COPT NO.
FOR THE ASSISTANT DIRECTOR FOR REPORTS AND ESTIHATES
G/s*
THE YUGOSLAV DILEMMA
CIA HISTORICAL REVIEW PROGRAM RELEASE IN FULL
DISSEMINATION NOTICE
L This copy ol this publication is for the information and use of the recipient designated on tho front cover and of individuals under the jurisdiction of the recipient's office who require the information for the performance of their official duties Further dissemination elsewhere in the department to other offices which require thefor the performance of official duties may be authorized by the following:
a. Special Assistant to the Secretary of State for Research and Intelligence for the Department of State
irector of Intelligence, OS, USA, for the Department of the Army
Naval Intelligence, for the Department of the Navy
of Intelligence, USAF, for the Department of the Air Force
of Security and Intelligence, AEC, for the Atomic Energy
eputy Director for Intelligence, Joint Staff, for the Joint Staff
g. Assistant Director for Collection and Dissemination, CIA, for any other Department or Agency
his copy may be either retained or destroyed by burning in accordance with applicable security regulations, or returned to the Central Intelligence Agency by arrangement with the Office of Collection and Dissemination. CIA.
DISTRIBUTION: Office or Uie President National Security Council National Security Resources Board Department of State Office of Secretary of Defense Department of the Army Department of the Navy Department of the Air Force
SUtc-Army-Navy-Air Force Coordinating Committee Joint Chiefs of Staff Atomic Energy Commission Research and Development Board
THE YUGOSLAV DILEMMA SUMMARY
Recent developments In tho worsening quarrel between the Soviet bloc andhave highlighted the paradox which now confronts Tito. While the USSR is shown lo be determined to deal with Tito's regime only on terms of the latler's complete submission. Tito can compromise onlyasis of political and economic equality. Soviet economic pressure has forced Tito to seek Increased Western trade and has made him economically increasingly dependent on the "imperialistic" West; yet anythingolitical rapprochement with the capitalist world might cause lilm to lose his principal domestic support, which emanates from the group of fanaticalwho make up the high command of the Yugoslav Communist Party. Moreover, any Yugoslav territorial compromises to Its non-Communist neighbors would tend to alienate the nationalistically minded rank-and-file party members and sympathisers.
Publicly, as shown ln Foreign Minister KardelJ's important policy announcement ofhc Yugoslav Government still supports the anti-Western Soviet line ln foreign policy. It Is evident, however, tliat as Tito's economic situation grows more desperate and his economic dependence on thc West (particularly the US)he may be forced to modify his hitherto vigorous anti-Western foreign policy.
Note: The mwjligcnce organlwUons of thc Departments of Slate, Navy, and the Ah- Force haw
i
THE YUGOSLAV DILEMMA
The increasingly sharp accusations recently exchanged between the USSR and Yugoslavia, as well as the virtual economic boycott by Uie Soviet Union of Its estranged satellite, clearly indicate that the USSR-Yugoslav break hasefinite turn for thc worse. This turn of events highlights the paradoxical situation which nowTito. Of the many measures instituted by the Kremlin against him, the orbit's growing economic blockade has proved the most effective, and. In his resulting desperate economic isolation, Tito must seek some alleviation of his mounting predicament In closer trade tics with the Wast. Tito must also realize, however, that the search for relief of his economic plight in the West may necessitate some moderationitherto vigorous anil-Western foreign policy.
So long as such moderation represents only the well-known Communist tactical maneuvering, it would not endanger Tito's internal positionarked deviation from Communist theory, for the sake of political rapprochement with the West, might deprive Tito of the support of his trusted lieutenants. Furthermore, any territorial concessions Tito might make to his non-Communist neighbors would weaken the support he is receiving from Yugoslav nationalists. Thus, Tito is faced with the problem of obUuning maximum trade concessions from the West, while at tho same timeinimum of political commitments in that quarter.
Tito has publicly admitted the serious effects on Yugoslav economy of theeconomic boycott by the Soviet bloc. Thc Cominform's deliberate failure to provide him with thc necessary industrial equipment, petroleum products, and technical assistance hasrastic revision of thc Yugoslav Five-Year Plan to primary emphasis on heavy Industry and housing. Ills choice of the latter for such priority is Indicative of Tito's anxiety to gain the continued support of the Yugoslav workers and Increase the Yugoslav industrial manpower potential by moving peasants Into the cities.9 Yugoslav budget In which military expenditures have received the largest proportionate Increase (SOotalurther indicates Tito's concern over the security of his regime.
In addition, Tito has publicly accused the Soviet bloc of reneging on the fulfillment of its trade agreements with Yugoslavia. Soviet trade with Yugoslavia, alreadywill be cut drastically9 to an announced level of one-eighth that of the past year. Evidence Is accumulating that the other members of the Soviet bloc are following the Kremlin's lead in restricting the8ntercourse with Yugoslaviainimum. Effective economic blows already carried out against Tito by thc Soviet bloc have been the stoppage of Yugoslav oil imports from Rumania, Hungary, and Albania; and. more recently, the curtailment of Polish coal and Czechoslovak heavy machinery.
In the face ot this growing economic blockade, Tilo is attempting to re-establish and expand commercial ties with the West. In the past six months, he has negotiated trade treaties with the United Kingdom, Switzerland. Belgium, Austria, thc Netherlands,
2
India, western Germany, and Argentina. Treaties wiin Italy and Pakistan arerocess o( negotiation. Tito has likewiseffer, contingent upon an easing ol US export controls, to exchange Yugoslav metals for US industrial equipment.
Meanwhile, the Kremlin concurrently with its increased pressure on Tito, is taking measures topread of "national" Communism into the remainder of the Satellite empire. Because its system of control is based upon unquestioning obedience to Moscow dictates, the Kremlin's preoccupation with eliminating further sources of rebellion hus resulted In an acceleration of plans to neutralize all satellite elements potentially hostile to the Soviet Union. The USSR, therefore, cannot risk the Impactompromise with Tito on his terms, or Indeed on any terms less than absolute subservience, would have on the relatively unstable Soviet empire.
Despite the conflict between Moscow-directed world Bolshevism and Yugoslav "national" Communism, the Tito regime has reaffirmed Its ideological affiliation with the Soviet bloc in the stand against the West. In what Is probably the most important Yugoslav foreign policy statement In recent years, Foreign Minister Kardclj on8 re lie rated Yugoslav adherence to Soviet policy in dealing with the "imperialistic" West Kardclj In effect indicated that the Kremlin-Tito rift was an internal Communist affair independent of the East-West struggle. In Yugoslavia's delicate position, however,eiteration of lis International position Is, In any event, necessary if only "for lhe record."
It is possible Ihat the attempt toestern economic orientation for Tito's previous dependence on the Soviet bloc may In timeradual moderation of Yugoslavia's anti-Western foreign policy. There lutvc been Indications that the official Yugoslav policy line has been somewhat softened In the current negotiations with Italy. The possibility likewise exists that Yugoslav tactics might also beregarding thc issues of Trieste, Carinthia, or aid tothe economic gains accruing to Yugoslavia were sufficient, and especially if the USSR should no longer support Yugoslav foreign policy against the West.
The continuing riftource of Irritation to lhe Kremlin, and reveals both thc unwillingness and lhe inability of the Kremlin to eliminate il at this time. Despite the difficulties which the Tito defection presents In the development of economic integration and political control of the Soviet bloc, there remains little probability of anTito, realizing that recantation would spell his doom,ew Year's Day message defiantly told the Cominform thatompromise based on his complete political and economic independence was acceptable.
For the Kremlin, on the other hand, the priceompromise with Tito Is loo lUgh. The very concept of Soviet domination over Its growing empire would be Jeopardized.esult, the struggle must continue and intensify. Economic necessity shouldontinued gradual revision of Yugoslav policies, resultingontinuedol Soviet-Yugoslavonsequent attempt lo shift Yugoslav economic orientation toward the West,ncreased probabilityodified Yugoslav policy line toward the West.
Original document.
Comment about this article, ask questions, or add new information about this topic: