yon the assistant director
KErORTS AND ESTIMATES
ESTIMATE OF THE YUGOSLAV REGIME'S ABILITY TO RESIST SOVIET PRESSURE9
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ESTIMATE OF THE YUGOSLAV REGIME'S ABILITY TO RESIST SOVIET PRESSURE9 e
SUMMARY
plans do not Include direct Soviet and/or Satellite military aggression against Yugoslavia lor the duration
In additionore hostile butineffective propaganda campaign, border incidents against Yugoslavia will probablyThese activities, however, will notinto large-scale guerrilla warfare
Tito's regime will meet no Lnsurmounl-able obstacles to Its continuance In
It Is estimated that the proclamation of an "independent" Macedonia would havesuccess in gaining the support of any sigrdncant number of Yugoslav Macedonians.roclamation, however, Is considered unlikely for the Immediate future.
Under prevailing internal and external conditions, the Soviet bloc will not be able In
This estimateurrey of some of the methods available to the Kremlin to dispose of the Tito regime and of the means available to Tito to resist such methods as the Kremlin may employ Inbc methods and means under consideration fall logically into four main categories: Military, political, economic, and subversive.
o exert sufficient economic pressure to force the collapse of the Yugoslav economy. Even without Imports from tbe US, theeconomy would not be seriouslyduring this period.
ito will seek to acquireimports from the West. lie isconfident of Western determination to maintain himontinuous irritant to the Kremlin, and of his ability to obtainassistance from the West with aof political concessions andolicy of self-protection and of economic self-interest, he will continue to trade with the East In certain strategic items.
Military pressure from thc East may eventually necessitate, for the purposes of US policy, military and economic assistance which would provide Yugoslavia with some means of self-protection. Much depends upon the extent of such pressure. The West,could provide necessary militaryfor immediate emergency use more easily and with greater assurance of effective utilization than it could the means forof such equipment.
he Intelligence orsaruxaUons of the Departments of the Army and Ihe Air Force have concurred In this report. The intelligence CrganLtaUon of the Department of State "concurs in the main body of the subject report. The appendix, however, contains ft euros which are notat variance with our csUmatcs. Concurrence, therefore, does not extend lo the accuracy of the details in lhe appendix.'* The Director of Naval Intelligence "concurs with subject paper except for paragraphace I. and fourth paragraph. 2nd column, pagehich discuss future US. policy. Tbe Office of Naval Intelligence has no cognisance over the formulation of UB.bc report is based on information available to CIA asune IMS.
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ESTIMATE OF THE YUGOSLAV REGIME'S ABILITY TO RESIST SOVIET PRESSURE9
Military. The Soviet leaders hate the following pos-
courses of action open to them into bring about the overthrow of tbe
Tito regime by force of arms:
Development of border incidents into crganlzed guerrilla warfare (see Subversive Section,
Direct military aggression by aof satellite armies from countriesto Yugoslavia;
Direct military aggression againstby Soviet troops.
Large-scale guerrilla warfare, which would actuallyar of attrition, presents the only serious military threat to Tito's control for the remaindert ls estimated that the Kremlin will not resort to large-scale guerrilla warfare unless It ls prepared to risk open war with Yugoslavia. Tito would take vigorous counter-measures to preventar of attrition with Itsfatal consequences to his regime. In such an eventuality, those measures would probably Involve Yugoslav-sponsoredaction in Albania and Bulgaria, which would create serious difficulties for the regimes of those two countries, especially the insecure Hozha Government ba Albania.
Thc Yugoslav Army, which is the second largest and second most competent inEurope, can defeat any combination of bordering satellite armies. The latter, apart from their doubtful loyalty to the Soviet Union, cannot9 attain the capabilities to cope with the Yugoslav Armed Forces, even with extensive Soviet logistical aid.
Direct Soviet military Intervention9 is considered improbable. Prior to any direct attack upon it. the Yugoslav Army would probably have from thirty to sixty days toIn the mountainous region south of the Sava and Danube rivers, thus preventing Its annihilation by the USSR forces. The de#
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termination and ability of Tito's forces toeven In guerrilla warfare, would act as an additional deterrent to direct Soviet military lnterrenUorx
2. Political.
The Soviet Union can expand its dialectical campaign against Tito and step up the war of nerves against Yugoslavia by increasing the number and virulence of protests against alleged Yugoslav-Inspired border incidents. Through propaganda media It can appeal more and more openly to various Yugoslav minority groups to overthrow the Tito regime in return for promised preferential treatment. Though considered less likely, it couldUSSR support of Yugoslav claims in Trieste, Italy, and Austria, and could organize and recognize an "Independent" Macedonian state aimed at undermining Tito's position In southern Yugoslavia. Even more unlikely,inal positive political step. It could sever formal Soviet end satellite diplomaticwith Yugoslavia.
Since the beginning of the year. Yugoslav-Soviet relations have increased in hostility. The intensified Soviet propaganda campaign, however, will probably meet with little success because the Comlnform charges are becoming increasingly hollow and Ineffective. On the otber hand, Comlnform propaganda tactics have had the eflect of rallying the extensive non-Communist Yugoslav population to Tito'sajority of the Yugoslavs. In spite of their dislike for Tito, would support him rather than contribute to thc return ofto Soviet control.
There are certain minority groups inMacedonia, and possibly thc other Yugoslav republics, who might attack Tito's regime In exchange for promises oftreatment by the USSR. Tito can thwart the potential threat of such groups through his security police The proclamation of an
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"independent" Macedonia would have little success In gaining the support of anynumber of Yugoslav Macedoniansroclamation. In any event, is considered unlikely for the Immediate future. If seriously threatened at any time9 by the formationacedonian state, Tito could engineer mass deportations ofMacedonians to other anas InBe could also cut off existingaid to the Oreek guerrillas and might even come to some understanding with the Oreek National Government
It Is believed that Tito's early conviction that the Kremlin planners did notar with the West gave him the courage. Initially, to defy the USSR. As he probably still holds to his original estimate concerning Soviet Intentions, Tito will react vigorously to any menacing Soviet-Satellite overtures which directly threaten his security. Theleaders, never certain of Tito's reactions or his ability to Involve them In an undesixed war with the West, will proceed with caution-Tito always has availableinal political counter-measure thc threat to charge theUnion with aggression before the United Nations.
3. Economic
Tbe Soviet-bloc cations can impose many economic sanctions against Yugoslavia- For instance, they can stop their deliveries ofequipment and essential rawIt is estimated, however, that the Kremlin will not apply total economicagainst Yugoslaviahile such sanctions would not be sufficiently effective to Impair seriously the over-all Yugoslavthe loss of Yugoslavia's strategic metals would be detrimental to Soviet-bloc economy.
6 there have been few signs ofdeterioration in Yugoslavia8 thc per capita grain production approximated the prewar levels and food shortages created by forced exports are expected to be alleviatedito has been able to importto maintain the restricted use status
1 There is no conclusive evidence that warU. or Is not, being sent irom Soviet-bloc nations to Yugoslavia.
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complicated by the Satellite embargoes;of steel, non-ferrous metals, electric power, textiles, and timber has reachedlevels, and in each case is continuing to expand; and the transportation system is capable of meeting all foreseeable
If the present reduction in Easterntrade with Yugoslavia is extended toomplete cessation of trade, Tito's economy will not be seriously damaged,the loss of Czech and Hungarianand equipment and of Polish and Czech coke willomewhat greateron the non-orbit countries for these items.
Yugoslavia, In anticipation of unfavorable relations with the Soviet bloc and uncertainty In Its trade dealings with the US, has already concluded several important trade agreements providing for expanded trade with the West
The Yugoslav economy, while notIs not making thc industrial expansion envisaged in Its unrealistic Five-Year Plan. Even If Yugoslavia were able to procureforeign exchange to purchase Industrial equipment, rapid Industrial progress would not be feasible in the near futurearge Increase In the skilled labor supply and substantial technical assistance from the West.
Military pressure from the East maynecessitate, for the purposes of Western policy, military and economic assistance which would provide Yugoslavia with some means of self-protection. Much depends upon the extent of such military pressure from the East, but the military necessities can beby thc West for Immediate emergency use far more easily than can the means for the production of such military equipment, with greater assurance for effective utilization.
4. Subversive.
Under Soviet direction, the Soviet-bloccan increase the scope of subversiveIn Yugoslavia. They can infiltrate numerous small anti-Tito bands fromsatellite areas in order to disseminate anti-Tito propaganda, enlist recruits, incite local Insurrections, perform acts of sabotage.
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communications, and prepare the way lor assassination of Tito and his aides. The Sorift-bloc nations can employ aircraft to drop anti-Tito propaganda leaflets and to parachute arms, supplies, and guerrilla war-rare specialists to anti-Tito groups.
Although Tito can expect Intensification of Soviet-Inspired covert guerrilla activity. It is estimated that for at least the remainderhe effectiveness of such maneuvers or other subversive tactics can be rnlrumlsed. The vast majority of the Yugoslavprobably support Tito's regime. Tbeconstitute about twof thc total partyThese anti-Tito elements are divided roughly into three mainld line Communists who spent many years of their lives ln the Soviet Union and whose sympathies are with theelements who are dissatisfied because
they faded to gam high positions in thccommensurate with their war-time records;ommunists who leftas refugees before tbe war and have subsequently been repatriated- This latter group had no contact with the Partisanand hence feci no particular loyalty for Tito. These pro-Comlnform groups areattempting to organize activeto the Tito regime by concentrating on wresting control away from thc army. Tito, apparently aware of the presence ofotentially dangerous opposition. Is retiring these elementsroup to the background In Party affairs and replacing the known un-rcliablcs with young stalwarts. Tito's secret police <UDB) are considered loyal and will provide stern counteraction to any campaign to Infiltrate Comlnform agents extensively, perpetrate widespread acts of sabotage,disturbances or Irisurrections, orassassination plots.
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APPENDIX
ESTIMATE OF YUGOSLAVIA'S ECONOMIC POSITION
Agriculture.
Yugoslavia has an agricultural economy, without appreciable benefits of8 the per capita production of grain approximated the prewar level which permitted annual exports ofetric tons. This production is maintained by backward methods and is not dependent upon mechanization. About half ofpresent usable tractors were Imported during the postwar period. Any substantial additions of tractors and motor-drivenmachinery in the near future would be of little benefit except on existing coUec-Uvc and state farms because of the poorof the roads in the rural areas, tho hilly terrain, and thc limited number of trained operators. At the present time there arefewerractors Inwhich can service thecres comprising the collective and state farms. Since the acreage of these farms represents less than three percent of the totalut in production because oftractors would hardly cripple thc economy of the country. However, any great increase in tractors and motor-drivenmight handicap the entire economyof the related supply problems, such as the greater need for petroleum and spare parts.
Unlike some of the Satellites, Yugoslavia has no serious shortage of draft animals. Tbe number of horses as9rercent of prewar,ercentattle totals are nearly at thc prewar level.
Food shortagesspecially in fats end oils, were not due to lack of basic supplies, but to government policy, such as the hog confiscation in September and large exportsgrains and meat. The food situation
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should Improveuch improvement Is not dependent upon farm machineryfrom the West, nor will It be seriously affected by an embargo from the Soviet bloc
2. Petroleum
Before World War H, Yugoslavia producedetric tons of crudea year, while the present estimated annual output0 tons. Prewar annual domestic requirements are estimated to beons of petroleum products. At present, If military requirements are added to estimated civilian needs, Yugoslavareons. Under the Five-Yearons of annualde petroleum output is to be achieved by the enduch an Increase Independs entirely upon theof oil drilling machinery, for exploration and exploitation. It Is extremely unlikely, however, that Yugoslavia will be able tosufficient equipment, either at home or abroad, to realize its goaL
In addition, thc government planned to place Inon cracking plant by the beginningugoslavia is entirely dependent on imports to equip this plant In view of the limited number of sources of equipment and the possiblein acquiring it, it is inconceivable that this refinery can be placed In operationr soon thereafter. Yugoslavia, Itself, is probably capable of maintaining the existing oil machinery inventory but is not capable of manufacturing additions.
The problem of insufficient supplies ofproducts which existed in Yugoslavia before the rift was aggravated by the embargo applied during the summer8 by the other Eastern European countries. However, primarily as the resultrade agreement with thc UK, lt appears likely that Yugo
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will be able to obtain sufficient foreign crude oil to meet9 requirements. There Is considerable evidence, moreover, that throughostwar Imports ofand motor gasoline were sufficient to maintain the restricted level of consumption in effect since the close of World War n, until imports from the West were received.
Unless Western Europeotalthe denial of petroleum products and crude petroleum by the Soviet bloc would not have serious effects upon the Yugoslavparticularly since Yugoslavia has been receiving these products under extensive agreements with the UK, Trieste, Tanglers, Italy, and thc Anglo-Iranian Oil Company.
At present, in spite of war damage andmaintenance, annual Yugoslav raw steel production9 levels0 metric0 percent increase. TheFive-Year Plan callsroductionetric tonsut planIs dependent upon steel Industryand expansion, asritish engineering concern. This will require Western assistance. Proposals by British technicians would provide total(including coke plants, steel plants, rolling mills and blast furnaces) for reaching the Flvc-Ycar Plan goaL
However, Yugoslavia has facilities forthe present inventory of steelequipment, unless such facilities are diverted to other uses, such as military. Even without Implementation of the Britishplans, thc Yugoslav steel industry should be able to Increase production slowly. Total embargo by the USSR and its Satellites is not likely totrain on Yugoslav steel production facilities; however, inability toequipment and technical assistance from the West would slow development of the industry.
At the present time Yugoslavia has noindustry, nor does lt have any knownof metallurgical coking coal. It isdependent upon outside sources of sup-
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ply for metallurgical coke for the iron and steel industry. Anetric tons will have to be importedf this0 tons will be received from Polanduantity valued atillion crowns will be received from Czechoslovakia. During the latter partugoslavia joined the ECE Coal Commission and asked0 tons of Bizonla coke be allocated during the first quartern addition, during tbe first quarter0 tons were promised by Czechoslovakia0 by the Netherlands. For the second quarter, Czechoslovakia agreed ton the event deliveries from Eastern Europe (Poland and Czechoslovakia) are cut off, Yugoslavia can probably obtain sufficient coke to meetthrough the Coal Commission from Western Europe.
5. Non-Fenoui Metals,
It Is estimated that toward the endroduction of non-ferrous metals, priinarily copper, lead and zinc, approximated thelevel as shown in the following table:
Smelter
The Five-Year Plan providesoal0 tons of refined copperYugoslavia's one refinery has0 tons annual maximum capacity. To provide for thc planned Increase in total production of refined copper. Yugoslavia would be obliged to Import expensive refining equipment. In the production ot smelted copper Yugoslavia has not reached the maximum capacity of tbe existing plant equipment near the Bar Mines. It is estimated that thc output of the Bar Mines, of smelted copper, could be increased0 tons annually, providing repairs and parts replacements could be procured.
Although the Five-Year Planise in the production of lead (smelter)0 tons901 and zinc (smelter)0 tons,of these two metals is reported to0ons respectivelyhe
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year of thc Plan.consumption of lead and copperwas higher than prewar. leavingcapacity lor lead concentrates at anrateone-lialf offor blister copperons. It is reported that9ercent of these metals had gone to Eastern European countries, and9 the proportion will probably still be high.
Zinc production ls expected to follow tbe lead output, proportionately.
2 Yugoslavia was the ninth largest copper producer ln the world, with an output5 tonsercent of the world's total production. The importance to Europe of Yugoslavia's lead and zinc supply Isby the fact that during the war this country supplied one-third of the* lead andercent of the zinc to Axis-Occupied Europe. While thc total output ofnon-ferrous metalsomparatively small percent of world production. It ls of great importance to the Soviets and thccountries, and the demand for It by the Soviet bloc will acteterrent to complete severance of trade relations. Present trade treaties with Soviet orbit countries andfor new trade agreements Indicate that Yugoslavia will continue, as in the past, to ship sizable quantities of these metals to the East.
It seems unlikely that production of these metals will be expanded to any markedwithout added necessary equipment for both expansion and needed repair andof present machinery.
6. Power.
In spite of what would seem to be aweak position In regard to thepower industry, there is considerableto prove that electric power output is appreciably greater than in prewar times.
Production of electricity in Yugoslavia is about evenly divided between thermal and hydro resources. In the absence of recent statistics, it is estimated that the division ls aboutercent thermal andercent hydro, although It may now beasis, as strong emphasis Is being
placed on the development of excellent water power resources. The machinery andfor this development, as well as forand expansion in the thcrmo plants, must come from abroad, sincemanufacturing facilities. In spite of great efforts to provide them, are entirelyto supply the nation's needs in meeting the Five-Year Plan objectives. The Five-Year Plan and goals for the electric industrya fourfold Increase ln electric power output as compared tooal that would tax the resources of any country, even under Ideal conditions of supply andability.
It ls known that there have been Important additions to thc national electric powercapacity since the war's end, and orders for large generating units have been placed.ln Switzerland and Italy within the past year. While Inability to obtain electrical machinery and equipment from the West would surely result in failure to accomplish the plannedIt would not significantlyelectric power output, Easternean exports, with the exception of those from Czechoslovakia, have been of no realin the development of Yugoslavpower, and the Soviet bloc could,exert little economic pressure to disrupt the industry.
7. Timber.
Timber products have always represented one of Yugoslavia's most important export items. Prewar exportsetric tons,ubic meters and went largely to Oermany and Western Europe in exchange forgoods. Since thc war, until the break with thc Couiinfonn, most of Yugoslavia's timber exports have gone to Eastern Europe and the USSR Total timber production for
is estimated0 cubic meters. This isercent greater than7 production. Present indications are that the
cut will slightlyand equipment for further development of the timber industry is being sought from the West.
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9 mayubic meters.9 trade agreements and trade negotiations Indicate thatf the Yugoslav timber enteringtrade channels will go to non-orbit countries. For example, the trade agreement with the United Kingdom calls for deliveriesubic meters, which accounts for almostercent of the total9 exports. It Is probable that there would have been an eventual Increase of Yugoslav timber exports to Western Europe had there been no break with the Comlnform. There Is no doubt, however, that the Comlnform break has accelerated this shift ba trade.
Before World War LT, cotton goodsone-half the output of the textileIn Yugoslavia, woolen goods one-quarter, with silk, linen, and other fiber goods making up the remaining one-quarter.
8 production of textiles wasofficiallyevel somewhat abovenot all of thc production reached thebecause of difficulties in the marketing system.
Textile production Is estimated as follows:
(in meterst
Textile*nd wool)
Yugoslavia has trade agreements with Italy, Poland, India, and Czechoslovakia fornecessary raw materials, semi-processed and finished textile products. Production In this Industry is not significantly dependent on imports from thc Soviet orbit.
The prewar Yugoslav economy supported only four major manufacturingexclusive of its arsenals. However, during the German occupation, sizableto capital equipment were made. Inrelatively large quantities ofwere obtained through Lend-Lease, TJNKRA, reparations, and postwar trade.
0 theremployeesin construction, mining, andIn Yugoslavia, outotal popula-
tion of8 million. Theof skilled workers was low compared with Western standards, and even compared with some other Eastern European countries. Many of these industrial workers, particularly from the skilled group, were lostesult of deportations during World War IL It Isthat toward the end8 the total number of Industrial employees had Increased to, but the number of skilled workers was still smalL In order to meet the labor requirements for rapidunder the Five-Year Plan, there must be large Increases In thc size of tbe skilled labor force. Yugoslavia cannotteaching cadres forapid expansion.
Uncoordinated implementation of certain parts of the Five-Year Plan by the Yugoslav theoreticians and planners has served only to worsen the Inherent difficulties of the Plan Itself.esult, the limited resources with which Yugoslavia has to pay for Industrialhave been and arc being Ineffectively dispersed by Investment ln capital goods, and the purchase of excessive quantities ofmaterials, such as ball bearings andwhich they are not prepared to use immediately. Although Yugoslav leadership has called attention to the fact that many new factories stand empty of machinery and that other factories stand with unusedthe Yugoslav purchasing policyto be one of buying, not for Immediate need and conversion to useful products, but of purchasing quantities and Items which will fit Into the Five-Year Plan.
Available evidence would indicate that Yugoslav manufacturing facilities have at least doubled In the postwar period overtimes. German additions, reparations, contributions under Lend-Lease and UNRRA, and purchases from abroad, as well as small amounts of manufactured equipment within Yugoslavia, have added quantitatively to Yugoslav manufacturing equipmentProper results arc not forthcoming from such equipment becauseoor management which fails to dovetail supply, production andack of skilled labor and
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In operating such equipment asnability to direct eiTiclenUy factory production;ormal difficulties in the transitionlanned economy. In spite of these difficulties, an Inordinately large part of the fabricating facilities have been utilized lor the production of war material, which Yugoslavia can Ul afford if It Is to advance Its Industrial economy. Therefore, in spite of the reportedly poor condition In the field of Industrial equipment, lt would seem that Yugoslavia has manufacturing facilities on which It can draw for Improving its existing inventory of equipment, If lt is believed that the external security position can afford alo military expenditures.
10. Transport.
Although Yugoslav economy Is widelymaking the country moreon transportation than would otherwise be the caseation with so young aneconomy, the country is in no dangerransport collapse. The transportation system, although ailing, is capable of coping with foreseeable traffic requirementsear and possibly longer, regardless of an Eastern economic blockade. The system, however, will not sustain planned Industrial expansion unless, as In the past, transport equipment and components are obtained from the West or from the Satellites.
The railroads are the most significant factor In thc Yugoslav transport system. Currently they are carrying freight trafficercent of8 rate. Inland waterways movemall percentage of the totalpercenteven percentuch of It was in transit traffic on the Danube. Highway transport traffic has not yet developed enough to have been tabulated, but an increase to the number of vehicles and road improvement have made it possible for highway transport to contribute toward making thc over-all transport system stronger and more elastic than before the war. Present tonnage of ocean shipping amounts to onlyercent of prewar. The slow rate of recovery of thc merchant marine may be due, in part at least, to the fact that the postwar trade which has been predorninantly with the
East, has moved largely by rail. Civilhas developedonsiderable extent since the war, but the shortage of aviation gasoline is requiring curtailment of traffic.
In spite of the substantial volume of traffic now being carried by the railroads aswith prewar times, reports arebeing received regarding inefficiency of the system. This situation is caused largely by the shortage of trained railroad operating and maintenance personnel, by the lack of qualified railroad administrators, and bylack of cooperation from Industry In planning and receiving shipments. Unless improvement in the utilization of railroadIs attained, traffic delays and periodic congestion of local traffic will continue, even though currently the railroads appear to be achieving the planned goals with respect to rolling stock and mileage.
11. Foreign Trade.
he value of Yugoslavia's foreign trade is estimated to have exceeded thelevel. Exports In this year,re believed to have approached the ma-rimum foreseeable export potential, and expansion of exportsf any, will probably be smalL
While prewar exports were shipped almost entirely to the West, primarily to Germany, the majority of postwar exports have gone to the Soviet bloc. On the basis7 trade and incomplete datandercent of the exports went to Eastern Europe, with Czechoslovakia, USSR, Poland, and Hungary as recipients of theamounts.t is estimated thatercent toercent of Yugoslavia'smetals exports moved into this area. Other leading exports were ferrous metals, agricultural products, timber, and tobacco. Yugoslavia's most critical imports from the Soviet orbit have been petroleum, coal, coke, semi-finished steel, and industrial machinery and equipment.
Since thc nit, the only complete Soviet-Satellite embargo against Yugoslavia has been on shipments of petroleum. However, deliveries of other items have beenmount. It is believed that, in view of the
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strategic Items received from Yugoslavia, thc USSR and the Satellites would be reluctant to sever completely their trade relations. Thus farndications are that, despite announced reductions,bloc-Yugoslav trade will continue, in items of primary Importance to theireconomics,trict basis of economic self-interest. This trade reduction with the East will enable Yugoslavia toreater portion of Its exports to the West in exchange for industrial equipment and machinery,the expansion in this trade willlargely on the type of commoditiesfor export to the West, and the volume of Western financial assistance.
Tlie following factors will limit Yugoslavia's ability to expand her trade with the West
Serious shortage of foreign exchange and gold reserves;
Continued exports, to thc East, ofexchange producing commodities;
Commitments to the West on payment of nationalization claims;
reduction of major fooddesigned to alleviate domesticfully appreciating thisis currently attempting toWestern loans, withoutexpansion will be far frommeet requirements of thc YugoslavPlan.
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