent in 1968, and rose again to 21.6 percent in 1970. The J. ~ fo of me.s good .in.l n an oA A.n Sf~ o-__1 4- -4 C_.. ularly large. During 1965-1970 the ratio of exports of industrial goods to the value of production has als declned 4Zui I6. -_LL~o1. pL These trends at least partly reflect the excess demand conditions that have characterized the economy in recent years. n.Io A strong drive towaU JULe8LULU11 L JuousLraJL enHLCLpUs through mergers and contractual agreements has continued. Such integrated enterprises are generally confined within republics. inter-repUbliC integration of enterprises is less common. The integration process has undoubtedly led to a strengthening of industry, though economic benefits may not always be as obvious as the financial ones to the participating enterprises. - 2/ Regional Development- 1.17 The designated less developed regions comprising the republics of Bosnia-Hercegovina, Macedonia, Montenegro and the autonomous province of Kosovo, account for 35 percent of the population and only 21 percent of the Gross Material Product (GMP). Total product of the less-developed regions has increased at about the same rate as that of the more developed regions, but their per capita GMP has increased more slowly because of higher population growth, and regional inequalities have widened. 1/ Cn A----A4- C 17^1 TT OCC hJ F nyonUJa Vp vuse L. 4.I DE ApWHU.LA J, VUAe. A. - 9 - 2.18 The less developed regions are characterized by a smaller economically active population, of which a smaller proportion is employed in the modern social sector, and lower productivity per worker combined, paradoxically, with a more capital intensive pattern of industrial development. The lower pro- ductivity may partly reflect skill deficiencies of the labor force, but appears to be largely the result of inefficient resource allocation and poor project selection and execution. The higher capital intensity is partly caused by the resource endowment of these republics - minerals and power - but is also the result of policy biases and sub-optimal resource allocation. 2.19 Regional development policy has emphasized the necessity for growth in the less develoned regions at a faster nace than the national average, financed by transfer of resources through the Federal Fund for the Development of Under-develoned Regions. The less develoned reDublies accounted for about 30 percent of the total fixed investment in the country during 1960-70. Dur- in' the IaRt five years the Fund provided over one fifth of the total invest- ment expenditure on fixed assets in these republies. However, ensuring the effortive ue nf the transferred Federal funds and the transfer of enterprise know-how and capital from the developed regions to the less developed regions has hen neolerted. Inter-reginnal linkaaen for Integrated growth of the na- tional economy and the encouragement of inter-regional migration of labor have an hen inmiffiripntly stressed. III. SHORT-TERM ECONOMIC MANAGEMENT )~ ~ ~ ~~o -iti-- UP..~ ~ ,F 4~4,,ne14-.1, ,.t-a ^f gvyn,h wj4ithmit- rijinninr into serious balance of payments difficulties is a major one in Yugoslavia. Thle rate of growth in the last three years has been rather high but the economy has suffered from significant pressure on the balance of payments. payments was unavoidable in the course of structural change accompanying the ~~Ze pi-.^v-4pnl-pAL cbrnnn II?n~ This is reflected, for example, in the widening deficit in the balance of trade with convertiUle currency countries cumpae wia 4Uh. v 1 I. . The underlying structural shift, however, is greatly exacerbated by a rapidly rising domestic demand combined with cost inflationary elements. 3. h rowt offJLI J cons~umIptLindmn UIIIJL LU.=%. Y=CLL WCLO~~l*~ consequence of the application of the principle of workers' self-management and the Economic Reform of 1965 which produced tLrung pressure for raising personal incomes. The share of personal income payments in the national income increased substantially in recent years, and this increase has led to a steady increase in private consumption. (Table 2). - 10 - 3.3 Investment demand was also high during the period. Investment in fixed assets as a percentage of GNP rose steadily during the upswing although declining slightly in 1970. High fixed investment was offset by a marked change in the rate of accumulation of stocks. After the Economic Reform, investment in stocks declined steadily from 7.5 percent of GNP in 1966 to 1.7 nercent in 1969 risine slightly to 2.5 percent in 1970. 1/ This decline reflects the increasing market orientation of production as decentraliza- tion nroceeded. Tnhlp 2! ACGREGATE DEMAND VARIARTES (Percent of GNP Current Pries) 19)65 1966 1967 1968 1969 1Q7n a. Consumntion AQ.5 67 8 71 0 72 '3 72. (7A43) - Private (51.8) (51.5) (53.9) (54.5) (54.5) (55.5) - Government (17-7) (1 1) (17- 1 (17.8) (17 7) f(1 81 bo Gross Rational Savings 310.5 1~9-7 ?Q_n 97-7 26.8R 25.%7 Investment 30.1 33.0 30.2 28.9 29.1 28.7 W4 eA.,,A -- (VA I 19 RN ~ 19' (9A r"I t)7 Al~ t1A~ 'N - Stocks (7.0) (7.5) (4.0) (2.3) (1.7) (2.5) d. Savings Gap (c - b) -0.4 0.8 0.8 1.2 1.3 3.0 3.4 Investment demand has been bouyant throughout the period. Invest- menL p1Hs are ULtined at L ent eurptise levl ian an environmenL wheL capital is undervalued. Under the old centralized system investment resources were alLUCaLU ULile statte. L Li r l D asLce Ueen Lan UVeL liatly by the banks (see Ch. IV) which provided over 50 percent of the investment resources in LHe 80c1@1 ULLUL tH 1oc. iaHe suLector iulnULRC U7 ""_G1L resources was not, however, accompanied by a growth of financial responsibil- ity. The change to enterprise demand for, and bank allocation of, investment resources did not lead to an enforcement of traditional market criteria. Enterprises making losses continued to operate and expand on the basis of credits, and unpaid bills. Although nominally independent, banks were often forced to acquiesce in uneconomic credit policies either owing to political pressure or pressure from founder members (shareholders) who are usually the major clients. The existence of a legal ceiling on interest rates was a fur-) ther stimulant for investment demand. 1/ The increase in the rate of accumulation stocks during 1970 probably reletinsebuildi- of stocks following t1h. r r- h-cy- ---th 4n 10A0 and some speculative stock-building in anticipation of a devaluation. 3.5 These factors suggest that excess demand in Yugoslavia is not simply an aggregate phenomenon calling for general aemanu deflation. It is a reflection of a more basic problem - the availability of investment funds even to inefficient capital users. General demand aeflation may even De counter productive if it leads the economy into a recession. From the point of view of economic efficiency, the regulation of excess demand has to be accompanied by a redirection of resources towards the more productive firms and sectors. This calls for limiting investment demand or the inerricient units in the economy. Stabilization policy operating through fiscal and monetary measures has to be more efficiently geared to this long-term ob- jective. Fiscal Policy and Demand Management 3.6 The scope for using fiscal policy as a flexible instrument of demand management was limited given the institutional framework that evolved under decentralization. Public current expenditure proved difficult to direct, owing to the highly fragmented system of public revenue and expend- iture flows. Vertical decentralization led to the establishment of independ- ent budgetary authorities at the Federal, republican and communal levels of government. Horizontal decentralization has led to the establishment, at each of these three levels, of independently financed, non-government public bodies (self-managed social funds) responsible for health, education and social insurance. Total public expenditure (including Social Insurance Funds) accounts for about 34 percent of GNP, but control over the various items of expenditure and revenue is dispersed very widely. The reduction in the powers of the Federal government made centralized expenditure control in response to the requirements of macro-economic policy extremely difficult. 3.7 Despite these limitations some attempt has been made to achieve stabilization objectives through expenditure control. Attention has centered on Federal budget expenditure and Federal extra-budgetary funds (investments and investment credits) although the need to incorporate republic and communes and the social funds in overall budget management is being increasingly recognized. 3.8 During 1971 fiscal policy contributed little to stabilization despite the urgent need to prune domestic excess demand if the devaluation was to be successful. This is partly explained by the concern for implement- ing major changes in the fiscal system provided in the recent constitutional amendments. Fiscal instruments for demand management were limited to the imposition of a 10.8 percent ceiling on revenue increases for all budgets and non-budgetary social funds. In fact, revenue ceilings were ill-suited to the economic situation in 1971 because the large current surpluses of 1970 made the ceiling largely irrelevant for current expenditure growth. Final accounts for 1971 are not yet available but preliminary results suggest that the in- enas in rPvPniPq wa ahout 9 nprrpnt for f-hp Federal budget (adiusted for comparability) and about 9 percent for the republics and communes. Never- thalacc riirront PvnPnditirPn intreniad hu Qhnitr 11 nPrrent and 16 na-rrpnt, respectively. As a result the consolidated budgets of the Federal, republic and communal governments show a much smaller aivrnlim~ thqn in 19)70- (Tah~ 1 1 Table 3: Consolidated Budget of Federation, Republics' anda C,o=iunes 'euilCP RUG CEUO Revenue 27,326 33,7 36,646 Current Expenditure 25,138 29,875 34,361 Current Surplus 2,138 3,9104 2.2 /a Estimate. 3.9 Federal investment expenditure was substantially reduced in 1971 follow,in the abolit4nn of the Pederal P-tra-hiidcPtarv at tiv s. In future infra-structure investments will be financed by the republics. The Federal government retains responsibility for the completion of some onning infra- structure projects in the less developed republics and regions, while other -4,0 4axra-m,nnt noiect have been tranqferred to the rpnublis-. In general terms any decline in total public investment appears to have been matched by parallel declines in revenues, GIven thp hiph nronn1.itv to consume out of personal income and the continuously high investment demand ,.O -C enterprises th process does d not contribuste. --M ... ras1 to Hp ri-dsirvi nn of aggregate demand. Prospects for Fiscal Policy 3.10 Following the constitutional amendments, the fiscal responsibilities of the Federal government will be limited to the trdtoa itm of current expenditure (defense and administration) and financial assistance for ex- budgetary role of the Federal government has been abolished. The Federal gOVerlHenL wil lUL egage in Linanciug o. ifrAstructur ju s t o sy5 for the completion of some ongoing projects). Both the Federal Fund for the Development of Underdeveloped regions and the Export Credit and Insurance Fund will continue, but responsibility for the financing of the Funds will be jointly shared by the Federation, republics anU enterprises. 3.11 The financing of Federal budget expenditure wIll be subStantially altered. Current revenues accruing directly to the budget will be limited to customs duties (on which rates have been raisea) ana various rees ana charges. The Federal direct tax on personal incomes has been abolished. The turnover tax is levied on all goods, excluding a specified list, at a rate determined by the Federal government, but the revenues from these taxes will - 13 - accrue to the reDublics. The excess of Federal budget expenditure over revenues will be financed by contributions from the individual republics in the proportion of their share in the social product. 1/ 3.12 These changes were nrimarily designed to further the process of decentralization by reducing the role of the Federal government. Successful demand manaeement will therefore denend crucially upon budgetary control at the level of the republics and controlling investment demand in the social sector. Control over Pxnndittire pnliip.c: of the republics is not made easier under the new system. Provision has been made for coordination on financial maters throtgh an inver-renhlirnn rnmmittee but this calls for agreement amongst all republics. Much will depend upon how the system works in n-rnrti ro it in tho initinl norind it 4s unlikely to hp rnnducive to flex- ible management of public expenditure levels. 3.13 The scope for using tax policy to absorb purchasing power in reference to the use of tax policy to remove "discrepancies between supply a& iILu . UnderL &.1VU &&AW L.Ll F= A~i eral goe nm n -a v - the rate on turnover tax, the revenues from which would accrue to the budgets of LAkELe fU.L re uL~~ bi~D~ lcs.Themaursw.L.L UC -I~LV -if- - -L.- expenditure control at the republic level preventing revenue inflows being aUsULUed Uy highleL gUverLLmenH exAendHurUes .What isneeAeuIu Ao an S I, Mpsit4^n of surcharges, revenue from which is earmarked to frozen accounts in the repuDics. EveH such a sysUem WUUld De largely vunuct ww&ct self-management unless an effective incomes policy is enforced. Without an incomes policy consumption taxes could be offset by higher personal income payments and lower enterprise savings. Monetary Policy 3.14 The importance of monetary policy in Yugoslavia follows from the limitations of fiscal instruments and the need to control iuvestment uemand. However, with respect to the latter, monetary policy has not been very effec- tive. Owing to the provision tnat banks maintain separate balance sheets or short- and long-term assets and liabilities respectively, monetary measures influence directly only the short-term operations ol uus. LuVebnLMLIL credit expansion by commercial banks was, till recently, not subject to di- rect control by the National Bank. 1/ These changes have been accompanied by a once for all transfer to the republics of existing financial assets and liabilities of the Federal government. This includes federal liabilities arising out of past borrowing amounting to about Din. 17.9 billion and federal assets from the General Investment Fund (abolished in 1963) amounting to about Din. 45 billion. - 14 - 3.1 ine railure or monetary policy to control investment aemana, is often blamed upon the commercial banks. Banks are accused of expanding credits at the expense of their own liquidity thus contributing to the in- vestment boom. In fact the malaise is more deep seated as the scarcity of financial resources is not an operative constraint upon effective demand in an environment where enterprises can allow unpaid bills to pile up. This is the source of the "illiquidity" which dominates discussion of short-term policy in Yugoslavia. Illiquidity is not merely a reflection of a structural imbalance reflecting a shortage of working capital - rather it is the mecha- nism which permits financial irresponsibility. The growth of unpaid inter- enterprise debts is clearly a major source or inflationary finance. Short- term stabilization in the future will depend upon correcting this basic cause of disequilibrium. 3.16 The recent constitutional changes were accompanied by several proposals for legal and financial reform. These proposals are being considered in the National Assembly and are included in the draft Social Plan as ingredients of government policy. They cover - provisions to prevent increases in personal income payments for enterprises making losses; - provisions to strengthen implementation of banKruptcy laws strengthening the hands of creditor enterprises in settlement of claims; - provisions to prevent enterprises making losses from engaging in further investments. These proposals are to be combined with immediate measures to meet the liquidity crisis of enterprises. This will involve determination of net indebtedness of each enterprise and compulsory liquidation of debts due and outstanding. Enterprises unable to clear their debts will be forced to issue bonds redeemable in three years at 8 percent interest. Throughout the period that these bonds remain outstanding debtor enterprises will be forced to observe limits on personal income payments and investment. 3.17 The actual impact of these measures will depend upon strictness in application. They are, however, crucial to the long-term economic efficiency of the economy. The weakness in financial discipline leads not only to excess demand but also prevents structural adjustments to favor the efficient sectors of the economy. Reform of the Banking_System 3.18 A revised law on banks aims at establishing a banking system appropriate for a decentralized framework. It provides for a unified mone- tary policv achieved through a regionally decentralized monetary authority, increased regulatory powers over the commercial banks and greater independence of banks from political influences. In the past the National Banks' monetary - 15 - nnI irv (hnt-b rrpriit- tpt n nnraftnvnI P-rolt priorit-4ac) was Aefter-4ned largely by the Federal Executive Council. Under the new system separate autonomous regions and the governors of these banks constitute the Board of e_- - - - ---..- Naioa Bak Me J - -; -&- - annLual credit expansion will be apportioned between the Federal National Bank and the sectoral priorities in allocating credit. Commercial bank relations with the ental mnetry athoItyWill1 h-enceforth be conductedA by_ thereub sa ~~ ~ ~. JLsu Iuaw s LuAUL L WL HC A L.LI UV U UULLL CLtU Ll LLUM LePUD- lican National Banks. 3.19 The decentralization of the monetary authority has been accom- measures have been taken and more fundamental reforms may be forthcoming. Stricter penalties will be imposed on commercial banks in the event of the inability of a bank to meet its financial obligations, including limitation of its right to expand credits for a specific period of time. Banks will also be affected by measures designed to force creditors to bear the burden of risk and to force debtors to assume responsID111ty for their obligations. 3.20 Te system of separate long- and short-term balance sheets has been abolished. The unification of balance sheets will leave the management of the asset portfolio to the commercial banks subject to liquidity criteria (reserve and other ratios) specified by the Federal National Bank. The existing ceiling on interest rate has also been abolished. In future the interest rate structure will be determined as part of overall monetary policy by the National Bank and the banking system. 3.21 The prospects for monetary policy depend upon the implementation of the various financial reforms. This will ensure that decentralized decision- making reflects the scarcity or financial resources. The decentralization of the National Bank may lead to difficulties in coordinating sector priorities but these are not crucial to stabilization as long as overall credit expansion is not excessive. The key to a more effective monetary policy is the pre- vention of recurring liquidity crises financed by an unplanned expansion in trade credit. Closing this credit gap in financing effective demand will increase the importance or bank credit in demand management. Improvements in the banking system, making it responsive to monetary regulation, will provide the government with a more effective instrument of demand management in the future. These improvements will also influence the efficiency of resource allocation. - 16 - IV. KEbUUKCE MUDLILATIUN AUN ALLUCAT1UN - Resource Mobilization 4.1 The process of decentralization has led to a substantial decline in the rate of saving and a change in the pattern of saving. After the Eco- nomic Reform of 1965 gross national savings as a percentage of GNP declined from about 32 percent in 1966 to about 26 percent in 1970. The decline was due mainly to rising personal consumption - an explicit objective of the Reform. While the savings rate is still high, the trend decline of savings would have to be arrested if a high rate of growth is to be maintained as projected by the draft plan. 4.2 Changes in the levels and the pattern of aggregate savings reflect the distributional changes affecting the relative position of the Federal and republican governments and of enterprises. These changes are important in determining the trends in aggregate savings in the future and the institu- tional framework that should be developed to mobilize sufficient domestic resources. Table 4: STRUCTURE OF SAVINGS (percentage of total savings) 1960-1964 Average 1966 1967 1968 1969 1970 State 36.1 21.1 23.3 23.7 19.9 15.1 Social Sector 52.3 62.5 57.0 60.6 55.3 54.6 Households 9.4 25.3 26.0 26.2 30.7 27.6 Unclassified /a 2.2 -8.9 -6.3 -10.5 -5.9 2.8 Total 100 100 100 100 100 100 /a Includes errors. 4.3 The pattern of savings shows two broad trends (Table 4). (i) With the progressive erosion of the role of the state the nhare of total savin2s 2enerated by the state (budgetarv and extra-budgetary operations of Federal, republican and rnmmiunal nvernmenta) declined from an averaea of 36 nArrAnt 1/ See Appendix 1, Vol. II. - 17 - in the period 1960-64 to 21 percent in 9oo ana to s5 percent in 1970. This decline occurred at both Federal and republic levels, although the former was much more rapid. (ii) The share of both the social sector and households in total savings increased markedly immediately after the Reforms although in later years the share of the social sector declined slightly while the share of households continued to increase. The decline in the share of the social sec- tor was entirely due to the decline in the share of economic enterprises in total savings reflecting pressure in self- managed enterprises to distribute more of the surplus in personal incomes. The share of household savings in total savings has increased threefold. 4.4 The reduction in the role of the state in generating savings is likely to continue. The recent constitutional amendments have effectively ended the savings-generating role of the Federal government by the abandon- ment of Federal extra-budgetary funds. Except for the completion of certain ongoing projects, the investment financing role of the Federal government has been transferred to the republics which will be responsible for all infrastructure investment in the future. This does not necessarily imply a corresponding increase in public savings at the republic level, as the aim at present is to rely upon alternative financing methods, e.g. participa- tion by interested economic enterprises and compulsory loans from enterprises. These factors suggest that public savings at the republic level may not be sufficient to compensate for the decline at the Federal level. Thus govern- ment policy on aggregate savings will have to concentrate on enterprise and household savings. 4.5 The tendency for the share of enterprise savings to decline re- flects the pressure to raise personal income payments. The constitutional amendments of 1971 provide for self-managed social agreements which would influence the income distribution policy of enterprises. The general prin- ciples of the incomes policy will be established for each republic by agree- ment between the republican government, the chamber of economy and the trade unions. The details of the agreement will be worked out by each branch to take account of peculiarities affecting it. Failure to determine a detailed incomes policy at the branch level will be countered by the provision of Ruidelines for the branch from the higher level. Alternative methods of enforcing the agreements are being proposed, e.g. progressive taxation on personal income payments above the guidelines. The incomes policv is still being developed and it is too early to say whether it will be successful in stabilizing or increasing the rate of enterprise accumulation. In practice, incomes policies will be much easier to implement in an environment of rapid and stable growth in which personal incomes can grow at a fast rate without generating inflationary pressure. - 18 - 4.6 Continuinv efforts to mobilize Drivate savinqs are also rpniiiral to stabilize the aggregate savings rate. The main institutional channel for this is the banking system through time and savinqs denosits- which have increased rapidly. The recent abolition of the legal ceiling on in- terast rates will increase the attrantion of such dPnnritq_ 4.7 The r.vernmt-nt has- recently started a q-tiy nfE nnnitml mrkreatsc in Yugoslavia to examine ways of increasing the supply of savings and imprnvino the allnntiin of fiind.- The findings nf the study wuld he of help in devising measures for improved resource mobilization and allocation. Resource Allocation and Economic Efficiency 4.8 In recent years the role of the government in mobilizing and 11 ^nat4n rn zwnr^nzI hea I n-valI hxykoan tlean et-ya-r Ar%7 tlh hainero C-te financing accounted for about 56 percent of total investment resources in the socIal sector during 1%0-6 but AnlqiinaA tn 15 rnari* in 1970 rh share of investment banks increased from an average of 10 percent in 1960-64 to 59 narant in 1970. The arnuth in invetmeni hankling wn nnt hrsevar, accompanied by a corresponding improvement in allocative efficiency. Indirect inflinna ^f -hga ema an the hannkno aato-cm the fallure to adopt improved methods and economic criteria for project selection, the existence of a --414nft a _" -,an- ,saa a 4 . 4v%=ff4^4p%t- ..aa ^if ,~r t.~ -1~ pressure of founder-members (shareholders) on bank policies and the weakness -F4 fnanc4i A14-n4lin 4ra ct-she m-4n- A-f4^4 4=la 4-,ranrnn nnn through the banking system. As pointed out, steps are being taken to cor- rect th,ese we--ne-s, n4 - ,s- 4- h -11- av meca .-nisam. 'llna., a.,.*14e., mentation of laws relating to financial responsibility of enterprises and on long-term improvement in resource allocation. 4.9 The main channel for transferring resources to the underdeveloped areas .nhe L p asL Was tHE XCULMC. XULuU .L%JL UMUXL%UVCAMUL 5U AULMe u Fund will continue to exist as a legal body but each republic will henceforth De airectly respuniule LUL .LUnLL.LJ..LMLiLm . Vn LLu $ qUUL1 V. 1 .74 pt!LCtLL Ul. Liue! Social Product. This represents an increase over the previous target of 1.85 percent - the difference being earmarked entirely for Kosovo as an addition to its previous share. These resources are now to be provided on long-term credit basis (15 years at 4 percent interest) to the Fund and not as grants as previously. 1/ Provision has been made for the period of the Five-year Plan for the financing of these contributions to the Fund and at present each republic's quota is met by compulsory loans from economic enterprises. The system of Federal budgetary grants for current expenditure for social pur- poses in the less-developed republics, the other major source of funds in 1/ Tnder the old system the allocation to the Fund was in the nature of a grant and the funds were provided to designated banks which utilized the rniroep by extending Investment creditn throneh the banking system. These funds (assets arising out of past loans) have been transferred to the republics. - 19 - the .past, is to continue but it is likely that under the new system of joint republican financing of Federal budget expenditure such grants will come in for continuous scrutiny. 4.10 The need to improve the allocation of resources is greatest in the less developed regions. The problems of inter-sectoral and inter-enterprise allocation are reflected in the low productivity of investment both in terms of output labor ratios and capital output ratios. Attempts to increase the flow of available resources without an improvement in absorptive capacity will be largely counter-productive. This problem will be highlighted in Kosovo where the large increase in funds allocated for economic and social purposes will need to be matched by a major expansion and improvement of the economic management system. The policy of subsidizing interest costs on investment resources channelled to enterprises throueh the Fund should he re-examined. The present concessional terms at which the Fund obtains resources could be passed on to the governments of less developed regions. buit need not be reflected in concessional terms to the final user. The introduction of higher costs for borrowed capital in a teneral environment of innrPaing financial discipline will help to improve efficiency of investment alloca- tion. The low prices for certain basic products (e.g. nowpr) nrnrlinced in the developing regions would, however, have to be raised if the enterprises pay a more realistic price for canital. V. EXTERNAL TRADE AND FINANCE 5.1 The balatnce of paympnt-i c.itiain ic - mniiv- ^nnaf--!4_f on. the continuation of rapid economic growth in Yugoslavia. Rapid growth of exports has been rnomnanied hv even more ranid rewth om 4mp s an w4A-enn current account deficits. The growth of imports reflects both the excess demand that- ha. e-hnrqt--Prigar fj. theecnom as wel as1 eo I structural- - characteristics and policy objectives. The main objective of recent foreign economic nolicv has been to integrate the Vuncina connomn more cloly with the world economy. The policy has led to an increasingly liberalized foreign exchanve and trade RvRtPm. to a oyewinc imnarnces of ee-alftrade and to a shift in trade from the bilateral to the convertible currency area. 5.2 Exports are, in principle, free of control, except those under bi- lateral payments agreements_ Lwhirh ala Q7h49bJ- -1 appova7b the Federal Secretariat for Foreign Trade, to regulate the size of bilateral credit bal- ancesq. P.wnnrf linonlQaQ t-n hlm~ 1~f-i1 cou- lesy- my be made C.,.,A9- ona on4-.a undertaking to import from those countries. Imports are formally more re- .qt-ri rtPd t-hrniicyl t-h=. mimr,j t 1-0,mr h - 4-, licenses~. are automatically granted if foreign exchange is available. The share of "lib- praticll l i beraliz- ed impo.LrtL ctgrs- radZfrom U8 Lc' - pr e LW 1 practically liberalized import categories - increased from 68 percent in 1967 to about 80 pecn in 1971 - 20- External Trade 5.3 Commodity Exports - Earnings from commodity exports increased by 9 percent per year during 1965-1970 and accounted for around 60 percent of total foreign exchange earnings in 1970. Rapid export growth was stimulated by the high level of economic activity in the industrialized Euro- pean countries which provided buoyant markets for Yugoslav products. But without the improvements in product quality and marketing achieved in recent years Yugoslav enterprises would not have been able to take advantage of these export opportunities. Close cooperation with foreign firms providing assist- ance in and facilities for marketing and technical know-how also became of increasing importance. Yugoslavia's share in its major markets expanded during 1965 to 1970. While total imports into industrial countries in Western Europe rose at a rate of 12 percent annually, their imports from Yugoslavia increased by 16.4 percent. Yugoslav exports did particularly well in the United Kingdom, France and Switzerland (Annex Table 3.8). 5.4 Yugoslavia's export structure is, in comparison with most develop- ing countries, highly diversified with exports of manufactures accounting for more than two-thirds, and machinery and transport equipment alone for more than 20 percent of the value of total exports in 1970. Exports of raw materials and semi-processed goods (included under manufactures) have been growing most rapidly and their share of total exports has increased at the expense of the share of investment goods and consumer goods. Agricultural exports were handicapped by the massive increase in protective duties of the EEC in 1968 and a poor harvest in 1970. The trade agreement with the EEC signed in March 1970, under which Yugoslavia enjoys preferential treatment for a number of agricultural products, partic-ularly high quality beef, is likely to encourage agriculture exports to these markets in the future. The livestock sector accounts for about 50 percent of agricultural exports, followed by fruits and vegetables (about 12 percent in 1970). 5.5 The bulk of Yugoslavia's exports of manufactured products to con- vertible currency countries consists of certain categories of textiles, leather and wood products (mostly furniture) and construction materials. The rela- tively high share of exports of more sophisticated manufactures, such as machinery and transport equipment and metal manufactures sold under bilateral agreements (around 70 percent in 1970), seems to indicate that Yugoslavia still has difficulties in establishing a truly competitive position in the world market in this field. Product design, quality and prices are in many instances shortcomines. In some cases, Yugoslav enternrises orefer to sell under bilateral agreements which provide higher profits and where competi- tion is less. Other problems facing exporters are bottlenecks in domp.qtirnliv supplied inputs resulting in delay of deliveries and under-utilization of ca- Dacitv. and insufficient reffnancine for medium- and lnnc-trm ePonrt cred1its Fb nnrt Prnmtinn nd alnrie a ytsfirentersc fnolirl etn,v- bates and special rediscount facilities at subsidized interest for export - 21 - of their foreign exchange earnings (retention quota). This proportion in- creases with the share of total production exported. Recently proposed changes in the foreign trade and exchange system would raise retention quotas and abolish the link with the proportion of total production exported. 5.7 Export credit insurance and refinancing of medium- and long-term export credits for exports of capital goods are provided by commercial banks, in particular by the Yugoslav Bank for Foreign Trade, and through the export Credit and Insurance Fund. Total export credit refinancing disbursed by the Fund increased from $13 million in 1968 to $85 million in 1970. Out of total export credits for the sale of canital aoodR of 8256 million between 1968 and 1970, the Fund refinanced $150 million or almost 60 percent of total credits extended. In rplation to exnorta of the hPnvier ratpaoripq of machinery and transport equipment, which are usually sold on medium- and long-term credits, the amount of refInancina IR relativplv small: it aeounted for only 21 ner- cent between 1968 and 1970. The Fund, which used to be financed from an extra-budgetary fund of the Federation. will heneforth he npt tin a a self-managed association of enterprises and banks with the participation of republics and the Federation which are sanperced rn nrovide the hulk of the financing. 5.8 Imports. Since the 1965 Economic Reform, Yugoslavia has been ex- npripnrina a atrnna demand fnr imnnrra even in vpara of recAnoinn. Rpt-ep"n 1965 and 1970 imports grew at an annual rate of 14 percent or almost three timn as fast As MP, Raw mtirinla Anti 4niatment annda whiph tnother accounted for 84 percent of total imports in 1970, experienced the fastest growth.. The mane~ahindA~ IhIpotdmn r the pre1val-ance.. of excess demand pressures in the economy, the large raw material require- men ts associated with the rapid increase in industrial production, the in- stitutional bias in favor of capital intensive investments in industry, and t-ui. policy vU4 ctiAvesof estoavlisuing a modern iuteruationally compe"tiAve -.l Vj..t U U tL.VA. I %.La U&I. S&L 5A AU LI LC . a L.Lt IL.L. .tiLjC L.L..V export sector and an increasingly liberalized foreign exchange and trade sysem.Imort o mater.i J _..----A.. -1- 'M -- - --C'_ Dys em lLUL LD ULA u L AA .LI DGUL 4UL.UULVCU LUL 4ULLUUSL. & c jJL_CLCL UL LIM material inputs used in industrial production in 1968 and this share has incr.ase si once.~. 'Iage r atiot of 41--redu eqtjuipmt goodsU 6SYnLL 4l fl%A-*- t.-Ad* mining to total investment in equipment was 55 percent in 1970. The re- strictive economic meaource advote 4n- 1710 anu 191e to control- Snf 1-Av4n- pressures and the two devaluations in 1971 can be expected to have some re- sDtraining iulPauLt UH iMpOrtose _j LA. nv..LL ±IL L Ut! Liprt L .1J _ L L LUL 1 Je? A.LVDAUCW * ULCALgUL CAURy CHEHiHgn JLUMI .LHVILUACD.~ LAVE UCCHL increasing faster than commodity exports and their share in total exports of 5LUUD dIHU WCAV.LLCD AHLUMI.ECU ALUI A.I CELCHL .LL 17U.J LU GLUUGHU VU C.JLLCHL LU 1970. They consist mainly of three categories, workers' remittances, trans- portationUL reeit anU LUim frLam, tourLim. WULKers remittances UV WL. lion in 1971) have shown the most remarkable growth over recent years with lf% 4 ez --- 4n-7- _& e7 - an average annual iurease bctween 19o anu i/ 1 of or percent. Mney ac- counted for 28 percent of convertible foreign exchange earnings in 1971. - 22 1 - However, they also introduce a highly volatile factor in the balance of activity in Western Europe. They have also tended to lead to an increase J n iM Uo r 7 t V Lf C 0 n S L b . t L L W- UJ e. S te - rrar ey t, s . ~ ~ AAo. tween 1965 and 1971, and amounted to $330 million in 1971. About 90 percent OI LOUrlSi receipts Lr I L Un VCrLiL e -L - c- UU u aL u u- creasing travel by Yugoslavs abroad, the net inflow of foreign exchange from tourism declined in I9IU ana stagnateu at one 17V level in 19i. Grsu income from transportation has been growing at 14 percent annually over the last five years and amounted to $425 million in i,I. incume frum trans- portation is, however, less important as a foreign exchange earner since it consists largely (75 percent) of non-convertible currencies. 5.11 Balance on Current Account. The trade deficit averaged $ouu mil- lion during 1961-65. It has increased since to $1.2 billion in 1970 and an estimated $1.4 billion in 1971. The bulk of this deficit was covered by net earnings from services and workers' remittances which rose from about $200 million in 1965 to $800 million in 1970 and an estimated $1.1 billion in 1971. With transfers covering another $70 million the deficit on current account is expected to amount to around $320 million in 1971. As current transactions with bilateral countries tend to be balanced, the overall bal- ance on current account is largely identical with that incurred with the convertible currency area (Annex Tables 3.1 to 3.3). Capital Flows 5.12 Total net inflow of medium- and long-term foreign capital averaged about $205 million during 1965-70 of which three fourths were medium-term suppliers' and financial credits (Table 5). The share of long-term Government loans, accounting for 41 percent of the net inflow during the first half of the 1960's, decreased to 13 percent in the second half. Repayments on such loans exceeded new inflows in 1968 and 1970. IBRD loans have been the main source of long-term loan capital since 1968. Credits from the non-convertible currency area have also become more important, providing in 1970 about 12 percent of the total net inflow of medium- and long-term capital. To some extent this inflow is offset by Yugoslavia export credits, which averaged about $50 million during 1965-70. The remaining deficit was covered by short-term credits and reserve move- ments. 5.13 The shift from long-term official credits to medium-term suppliers' and financial credits has led to a rapid increase in Yugoslavia's debt serv- ice oblizations. The Yugolsav authorities are well aware of this trend and are following an active debt management policy aimed at regulating and im- nravina the terms of capital inflow. Following the standby agreement with the International Monetary Fund in July 1971 Yugoslavia agreed to limits on evxernal meitm-term and short-term borrowine. which it has adhered to. The - 23 - outstanding short-term credits at the end of 1971 were lower than a year earlier and the growth in 1971 of medium-term debt guaranteed by the busi- ness banks was significantly lower than in 1970. To improve the structure of the outstanding debt Yugoslavia has also approached a number of countries to reschedule or refinance existing debts and to extend long-term credits. By end 1971, the United States agreed to reschedule $58.5 million debt pay- ments falling due in 1971 and 1972. Italy, Germany and France have agreed to extend financial credits of $75 million, $93 million and $18 million re- spectively. The terms of these new loans and of the rescheduling are slight- ly more favorable than the average terms of the outstanding external debt during 1972 to 1974. The Yugoslav authorities hope to conclude similar agree- ments with other major creditors in the near future. Table 5: NET INFLOW OF MEDIUM- AND LONG-TERM CAPITAL 1965-1971 (million US $) 1965 1966 1967 1968 1969 1970 1971* Foreign Capital Gross Inflow 328 382 351 390 517 636 715 Repayments 165 178 173 225 264 367 420 Net Inflow 163 204 178 165 253 269 295 of which: Official Capital 90 133 18 11 52 -9 Eastern Europe -19 7 14 10 53 33 U.S.A. 60 115 10 4 -19 -45 Other Bilateral 71 107 -6 -15 -23 -69 Other 11 -8 -16 -19 -3 -24 International 38 19 10 16 21 27 26 Of which World Bank 35 19 11 16 22 27 27 Private Capital-- 73 71 160 154 201 278 Yugoslav Export Credits Gross Outflow .. .. 85 104 137 97 116 Repayments .. .. 46 58 45 47 44 Net -44 -39 -39 -46 -92 -50 -72 Total Canital Inflow. net 119 165 139 119 161 219 223 * Preliminary estimate. /1 Mostly financial and suppliers' credit. 5.14 Since a continuous net capital inflow will be needed in the fore- seeable futUre LU m±aULlI a.gn growth rates, the Government has tried tap- ping other sources of long-term finance. It is seriously studying the possibilities both of private rlace.ents and public issues in the Western capItLl art.ThGovenunent has also tried to enorg pr ivate foreign investment through special legislation in 1967. However, the response of foreign investors has so far been disappointing. By Novemuer 1971, only 38 joint venture agreements had been signed between local and foreign enter- prises cummitting the latter to iuvest arouna $9 million. Among the main reasons for the reluctance of foreign private firms to invest on a larger scale in Yuguslavia naS Deen the restrictive regulation of such matters as majority share of capital, management control and profit transfer. There is also a lack of understanding of the economic and social conditions in Yugoslavia on the part of private foreign firms which makes them apprehensive to place risk capital in a socialist country. In the light of this develop- ment, the conditions for foreign partners in joint ventures with Yugoslav enterprises have recently been further improved. The Constitution now includes a provision which protects foreign partners against any unfavorable change in regulations regarding joint ventures after conclusion of contract; the regulation by which the foreign partner had to re-invest 20 percent of his profits has been abolished; the portion of foreign exchange available for transfer of profits has been increased to 33 percent of the enter- prise's total foreign exchange earnings. With increasing communication and familiarity with conditions and the recent change in regulations, the Yugoslav authorities expect the flow of private foreign capital to increase. VI. DEVELOPMENT PROSPECTS Short-Term Prospects 6.1 The growth of GDP is expected to slow down to about 5 percent in 1972 (compared to 8 percent in 1971) reflecting a slower growth particularly of investment expenditures. The reduction of excess domestic aggregate de- mand, together with the devaluation of the dinar and imposition of restric- tions on import of luxury consumer goods, is anticipated to result in a favorable development of foreign trade, and exports are projected to increase by 12-14 percent and imports by 6 percent, in 1972. Consequently the balance of payments deficit is likely to be significantly lower than the level of 1970 and 1971. The rate of growth of prices ie projected to slowdown signi- ficantly below the rates prevailing in 1970 and 1971, though the official target of restricting price increase to 5 percent appears optimistic. The statement on Government economic policy for 1972 aims to achieve economic stability by restraining inflationary pressures and reducing the balance of payments deficits. The reduction of inflationary pressure is to be attained by a continuation of the restrictive monetary policy, limits on the growth of public expenditure, restrictions on investment spending, and a slowdown of the growth of personal incomes. If the income policy framework being developed in the republics does not succeed measures to restrict personal income growth are to be undertaken by the Federal Government. Developments during the - 25 - fist mons o 11, ,hnave been, on wte whole, favorable ana inaicare tnat the official projections of developments in 1972 are, on the whole, not un- reasonaue. Furtermore, the average rate of growth in the United States and the OECD countries in 1972 is expected to be significantly above 1971 and this should nave favorable consequences for Yugoslavia. The slowdown of economic growth in Germany appears to be ending and is not likely to have unfavorable effects on workers remittances and tourism receipts in Yugoslavia. Medium-Term Prospects 0.1 nThe prospects for continued economic growth in the medium-term are generally good. The endowment of natural and human resources, together with the pragmatic and dynamic approach to the solution of economic difficulties, the readiness to consider and undertake institutional changes, and the general commitment to an open market-oriented economy, give ground for a favorable assessment of future economic performance. 6.3 The major factors likely to influence growth are (a) the efficiency of the new system of decision-making based on consensus among the republics in formulating, adopting and implementing general economic policy and in effectively coordinating regional investment programs; (b) success in con- trolling inflationary pressures, implying the development of an environment of financial responsibility in which monetary policy can be more effective, an incomes policy to restrict the growth of personal incomes, and the devel- opment of flexible fiscal policies in the republics; (c) improvement in the tight balance of payments situation, depending partly on the attainment of domestic stability as well as on the rate of growth in Western European coun- tries, particularly Italy and Germany, which absorb more than a quarter of Yugoslav exports and are a major source of tourism earnings and workers' remittances; (d) improvement in resource allocation especially in the less- developed regions. The 1971-75 Social Plan 6.4 The 1971-75 Social Plan which has yet to be approved by the Re- publics and the Federation aims at a growth of social product of 7.5 percent per year with gross investments growing at the same rate as social product and private consumption and government expenditure somewhat slower - 7 percent and 6.5 percent per year, respectively. This implies, perhaps optimistically, a slower growth of private consumption than would be expected on the basis of trends that have prevailed since the Economic Reform. Prices are projected to rise at an average rate of 5 percent. Social sector employment is anticipated to grow at 3 percent per year. Exports of goods and services are projected to increase at 11-13 percent per year and imports at 9-11 ner- cent per year. The current account deficit would consequently decline to $250 million by 1975. The plan stresses the importance of achievine domegtc stabilization, improving resource allocation and increasing efficiency in attaining these targets. It also stresses that an increase in the prodtiction - 26 - of power, the expansion of the transmission network and the further develop- M_t f the t-0 --nr- *.,cysten -w. pre-co.n-dit-ins for. attainin te lia 1.n .- 1. _, - - V-. ~. LL±I1~L L aEgeLS. A major drawback of the draft plan is the absence of a plan for investment financinag. A.J rruc JA -IoCUVns are CAAA U-orluDL1c given past Lren's, 6.5iThe Plan projections a ae fily optimistic C tens implying a continuation of the recent high growth rate with reduction in iaLaonary pressure anu .iprovemient vLu in Le relative growtD 0 COf - sumption and investment, and in the balance of payments. The projected expot growtL- is not unrealistic but the projecLeC import growth implies a significant slowdown in the rate of increase of imports, and a sharp de- cine in tne elasticity of imports with reference to production. 0.0 ine errect of recent devaluation on exports is likely to be con- centrated on agricultural products, raw materials and semi-processed goods, where price considerations are more important than in the field of manufac- tures. Here product quality, design and marketing are significant factors, and it is in these areas where Yugoslavia's position needs strengthening. If progress is made in these fields, commodity exports to the West could probably expand at an annual rate of 12 percent over the next five years. Exports to bilateral countries are expected to grow at 8 percent annually. Total commodity exports would then increase by around 11 percent per year during 1972-76. 6.7 The medium-term prospects for an expansion of foreign exchange earnings from invisibles are even more favorable. Since tourist expenditures are relatively price elastic, the devaluations are likely to encourage tour- ist inflow and to discourage Yugoslavs from travelling abroad. In the short- run, however, capacity limitations of tourist facilities in Yugoslavia dur- ing the peak season and a possible slowdown of economic activity in Germany might temporarily reduce the growth of tourism receipts. Workers' remit- tances also depend heavily on the economic expansion in Western Europe. Over the period 1972 to 1976, rising real incomes as well as an increase in the number of workers abroad, and possibly a slight increase in the portion of income remitted home, could lead to a growth of workers' remittances of about 14-16 percent annually. Altogether, gross earnings of convertible foreign exchange could thus be projected to rise at an average rate of about 13-14 percent a year between 1972 and 1976, while total earnings including exports to the bilateral area could rise at around 12 percent. 6.8 Yugoslavia's policy of modernizing production techniques and in- creasing enterprise competitiveness, and its dependence on certain raw ma- terial imports, renders import demand relatively price inelastic. The im- port elasticity with reference to GDP has averaged 2.6 during 1966-70 and unless it is reduced through stabilization and improved allocation of re- sources rapid economic growth is not likely to be maintained. 6.9 Assuming that total exchange earnings will grow at about 12 percent per year (about 3 percentage points below the 1965-71 trend and in line with the Draft Plan for 1971-75), that import growth can be constrained to about - 27 - quired net inflow of capital would decrease from $275 million in 1971 to zero L 17 / u e 1 ra s eUL tCemL CALLLUMCV LVatLL_V LU L LL tLIV dSUILCU growth of imports. If imports grow at 11 percent per year, the required net capital imuport in1190 would W aUmoIfunt to abut ?30 mllon External vebt Management 6.10 Taking into account the net capital requirements and the rapiLy increasing repayment obligations, Yugoslavia will need to borrow very large gross amounts during the next few years. Total debt service amounted to about $500 million in 1970 and increased to an estimated $575 million in 1971, of which more than 90 percent was in convertible currencies. 1/ Allowing for borrowing in Western capital markets and inflows of official capital, and taking account of expected debt service obligations, there would still remain a large gap, reaching about $1.0 billion in 1976, to be filled mostly by commercial credits. Yugoslavia has had little difficulty in the past in obtaining the needed amounts of suppliers' credits. Assuming that future borrowing is on present average terms (6 percent interest and 6-year maturity) debt service in 1976 would amount to between $0.8-$1.0 bil- lion, 95 percent of it in convertible currency. The debt service ratio on total external debt would be around 16-18 percent, while the ratio on exter- nal debt in convertible currencies would stabilize around 25-27 percent during 1971-76. This outlook implies a large but manageable growth in ex- ternal debt. 6.11 The illustrative projections above show clearly that the debt situation will remain serious and that the Government has to continue to give attention to external debt management. The rapid increase in the external debt burden mentioned earlier was partly the result of liberal regulations concerning foreign commercial borrowing. The Government has placed increasing emphasis on regulating the growth and structure of exter- nal borrowing. The National Bank instituted, in July 1971, new reporting procedures which will help to regulate the growth of external debt. Enter- prises and banks must notify the National Bank of the republic before borrow- ing abroad and then register with it the debt incurred. The National Bank may refuse to register a loan undertaken on unfavorable terms or in excess of the estimated borrowing limit of the unit concerned. Banks are authorized to guarantee only those external loans that have been registered. Under the regulations governing external borrowing till April 1972, the enterprises and banks were free to borrow abroad only within limits determined by their estimated capacity to repay in foreign exchange. In general, the borrowing limits of enterprises depended on the exchange available to them in the form of retention quotas and depreciation allowances in foreign exchange. Banks were allowed to incur or guarantee external loans to a limit dependent on their "foreign exchange credit-fund", consisting of their purchases of reten- tion quotas from enterprises and earnings from their assets denominated in If Dalance~ o. pamet dta. - 28 - foreign currencies. In addition, a macro-economic limit on aggregate exter- nal borrowing was determined each year, jointly by the Federal Government and the National Bank of Yugoslavia, according to the estimated requirements for servicing existing debt and covering the foreign exchange gap. The limit was set at $900 million in 1971 and kept unchanged for 1972. Of this, $100 million was retained for foreign loans to be authorized by the Government, and the rest allocated among the authorized banks according to their foreign ex- change credit fund. To discourage unnecessary recourse to external credit dinar deposits of 10 percent and 20 percent respectively were imposed in 1971, on medium- and long-term loans and financial credits which are to be repaid from retention quotas. Bilateral negotiations with donor countries to secure longer term credits are also being continued. 6.12 On April 28, 1972 new regulations have been enacted for regulating external borrowing. The new regulations replace the system of limits on borrowing set for enterprises and banks on the basis of their estimated ca- Dacity to repay in foreign exchange with one of variable dinar deposits which would make external loans, particularly with relatively short-term maturity, costly and less attractive. The dinar deposits are non-interest bearing, and have to be deposited with the National Bank before an external loan can be registered. The deposits are not repaid until the external loan has been fully repaid. In addition, the banks and enterprises taking an external loan have to surrender their rights to retention quota equivalent to the amount of dinars deposited. The dinar deposits vary from 40 percent for financial cred- its with a maturity of 2 years and less, to 20 percent for those with a matu- rity above 5 years. Dinar deposits varying from 20 percent to 1 percent, in- versely with the maturity of the loan incurred, are required for credits for imports of capital goods. 1/ Dinar deposits of 50 percent are required for credits for the imnort of raw materials and intermediate products. The sys- tem of ceilings on the amount of bank guarantees for external borrowing by enternrises has ben replaced by a dinar denosit by the guaranteeing bank of 5 percent of the amount of the guarantee. The aggregate amount of external hnrrmwina under the new qvstem. is to be regulated by chanLinp the nercentase of dinar deposit requirements. Loans from international financial organiza- tinnrn ng-rtnin nther kinlc nf external horrowing (e.g. financial credits in joint ventures) are not subject to the dinar deposit requirements. The effectiveness of the new -ramiInt-innc nn Pvt,rnal borrowino can bi ej-PAe nlyv with time. However, they indicate that a serious effort is being made to prevent the A F#-4^ n nf t a avtarnn1ap det cit-intnn, ndr t-n imp-rmy' it to the extent possible. 1/ In less-developed republics the percentage of these deposits varies from 10 percent to 1 percent. ANNEX: CONSTITUTIONAL CHANGES Introduction 1. Since 1945 Yugoslavia has experimented with a number of different economic systems moving progressively from the centrally planned economy of the late 1940's to a decentralized economic system relying on workers! self- management and an extension of the market. The twenty-three amendments to the Constitution of 1963 passed in July 1971 constitute a major step in One progress towards decentralization. 2. Major changes resulting from the constitutional amendments have included the granting of increased authority to the republics, a reduction and a redefining of the authority of the Federation, and the designing of mechanisms to maintain the unity of the Yugoslav market. Some major economic responsibilities of the Federation have been transferred to the republics and autonomous provinces, which now have to find new investment funds and repay old Federal debts. To permit the Federal Government to take action on behalf of Yugoslavia and to maintain the unity of the market, a new system has been developed, relying on the consensus of the governments of republics and autonomous provinces. When no consensus is achieved and when it is neces- sary to take quick action, the constitutional amendments permit the temporary enactment of laws by the Federal Assembly, subject to later agreement by all republics and autonomous provinces. Responsibilities of the Federation 3. The responsibilities of the Federation have been defined and in addition to national defence, internal security and foreign policy include the regulation of the monetary, credit and banking system; the regulation of the system of foreign trade and exchange; the control of prices of basic commodities and services; the regulation of the Fund for Underdeveloped Re- gions, and other measures to maintain the unity of the Yugoslav market. 4. The unity of the Yugoslav market is to be maintained through a number of mechanisms, including the preparation of the Yugoslav social plan by the Federation in consultation with the republics and autonomous provinces. The plan will provide not only indicative targets, but will also lay ddwn guidelines and a framework to provide the economic policies by which ne targets can be met. The control of monetary and foreign exchange policies throughout Yugoslavia will be achieved through a new Board of Governors of the National Banks which will consist of the Governor of the Yugoslav Na- tional Bank and the Governors of the National Banks of republics and auton- omous provinces. A common import policy will be maintained and it has been accepted in the Constitution that to prevent discrimination and monopoly, no republic may give to its own enterprises economic advantages more favor- able than available to enterprises from other republics. To obviate market disturbances, Federal agencies may propose to socio-political organizations changes in contributions or taxes and also suggest that such organizations refrain from spending part of their revenue. Federal agencies may also in- itiate consideration of the formulation of social contracts and take other action to try to eliminate disturbances in the market. Freedom of movement of labor throughout Yugoslavia would be maintained. 1/ Form of the Federation -- 5. The authority of the Federation rests in the consensus of the republics. It is guided by a Presidency consisting at present of 23 members, but on the retirement of President Tito, of 22 members. The Presidency will then consist of three members from each republic and two members from each autonomous province. Members are nominated by their respective republics and approved by the Federal Assembly for a term of five years. On President Tito's retirement and the reduction of the Presidency to 22 members, a presi- dent and vice-president will be appointed from the members to act for a period of one year by rotation, the President and Vice-President being from different republics. The Presidency appoints judges and ambassadors, com- mands the armed forces and is responsible for carrying on the government of the country when crises occur. 6. The executive branch of the Federation is the Federal Executive Council (FEC) which consists of 28 members chosen from among the republics for a term of four years on the same representative basis as the Presidency. The President of the FEC is chosen by the presidency and approved by the Federal Assembly, and he chooses his colleagues from lists of candidates sub- mitted by each republic. The members of the Federal Executive Council also have to be approved by the Federal Assembly. 7. The Federal Assembly remains a five chamber body. All legislation has to be approved by the Chamber of Nationalities and by one of the other four chambers depending on its competency. For economic matters, the Eco- nomic Chamber has to give its approval. 8. Since legislation cannot be submitted to the Federal Assembly without the anroval of all republics, five Inter-Republic Committees have been established where discussions can take place and consensus achieved. Tho fHue Tnter-RPniihliran Committees deal with (a) development policv. (b) foreign trade and foreign currency systems, (c) the monetary system, (d) internal market matters, (e) financial matters. Eanh Inter-Renublican Com- mittees is chaired by a member of the Federal Executive Council and the members ar the --nro-riate sere-farpq nd other persons from the rpniiblic- e.g. for the Committee on financial matters, the Secretaries for Finance. There is also a- Coordination Commilttee consistIng of the PrPecidPnf nf HP Federal Executive Council, the Presidents of the Executive Councils of the republics, one other member from each -rex ijh4r 1-aa-Tor withl fi-te meambe rs! of the Federal Executive Council. There are intricate rules to allow procedural -/ of l .1 l,en t 4a A4a 1,n .a n -rn,, l nnd toh 1/ See Chart. allow for the continuity of government if such disagreements result in the res 4gnati on of the Federal ExeCUI4ve C'uc1I.1-r ar a' ~1s ,aye nm4 councils and similar bodies of an advisory nature. Amendments Affecting Enterprises 9. The amendments include some basic changes in the system of eco- nouic self-rmanagemient. lhe right of sel-management has been strengthened and a sub-unit of an enterprise is allowed to break away from the parent oudy and constitute a separate organization provided it does not give up contractual obligations. An enterprise now also has the right to invest in anouter enterprise and receive part or tne surplus. in Joint ventures, the rights of foreigners cannot be diminished by changes in the law made after a contract has been finalized. 1U. A change has been made in the number of workers who can be employed by a person in the private (as against the socialized) sector. Independent persons can now employ more than the present limit or five persons. The number is to be set by each republic individually. Where workers participate in a venture by pooling their labor and instruments of labor to form a coope- rative or similar venture, there is no limit on the number of workers. Social Planning 11. One amendment deals with social plans and the policies for their implementation. It states that social plans will be based on social con- tracts and on agreements made by republics regarding economic policy of com- mon concern. The Federal plan cannot be adopted without agreement from all republics on size and characteristics. There must be consensus, although the plan itself may be very different in some respects from the intentions of individual republics. Social Contracts 12. The constitutional amendments refer to social contracts and state that organizations by means of social contracts will achieve adjustment and regulation of socio-economic and other relations of common concern. Social contracts are to be agreed by each branch of the economy in each republic and the Constitution states that they shall be binding on organizations and communities which have entered into them. However, in principle "social con- tracts" are regarded as a self-management substitute for state direction and coordination. Such contracts e.g. are being used as a device for developing incomes policy guidelines. Enterprises are not forced to enter into a social agreement, but the constitution states that socio-political communities may proclaim a social contract generally binding on the failure of enterprises to arrive at an agreement. Fund for Accelerating the Development of Underdeveloped Republics 13. The Federation is also responsible for regulating the Fund for the Development of Underdeveloped Regions. A new Board of Management has been created with a President and 15 members: the president and six members appointed by the Federal Assembly and one member by each republic. The Board is responsible to the Federal Assembly. Implementing Legislation 14. To implement the principles elaborated in the amendments, many new laws have been passed or are being drafted. About 30 new laws have been submitted to the Federal Assembly by the end of 1971 and 80 more laws are scheduled for 1972. At the same time a vast amount of legislative change is being undertaken in the republics and .autonomous provinces. Consequently, the economic and political system resulting from the constitutional amend- ments has not yet been fully created. Political Structure of the Federation THE PRESIDENT OF THE SFRY OMMNDER-IN-CHIEF FEDERAL ASSEMBLY PRESIDENCY OF E COUNCLS OF THE FRETHEENCY; -Chamber of FRY-ForeinAffairs Nationalities -peoples Defense -Chqmhr of St.it. qPenritv Economy -Economic -nhnmbpr nf Ana Welfare and Health Chamber -Pultral and Educational Chamber dOORDINl'ATINGfI~RLE ECJII...... 8lTR-R?.EPUJBLICAN CONMITTEES' COORINAINGEDERAL EXECUTIVEi MM F PATTTP TT -h-irnl nnV+ P-I1 I -Foreign Trade and -Monetary System -Finance Matters FEDERAL FEDERA FEDERAL - IFEDERAL - c' Tl'(fl T?" An TA me. Tl TD V rrVDA~'~ A MiTT TOrr A 'M A TWTM 'T1TTmPT;Q -Foreign Tradacial IA f - Lp c -ai tsre hurL.L±~ U. E LCILLI-L1r -Finances -Reserves of _civil -Prices -For eign Bodatn oprto -Finances-'era"na Defense Authority Scitic, Affairs Measures and -Agriuty Preiou MetalsInUL It;U11.Uj -Foreign gCoogy -Labor and -yr-eerlg WelfareStnad -Judicial ana Ptet General Admin.-egtan Aflalrs Maue n -AgriculturePrcosMtl -Transporo -Geolog  STATISTICAL ANNEX TABLE OF CONTENTS Table Noo T4 POPTTT.ATTON AND F.MPTOYMENT 1.1 Area and Population 1.2 Structure and Growth of Population and Labor Force by RegiOns, 1561-1O80 1.3 Growth of Economically Active Population by Republic and 1.4 Employment in the Social Sector, 1965-1970 1.5 Sector Shares of Output'~ and Emlyet 195-170~ 1.6 External Migration by Country of Destination, 1964-1970 1*7 Unemploymuun anu Unfiled Vacancis 1.8 Distribution of Unemployment by Republics, 1960-1971 9.7 Uian Unempluyment ates 1768 an 70 1.10 Sectoral Composition of Employment Growth in Developed and Les DeVLUpe RepuULcs, 17U=7 !, rAmTINALY AA AWVTTmc 2.1 industrial Origin of Gross Domestic Product, 1965-1970 2.2 Gross Material Product, 1965-1970 2.3 Resources and Uses, 1960-1970 (at constant 1966 prices) 2.4 Resources and Uses, 1965-1970 (at current prices) 2.5 Net Average Personal incomes in the Socialized Sector by Industry, 1965-1970 III. BALANCE OF PAYNENTS 3.1 Balance of Payments, 1965-1971 3.2 Balance of Payments with Convertible Area, 19o-17t 3.3 Balance of Payments with Bilateral Area, 1967-1971 3.4 Exports, by Commodity Group, 1965-1970 3.5 Imports, by Commodity Group 3.6 Exports by Areas and Countries of Destination, 1965-1970 3.7 Imports by Areas and Countries of Origin, 1965-1970 3.8 Growth of Total imports and imports from Yugoslavia in Main Foreign Markets 3.9 Share of Major Exporwitems to Developed Countries in the Convertible Currency Area, 1961-1970 3.10 Receipts and Payments for Services, 1965-1971 3.11 Medium and Long Term Capital Flows, 1965-1971 3.12 Foreign Exchange Reserves, 1165-1971 IV. EXTERNAL DEBT 4.1 External Public and Private Debt Outstanding as of December 31, 1970 4.2 Estimated Future Service Payments on External Debt Outstanding as of December 31, 1970 -2- Table No. V. PUBLIC FINANCE 5.1 Revenues & Expenditures of the Federal Budget 5.2 Consolidated Budgets of Republics and Communes 5.3 Receipts & Expenditures of Federal Extrabudgetary Funds 5.4 Receipts of Social Insurance Funds VI. MONEY AND BANKING 6.1 Consolidated Balance Sheet of Short-Term Operations of all Banks, 1966-1970 6.2 Balance Sheet of Long-Tenn Operations of all Banks, 1966-1970 VII. AGRICULTURE 7.1 Land Tenure in 1960, 1969 and 1970 7.2 Production of Major Agricultural Crops 7.3 Number of Livestock and Livestock Production 7.4 Income of Peasant Households 7.5 Area Sown with Major Crops 7.6 Regional Pattern of Land Use - Average 1960-1969 7.7 Indicators of Productivity and Technical Efficiency in Sectors 7.8 Structure of Agricultural Exports by Countries in 1970 7.9 ObJectives for the Develonment of Production of Mqior Agricultural Goods until 1975 7.10 Planned Production. (bnsumntion and Trade Rurnliu in 197r VIII. TNDUSTRY 8.1 Growth rates of TndistriA] Ontnit 8.2 Major Industrial Indicators, 1965-1970 8.4 Structure of Industry, 1969 8.6 Industrial Financial Ratios A87 Tnemani+ A pan4+n Tv+- -4+- 1040 8.8 Characteristics of Industrial Investment by Republic IX. MISCELLANEDUS A. Regional Tables 9.1 Selected Regional Indicators 9.2 Labor Force and workng Popuation 9.3 Distribution of Economically Active Population by Sectors Y.4 rersons Eployed According to Level of Professional Education 9.5 Growth of Gross Material Product by Republics, 1960-1970 9.o Net Material Product by Sectors -3- TabLe NO 9.7 Gross Rixed iaveatent by Setor 9.8 Structure of Industry: Social Product 1961 and 1969 9.9 incremental Capital Output aTios by Repulics B. Uter McSU"LLAAUe-u RlaUeB 9.10 Selected Price Indicess 966-y1971 9.11 Nights spent by Foreign Touristeby Country Origin, 1967-1971  Symbols used in Statistical Tables: ( ) Mission estimate in whole or in part. - Nil or negligible. Not available. Not available separately but included in total. x Less than half the smallest unit shown. * Incomplete. n.a. Not applicable.  Table 1.1: AREA AND POPULATION Rate of Population Populationä. Birth Rate Natural Growth Area (thousands) Density (per thousand) Increase (%) Rate (sq. lan.) 1971 (per sq. km) 1965 1970 1970 1.961-71 Serbia 88,361 8,h37 94.9 18.8 17.4 08 1.0 of which Vojvodina (2,o506) 1,950 90.5 15.5 12.6 0.2 0.5 Kosovo (10,887) 1,244 112.1 4o.5 36.o 2.7 2.6 Croatia 56,538 4,423 78.0 16.6 13.9 0.4 0.6 Bosnia and Hercegovina 51,129 3,743 72. 29.0 20.9 1.h 1.4 Slovenia 20,251 1,725 84.8 18.5 16.4 0.6 0.8 Macedonia 25,713 1,6147 63.4 28.1 23.3 1.5 1.6 ontenegro 13,812 530 38.0 24.7 19.8 1.3 1-2 Less Developed Republics 101,5141 7,,'164 70.5 30.4 24.0 1.6 1.6 Developed 1epublics 154,263 13, 341 86.4 16.6 .4.4 0.5 0.7 Total - Yugoslavia 126 21.0 17.8 0.9 1.0 a/ Provisional Population Census results for March 1971 Source: Federal Institute for Statistics Table 1.2: STRUCTURE AND GROWTH OF POPULATION AND LABOR FORCE 1BY REGIONS, 1961-80 Growth Rates 1961 1971 1980 1961-71 1971-80 Yugoslavia Total Population 185L9 2C5C5 22L33 1.C C.9 Total Labor Force 83LC 9R16 96L6 C.6 0.9 Act:ivity Rate (1) b5.C 3.0 3.C -C.5 - Non Fan Employment (2) 3589 316 552b 1.9 2.5 Migrants Abroad 2C 57b ACC - 3.L Agriculture (2) 0731 3926 3322 -1.6 -1.b Share of' Labor Force in Agriculture 56.7 .-5 3b.t -2.6 -2.6 Developed Regions Total Population l2b3C 133bC l1j3CC C.7 C.7 Total Labor Force 6CC3 6323 6778 C.5 C.7 Activity Rate 8.3 b7.A 7.b -0.2 - Non Farm Employment (2) 27CC 3191 3890 1.7 2.0 Migrants Abroad 2C 378 L73 - 2.3 Agriculture (2) 3283 275b 2b15 -1.8 -1.2 Share of Labor Force in Agriculture 5h.7 L3.6 35.6 -2.3.7 less Developed Regions Total Population 6119 7166 8311 1.6 1.5 Total Labor. Fbrce 2337 2b93 2892 C.7 1.5 Activity Rate 38.2 3L.8 3b .8 -C.9 - Non Farm Employment (2) 888 1128 1516 2.Jj 3.C Migrants Abroad - 196 327 - 5.3 Agriculture (2) 1b9 1169 10b9 -2.2 -1.1 Share of Labor Force in Agriculture 62.C L6.9 36.3 -2.8 -2.6 Notes: 1T Labor Force t Total Pc:pulation (2) Including Social and Private Sector Source: Provisional Results of 3% Sample in 1971 Census. Table 1.1: GROWTH OF ECONOMICALLY ACTIVE PoPULATION BY REPUBLIC AMD ACTIVITY, 1961-1971 Percentage Change 1961-1971 Total Economically Agriculture, Active a/ Industry Forestry Trade, Population, 1971- Total and and Transport Other (000) Mini: Fshing and Catering Activities A B A 13 Bosnia and Hercegovina 1,370 1,249 10.8 -2.7 37.5 -16.7 43.0 -1.2 Montenegro 172 166 6.2 2.5 75.0 -15.9 90.9 -8.5 Croatia 1, 978 1,786 1.2 -8.1 31.2 -26.3 41.6 -12.1 Macedonia 621 574 12.1 3.8 81.5 -15.9 64.3 7.6 Slovenia 815 774 6.1 1.2 41.5 -31.6 44.4 -5.3 Serbia 3,859 3,693 6.7 2.2 4.2 -12.1 55.9 8.3 of which: Serbia Proper 2,708 2,609 9.9 -5.6 47.3 -7.4 58.8 10.8 Vojvodina 821 775 0.6 -4.9 34.5 -21.2 45.6 -3.7 Kosovo 330 309 -1.5 -6.7 60.9 -27.1 77.8 25.8 Less Developed Republics 2,493 2,301 6.7 -1.4 51.0 -18.2 54.3 .4.0 Developed Republics 6,323 5,960 5.5 -0.5 38.9 -17.1 47.3 -1.6 Yugoslavia 8,916 8,242 5.7 -1.0 41.6 -17.3 48.6 - a/ In Column A teMPorary workers abroad are incLuded in the economically active population. In Column B they are excluded. Sources: Statistical Yearbook 1969 Statistical Bulletin No. 700 (1971 Census Results based on a 3% sample) November 1971 Table 1.L: EMPLOYMENT IN THE SOCIAL SECTOR, 1965-1970 (annual averages - thousands) 965 266 1267 120 .1.6 1970 1.nl Manufacturing and mining 1,377 1,358 1,352 1,39 1,399 1,,454 1,528 Agriculture and fishiLng 313 293 274 253 246 242 260 Forestry 87 77 69 66 68 67 70 Construction 331 309 306 316 332 347 374 Transport and commiuncations 251 246 249 255 260 269 283 Trade and catering 348 349 362 374 402 433 478 Handicraft 215 200 195 196 209 213 223 Housing and public utilities 68 67 70 75 79 88 96 Culture and social welfare 410 423 b.28 4.0 458 477 499 Social and government services 183 169 161 163 169 175 184 T ota]. _8j.66 VIli 622_6 a/ June 19TL Source: Federal Institute for Statistics Table 1.5: SECTOR SARES OF OUTrPUr AND EMPLOYMENT, 153-70 Total Ariculture Industry Construction Services 1953: (Per Capita Income = $276)* Output 1CC.C 37.9 32.2 8.3 21.6 Employment ICC.C 66.7 8.C 2.6 2-2.7 1961: (Per Capita Income = $18)* Output 10C .C 2b.9 b3.9 7.2 2b.C Ehployment ICC.C 56.9 13.6 3.8 25.7 1971: (Per Capita Income - $625)* output ICC.C 18.59 b9.7 7.2 2h.2 Bnployment 1CC.C bb. 1.8.3 1.6 32.6 * In 1966 prices at factor cost. Soic: Statisticki Godisnjak. Table 1 .6: EXTERNAL MIGRATION BY COUNTRY OF DESTINATION, 1964-1970a/ Migrants Leaing GermnZ France AustriaY Switzerland Other Total Germaaing Gross Outflows 1964 17,459 3,947 5,342 2,038 142 29,228 22373 1965 30,983 6,656 14,554 1,843 1, E56 55, 892 26,507 1966 50,869 10,035 26,182 1,907 3,3314 92,327 53,903 1967 15,379 9,671 16,816 1,990 3,338 47,196 25,755 1968 76,782 7,953 16,390 3,172 3,065 107,362 13,094 1969 192,232 1,270 10,165 2,083 4,352 220,082 43,671 1970 218, 124 9,58/ 9,579-/ 3,594 5,659 2146, 80L 197 1-/ ** ** ** ** ..9, (121,9000) ..0 Stock of Yugoslav Workers Abroa-dS!v.=9 DO- thousand' 425 70 65 22 265 8J97 a/ Data for 1971 consistent with those of earlier years are not yet available. b( Official channel only. c/ First 10 ionths. d/ First 9 months. e/ Estimated by comparing stock increments with gross inflows. These workers do not necessarily return to Yugoslavia. / Mission estimate. Sources: Institute of Geography,, Zagreb Federal Employment Office Tale 1.: UELOYMET AID UFILLED VACåNCIES Total Unemploy- DuratIon of UnemploMent/ ApplyIng Urban Unfilled Vacancies Registered ment for fIrst cf Unamp)oy- As % o£ % Une Rate 1 month 1-2 yr. . /obc Womer,' Unskilled mrent.' Total Unemplomn nskillei (thousand) -tho u) 1960 184.6 5.9 23-1 5.5 1.9 31.4 53.0 84.9 •• 59.1 32.0 73.8 1965 266.9 6.8 16.7 8.1 4.3 35.8 46.8 81-3 .. 53.3 •• 70.7 1966 265.3 6.9 16.3 10.2 4.9 32.9 45.6 77.6 ·· 43.7 16.5 65.7 1967 291.5 7.6 14.4 9.9 5.2 31.5 43-9. 72.7 .. 33.5 11.5 64.8 1968 326.8 8.3 14-4 9.6 5.4 35-5 43.5 71.0 •• 35.5 10.9 62.0 1969 315.6 7.8 13-3 9.8 7.1 46.0 45.3 72.9 ·· 43.2 13.7 61.8 1970 289.7 7.0 13.3 10.0 7.9 53-0 45.5 71.0 33.0 46.3 16.0 60.6 1971 264.0 6.2 ... ••• ••• 47.5 73.8 36.o 54.. 20.5·· a/ Year-end levels. b/ Registered unemploymønt as a percentage of social sector employment plus registered unemployment.. 9/ As a percentage of total uneployed. / Includes some semi-sklled labor. ef January-July 1971. Source: Federal Statistical Office Table 1.8 : DISTRIBUTION OF UNILOMENT BY RFPUBLICS, 1960-71 Bosnia- Croatia 4acedonia Montenegro Slovenia Serbia Serbia Vojvodina Kosovo Less Developed Yugoslavia Hercegovina Total Proper Dev el oped Republics Reublics Percentage (Year End) Unemployment Levelsa/ 1960 .0 4.7 12.1 6.1 1.9 6.7 6.5 4.5 13.9 5.9 1965 5.1 6.3 16.6 6.3 2.5 7.4 7.4 0.3 21.0 6.' 1963 7.6 6.4 19.1 9.1 3.6 9.å 9.0 7.6 21.4 3.3 1969 6.6 5.4 13.7 8.0 3.2 9.3 6.7 6.3 22.0 7.3 1970 5.3 4.3 13.4 6.5 2.8 8.5 3.2 5.9 20.3 7.0 1971b 4.7 3.5 16.2 å.4 2ý4 7.8 7.5 5.6 17.b 6.2 -epublic Unemployment as Percentage of Total Unemployment 1960 9ý4 25.1 1a.3 2.1 1.5 46.6 25.3 9.1 9.6 35.0 64.6 100.0 1971 10.1 13.6 20. 1.5 5.2 49.2 3:1.6 9.b 3.2 00.2 59.3 103.0 a/ Pbsolute number unepcloyed as )ercentage of labor force erployed in the social sector plus the unemployed. b Pugust 1971. 7curce: StRtistical Yearbook of the SFI, of Yugoslavia 1971 and Indeks, October 1971. Table 1.9: URBAN UNMWYENT1/ RATES 1968 AND 1970 196c 197C Bosnia-Hercegovina: Sarajevo 3.0 Banja Luka 6.8 1.9 Mostar 5.3 5.7 TuzIa 8.2 7.5 Monte ngro: Niksi c 12.5 8.C Titograd 16.5 8.3 Croatia: Rijeka 5.5 .1 Split 8.3 7.C Zagreb 3.9 2.5 Mac ed cnia: Skopje 11.8 13.C Bi tola 26.5 22.0 Slovenia: Ljubljana 3.C 1.9 Maribor b .6 2.7 Serbia Proper: Belgrade 6. . Vojvodina: Novisad 7.2 5.3 Subatica 77 Kosovo: Pristina 7.C 7.1 1/ Registered worlkseekers as a percentage of ernployed labour force in each town. Source: Statistieki Gcdisnjak. Table 1.10: SECTORAL COMPOSITION OF EMPLOYMENT GROWTH IN DEVELOPED AND LESS DEVELOPED REPUBLICS 1970-1971' Less 'ugoslavia Developed Republ ics Developed Republics Absolute Percent Absolute Percent Absolute Percent -Oxxt (O .. .hoot. Total 181.8 h.7 122.3 4*3 59.5 6.2 Industry 73.* 5.9 47.7 [.3 25.7 7.2 Agriculture 3.0 0.9 -0.3 -0.1 3.3 3*h Construction 9.5 2.7 4.0 1.6 5.5 5.6 Services 95.9 5.7 71.0 5.6 24.9 6.1 of which: Transport and Communications 10.9 4.0 8.2 3*9 2.7 4.5 Trade and Catering 38.9 8.6 30.0 8.4 8.9 9.5 Arts and Crafts 7.1 3.3 4.9 2.9 2.2 4.7 Housing 5.8 6.4 4.2 6.3 1.6 6.6 Non-Economic Activities 33.2 5.1 23.7 5.1 9.5 5.2 a/ July 1970 - July 1971. Source: Indeks, October 1971. Table 2.1: INDUSTRIAL ORIGIN OF GROSS D01ESTIC PRDUCT, 1965-1970 (millions of dinars) At current factor cost 196ý5 1966 .1967 1968 1969191 Agriculture, forestry and fishing 18,151 24,715 24,677 22,952 26,175 28,633 Manufacturing and mining 22, 944 30,598 32,696 36,432 39, 852 46,420 Electricity, gas and water 2,075 2,681 3,113 3,381 3,956 5,047 Construction 7,580 9,752 11,463 13,269 15,485 20,048 Transportation and connunication 5,904 6,949 7,531 8,060 9,390 11,698 Wholesale and retail trade 7, 003 8, 978 lo,364 12,318 14, 7'32 19,091 Banking, Insurance and real estate IL,466 1,589 1,779 1,969 2,191 2,438 Ownership of drellings 648 730 823 1,030 1,254 1,368 Public administration and defense 1,239 4,958 5,488 6,180 6,866 7,628 iscellaneous services 7,848 9,576 10,782 12,924 15,508 18,144 Total GDP at factor cost 7,858 100,526 108, 716 118,515 135 9 At constant 1966 prices Agriculture, forestry and fishing 21,43L 24,TL5 24, 338 23,437 25,617 24, 305 Manufacturing and mining 29,495 30,598 30,688 32,467 35,715 39,275 Electricity, gas and water 2,547 2,681 3,005 3,308 3,678 4,116 Construction 9,820 9,752 10,269 10,813 11,786 12:,869 Transportation and cowunication. 6,636 6,949 7,178 7,781 8,6,37 9,413 Wholesale and retai. trade 8, 413 8, 978 9,175 9,863 11,037 12,153 Banking, insurance and real estate 1,668 1,589 1,478 1,529 1,563 1,611 Ownership of dwreliings 721 730 738 756 775 793 Public É.dministration and defense 5,370 4,958 4,720 4,780 4,981 5,171 Miscellaneous services 9,615 9,576 9,842 10,206 10,933 n,544 Total GDP at factor cost ,716 1(0,5?6 1L,O4,3940 7L22 121,252 Source: Mission estimates based on information supplied by the Federal Institute for Statistics. The official Yugoslav national accounts are presented in the form of Gross Material Social Product as sho%,n in Table 2.2. Table 2.2: GROSS MATERIAL PRODUCTI 1965-1970 (millions of current dinars) 1Li1.967 _ Manufacturing and mining 30,544 33,236 35, 49 39,816 45,I52 5, 24L Agriculture and fishing 21,010 27,261 26,181 2J1,425 28, 892 32,007 Forestry 1,292 1,37 1,334 1ZL 1,569 2,062 Construction 5,686 6,974 8,314 9,426 10,692 13,843 Trnsport and coiunicationa 6, :383 7, 84L 8,I6 9,570 10,551 13,643 Trade and catering 10,318 1,978 17,569 20,289 23,925 31,004 Housing and public utilities 506 699 811 937 1,063 1,239 Arts, crafts and others 3,775 4,693 5,,413 6,089 6,999 8,537 Undistributed by economic activities - - - 2,649 - Total ILk .29042- 103, M RiAM IUal2 1IL.A a/ The Gross Material Product measures the volume of output of goods and services, but excludes certain services indluded in the concept of Gross National Product. These are public administration and defense, services of education, health and welfare, insurance, scientific, cultural and professional organizations. The difference between GM3P and GNP is approximately 12 to 14 percent. b/ Preliminary data. Source: Federal Institute for Statistics Table 2.3: RESOURCES AND USES, 1965-1970 (at constant 1966 prices - millions of dinars) 21966 1968 1965 1970 Total Resources 101,542 108,472 109,953 113,,459 122,842 135,176 Total Cons )tionW 69,750 72,969 76,739 80,865 86,979 94,885 Privater 51,755 55,362 58,681 61,987 67,308 74,034 General Government 17,995 17,607 18,058 18,878 19,671 20, 8-1 Total Gross Investment 31,792 35,503 33,214 32,594 35,863 140,291 Gross fixed investment 26,339 27,A16 28,322 29,912 33,116 36,427 Change in stocks 5,J453 8,087 4,882 2,682 2,747 3,864 Net exports of goods and non-factor services 964 -810 -1,321 -1,079 12 -5,332 Exports of goods and non-factor services 18,867 21,155 22,357 24,027 28,191 29,638 Imports of goods and non-factor services 17,903 21,965 23,678 25,106 28,179 34,970 GDP at marketgrices 07 1 612. 1228 22 a/ Calculated as residual. Source: Massion estiMtes based on information supplied by the Federal Institute for Statistics Table 2.h: RESOURCES AND USES, 1965-1970 (at current prices - millions of dinars) -9166 1967 1968 1269 1970 Total Resources 83,397 108, 472 119, 424 131,033 151, 884 186,018 Total consxpitione/ 58,180 72,969 83, 764 93,630 108,229 134,147 Private 43,3140 55,362 63,657 70,630 81,729 100,133 General government 14,840 17,607 20,107 23,000 26,500 34,014 Total gross investment 25,217 35,503 35,660 37,403 43,655 51,871 Gross fixed investment 20,527 27, 416 30,940 34, 481 ho,518 47,2244 Change in stocks 4,690 8,087 4,720 2, 922 3,137 4,627 Net exports of goods and non-factor services 551 -81o -1,668 -2,005 -3,363 -9,600 Exports of goods and non-factor services 18,871 21,155 22,184 23,186 26,525 31,063 Inports of goods and non-factor services 18,320 21,965 23, 852 25j,191 29,, 888 40,663 GDP at market prices 83,948 107,662 117,756 129,028 148,521 176,418 Net factor income from abroad -263 -75 188 525 1,438 4,125 GNP at iriarket prices 83,685 107,587 117, 994 129,553 149, 959 180,543 Net indirect taxes 6,090 7,136 9,040 10,513 13,112 15,903 GNP at factor cost 77,595 100,451 108,904 119,040 136,847 164, 64o Gross National Saving 25,505 34,618 34,180 35,923 41,730 46,396 a/ calculated as residlual. Source: Mission estimates based on information supplied by the Federal Institute for Statistics. Table 2.5: NET AVEA'3E PERSONAL INCOYES IN THE SOCIALIZED SECTOR BY IND]STRY, 1965-1970 (Dinars per month) 1965 1966 1967 1968 1969 1970 Manufacturing and ining 501 686 755 630 959 1,120 Agriculture 399 587 684 715 822 962 Construction hl 632 745 822 926 1,127 Transportation and Communication 556 761 836 934 1,068 1,277 Trade and Catering 518 724 821 904 1,o54 1,250 Arts and Crafts 450 624 725 796 910 1,077 Cultural and Social Activities 589 769 896 976 1,109 1, 324 Government Services 607 835 995 1,087 1,250 1,473 Social Sector Average 5o1 693 787 862 990 1,173 Index of Average Nominal Income (1970 = 100) 42 58 66 73 84 100 Source: Indeks  Table 3.1: BALANCE OF PAYNTS., 1965-1971 (millions of dollars) L26 1966 1967 1968 1969 1970 1971* A. Current Account Balance - -82 -lo6 -108 -3D -32k I. Trade Balance -196 -3 -@ - 2 -660 -i19 1 439 1. Exports 1,092 1,220 1,253 1,2 1, 1, , ' 2. Imports -1,288 -1,575 -1,708 -1,797 -2,135 -2,87 3,253 II. Services net 192 261 4l 88 5o7 793 1,05 3. Tourism & foreign travel, net 73 7_ 98 136 1ME 177 4. Transportation, net 118 140 140 144 163 201 244 5. Workers' remittances 32 64 89 122 206 44o 630 6. Investment income (net) -53 -70 -67 -77 -88 -110 -135 7. Other services, net 32 6 81 63 58 116 111 III. Transfers,net 77 L9 12 L8 i 61 70 B. Capital Account 28 68 147 186 241 168 IV. Medium and long-term Capital 119 611 161 219 203 67 Medium and long-term loans& net Wi 206 178 _2 8.1 Inflowa' gross 228 279 334 390 517 636 610 8.2 Repayments -165 -178 -173 -219 -239 -.335 -420 8.3 Agriculture imports loans, net 100 103 17 -6 -25 -32 75 9. Exports credits extended, net -44 -39 -39 -46 -92 -50 -72 V. Short-term Capita.net including errors and omissions) -91 -97 8 -56 25 C. Balance (A + B) 101 6 - 78 -99 -156 D. Reserve movements_ = increase -101 - -3 -78 99 156 10. Use of SDRsif -17 -22 C/ 11. Changes in other reserves -101 -33 -65 43 -78 80 134 - 11.1 Gold and convertible currencies -27 -10 - -52 -158 109 14 11.2 Bilateral balances -74 -23 -94 48 58 71 45 11.3 Net IMF account, National Bank and commercial banks' credits d/ d/ 29 47 22 -loo 75 E. Official Reservese 10L 115 80 132 253 140 212 * Estimates a/ Including joint venture capital. b/ Allocation of SDRs was 25.2 million in 1970 and 22.1 million in 1971. c/ As of September 30, 1971. d/ Included in short-term capital. e/ Including Fund Gold Tranche Position and SDRs. / As of November 30, 1971. Source: Data submitted by Yugoslav authorities. able_3.2: BAIMG0 OF PAlN Gli CONVEs'IbLE AREA, 1967 - 1971 (millions of dollars) 1967 1968 1969 1970 1971* A. Currenr Accoust Ba Larce -2 - -88 •374 -212 1 Trade B9lance -9 10 1. Expr Cs 715 7 2. Imports -1147 -1208 -100-213 23100 Il Service: NYNt 300 346 >90 926 3. Tour -sm and foreign travel, net. -77 77 71 ¯[3 2 9 ' b4. Trarisporfation, net, 84 92 96 11Ž 5.Workers' rnittances 89 122 206 440 630 6. lnvestmerný. incone, net -66 -76 -88 .11 -112 7. Olher services, ne t and transfer 10, 87 131 152 157 B. Capital Account 10 129 224 TI] Medium a_ nf-term capital "' -i-- . Med im - lron--erm ) oans-, n7 9 3 192 -205 26 8.1 Inflo, gross 305 337 449 568 62 5 8.2 Repayments -163 -180 -232 -331 -iÓ 8.3 Agriculturs imports loans, net. 17 -6 -23 -32 75 9. ExporPc credits extended, netl -13 30 -59 -25 -55 V Short-ter rapital, net -43 8 91 166 -101 (includ:ing errnrs and omissicrs) ---- --0 2. Balanae (A K P) -29 . 136 -28 -11. D serve lovements (- increase) 29 -3 -136 28 10. Uso of ;D'5s Z-- i. ,hange in other reserves 29 -5 -i36 9 85 1 .1 Gold and convertible currcncies - -52 -15 109 14 11.2 Net lm-P accourit, National Bank 29 47 22 -100 75 and comermcial banks' credits E. Official eservs- 80 132 253 1>40 10 E:stimates. a/ Includirig joir venture capital. b/ ;llocaion c-f 1JS was 25.2 million in 19'70 and ?2.1 million in 1971. c/ As of September 30, 1971. d/ [ncluding !und '.,old gnnche 'osi tio and fDOs. / As of October 31, 1971. ce: Data submitted by Yugoslav authorities Table 3: BALANCE OF PAYMENTS WITH BILATERAL AREA, 1967-1971 (millions of dollars) 1967 1968 1969 1970 1 A. Current Account Balance 0 18 -20 34 -82 I. Trade Balance -2 -62 -82-9 209 1. Exports 33 527 553 3L7? 734 2. Imports -561 -589 -635 -741 -943 II. Services net 80 62 128 127 3. Tourism and foreign travel, net 10 i3 23 IT 17 4. Transportation, net 56 c2 67 89 89 5. Investment Income, net -1 -.1 - - -3 6. Other services, net and transfer payments 8 1-4 -28 25 24 B. Caita Account !1 -66 __L lz, III. Mediunrand Loa-term Capital -2 28 -12 - - .= - 1 7. Medium- apd long-term Loans., net 19 116 7.1 Infloi4 gross 29 53 68 68 5 7.2 Repayments -10 -39 -7 -4 -10 8. Export credits extended -26 -16 -33 -25 -17 IV. Short-term Capital net 1 -615 -66 -19 9 7including errors and omissions) C. Balance (A 9 B -48 -71 - D. Reserve movemeits = Bilateral balances -9 48 58 71 45 * Estimates a/ Including joint venture capital. Source: Data submitted by the Yugoslav authorities. Table 3.6: FXPCtTS, 0Y C01ir,ODITY GROUP, 1965-1970 (millions cf dinars and percent of total exports) 1965 1966 1967 1968 1969 1970 Value Share £ Value Share 9 Value Share % Value Share % Value Share 9 Value Share 9 To'AL 13,643.3 10.J 251.0 100.0 15,6.5.3 100. l 75,796.3 100.0 13,631.0 100.0 20,939.0 100.0 Paw materials and semi.- processed goods 5,737.6 62.0 6.551.5 63.0 7,516.6 63.1 7,370.1 69.8 9,633.0 52.6 10,996.6 52.6 of which: Crude materials and sei-products 3,966.6 29.1 6,616.3 29.0 5,297.6 33.9 5,662.6 35.7 6,37L[.6 37.3 7,575.6 36.2 Mineral fuels 202.1 1.6 320.3 2.1 323.1 2.1 136.7 1.2 233.9 1.3 302.7 1.6 Other manufactured goods for re,roduction 1,569.0 11.5 1,316.8 11.9 1,391.0 12.1 2,oo.3 12.9 2,536.7 16.0 3,113.2 16.3 Investment goods 2,3L0.7 17.2 2,739.1 13.3 2,210.B 16.1 2,669.2 15.5 2,554.3 13.9 3,025.9 16.6 of which: Transport equipment 1,553.4 11.6 1,726.3 11.3 1,102.3 7.0 1,379.4 3.8 1,650. 7.9 1,339.9 9.0 Flectric moters and other equipment 167.7 1.2 306.6 2.0 356.9 2.3 617.5 2.6 l15.8 2.3 466.7 2.2 Agricultural machinery 136.6 1.1 26û.7 1.6 213.3 1.6 197.5 1.2 150.1 0.3 143.5 0.7 Other 633.2 3.2 517.7 3.6 537.3 3.6 I56.3 2.9 538.0 2.9 527.8 2.5 Consuners, goods 5,515.6 6o.8 5,910. 33.7 5,913.5 37.3 5,377.0 3u.7 6,133.7 33.5 6,966.7 33.2 of woich: Pood 2,691.0 19.7 2,302.8 13.3 2,655.7 15.7 1,905.6 12.0 2,219.9 12.0 2,603.3 11.5 Clothing and footwear 953.9 7.0 1,156.1 7.6 1,535.6 9.8 1,567.9 9.9 1,673.5 9.1 1,756.3 8.6 Beverages and Tobacco 602.5 6.6 579.3 3.8 620.2 )j.0 516.8 3.3 518. 2.0 713.3 3.6 Other Textile 605.7 3.0 446.e 2.9 651.6 2.9 486.5 3.1 555.9 3.0 520.5 2.5 Other consumers' goods 907.5 6.7 926.2 6.1 355.3 5.6 1,000.2 6.3 1,211.0 6.6 1,573.3 7.5 Source: Etatistics of foreign Trade of the SF'2 Yugoslavia for the years 1967, 1969, 1970, published by federal Institute for Statistios. Table 3.5: IMPORTS, BY COMMODITY GROUP (millions of dinars and percent of total inports) 1965 1966 1967 1963 1969 1970 Value Share % Value Share N Value Share 5 Value Share % Value Share X Value Share TOTAL 16,099. 4 100.0 19,692.9 100.0 21,341.6 100.0 22,460.2 100.0 26,672.2 130.0 35,925.1 100.0 Saw materials and semi- processed goods 9,997.8 62.1 11,333.9 57.5 12,214.6 57.2 12,770.2 56.9 16,057.3 60.2 22,715.3 63.2 of which: Crude måterials and semi-products 6,755.6 42.0 7,88.2 38.0 7,838.a 36.7 7,994.7 35.6 10,311.5 38.7 14,542.3 40.5 ineral fuels 899.5 5.6 1,030.2 5.2 1,057.0 5.0 1,224.4 5.5 1,291.0 1.8 1,729.4 4.3 Other manufactured goods for reproduction 2,312.7 14.5 2,815.4 11.3 3,318.8 15.5 3,551.0 15.8 4,451.8 16.7 6,hWI.2 17.9 Investment goods 3,174.8 19.7 4,281.3 21.3 4,633.5 21.7 5,593.3 24.9 5,941.4 22.3 7,673.3 21.1 of which: Transport eouipment 565.5 3.5 939.1 4.3 931.3 4.4 1,013.2 4.5 968.5 3.6 1,716.7 4.3 Electric motors and other equipment 319.0 2.0 428.3 2.2 453.2 2.1 555.9 2.5 720.5 2.7 323.2 2.3 Ngricultural rachinery 92.0 0.6 195.3 1.0 269.i 1.3 239.9 1.1 232.4 0.9 396.9 1.1 Other 2,193.3 13.6 2,718.6 13.3 2,979.6 13.9 3,779.3 16.8 4,020.0 15.1 4,736.5 13.2 consumersl goods 2,926.7 18.2 4,077.2 20.7 4,493.6 21.1 1,096.3 18.2 1,673.6 17.5 5,536.0 15.4 of which:: food 1,939.6 12.1 2,511.6 12.3 1,387.7 3.9 1,057.6 4.7 1,137.2 4.5 1,436.5 4.1 Textile articles, including clothing and footwear 403.3 2.5 644.3 3.2 732.5 3.7 1,036.9 4.6 1,,107.9 1.1 1,164.3 3.3 Other consumers' goods 583.8 3.6 921.3 4.7 1,823.4 8.5 2,002.3 8.9 2,378.5 8.9 2,831.7 8.0 Source: St-atistics of Foreign Trade of the SFR Yugoslavia, for the years 1967, 1969, 1970, published by Federal Institute for Statistics. Table 3.6: EXPoROTS BY ARFAS AND COUNTRIl OF DESTINATION, 1965-1970 (millions of dinars and percent of total exports) 1965 1966 1967 1963 1969 1973 value Share Value Share 5 Value Share 5 Value Share 5 Value Share % Value Share TOT, 13,643.8 10.O 1_ ,251.9 l00.a u 15,6i5.8 100.0 15,796.3 100.0 13,631.0 100. 20,939.0 100.0 3,431.2 25.1 6,235.3 27.7 4,636.6 29.7 4,611.8 23.0 5,399.0 32.0 6,903.5 33.0 of which: Italy 1,303.1 13.2 2,163.1 14.2 2,313.5 13.0 2,206.6 16.0 2,837.1 15.4 3,132.1 15.2 Germany, 'ederal Republic of 1,195. 3.3 1,622.7 9.3 1,202.7 7.7 1,515.6 9.6 2,023.3 11.0 2,669.2 11.3 arance 219.2 1.6 357.6 2.3 361.9 2.2 363.5 2.3 609.1 3.3 795.9 3.3 Netherlarr 123.5 0.9 133.3 1.2 173.2 1.1 191.3 1.2 233.3 1.5 336.7 1.6 Belgium-Luxernbourg 35.0 o.6 109.1 0.7 105.1 0.7 136.5 0.9 166.2 0.3 119.6 n.6 KT A 1,203.6 3.3 1,677.3 11.1 1,352.1 11.9 2,006.1 12.7 2,577.9 16.0 3,024.7 lä. of which: United Kingdon 652.6 3.3 543.3 3.6 573.7 3.7 759.0 u.8 1,062.2 5.9 1,203.5 5.3 Austria 356.7 2.o 559.5 3.7 602.1 3.9 556.6 3.5 580.6 3.2 632.6 3.0 Switzerland 226.5 1.7 314.4 2.1 320.5 2.0 363.5 2.2 633.3 2.6 653.7 3.1 Sweden 103.9 0.3 180.o 1.2 150-7 1.0 219.1 1.4 208.0 1.1 2333.5 I.1 nenmark 3.5 5 0.3 48.3 0.3 63.9 O.3 55.8 0.6 73.5 0.6 79.3 0.6 Inland 9.3 0.1 10.7 0.1 98.5 o.6 3.0 0.0 71.1 0.6 76.9 0.6 Norway 7.3 J.O 15.9 0.1 57.1 0.6 56.3 0.6 93.6 0.5 135.3 0.6 Other 0.3 0.0 0.2 0.0 0.6 0.0 0.8 0.0 0.1 0.0 0.1 0.0 cn& eount,ris 5,725.3 62.0 5,574.2 36.5 5,637.9 36.0 5,256.2 33.3 5,369.1 29.1 6,670.0 30.3 0of which: USS: 2,366.3 17.2 2,621.3 15.3 2,740.6 17.5 2,593.9 16.5 2,580.1 16.0 3,019.1 16.4 Vzechoslovakia 886.9 6.6 366.9 5.5 626.4 6.0 635.1 6.3 735.0 6.2 1,115.0 .3 Poland 802.9 5.9 703.9 6.6 573.6 3.7 662.1 2.9 535.8 3.2 710.5 3.6 Hungary 324.6 2.6 367.6 2.6 376.0 2.6 191.3 1.2 283.3 1.5 336.7 1.6 Germany, Democratic Eepublic of 950.3 7.0 805.0 5.3 733.0 5.0 691.4 6.6 550.3 3.0 638.9 3.0 Bulgaria 236.5 1.9 221.9 1.5 269.0 1.5 336.0 2.2 233.6 1.6 276.5 1.3 14unania 161.0 1.2 209.1 1.6 236.1 1.8 277.9 1.8 296.2 1.6 373.3 1.3 Other Europe 363.7 2.5 653.0 3.c 466.1 3.0 735.1 6.7 786.2 6.3 B55.6 6.1 Table 3.6: Continued 1965 1966 1967 1968 1969 1970 Value Share % Value Share % Value Share % Value Share % Value Share % Value Sh NOTH MI. 05.6 5.9 967.9 6.6 1,023.7 6.6 1,158.1 7.6 1,223.6 6.6 1,199.3 5.7 of which: USs 776.1 5.7 935.7 6.2 990.8 6.3 1,116.4 7.1 1,166.o 6.3 1,113.9 5,3 Canada 29.3 0.2 32.2 0.2 37.9 0.3 41.7 0.3 57.6 0.3 30.6 0.6 LATIN :ERIon 209.3 1.5 200.6 1.3 219.7 1.6 264.6 1.5 682.7 2.6 279.8 1.3 of which: Brazil 30.5 0.3 35.0 0.6 66.7 0.3 36.3 0.2 60.9 0.2 62.6 0.3 Cuba 61.9 0.5 85.0 0.6 68.0 0.6 77.1 o.5 28.7 0.2 27.7 0.2 Panama 86.1 o.6 5.6 0.0 22.3 0.2 35.1 0.2 296.4 1.6 3.1 0.0 Colombia 16.6 0.1 16.7 0.1 64.5 0.4 68.5 0.5 76.4 0.5 96.3 0.5 tSIA 1,265.7 9.3 1,421.9 9.3 1,232.8 7.9 1,322.9 8.3 1,345.5 7.3 1,670.6 7.0 of which: India 370.3 2.7 536.9 3.5 339.1 2.2 327.8 2.1 L96.5 2.7 569.0 2.7 Iran 80.5 0.6 109.6 0.7 117.3 0.8 98.1 0.6 136.8 0.7 172.9 0.8 Indonesia 321.5 2.6 201.7 1.3 115.0 0.7 99.6 0.6 42.0 0.2 20.1 0.1 Pakistan 90.6 0.7 101.6 0.7 101.1 0.6 297.1 1.9 169.1 0.9 136.2 0.6 1FIcA 550.0 4.8 713.7 6.7 569-3 3.6 656.5 6.2 715.6 3.9 751.8 3.6 of which: Egypt 255.2 1.9 301.1 2.0 253.0 1.6 368.3 2.2 270.2 1.5 327.5 1.6 Ghana 155.5 1.2 62.0 0.6 21.3 0.1 40.2 0.3 42.3 0.2 37.0 0.2 Tunisia 39.3 0.3 50.9 0.3 61.9 0.6 39.6 0.3 54.0 0.3 33.1 0.2 Guinea 17.5 0.1 33.3 0.3 16.4 0.1 21.6 0.2 49.3 0.3 32.0 0.2 Sudan 38.9 0.3 53.2 0.4 13.2 0.1 26.6 0.2 69.5 0.6 74.7 o.4 Other 6.0 0. 6.3 0.0 6.3 0.0 7.2 0.0 31.7 0.1 33. 0 0.2 Sources: Statistics of Foreign Trade of the SFI Yugoslavia, for the years 1965 through 1971, published by the Federal Institute for Statistics, Belgrade. Itatisticki Godisnjak JugosIavije, 1971 (Statistical Yearbook for Yugoslavia, 1971), published by the Federal Institute for Statistics, Belgrade.  Table3, IMPORTS BY AREAS AND COUNTRIES OF ORIGIN, 1965-1970 Tnillions of dinars and percent of total imports) 1965 1966 1967 1968 1969 1970 Value Share % Value Share % Value Share % Value Shar,e % Value Share % Value Share $ TOTAL. 16,099.4 100.0 1992.9 100.0 21,31.6 100.0 22,2 100.0 7 100.0 3,925.1 100.0 C 4,179.1 26.0 5,119.8 26.o 8,213.3 38.5 8,771.0 39.0 10,478.7 39.3 14,309.4 39.3 of which: Italy 1,719.2 10.7 2,106.1 10.7 2,350.6 13.4 3,357.8 14.9 3,996.3 15.0 4,725.3 13.2 Germany, Federal Republic of 1,462.8 9.1 1,933.5 9.8 3,57L.3 16.8 4,007.9 17.3 4,856.9 18.2 7,039.5 19.7 France 582.2 3.6 582.1 3.0 1,008.4 4.7 815.7 3.6 900.8 3.4 1,373.6 3.8 Netherlands 2714.2 1.7 290.3 1.5 387.5 1.8 349.0 1.5 446.9 1.7 621.7 1.7 Belgium-Luxembourg 140.7 0.9 207.8 1.1 392.7 1.8 240.6 1.1 277.8 1.0 b99.3 1.L FFTA 1,779.3 11.1 2,201.2 11.2 2,665.1 12.5 3,167.6 14.1 4,303.2 16.1 6,95.5 18.0 of which: United Kingdom 779.5 4.8 1,093.2 5.6 1,139.5 5.3 1,039.3 4.8 1,492.4 5.6 2,232.6 6.2 Austria 430.0 2.7 471.2 2.4 734.2 3.4 1,044.0 4.6 1,274.1 h.8 1,896.9 5.3 Switzerland 265.h 1.7 352.6 1.8 1416.6 2.0 616.5 2.7 967.9 3.6 1,614.6 4.5 Sweden 178.8 1.1 155.7 0.8 229.9 1.1 263.1 1.2 333.0 1.4 501.0 1.4 Denmark 76.1 0.5 46.0 0.2 69.1 0.3 86.4 c.4 104.6 0.4 117.9 0.3 Finland 16.5 0.1 14.9 0.1 18.7 0.1 10.1 0.1 25.5 0.1 45.8 0.1 Norway 32.8 0.2 60.5 0.3 55.5 0.3 57.9 0.4 55.0 0.2 314.7 0.2 Other 0.2 0.0 2.1 0.0 1.6 0.0 0.0 0.0 0.7 0.0 2.0 0.0 CMFA countries 4,595.4 28.5 6,172.0 31.3 5,!28.2 25.9 6,073.5 27.0 6,305.6 23.7 7,351.1 20.4 of which: USSR 1,349.2 8.4 1,821.7 9.3 2,047.9 9.6 2,353.4 10.5 2,102.4 7.9 2,LIL.6 6.7 Czechoslovakia 881.9 5.5 1,165.0 5.9 1,183.4 5.5 1,288.L 5.7 1,498.3 5.6 1,893.4 5.3 Poland 713.3 4.4 901.4 4.6 519.9 2.4 557.9 2.5 587.1 2.2 646.6 1.8 Hungary 384.7 2.4 442.6 2.2 397.1 1.9 426.1 1.9 547.4 2.1 613,6 1.7 Germany, Democratic Republic of 789.1 4.9 1,099.2 5.6 861.1 4.0 885.6 3.9 970.6 3.6 928.0 2.6 Bulgaria 276.6 1.7 461.3 2,3 247.1 1.2 284.5 1.3 287.6 1.1 410.6 1.1 Rumania 200.6 1.2 280.8 1.4 271.7 1.3 277.6 1.2 312.2 1.2 444.3 1.2 Other Erope 285.3 1.8 421.3 2.1 466.6 2.2 440.8 2.0 674.9 2.5 790.3 2.2 Table 3.7: Continued 1965 1966 1967 1968 1969 1970 Value Share Value Share % Value Share % Value Share % Value Share % Value Share % NORTH AMERICA 2,432.8 15.2 2,550.1 13.0 1,586.2 7.5 1,149.7 5.1 1,198.14 4.5 2,220.5 6.2 of which: USA 2,375.8 14.8 2,498.0 12.7 1,549.9 7.3 1,129.4 5.0 1,155.8 4.3 2,001.8 5.6 Canada 57.0 0.4 52.1 0.3 36.3 0.2 20.3 0.1 42.6 0.2 218.7 0.6 LATIN AMERICA 544.8 3.4 732.6 3.7 679.3 3.2 555.9 2.5 632.2 2.4 1,013.0 2.8 of which: Brazil 191.3 1.2 228.7 1.2 257.1 1.2 182.1 0.8 255.6 1.0 247.4 0.7 Cuba 64.6 0.4 1114.5 0.6 51.1 0.2 64.7 0.3 37.9 0.1 11.7 0.0 Panama 1.6 0.0 2.7 0.0 3.7 0.0 1.9 0.10 3.3 0.0 123.3 0.4 Colombia 13.7 0.1 20.2 0.1 23.3 0.1 62.2 0.3 50.9 0.2 110.5 0.3 Peru 49.5 0.3 90.4 0.4 73.0 0.3 77.5 0.3 88.3 0.3 275.:2 0.8 ASIA 1,224.0 7.6 1,5914.8 8.1 1,312.2 6.2 1,375.3 6.1 1,822.3 6.8 2,356.1 6.5 of which: India 327.1 2.0 321.5 1.6 278.5 1.3 252.2 1.1 1434.8 1.6 539.2 1.5 Iran 22.2 0.1 1114.9 0.6 85.7 0.4 35.1 0.2 223.3 0.8 225.3 0.6 Indonesia 49.2 0.3 71. 0.4 2.4 0.0 11.4 0.1 9.1 0.0 10.9 0.0 Pakistan 58.0 0.4 69.2 0.14 82.4 0.4 73.1 0.3 141.1 0.5 118.3 0.3 Japan 265.5 1.7 495.3 2.5 229.4 1.1 497.3 2.2 223.1 0.8 471.6 1.3 AFRICA 798.7 5.0 657.3 3.3 607.4 2.8 597.8 2.7 902.5 3.4 972.7 2.7 of which: Egypt 301.7 1.9 30!.6 1.6 223.3 1.0 196.6 0.9 371.4 1.4 297.8 0.8 Ghana 61.7 0.4 714.0 0.4 60.5 0.3 48.7 0.2 57.1 0.2 143.5 0.4 Tunisia 78.3 0.5 75.8 0.4 75.3 0.4 66.8 0.3 77.3 0.3 64.9 0.2 Guinea 29.9 0.2 49.0 0.3 34.7 0.2 32.9 0.2 24.0 0.1 16.1 0.0 Sudan 50.6 0.3 5.8 0.0 3.7 0.0 26.9 0.1 51.1 0.2 37.6 0.1 Other 257.1 1.6 243.8 1.2 283.4 1.3 328.7 1.5 3514.3 1.3 416.6 1.2 Source: Statistics! of Foreign Trade of the SFR Yugoslavia, for the years 1965 through 1971, published by the Federal Institute for Statistics, Belgrade. Table E: GROWTH OF TOTAL IMPORTS AND IMPORTS ).ROM YUGOSLAVIA IN MAIN FOREIGN MARKETS' Are.Country Annual growth rate 1965-1970 of: Tota_LIqorts >rts from Yu avia World 10.2 9.0 Less Developed Countries 8.3 6.3 Industrialized Countries 12.0 15.4 Industrial Europe 11.9 16.4 of which: EEC . 13.2 15.0 Belgium - Lumemburg 12.7 7.0 France 12.5 30.0 Germany 14.2 15.6 Italy 13.3 12.0 Netherlands 12.4 22.0 EFTA 9.3 20.0 of which: Austria 12.9 12.3 Switzerland 12.7 24.0 United Kingdom 7.2 22.0 a/ Excluding Eastern bloc countries. Source: IBRD and IMF, Direction of Trade 1961-1965 and 1966-1970, and Statistics of Foreign Trade of the SFR Yugoslavia.  Table 3.9: SHARE OF MAJOR EKPORT ITEMS TO DEVELOPED COUNTRIES IN THE CONVERTIBLE CURRENCY AREA 1961 - 1970 (IN PRCET' v) 1970 Share to Developed Countries in Convertible "4 L0A J JCrenc Aread Total TEn^v+c -z I 10AC ToAR 107n Live Animals 2.h 88.9 92.9 9L.8 93.6 Meatl in Processed Form 7.2 81.6 75.1 98.4 86.9 Fruits, Vegetables 2.5 77.3 67.8 78.9 82.0 Leather 0.8 73.2 59.8 69.2 88.3 Leather Clothes, Fur 0.9 ... 81.1 100.0 89.1 Textile and Yarn Fabrics 0.4 55.7 43.4 61.3 68.8 clothing,Not of Pur h.9 62.6 43.1 61.6 58.5 Furniture 2.6 88.7 73.8 86.2 86.7 Metaliferous Cres, Scrap 1.8 ... 66.5 50.8 59.2 Iron and Steel 0.1 100.0 100.0 100.0 99.1 Non-Ferrous Metals 1.h 85.9 66.3 42.5 55.0 Coal, Coke, Briquettes 0.4 100.0 99.9 100.0 88.5 Petroleum and Products 0.7 62.3 50.8 83.1 87.4 Wood, Cork Manufactures 1.5 68.4 51.1 51.8 55.9 M!ai ranuiacilures 3.5 30.0 10.4 25.1 12. 1~~iI I: . i I ". 11 fl 1b fl n j1 fl )11-P.tIectrical IN'Laciery 14.) 4..C 7. fe) JU*U 'I't.ajn+w4n,l Mlacnk4ner 7 1 9f ) 0 O0R A, TranSpo%rt. v-15pmen+ 113793.613.5 of which Shins (7W) 8.q 0.h 1.2 1.7 29.6 )TA L: 100.0 52.7 h2.7 51.9 56.L :nurce: United Nations, Commodity Trade Statistics, Statistical Papers Series "D". Table 3.10: RECETPTS AND PAYMENTS FOR SERVICES, 1965-1971 (millions of dollars) 1965 1966 1967 1968 1969 1970a/ Credit Debit Net Credit Debit Net Credit Debit Net Credit DeF Net Credit Debit Net Credit Debit Net Credit Workers' remittances 32 - 32 61; - 6h 89 - 89 122 - 122 206 - 206 44o - 4h0 630 Tourism 81 18 63 117 35 82 150 52 98 189 53 136 2L1 73 168 275 129 146 355 Transportation 194 76 118 226 86 140 232 92 140 27 103 144 280 117 163 354 153 201 424 Investment incomec/ 8 61 -53 6 76 -70 3 75 -67 8 85 -77 12 100 -88 16 126 -110 15 Government, n.i.e.d/ 24 30 -6 28 38 -10 15 12 3 16 13 3 29 9 20 36 11 25 Insurance 12 7 5 11 7 4 14 8 6 12 11 1 18 12 6 31 15 16 )211 Other services 54 21 33 77 26 51 114 42 72 111 52 59 91 59 32 125 50 35 ) Total 105 213 192 529 268 261 622 281 341 705 317 388 877 370 507 1,277 484 793 1,635 a/ Preliminary. b/ Fstimates. c/ Includes investment income paid in local currency: $9 million in 1965, and $10 million in each of 1966, 1967, 1968, 1969 and 1970. d/ Beginning with 1967 some regrouping of items was made. Source: National Bank of Yugoslavia Table 3.11: MEDIUM AM LONG TERM CAPITAL FLOWS, 1965-1971 (Million US $) 1965 1966 1967 1968 1960 1970 1971* Foreign Capital a/ Gross inflow 328 382 351 390 517 636 715 P epaymenTs- 165 178 173 225 264 367 420 Net Inflow 163 204 178 L65 253 269 295 of which: Of ficial Capital 90 133 18 11 52 -9 Eastern Europe -19 7 14 10 53 33 Other Bilateral 71 107 -6 -15 -22 -69 U.S.A. 60 115 10 4 -19 -45 Other 11 -8 -16 -19 -3 -2 International 38 19 10 16 21 27 26 of which Wornd r 35 19 Ll 16 22 27 27 Private Capital 73 71 160 154 201 278 Y>ugoslav 'Ex>rt Credits Gross Outflow .. .. 85 .104 137 97 116 Repayments .. .. 46 58 45 47 44 Net -hh -39 -39 -46 -92 -50 -72 Total Capital Inflow, Net 119 165 139 119 161 219 223 * Preliminary esti_mate. a/ Includes agriculture import loans net. Sýource: Data submnited by -hl YugOolaV athorities. Tabl_ 3.12: FOREIGN EXCHANGE RESERVES, 1965-1971 (millions of dollars-at end of period) 5 1966 1967 1968 1)6 1970 1971 Gold and convertible foreign exchange 115126 137 184 3h2 266 276 National Banka/ 104 15 80 132 253 140 :212 Other banks 11 11 57 52 89 104 64 Imports from the convertible currency areab/808 95 1,147 1,208 1,500 2,133 2,310 Convertible reserves as a percentage of imports from the convertible area 14.2 1:3.2 11.9 15.2 22.8 11. 11.9 in months of imports 1.8 1.6 1.h 1.8 :2.7 1.h 1.4 Bilateral balances 46 69 170 123 65 -34 -34 a/ Including IMF gold tranch position and SDR holdings. b,/ Goods only. Source: National Bank of Yugoslavia Table b.1: ETEMAL PUBLIC AND £3ATE DEBJ ?! OUTSrTNDING 1/ AS CF D1E,14M 31, 1970 Debt, lipayable in forign Crncy (in millions of US Dollars) kxiernal nubic Dert ubil -raat s Debt Cutstanding 11br. Citstanding Doceer 31, 1970 hecember 33, 1970 Disbursed Encluding Disbursed Inludir.g nourra Only Undisbursed j' ly Undiubart3d TCTAL 1,208.0 ,717. 452.7 - 06&.O : "TCBLE GURNCY 1.007.' 1,305.3 t.0. ,162.5 NCN-CSONVIITBLE CURRENCI ?W0.9 j11.1 11.2 97.é n/ Supplinrs' Gredits 181.8 218.3 LO, 8 i . ,onverl.-ble Crrerc r 80÷8 11e 16 1stria T. ¯ . 73.9 34. Belgiun 1.6 2.6 13,5 8,6 Canada - - . ., Denmark 0.2 0.3 1-, 1.9 xar .3 13.4 69.7 157. G,ranny (Fed. hep, ofl 7.2 10.2 03.6 271.0 Itly j2.6 32.9 3 .3 7 J --pa n 47,7 4B. - - Nethcrlands 1.. 1.4 11-9 '-7 krway ..3 1.3 1. Pakistan - - - c.i 4sdien 1.7 15.5 -5. 5witzerland 7.6 L, l3.7 129.7 Tunisia - -- C. United Kingdom 35.9 58.6 39.6 iäG. USA 11.0 11.0 5.6 r .56 Won-ny-w u tla urrency Aea - - 11.9 97. ,zechoslevakia -9 -24. _ast Germaniy - - 1.9 56.3 Hungary - - (.9 1.i Polind - - 3.1 13.1 USSR1 - -. . 0.1 uredits from Private Banks 1D6.> 136.6 Austria VT7 715. Gerwany (Fed. Rep. of) .101.7 . 4 1 Sv- terland united Kingdem 4.5 9.3 Pub-il --sue -nd- 4v,5 2,0.8 Switaar land '.] .1 United Xingnon 3.3. J2216. 18. Nationalization Belgium 7T~1 Italy 1.3 1 Other Private Financial Institutions 27.2 37.7 Germany (Fed. Rep. of) 27.3 27.7 Ioans from. internahinral Organizaciore 251.5 an., -UROFIKA 7.7 7 IBID 243.7 4r7. Icans from Governments 615.5 9>82. Converti~e Curren-y A-rea l. Aus tria T. 1. Belgium 0.3 G_ France 9.0 1 Germany (Fed. Rep. of) 28.7 28.7 Italy 69.6 83.1 Japan 3.5 3-5 Switzerland 1.4 lit United Kingdom 2.2 2.ý U34 76.1 cy6.7 Non-Convertible Currency Area 200.9 L12. Czechislovakia 79 T Germany (Es t) 8.9 8-5 Fungary 0.5 0.5 Poland 32.9 49. Rumania 8.A 16. U-SSR7 2703 .3 a/ Debt with a maurity of over cne year. b/ Includns principal in arrears of 4733 thouEand in upplier5' credits from Belgium. Sourc: Economic ana Social Data Division, Feonomic Program Department. Table 4.2: ESTIMATED FUTURE SERVICE PAYMENTS ON EXTERNAL DEBT OUTSTANDING AS UF DECEMBER 31, 1970 (millions of dollars) 1971 1972 1973 1974 1975 1976 tal Amortization Payments 562.2 397.8 354.9 361.9 256.0 201.3 Public Debt L14.3 177.4 161.4 212.0 143.6 137.2 SuiDliers credits 46.1 42.1 35.6 29.1 24.3 14.6 Loans from private banks a/ 51.1 23.3 2.1 63.9 1.7 15.5 Loans from international organizations 12.3 13.8 15.1 17.6 20.1 22.4 of which: World Bank 11. 4 1A-l 1)1.2 16.8 19.3 21.6 Loans from governments 103.6 96.7 107.1 100.7 97.5 84.7 Convertible currency area 76.1 64.4 62.3 58.2 51.1 41.6 12. 1 n .L 1. L, Non-convertible currency area 27.5 32.3 VU 4 Dc., 4u.4 4_. Nationalization 1.2 1.5 1.5 0.7 - - Publicly issued bonds - - - - - - Non Public Debt 347.9 220.4 193.5 149.9 112.4 64.1 Convertible currency area 342.2 213.2 183.5 132.8 101.0 56.5 Non-convertible currency area 5.7 7.2 10.0 17.1 11.4 7.6 Total Interest Payments 110.1 101.3 87.8 73.9 57.2 45.3 Public Debt 59.7 56.4 51.7 47.0 37.3 32.5 Suppliers credits 10.0 9.1 6*1 1* 2. 1. Loans from private banks a/ 10.1 7.1 6.3 6.2 1.3 1.7 Loans from international organizations 14.8 17.1 18.9 20.2 20.7 20.4 of which: World Bank 14.4 16.7 18.5 19.9 20.4 20.2 Loans from governments 24.8 23.1 20.1 16.3 12.2 9.3 Conert-ile cuency area p0.1 14.5 12.9 10.1 7.3 4.9 Non-convertible currency area 4.7 7.6 7.2 6.2 4.9 4.4 Nationalization - - - - - - Publicly issued bonds - - - - - - Non Public Debt 50.4 44.9 36.1 26.9 19.9 12.8 Convertible currency area 49,6 43.6 34.0 25.3 18.5 11.6 Non-convertibl currpnov area 0.8 1.3 2.1 1.6 1.4 1.2 -otal Debt Service Payments 672.3 499.1 442.7 435.8 313.2 246.6 Convertible currency area 633.6 450.7 378.6 368.4 249.1 190.3 Non-convertible currency area 38.7 48.4 64.1 67.4 64.1 56.3 a/ Includes "Other Private Financial Institutions". Source: External Debt System, Economic and Social Data Divisn, Economic Program Department IBRD Table 5.1: REVENUES AND EXPFWDITURE OF THE FEDERAL BUDGET (In millions of dinars) 19b7 Ly0 10o ly1 17- Actual Actual Actual Planned Actual Budget Estimate T. RFVMTR Turnover tax ,778 5,355 6,599 7,775 8,243 7,693 5,213 Tn-r mn no-e%nnl innoma a h 0 1 _KK1) ,1T Customs duties 2,331 2,822 3,108 3,821 4,315 6,747 7,310 Other rewenne 907 01 293A Al 386 Resources for Investments in the Economy - - - - - - 1,72 Contributions of Republics - - - - -26 2/ - __ Total 9,948 10,828 11,554 13,.441 14,367- 15,115 18,362 II. EXPENDITURE/ TPfAnn C 2An) A LAA A o-- 7 7AA 7 7AR A RaA A oA Administration 1s300 1,105 1,205 1,533 1.545 1,556 1,700 AAA44tinna 4inA +- Republics 1,017 1,140 1,242 1,367 1367 1,630 1,429 social sector 677 640 527 717 704 568 1,207 Contribution to social u1surance funds pmJ uru U25 Yff 7r(u Investments - - - - - 1,083 2,255 ...%..1i L.... ^ I rO, k. -na ,-,I . O,vO I dL7s.-IU -LU .7.l -".L~YY . 3uU) L40y J-L43± jo _)-L III. SURPLUS OR DEFICIT 578 435 355 436 1,371 604 10 IV. FINANCING External (net) -53 -46 48 -39 -39 -35 Domestic (net) -525 -389 -307 -397 -1,332 -569 Bank borrowing (...) (...) (...) (-185) (-185) (-333) Other borrowing (-96) (-82) (-77) (-80) (-aO) (-85 Reserve Funds and Others (....) (...) (...) (-132) (-1,067)- (-151) Source: Data submitted by the Yugoslav authorities. 1/ Estimates for 1971 relate to the rebalanced budget introduced in September 1971 and are not strictly comparable. Expenditures are higher by N.D. 3696 million (Investments 2255 Din; Refunds of Customs Duties N.D. 1100 and Other N.D. 341). Netting these out from both revenues and expenditures leaves the surplus unchanged. 2/ Including funds for scientific activities. 3/ Excluding allotments to reserve funds. 4/ Includes N.D. 132 million allotment to Reserve Funds and N.D. 935 million deposited in spncal acolints -rvan an------- l Table 5.2: C0NSCLIDATED BUDGETS OF REPUBLICS AND COMMUNES (In millions of dinars) Budget REVENUE Income Tax 5,874 7,120 8,533 11,043 11,061 Sales and excise taxes 3,182 3,812 4,810 5,936 7,728 Fees and charges for services 556 563 708 860 921 Other revenue 580 618 479 206 836 Transfer from Federal budget 1,017 1,140 1,242 1,367 1,429 Total 11,209 13,253 15,772 19,1412 21s981 CUUtENT Ei! DITURE 1/ Defense 19 28 47 77 108 Eaucation 4,1> 14,72 5,939 7,14u,2 Social security and health protection 647 1,142 1,385 1,607 2,468 J%U."IJ.Ls buat.Lull C#,747 4 -7rJ 4 p4L4 ) U r-JC Current transfers to the economy 352 351 441 554 433 Communal activities 3 917 41 77 000 871 Grants to nonbudget institutions 1,011 1,1145 1,462 1,674 1,943 Other ey 364 1o o416 0 Tot-al 9-788 11.h9 11.989 16.879 19.70q CURRENT SURPLUS OR DEFICIT 1,421 1,814 1,783 2,533 2,276 CAPITAL EXPENDITURE 1,088 1,240 1,365 1,623 1,882 OVERALL SURPLUS OR DEFICIT 333 574 418 910 394 ALLOCATION TO RESERVE FUNDS (...) (122) (105) (113) Source: Data submitted by the Yugoslav authorities. 1/ Excluding allotments to reserve fund. 2/ These figures relate to the original budget presentation before the revision of September 1971 according to the new budgetary system. Contributions of Republics to Federal Budgets under the new system are not included in expenditures and turnover tax revenues now accruing to the Republicst Budgets are not inc uded in revenues. Table 5•' RECEIPTS AND EXPENDITURES OF FEDERAL EXTRABUDGETARY F UNDS 1/ (In millions of dinars) 1967 1968 1969 1970 1970 2, 1971 Breakdown of Public Investment EXpenditure 1971 Planned Actual - Planned Federation Republics Fund f--r Und. Export Credit Dev. Republics Fund I. REVENUE Business capital tax 2,805 3,125 3,455 3,739 3,130 820 - 600 - 220 Participation in interest income of the National Bank 627 558 600 770 709 750 186 564 - Participation in excise and sales tax 530 533 682 1,041 960 - - - -- Repayment of principal and interest on government investment funds 1,320 1,319 1,621 1,5951 1,3704, 2,838 - 2,413 - 425 Other revenue _3 203 874 1,216 569-' 3561/ 545 82 463 - - Compulsory Loan - - - - - 2,537 8 - 2,537 Contribution from Republics - - - - - 287 - - 287 Federal Budget - - - - - 945 945 - - Total 5,485 6,4o? 7,574 7,714 6,525 8,722 1,213 4,040 2,824 645 II. EXPENDITURE Investments for underdeveloped areas 1,125 1,620 1,976 2,113 2,031 2,824 - - 2,824 - Investment credits 5/ 2,136 2,463 3,203 4,741 3,748 6,710 2,075 4,635 - Credit for financing export of capital goods and investment works abroad 836 735 1,054 1,615 1,359 1,700 - - - 1,700 Other special purpose credit 448 435 987 723 834 - - - - Miscellaneous obligations 888 - - - - - - - - Total 5,433 5,253 7,220 9,192 7,972 11,234 2,070 4,635 2,824 1,700 II¯. SURPLUS OR DEFICIT 52 1,156 354 -1,478 -1,447 2,512 -862 -595 - 1,055 !V. FINANCING External -543 -758 -681 -86 -835 -1,474 29 -1,503 - - Borrowing (8C0) (48c?) (493) (:L,001) (395) (225) (71) (154) - Amortization 6/ (-1,343) (-1,247) (-1,174) (-1,087) (-1,230) (-1,699) (-42) (-1,657) - Domestic 491 -398 327 1,1564 2,282 3.566 833 2,018 - (1,055) Bank borrowing (net) (..) (...) (...) (1,120) (1,812) - - - - Balance (residual) 7/ (..) (...) (...) (444) (470) - - - - Source: Data submitted by the Yugoslav authorities and adjusted by the staff. 1/ The Educational Fund is included in the various government budgets. The Social Security :unds are accounted separately, 2/ Preliminary data. / Includes earnings on foreign exchange transactions and earnings on dinar deposits of the Federation in the National Bank. 14/ Excluding bond issue of Din 1,222 million (planned) and Din 597 million (actual) which is treated as financing item. 5/ Excludes settlement of obligations from previous years amnounting to Din 90 million in 1969 and Dir. 798 million (planned) in 1970. D/ Including pa'ments for nationalized property, 7/ Inclides forced deposits ard financing of miscellaneous obligations of Din 888 million in 1967 and their formal settlement In 1969 (Din 90 million) and 1970 (Din 798 million planned). Table 5.h: RECEIPTS OF SOCIAL INSURANCE FUNDS (in million of dinars) .l i.. 1966 1967 1968 1969 1970 1971a ticea.Ltni .Insuranlce6- 1. Basic contribution 3,514 2,830 3,083 3,766 4,77*4 2* Additional supplementary contribution 730 711 787 950 1,140* 3. Contribution for the Health Insurance of pensionerq and pension baneficiariesmi 467 477 569 700 899 4. Others 260 229 249 344 505 5. Total (1) through (4) 4,91 4 247 4 688 5 761 7,318 6. Transfers 1,109 7. Total(5)-(6) 3,669 3,984 88 6,209 Disability and Pension Insurance Fund 6. Basic contribution 4,850 5,214 6,01 8,130 10,056 9. Additional supplemAntary contribution 62 68 141 186 2*49 10. Transfers from Federation budget 69 770 981 1,609 1,789 11. Transfers from Republic budgets - 111 278 376 497 12. Others 313 35 77 122 195 13. Total (8) through (12) 5,294 6,199 7,877 10,423 12,787 14. Grand total(7+13-3):1 9,798 2391 11,293 14,608 18,996 23,157 15. Total original revenues 9,729 8,509 10,035 12,622 16,710 21,865 (14 less 10 and 11) a/ Estimate. b/ Transfers fran the Disability and Pension Insurance Funds (below) d/ Since line 3 is a transfer from one fund to the other, it is omitted from the consolida- tion to prevent a double count of revenues. Source: Federal Secretariat for Finance Table 6.1: CONSOLIDATED BALANCE SHEET OF SEDRT-TERM ADW0APTAVQ nP ATT MAMERq 1oA-1o7A WAS ",LW&A.16%#J1~. W &4&"-' VA . - d' IW I.JA,L IiiL.L.LuLoD I.L UL4AL..L 0 WA.JI %14. jJ%7A -L%AA 4J- 3 - - 4 - 4 A a/ OOA 1047 10 A Oo 107) 1071 oreagn exchange assets 0.0 0.0 0.y y. 7.2 9.4 Short-term credits of 39.9 43.4 51.0 58.3 68.1 74.5 which: consumer credits 3.4 2.6 4.2 4.8 6.7 6.7 Investment credits 1.4 1.0 3.7 5.8 9.1 9.4 Other assets 3.1 3.3 3.3 2.4 4.1 8.3 Idabilities total 50.4 54. 64.9 .5 88.5 101.6 Foreign exchange Jauj-. Ul 5.6 9.1 9.9 12.3 15.7 23.1 Money supPl3 23.9 23.5 29.1 32.6 38.5 39.7 Currency in circul* 6.9 8.0 9.6 11.9 15.0 16.2 Demand deposits 15.0 14.1 17.2 18.4 21.2 23.0 .c/ Float- 2.0 1.4 2.3 2.3 2.3 0.5 Other sight deposits - 8.3 9.0 10.7 13.3 15.8 16.1 Restricted deposits 11.4 11.9 12.6 14.1 15.5 17.9 Other Liabilities 1.2 1.0 2.6 3.2 3.0 4.8 a/ End of June b/ Investment credits granted to business banks by the National Bank and transfers to the balance sheet of investment operations. c/ Transfers between bank accounts that have been debited at the bank of the transferor but have not yet been credited to the bank of the transferee. d/ Sight saving deposits; ndused for current payments. e/ Investment guarantee deposits, budgetary reserve funds, etc. Source: National Bank of Yugoslavia Table 6.2: .BALANCE SHEET OF IONG-TERM OPERATIONS OF AIL BANKS 1966-1970 (in billions of dinara - end of period) a/ b/ 1966 1967 16 1969° 1970 i_71 Assets 97.7 106.9 123.1 102.2 123.8 136.5 Foreign exchange assets - - 2.3 2.4 3.5 4.9 Investment credits a/ 65.6 7_.0 86.8 84.6a/ 108.2 117.8 of wahi ch:- flciajl inie+mantq. 3 5l 2. MnAam ^,n ^o.her hank- 3n. 32. 3n. -e.6- 7.9 8.1 1 9 L0 - Other assets 1*.1 1. 3.8 h.6 h.2 5.7 I-Aabilities 07 1IA.o 123. 102.2 12-i.R 136.5 .-........ . ...-4. v- .-- - Foef IJa1- +1cfn1 jöh0.744-4 O9 Forig exhangeliabilities - - 5.0 7 .1 91 3. Bankw own f .ds 0 .9 .59 10. 9.8 9.8 1~2 VL ~ .7 jlj om Time depoits -l 8. 12.6 16.2 20.5 26. 28.9 __al el Iestmen ff nd 2 L - - 77. 82.0 89. 6n0a ^.7 7-1.f 77.6 nfl 7,nE but also the consequioe of the withdrawal of federal resources out of the balance sheet of the investment operations of all1 banks. These resources amounted to D7 .25 billion of Investment Credits and D20.2 billion of "Caia on other Banks". On the liabilities side, Time epJosits wre reduced by Jl..3 biLLon and Investment Funds by about D36 billion. b/ Eri of June c/ Includes investments in housing and cammunal developnent, and in social investment loan runds. d/ Inciudes sma amounts of securities. e/ Includes housing and cmnnal developnent funds, foreign credit liabilities, transfers from the short-term account and, up to 1969, government-owned funds originating from the previas Social Investment Funds. Source: National Bank of Yugoslavia Table 7.1: LAND TENURE IN 1960, 1969, AND 1970 Number of Holdings Area in Thousands of Hectares 1960 1969 197C 1960 1969 lV70 Total 2 223 2,602 122 125 Social holdings 5,120 215 1 I 29) 493 Kombinats and social farms 475 286 269 798 1,351 1,474 Agricultural Institutions 412 498 554 112 301 336 Cooperatives 4,086 1, 371 1,102 653 838 <683 Peasant work-coops 147 - - Private holdings 2 618 10 2 O 11,1 01096 1p to 2 hectares 915,811 1,olk,ooo 89k 983 From 2 to 3 hectares 392,820 400,OC0 985 1,022 From 3 to 5 hectares 558,294 526,000 2,206 2,099 From 5 to 8 hectares 421,967 386,000 2,659 2,439 Over 8 hectares 329,231 276,000 I,365 3,552 a/ Data on the number of' and area of smallholdings for 1970 are not available. Sourcet Federal Institute for Statistics. Table 7.2: PRODUCTION OF MAJOR AGRICULTURAL CROPS (in thousands of metric tons) Cereals 1966 1967 1968 1969 1970 Wheat 3,460 4,600 4,820 4,360 4,880 3,790 Corn 5.920 7.980 7.200 6,810 7,821 6,933 Oats 337 386 363 295 308 309 Rye 156 176 171 138 135 127 Barley 682 713 606 o450 459 402 Fibers Hemp 306 309 261 73 84 106 7_Y 12 12 10 7 7 6 Cotton 6 6 10 9 9 12 Other Industrial Crops Sunflower 265 282 250 309 390 264 Sug.ar beet 2,629- 0 1f -R 3,680 2A1 3,AA ),1 Tobacco 49 54 54 44 46 LL9 Vegetables Potatoes 2,380 3,230 2,810 2,890 3,144 2,964 anse 171 91A 100 171 19 188 Cabbage and kale 481 610 539 633 611 619 Melons 420 481 520 445 432 400 Fodder Alfalfa 1,830 2,180 2,080 1,900 2,061 2,106 urc 7L4er L,nsJ.uJeo 17'J us j Source: Federal. institute for S-i-i-is Table 7.3: NUMBER OF LIVESTOCK AND LIVESTOCK PRCDUCTION 1965 1966 1967 1968 1969 1970 197/ Livestock (in thousands) Cattle 5,219 5,584 5,710 5,693 5,261 5,029 5,138 Hogs 6,985 5,118 5,525 5,865 5,093 5,544 6,562 Sheep 9,433 9,868 10,329 10,340 9,730 8,974 8,703 Horses 1,109 1,131 1,134 1,126 1,109 1,076 1,048 Poultry 31,h29 31,685 35,153 35,974 37,142 [0,854 44,954 Production Meat (000 tons) 776 709 780 848 AoA Ah Milk (million liters) 2.ho 2.614 2.712 9 TA 9792 9 AK< Eggs (millions) 1 7) 1.QQA 2.19A P-AA 9 26A 9 RAR Wool (tons) 12.4Q 1 AA 1A ) I '9 19 AA7 -I of a/ Estimates. Source: Federal Institute for Statistics Table .?INCOM F PESAT HOUSEHOTLDS HousholdIncme Frmnff 1969 Total Cash Holding Holding - Dinar/year - All Farms 13,8 8,762 8,042 ,833 0 - 2 ha. 11,518 8,385 i,158 7,360 2 - 3 ha. 12,251 7,762 6,726 3 - 5 ha. 14,065 8,h2 8,869 5,196 5 - 8 ha. 16,067 9,342 11,617 4,450 More than 8 ha. 19,397 10,911 14,587 4,810 Source: Statistical Yearbook of Yugoslavia 1971 Table 7.5: AREA SOWN WITH MAJOR CROPS Sugar Year Wleat Barley Oats Maize Hz Beet Sunflower 1961 2,070 194 376 359 2,550 h 83 91 1962 2,160 179 353 312 2,470 50 78 98 1963 2,150 157 353 317 2,410 45 98 142 1964 2,100 L58 370 308 2,440 h5 89 146 1965 1,700 146 409 322 2,600 52 82 162 1966 1,830 1L2 397 321 2,510 45 106 156 1967 1,880 138 345 302 2,520 39 102 148 1968 2,010 :132 313 285 2,470 17 79 161 1969 2,024 12h 300 274 2,403 16 96 220 1970 1,852 '113 282 283 2,371 18 88 203 Cabbage Year Tobacco Poatoe Beans Peas &Kal.e Lucerie clover Yetch. 1961 31 298 32 11 37 268 2h3 45 1962 38 302 33 nl 36 275 236 40 1963 Sh 322 37 14 37 305 223 38 1964 65 321 36 13 37 338 2.6 35 1965 61 323 37 13 38 351 220 36 1966 63 334 38 14 40 358 223 36 1967 59 331 39 14 h0 363 230 33 1968 57 333 h0 15 i 350 233 31 1969 54 330 38 16 41 352 230 27 1970 53 330 40 16 43 365 235 2h Source: Statistical Yearbook, Yugoslav-ia 1971 Table 7.6g REIAL PATTEN F LåND USE - AVERAGE 1960-69 SERBIA sEJ Bosila & M4antonegro Croatia Macedonia Slovenia all Serbia Vovodna ko Herz. ._Proper Total agric, land th. has. 14866 2617 579 3395 1437 935 5904 3493 1834 576 Arable land 5 51.2 45.7 11.4 46.9 42.2 30.9 65.6 57.0 86.2 51.9 Cereals % 36.2 31.5 7.6 31.7 214.0 15.6 33.5 43.8 64-0 1&3.8 - lieat% 13.3 8.6 1.2 11.8 10.1 6.0 19.4 18.b 22.-4 18.8 - mLizo% 16.7 14.1 2. 15.3 4.2 IL.7 25.0 20.6 35.2 18.6 Industrial crops % 2.6 0.8 0.2 1.6 4.1 o.4 4.1 1.6 9.5 2.2 Vegetables % 3.9 3.6 1.7 4.5 2.8 6.6 3.7 4.0 3.6 4.7 Livestock vegs.- 5.3 3.3 1.0 6.1 2.2 7.6 6.4 6.1 8.4 2.6 Q.charda & Vineyards % 4,.7 2.8 1.7 4.7 2.9 5.8 6.0 8.7 1.8 2.6 Pasture & Livestock feed % 43.6 51.3 86.5 17.6 54.8 63.0 27.9 34.1 10.8 k5.3 Source: StatLatical Yarbook, Tugoslavla, 1971 T.able 7.7: INDICATORS OF PRODUCTIVITY AND TECHNICAL EFFICIENCY IN SECTORS Relative Yleld Index (Average for all Sectors 100) Indiv. in Indiv. with- Indiv. in Indiv.wi=- All Coop.er- out Cooper- Cooper- out Cooper- Sectors Social ation ation Social ation ation Yield of wheat in 1960 17.3 30.6 23.8 -14.h 176.9 137.6 83.2 100 kg/ha 1965 20.5 32.5 24.3 15.8 158.5 118.5 77.0 1968 :21.8 33.6 23.8 16.0 154.1 109.2 73.h 1970 20.7 29.1 21.1 16.5 14o.6 101.9 79.7 Yield of maize in 1960 :23.9 65.4 34.1 21.0 189.9 142.7 37.9 100 kg/ha 1965 23.1 44.9 34.2 17.1 194.4 148.1 74.0 1968 27.6 52.2 1.i 20.6 189.1 145.3 74.6. 1970 29.5 55.0 43.0 23.2 186.h 1h5.8 78.6 Yield of sugar- 1960 294 337 263 281 n14.6 89.,4 95.6 beet in 100 kg/ha 1965 3:29 379 265 224 115.2 80.5 68.1 1968 369 439 312 133 119.0 84.6 36.0 1970 346 394 299 202 113.9 86.4 58. Yield of sunflower 1960 13.3 15.9 12.-7 19.5 95.5 in 100 kg/ha 1965 16.7 19.0 14.0 113.8 83.8 1968 19.2 21.9 15.6 11h.1 81.3 1970 13.6 14.9 12.02 109.6 88.h Yield of potatoes 1960 112 155 113 138.4 100.9 in 100 kg/ha 1965 73 11h 73 156.2 100.0 1968 86 161 8$ 210.5 98.8 1970 89 166 89 186.5 100.0 milk production 1960 1,107 2,103 kg per cow 1965 1,184 3,018 778 254.8 65.7 1968 1,196 3, 82 798 291.1 66.7 1970 1,186 3,76h 803 317.3 67.7 Source: Based on data subritted by the Yugoslav authorities. Tab.e_,L8: Structure of aýricultural mnorts by countries in 1970 Revl" cattle 13 82 5 Frts% "eat 12 57 7 123 Canmd Peat 42 30 19 9 Vair@ 55 5 18 22 Fresh frui t 15 23 42 20 P1u1,1 13 59 33 Hans 18 40 1? 25 vi he 24 28 21 27 therfron ouality vine in 8ottles 2 35 Tobacco 11 15 33 13 28 Sour e: Based on data submitted by the Yugoslav authorities. Table 7.9: OBJECTIVES FOR THE DEVELOPMENT OF PRODUCTION OF MAJOR AGRICULTURAL GOODS UNTIL 1975 Production in 1000 tons Plannod AnnuAl 1969/70 Plan 1975 growth rate Wheat and rye 4,466 51100 2.8 Maize .7,377 8,500 3.0 Sugar Beet 3,293 ,5OO 6.5 Sunflower 327 480 8.5 Tabacco h8 5 2.8 Meat 827 1,000 4.0 Milk (mill lit) 2,688 3,100 3.0 Eggs (mill pieces) 2,671 3,800 7.2 Source: Social Plan of Yugoslavia, Draft, November,1971 Table 7.10: PLANNED PRODUCTIO , CONSUMPTION AND TRADE SURPLUS IN 1975 ( 1000 tons ) Production Consumption Trade Balance3/ Wheat and flour 5.100 0.LOO-/ + 0 Course Erain 9.5oo 7. 30 + 1970 Sugar 600 600 + 0 Beef and veal/ 300 180 + 120 Pork2/ 400 355 + 65 Mutton and lambg/ 60 56 + 4 Eggs 10 0ou + 1U 1 including seed and animal feed 1/ dressed carcase weight -3/' +Exports, - imports Source: Institute of Planning, Beograd, and Social Plan of Yugoslavia, Draft, November 1971 Table 8.1: GROWTH RATES OF INDSTRIAL OtrPUrN Industry branches 196 1,966 1967 1968 19 1 197bi / AvierageS/ Electric power 9.4 10.5 8.8 10.4 12.1 13.4 12.6 12.2 Coal and coke 0.4 -2.2 -10.4 1.5 -1.,5 3.6 14.2 4.5 Petroleum 18.5 19.0 9.4 3.0 117 16.0 13.0 10.9 Iron and steel 7.4 4.9 -0.9 9.1 10.6 13.8 1o.6 11.0 Non-ferrous metals 6.1 2.9 3.7 6.9 10.h 5.9 .0.8 6.0 Non-metallic minerals 8.9 7.4 -1.3 8.0 16.1 11.1 19.5 13.7 Metal products 8.2 0.6 -4.2 4.8 14.9 10.9 10.0 10.2 Shipbuilding 22.0 5.4 13.8 39.0 8.7 -0.6 -3.4 10.9 Electrical equipment 4.7 4.6 3.0 9.1 20.6 7.1 128 12.4 Chemicals 21.4 14.4 1.5 16.1 22.1 16.1 17.1 17.8 Construction materials 4.0 0.3 4.9 1o.6 11.1 8.8 15.0 l1.4 Wood products 7.1 2.8 -4.3 5.6 9.5 6.7 11*3 8.3 Pulp and paper 15.3 7.7 9.8 8.6 6.9 6*3 11*3 8.3 Textiles and clothing 6.9 8.1 -3.1 3.8 5.4 4.4 6.9 5.1 Leather and footwear 5.4 1.2 -3.1 -0.2 9.8 -1.9 9.7 4.4 Rubber products 10.1 7.6 3.1 --0.4 19.9 7.4 14.2 10.3 Food processing 7.2 8.5 2.o -.o.4 8.8 11.0 13.7 8.3 Printing .. 3.9 6.3 9.5 8.7 7.6 10.1 9.0 Tobacco manufacture 7.2 -9.1 0.5 1.0 -9.4 1.8 8.2 0.4 Others 10.0 6.0 3.4 --7.7 19.0 18.3 5.2 8.7 Total 8.1 _42 -0.2 .11.1 9 11.1 a/ Growth of quantum indices of production. S/ Estimate: January-August 1971/January-August 1970. c! Average of the annual growth rates, 1968-1971. Sources: 1965-1970: Statistical Yearbook of SFR of Yugoslavia 1971 1970-1971: Indeks Table 8.2: MAJOR INDUSTRIAL INDICATORS, a/ 1965-1970 IndustJybranches Productionb Empoyment/ Productivjt Personal Income Electric power 69 14.2 47.8 41.5 Coal and coke 9 -24.7 20•3 4.8 Petroleum 74 29.8 33.8 35.2 Iron and steel 43 10.5 30.2 20.9 Non-ferrous metals 33 11.1 20.0 27.2 Non-metallic minerals 48 4.,0 41.9 31 .0 Metal products 27 6.1 19•4 37-9 Shipbilding 80 10.5 63.8 :38.2 Electrical equipment 52 13.9 33.3 14.5 Chemicals 91 22.3 56.2 :32.1 Construction materials 40 -5.0 48.0 51.1 Wood products 21 -5.1 27.9 17.8 Pulp and paper 46 16.8 25.0 32.6 Textiles and clothing 19 8.5 9.9 22.4 Leather and footwear 5 .7 0.4 30.2 Rubber products 42 14.3 24.3 21.3 Food processing 33 8.1 23.1 37•4 Printing 81 8.3 30•4 47.8 Tobacco manufacture -16 -28.2 18.9 35.5 Total 4.7 28.2 a/ Figures show relative index changes (in %) of 1970 over 1965. b/ Calculated from indices of physical production. c/ Calculated from indices of eiqployment. d/ CaLculated from productivity indices. e/ Calculated from indices of average income in real terms. Source: Federal Institute for Statistics Table 8.3: INDUSTRIAL PRICES Industry branches Price ControlY Industrial Producer Prices EMoort Prices (95= 100 =-;,10- 1970 1968 .190 1971-b 1968 15 1 Electric power 100 1:25 133 136 .. .. Coal. and coke 10 109 125 166 99 1o 126 Petroleum 89 97 97 136 115 122 129 Iron and steel 100 119 134 177 89 10 117 Non--ferrous metals 100 133 161 177 94 100 115 Non--metallic minerals 13 112 124 133 97 100 112 Metal products 67 110 120 130 106 106 119 Shipbuilding ** * *. 103 113 102 Electrical equipment 77 111 115 122 111 117 128 Chemicals 80 111 U 120 109 110 126 Construction materials 25 1:28 148 169 100 99 96 Wood products 2 115 159 168 103 106 121 Pulp and paper 7 105 132 142 98 101 112 Textiles and clothing - 111 119 128 101 106 113 Leather and footwear 119 134 142 108 10 107 Rubber products k8 112 120 135 ..- .. Food processing 54 120 141 156 116 121 121 Tobacco manufactures 100 71 73 80 96 92 101 Total 49 :14 128 142 104 107 1L7 a/ Sales at controlled prices in percent of total sales of the industry branch. b/ January-July only. Source: FederaL Institute for Statistics Table 8.4: STRUCTURE OF INDUSTRY, 1969 Industry branches Social product_ Employment Fixed assets ND billion thousands ND billion Electric power 3.035 ä.7 38.6 2.8 14-134 25.1 Coal and coke 1.663 3.7 614.8 4.7 3.052 5.4 Petroleum 2.607 5.8 20.5 1.5 2.849 5.1 Iron and steel 1.615 3.6 46.7 3.1 3.043 5.4 Non-ferrous metals 2.114 4.7 51.1 3.7 3.964 7.1 Non-metallic minerals 1.077 2.4 42.9 3.1 1.269 23 Metal products 7.662 16.9 264.7 19.0 5.483 9.8 Shipbuilding .863 1.9 22.1. 1.6 .743 1.3 Electrical equipment 2.938 6.5 93.7 6.7 1L.966 3.5 Chemicals 3-183 7.0 76.2 5.5 4.063 7.2 Construction metarials 1.621 3.6 53.3 3.8 1.447 2.6 Wood products 3.C02 6.6 127.14 9.2 1.913 3.4 Pulp and paper .839 1.9 27.9 2.0 2.33L 4.1 Textiles and clothing 4.501 10.8 225.8 16.2 3.991 7.1 Leather and footwear 1.115 2.5 41.9 3.0 .52,4 0.9 Rubber products .872 1.9 24.9 1.8 .41:2 0.7 Food processing 2.825 6.2 89.1 6.14 3.296 5.9 Print:Lng 1.890 4.2 47.3 3.4 1.022 1.8 Tobacco manifactures .972 2.1 17.4 1.3 .550 1.0 Others .440 1.0 13.2 0.9 .183 0.3 Total h.234 100.0 3.LÄ10.0 56.235 100.0 Source: Federal Institute for Statistics Table 8-5: EXPQRT AMD IMPOi SflUES (1) (2) (3) (h) (5) Total Net Ind,ustry branches. T.otal Exports (19 Exprt Sharejý Inprt Shareb' Imort Content Exort Share- Electric power 0.1 0.7 5.1 0.1 Coal and coke 0.5 2.6 12.5 14.3 2.2 Petroleum 0.8 2.5 27.1 27.6 1.8 Iron and steel 3*3 10.8 37.8 11.2 9.6 Non-ferrous metals 16.0 37-7 36.7 13.6 32.6 Non-metallic minerals 2.8 19.5 36.6 10.4 17.5 Metal products 14.1 10.2 33.5 13.8 8.8 Shipbuilding 9.8 55.7 36.6 29.8 39.1 Electrical equipnent 8.2 15.h 20.5 29.3 9.3 chemicals 6.5 11.0 28.7 23.1 8.5 onstruction materials 0.2 0.9 2,.1 6.7 0.8 Wood products 8.9 17.7 6.9 9.h 16.0 Pulp and paper 2-3 12.2 23-5 16.2 10.2 Textiles and clothing 114. 13.9 17.9 18.9 11.3 Leather, and footwear 5.h 26.8 15-3 17.6 22.1 Rubber products 0.5 4.9 26.5 30.5 3. Food proØessing 6.5 8.0 8.h 4.1 7.7 Printing o.4 1.4 2.5 8.7 1.3 Tobacco manufactures 2.2 18.9 2.1 5.1 18.1 Others 0.2 0.6 2.0 16.4 1.0 otal, 100-0 211.1 21.6 a/ E1ports (%) 1970 Value of production b/ Imorts o s ( 1970 Doestic consumription Value of production - exports + imports c/ Direct and indirect intermediary iiports Value of production d/ EortShare x (10 Total IMport Content) 1968/1970 Souirce: Statistical Yearbook Input/Output table 1968 Table 8.6: INDUSTRIAL FINANCIAL RATIOS Industry_Branches Depreciation Accumulation Self-fin cing Income Distz.bution Replacement Ra Rate_/ Rat e& RateSV Rate_ 192 961566 -19659 _P61661j Electric pxwer 4.5 10.5 55.3 57.7 28 Coal and coke 6.7 13.3 88.0 96.7 25 Petroleum 10.4 20.8 175.3 864 22 Iron and steel 6.8 15.7 41.2 87.2 58 Non-ferrous metals 9.0 18.0 98.9 793 32 Non-metallic inerals 6.4 20.8 127.9 78.4 33 Metal products 7.5 27.2 258.3 83.3 19 Shipbuilding 7.2 21.9 220.9 85.6 22 Electrical equipment 8.1 35.2 278.7 714.9 22 Chemicals 7.8 26.0 136.0 68.7 37 Construction materials 6.6 32.3 163.0 69.5 33 Wood products 8.2 30.5 203.9 80.9 214 Pulp and paper 5.5 6.8 58.9 112.2 22 Textiles and clothing 7.1 21.4 268.9 85.9 21 Leather and footwear 6.7 29.4 262.7 83.7 26 Rubber products 8.2 52.8 395.6 67.2 20 Food processing 6.0 19.2 152.4 78.0 37 Printing 6.4 37.6 293.6 75.6 31 Tobacco manufactures 5.7 13.3 151.9 87.1 32 Others 7.9 61.0 66.1 82.9 11.7 Total 6.8 19.5 122.1 -5 a/ Depreciation rate: Depreciation/Purchase value of fixed assets. b/ Accumulation rate: Depreciation + Allocations to funds of economic organizations and joint reserves of economic organization/Actual value of fixed assets. c/ Self-financing rate: Depreciation + Funds/Total investments expenditure in fixed funds. d/ Income distribution rate: Net personal income/Net personal income plus allocation to enterprise funds. e/ Replacement rate: Investment expenditure for equipment/Purchase value of equipment. Source: Federal Institute for Statistics Table 8.7: INVESTMENT AND CAPITAL INTENSITY, 1969 Investment2/ (millions percentage Industry branches of dinars) of Total CORh/ CLRI/ Electric power 9,773.0 27.8 9.04 713.9 Coal and colke 1, 981.1 5.h. 5.45 113.1 Petroleum 1,589.3 4.4 3.70 319.4 Iron and steel 4,430.0 12.1 4.87 170.5 Non-ferrous metals 2,991.3 8.1 3.51 158.8 Non-metallic minerals 816.0 2.2 2.59 61.5 Metal products 2,386.0 6.5 1.96 51.2 Shipbuilding 337.4 0.9 1.55 82.1 Electrical equipment 921.5 2.5 1.50 42.9 Chemicals 3,172.3 8.7 2.34 113.5 Construction materials 978.1 2.7 2.86 75.7 Wood products 929.8 2.5 1.88 35.5 Pulp and paper 955.8 2.6 5.52 156.3 Textiles and clothing 1,572.3 4.3 1.76 37.5 Leather and footwear 271.3 0.7 1.28 27.0 Rubber products 194.7 0.5 1.19 37.1 Food processing 1,864.5 5.1 2.76 78.7 Printing 576.9 1.6 1.08 38.9 Tobacco manufactures 21.5 0.7 14.38 60.8 Others 523.3 1.4 1.54 33.3 Total . o6.1 100.C 2.92 88.1 a/ Sum 1966-1969 in current prices according to data from Social Auditing and Accounting Service. b/ COR: Capital-output ratio: fixed assets (in prices of 1966)/social product. c/ QUR: Capital-labor ratio: fixed assets (in prices of 1966)/employment. Source: Federal Institute for Statistics Table 8.8: CHARACTERISTICS OF INDUSTRIAL INVESTMENT BY REPUBLIC CORW CLR-L CLR ICOR ICLR*/ ICLI (1969) (1969) CCR (1955-1969) (1955 -1969) ICOR thousands thousands thous ands thousands level of dinars of dinars level of dinars of ~inm-s Bosnia 4.03 138 10142 118 25.9 86 4.0 125 164.0 110 40.9 87 Mbntenegro 5.4o 185 155.6 177 28.8 95 6.4 200 223.9 151 34.8 74 Croatia 2.148 85 85.2 97 34.4 1114 2.2 69 138.5 93 63.4 135 Macedonia 3-17 109 81•8 93 25.8 85 6.4 2C0 211.-4 1142 33.1 71 Slovenia 2.60 89 89.9 102 34.6 115 2.2 69 131.5 88 59.0 126 S erbia 2.92 100 80.9 92 27.7 92 3.5 109 139.5 93 39.3 84 Serbia proper 2.74 94 77.3 88 28.3 94 ... ... ... • Vojvodina 3.11 107 82.3 93 26.5 88 ... . . ... ... Kosovo 4.14o 151 114.9 130 26.2 87 ... ... . .. . Total Yugoslavia 2.92 100 88.1 100 Q.2 100 3.2 100 1.48.6 100 46.8 100 a/ COR: Capital-output ratio: fixed assets (in prices of 1966)/social outprt. i/ CLR: Capital-labor ratio: fixed assets (in prices of 1966)/employment. 2/ R: Productivity: social product/employment (in 1969). CO)R d/ ICOR: Increnntal capital-output ratio: investment expenditures/increase of social product. E/ ICLR: Incremental capital-labor ratio: investment expenditures/increase of employment. IM:,, Productivity increiment: increase of social product/increase of employient (1955-1969). Source: Federal Institute of Statistics Table 9.1 : SELECTED REGIONAL INDICATORS Bosnia and Montenegro Macedonia Kosovo Croatia Slovenia Serbia Proper Vojvodina Less Developed Developed Regions Yugoslavia Hercegovina Regions Distribution of Total Population, 1971 18.3 2.6 8.0 6.1 21.6 8.4 25.6 9.5 34.9 65.1 100.0 Distribution of Active Population, 1971 (M) 15.5 2.0 7.0 3.7 22.4 9.2 30.7 9.3 28.3 71.7 100.0 Distribution of Social Sector Dnployment, 1970 13.5 2.0 6.7 2.6 25.1 11.2 25.14 10.5 24.8 75.2 100.0 Distribution of Social Product, 1970 11.6 1.8 5.5 2.0 26.6 15.8 25.7 11.0 21.0 79.0 100.0 Social Product Per Capita, 1970 60.9 67.1 70.1 33.9 124.1 189.3 102.,5 116.3 58.7 116.6 100.0 Social Product Per Worker in Social Sector, 1970 a/ 81.8 89.7 80.1 80.1 109.2 121.6 98.4 98.5 80.5 106.4 100.0 Personal Income Per Worker, 1970 a/ 90.4 93.5 82.5 69.4 102.5 117.9 96.4 99.1 86.3 l0.5 100.0 a/ Epressei as Index, Yugoslavia = 100 Sources: Statistical Yearbook and Preliminary Results of 1971 Census. Table 9.2: LABOUR FORCE AND WORKING POPULATION 1961 1971 t1golavi a Less Developed Yugoslavia Less Developed Developed Regions 'Developed Regions Regions ]Regions Working Age Population as Percent 62.6 56.9 65.4 64.9 58.5 68.4 of rotal Population Active Population as Percent of Working 71.8 67.1 73.8 66.8 60.0 69.8 Age Population Active ]Population as Percent of Total [650 38.2 48.2 43.3 35.1 47.8 ?opulation rotal Pcopulation 18,519 6,120 12,429 20,503 7,165 13,339 (Thousands) Sources: Statistical Yearbook Federal Institute of Statistics Table93: DISTRIBUTION OF ECONOMCALLY ACTIVE POPULATION BY SECTORS (in Percent) 1953 Yugoslavia Less Devreloped Yugoslavia Leas Developed Developed Regions Developed Regions Regions Regions Industry and Mininkg 8.0 6.4 8.6 :L9.5 17.1 20.4 Agriculture 66.8 68.8 66.0 h7.6 50.8 h6.2 Trade, Transport and Catering 4.9 4.3 5.2 10.1 B.5 10.7 Other 20.3 20.5 20.3 22.7 23.5 22.4 Total. 100.0 100.0 100.0 100. 100.0 100.0 Scvrcib : St.atistical Yearbook Table 9.h: PERSONS EMPLOYED ACCORDING TO LEVEL OF PROFESSIONAL EDUCaTION (As of December 31, 1969) With Total Unskilled Setniskilled Skilled Professional Employed Workers Workers Workers Education Bosnia and Hercegovina 495 24.4 13.3 32.8 29.5 Montenegro 74 19.9 13.4 31.4 35.3 Croatia 912 214.8 13.3 31.6 30.3 Macedonia 2,47 20.2 14.0 32.4 33-,4 Slovenia 515 26.IL 15.7 31.0 27.2 Serbia Proper 936 21.7 11.6 33•1 33.6 Vojvodina 385 26.1 11.2 32.7 30.0 Kosovo 96 18.2 13.7 30.4 37.7 Less Developed Republics 912 22.3 13.5 32.3 31.9 Developed Republics 2,748 214.1 12.9 32.2 30.8 Yugoslavia 3,660 23.8 13.0 32.2 31.0 Source: Statistical Yearbook, 1971 Table 9.5: GROwTH OF GROSS MATERIAL PRODUCT BY REPUBLICS, 1960-1970 (1966 prices) Growth rates: 1960-1970 1960 1970 (percent) GIP Population Per Ca-ita GM Ppulation Per Canita GMP Ponulation Per Cauita (million dinars) (000 dnas (million dinars) (00D) (dinars Bosnia and Hercegovina 8,476.0 3,260 2,6,5 14,536.7 3,703 3,925 5.6 1.4 6.2 Montenegro 1,029.0 667 2,203 2,357.7 525 6,491 8.7 1.2 7.6 Croatia 17,663.4 6,160 6,213 32,920.1 6,611 7,663 6.6 0.7 5.9 Macedonia 3,237.0 1,392 2,325 6,379.1 1,629 6,223 7.B 1.6 6.2 Slovenia 9,565.0 1,530 6,056 19,621.5 1,713 11,305 7.3 0.3 6.5 Serbia, of which 25,362.6 7,583 3,365 47,612.9 8,335 5,673 6.5 1.1 5.5 Serbia proper 16,321.9 6,799 3,å01 31,671.5 5,219 6,030 6.3 0.9 5.9 9ojvodina 7,812.1 1,360 6,266 13,565.5 1,966 6,971 5.7 0.6 5.1 Kosovo 1,223.6 96 1,301 2,575.9 1,220 2,111 7.7 2.6 5.0 Less Oeveloped Republics 13,963.6 6,063 2,312 26,367.6 7,077 3,723 6.6 1.6 6.9 Develod reublics 51,162.4 12,359 6,160 97,378.6 13,294 7,325 6.7 3.7 5.9 Yugoslavia 65,130.3 13,602 3,539 123,726.0 20,371 6,076 6.7 1.0 5.6 Source: Statistical Yearbook 1971 Table 9.6. NET MATERIAL FRODUOT BY SECTORS (in percent) Average 1959-60 Average 1969-70 Industry Agriculture Trade, Trans- Industry Agriculture Trade, Trans- and and portation & and and portation & ining Forestr_ Caterig Other Total Mining Forestry Cateri Otners Total Underdeveloped Regionis 25.7 hO.9 20.3 13.1 100 33.3 26.4 2h.7 15.6 100 Bosnia and Hercegovina 29.1- 35.0 20.7 12.2 10 37 ~52. l4.6 100 on.tenegro 17.6 38.4 26.1 17.9 100 28.2 19.6 35.5 16.7 100 Macedonia 22.5 4h.8 20.2 12.5 100 30.7 28.9 24.0 16.4 100 Kosovo 18.3 51.6 13.6 16.5 100 31.5 31.4 19.1 18.0 100 Developed Regions 28.1 31.7 22.7 14.5 100 35.2 22.2 27.5 15.1 100 Croatia 2.U 31.6 25.14 171 100 3T4.¯ 70.( 29.0 16.7 l00 Slovenia . 21.2 23.7 15.7 100 45.1 11.8 27.5 15.6 100 Serbia (Proper) 29.3 35.9 25.0 9.8 100 33.9 23.4 27.8 14.9 100 Vojvodina 11.7 53.7 17.8 16.8 100 26.6 37.2 23.1 13.1 100 Yugoslavia 27.6 36.0 23.0 13.h 100 34.8 23.0 26.9 15.3 100 Source: Based on data of the Federal Institute of Statistics. Table 9*7: GROSS FIXED INVESTRENT BY SBCTORS2 (in percent) 1959-196i 1965-1970 Industry Agriculture Transportation Others Total Industry Agriculture Transportation Others Total and and and and Mining Forestry Mining Forestry Less Developed Regions 41.6 12.1 14.7 31.6 100 43.4 7.9 15.6 33.1 100 Croatia 32.2 9.8 19.6 38.4 100 28.2 8.0 15.2 43.6 100 Slovenia 31.7 10.6 12.8 h4.9 100 35.4 6.6 12.6 45.4 100 Serbia proper 33.9 6.7 15.8 13.6 100 40.8 4.9 11.0 43.3 100 Vojvodina 30.5 33.3 7.0 29.2 100 31.7 26.1 7.1 35.1 100 Developed Regions 32.1 1.1 13.8 3900 100 34.0 11.4 11.5 43.1 100 Yugoslavia 34.9 12.0 114.6 38.5 100 37.1 8.6 12.6 41.5 100 Bosnia, 12.1 9.6 13.,8 34.5 100 41.8 6.2 16.9 35.2 100 Montenegro 44.7 5.7 25.8 23.8 100 30.2 4.0 27.6 38.5, 100 Macedonia :36.5 16.4 11.9 35.2 100 43.3 10.2 10.9 35.7 100 Kosovo 53.2 16.8 7.2 22.8 100 58.2 11.3 7.1 23.3 100 a/ Average of annual percentages over 1959-1966 and 1965-1970 respectively. Source: Statistical Yearbooks of Yugoslavia. L Table 9.8: STRUCTURE OF INDUSTRY: SOCIAL PRODUCT, 1961 AND 1969 (percent) Bosnia Montenegro Macedonia Kosovo Croatia Slovenia Serbia Vojvodina Developed Less Developed Yugoslavia and proper Regions Regions Hercegon-a__ - _ - - - - - - - - - --- - - 1961 1969 1961 1969 1961 1969 1961 1969 196 1969 961 1969 1961 196 1961 1969 1961 1969 1961 1969 1961 1969 Flectric Power 5.0 10.01 14.9 17.10 7.4 9.46 3.2 4.20 3.7 5.90 5.1 5.81 4.44 6.17 2.9 5.46 6.2 5.91 6.0 9.86 L.6 6.7 Coal and Coke 14,.0 10.30 3.6 2.43 -- -- 5.0 21.49 2.8 0.89 5.0 4.03 4.69 3.82 0.5 0.13 3.7 2.44 10.2 8.61 5.1 3.7 Petroleum 3,9 1.29 - -- - -- - -- 12.14 16.61 0.4 -- -- -- 4.0 9.81 5.1 7.0å 2.7 0.79 4.6 5.8 Iron and Steel 15.2 11.10 26.9 15.30 1.4 2.11 -- -- 2.14 2.03 7.8 4.96 1.24 0.55 - -- 3.2 2.08 12.5 8.45 5.2 3. 6 Non Ferrous Metals 0.9 0.71 7.8 5.47 5.9 7.80 52.3 37.22 2.3 1.21 5.2 5.36 8.10 8.73 - -- 4.5 4.32 5.6 6.21 4.7 4.7 Non Metallic Minerals 2.6 1.97 2.5 1.30 6.3 6.34 3.5 2.14 1.2 1.52 2.2 1.93 4.32 3.35 2.8 2.55 2.5 2.27 3.3 2.85 2.7 2.4 Metal Products 14.8 14.65 5.1 6.59 5.4 5.72 0.5 3.52 12.6 11.18 19.a 21.32 26.65 25.28 19.3 18.09 19.2 18.68 11.5 11.03 17.5 16.9 Ship building -- - 1.2 1.36 -- -- -- -- 5.6 5.65 0.2 0.10 0.23 0.15 1.2 1.51 2.2 2.37 -- 0.11 1.8 1.9 Electrical Equipment 3.2 7.59 4.9 8.68 2.8 2.75 - -- 4.8 5.63 6.5 7.10 6.28 8.65 6.3 3.38 5.8 6.66 3.0 5.91 5.2 6.5 Chanicals 4.6 4.87 0.8 1.34 6.0 9.41 -- 3.37 5.8 7.84 5.3 7.16 8.29 7.14 2.9 7.85 6.1 7.67 4.3 5.40 5.7 7.0 Construction Materials 1.6 1.90 2.5 1.39 5.3 8.31 7.7 2.71 5. 14.26 2.7 3.16 3.40 3.00 7.4 2.72 4.3 3.67 2.3 3.29 4.0 3.6 Wood Products 11.7 13.43 13.2 11.26 5.6 8.26 3.8 4.58 6.3 5.42 7.1 8.62 2.94 3.31 14.6 4.58 5.4 5.47 12.2 11.30 6.8 6.6 Pulp and Paper 5.0 3.85 -- 4.81 0.2 0.33 0.3 0.55 2.0 1.33 4.1 2.90 1.03 0.98 -- 1.36 2.1 1.60 3.5 2.86 2.4 1.9 Textiles and Clothing 4.5 7.79 1.8 10.89 16.7 17.93 12.0 12.07 11.2 10.04 1.8 12.24 9.76 10.0 16.5 13.85 12.2 10.92 7.0 10.60 11. 10.8 Leather and Footwear 1,0 1.73 0.6 2.18 2.4 3.56 1.9 2.33 1.5 1.67 3.9 4.54 1.74 1.614 3.1 3.67 2.3 2.54 1.3 2.21 2.1 2.5 Rubber Products - 0.04 0.4 0.41 -- -- -- 1.19 3.9 b.22 1.4 1.29 1.98 1.62 -- 0.39 2.3 2.37 -- 0.18 1.9 1.9 Food Processing 1.2 1.42 2.1 3.89 9.2 3.46 1.5 -- 8.6 8.43 3.7 4.50 5.25 5.1L 23.6 17.21 7.8 7.36 2.8 1.91 6.7 6.2 Printing 1.3 2.36 2.0 2.62 2.2 2.80 1.5 0.76 2.3 3.85 2.6 3.86 4.20 6.42 3.7 14.24 3.1 4.66 1.5 2.32 2.8 4.2 Tobacco Manufactures 5.9 4.26 6.4 2.44 22.7 10.38 5.9 3.87 2.5 1.15 1.3 0.39 3.98 2.59 0.7 0.55 2.4 1.34 9.0 5.35 3.8 2.1 Others 0.6 0.69 3.3 0.54 0.5 1.39 0.9 -- 2.7 1.17 0.9 0.73 1.48 1.21 0.5 c).65 1.7 1.03 0.8 0.76 1.5 1.0 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Statistical Yearbook of Yugoslavia Table 9.9 INCREMENTAL CAPITAL OUTPUT RATIDS BY REPUBLICS 1965-1970 Less Developed Republics 6.5 Bosnia and Hercegovina 5.82 Montenegro 6.66 Macedonia 9.63 Kosovo 7.05 Developed Republics Croatia 4.24 Slovenia 3.65 Serbia Proper 5.43 Vojvodina 3.97 Yugoslavia 4.94 a/ Assuming one year lag between fixed investment and,increment in output, defined as gross material product. Source: "Investment" 1907-1969 by Institute of Economic Investments, Belgrade. Table 9.10: SELECTED PRICE INDICES, 1966-1971 Producers Prices Retail Prices Industrial Producets Agri. Cost Capital Raw Consumer Products Ind. Agri. of Total GoodIs Materials Goods (1970-100) Total Goods Goods Services Living 1966 87 92 84 88 85 76 77 81 67 74 1967 86 94 86 90 82 82 82 82 76 80 1968 89 94 -87 89 79 85 & 9I 84 84 1969 91 95 89 93 87 91 91 89 94 90 1970 100 100 100 100 100 100 100 100 100 100 1971 115 n12 118 112 126 115 114 119 115 115 Source: Federal Institute for Statistics Table 9.111: NIGHTS SPENT BY FOREIGN TOURISTS BY COUNTRY OF ORIGIN, 1967-1971 1967 1968 1969 1970 1971!/ Countrof Origin Number % Number L Number _ Number $ Number _ (0) -- T1c001700T 7-0 7000 T ) Italy 1,361 8.4 1,729 10.0 2,105 9.14 2,282 10.1 1,025 8.o West Germany 4,568 28.14 5,079 29.5 7,391 32.9 8,152 36.1 4,76h 36.9 France 951 6.0 818 4.8 913 4. 1 1,002 4. 4 513 4.0 Belgium 386 2.4 373 2.2 417 2.0 436 2.0 324 2.5 Netherlands 788 L.9 875 5.1 955 14.2 1,065 14.7 2,022 7.9 Total EEC 8,051 50.1 8,874 51.6 11,781 52.6 12,937 57.3 7,648 59.3 Austria 3,022 18.8 2,9h3 17.1 3,575 15.9 3,423 15.2 1,907 14.8 Great Britain 1,160 7.2 957 5.6 1,094 4.9 1,1406 6.2 868 6.7 Sweden 326 2.0 32L 1.8 396 1.8 361 1.6 211 1.6 Switzerland 345 2.1 386 2.2 549 2. 4 590 2.6 400 3.1 Denmark 156 1.0 201 1.2 213 0.9 278 1.2 222 1.7 Norway 35 0.2 40 0.2 47 0.2 65 0.3 40 0.3 Total ETA 5,oU 31.3 4,851 28.1 5,874 26. 1 6,123 27.1 3,648 28.2 Other convertible countries 346 2.1 31 2.0 457 2.0 683 3.0 438 3.4 Total convertible countries 13. 3 83. 11bg066 81.7 18 112 80.8 19 743 87.4 11 734 90.9 TOTAL 16 107 100.0 17,209 100.0 221,437 100.0 22,560 100.0 12L 100.0 a/ January-July Source: Federal Institute for Statistics