Created: 1/14/1986

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Economic Stagnation and_Social Inslability in Kosot

Inosovo's ptr cspiia grosi social prodoci (similar loGNPl4 was roughly orutlilrd of

Four yearsujoi rioting nvjng ethnic Albanians in ihe southern province of Kosovo.

Belgrade stall is unable lo ease light security andfor Yugoslavia aswhole and onc-sisth of thai cf

not adequately addressed theealthiest republic, Slovenia. -

grievances Rapid population growth is erodingInercentbe

capita wealth and contributing to Kosovo'sforce-imes ihenaliorta) rate, with lillk

relative economic backwardness within Ibefor improvement m



Tbe government's large investment in

capital-intensive Industries has failed iorowing labor surplus, and an already serious unemployment problemis likelyorsen over ihe next few jeanUflH

Se<tea>ea(kal Uarent

Friction between ethnic Albanians and neighboring Slavic groups remainsost inflamed nationality problem.eccmbci. Belgrade announced one of the biggest roundups of ethnic Albanian nationalists sinceI disorders The Interior Ministry said SO Albanians from several regions would br put oo trial for organired antiiegimc actniuo aad links io foreign (read Afbaaaiai lotdlsgencc servica Ii reported thai one lecurMi ofScia! was iniurcdhootout and th those arrested had previous records.

The sociopolitical problem dearly persists Lastosovo official revealed thai 6tS Albanian Mtionalivts had beer sentenced sincef! in prtsoe Tbe problem of repeat oAeadert is lately to grow as asoreested snare freed Tbe regsase contmees to 'uleoei graating aanooalni demandseparate Albanian republic, opting instead for an uncertain policyeaiy securiiy pretence wilk

Belgrade's economic aid iomillionS at current ei changecontributed lo improvements in some sectors of Its economy but has beea enable le keep pace with rapid per*blion growthunes ihe national rate.opulation iruwth has kept per capita wealth below thc rest of Yugoslavia, and the gap has widened in icccm yean. Rapid population growth has been accompaniedemographic shift toward the city and growtharge canceled data with few jo* prospecit htnovo'iaim has been depressed by krn rales of work force parucvation. Slack labor demand, and poor worker productivity. Tbe Kosovat worker is onlyercent as productive as the average Yugoslav and must support more than twice as many mHv-orkeri*! ^ff

loteslanvnl PoUries Irrvestnteni ia Kosovo has been concern Tiled on capital-irrtensne heavy industry to capital Ihe provincei considerable eatu'il resources local authorities have promoted dceloprneni of two large enterprise* to eitraci lead. /inc. and nickel deposits, bail these protects arc heavily id debt Whileicv beim its processing capaol) and laces cibauilma of it* ores, therodactngeat

Poierty aed Siagnetlon

One of Ihe factors lhal has fueledosovo is ihe region's continuingcum paoe 'esiugoslosia Kosovo is one ol the country'sregions in farmland and natural resources, but it has more in common with the Third World than Europe

Kosovo has rich reserve* of lignite cool and presentlyW percent of tbe declrtcil) it generates to Other parts of Yugoslavia. Local uffidals arc currently irymsecure outside Financingand generatingeclr.eiiyowever, do not


meni hai. sei ihe price below com

Link investment has been channeled Into labor-intensive projects to esploit tbe province's large laborew labor-intcmivc projocisvr been successful. *nd. ft

tic Chamber't

moimtnt iaperWd

Most imetiotent funds, however, are alreads commillcd toroicd'

The developed republic* of (he north and Cioaiia- -continueamtracts. an area the)he northern republic) are draftingonirlbuiiuia tu the ledci.il FundArea* ihai are earmarkedic^jiiv Cw-.il his tilled

ihai iiimit on eoairibatiom, and Serbia hat actually obstructed Fund legislation in an aiicmpt to chance the way lit cemliibuiiom. are handled.ajuaaaj


Economic protpccit for Kmovo are mil bright, and Belgrade'*opiiom there will continue lobe limited for ibe oeit teve/al yeaiv Rapidpwib probata!ot skr* through the end of Ibnading lo the itcrtittcrKe of poverty, high unemployment, and the potential fen tociil Uutabilltv. The proviocial leadership mil have link room to maneuver in nwdtf)iat paat lavesuncMnd utterrmini) about federal funding will reduce the chance* for needed labor-Intensive investment in ihe future. The provinces rclaioc eeoaeame pcanioe. within ihe Yugmlavjeek ration can be eapecud to decline further ot northern areat continueove ah


The eitertta' (Mndmf lhat hlenotar etanacrt hate ivrte rjdepend oa it litet) to tnunn wareee oaer iSe net! few tear* Sot! funding mine* from huvils uibuduvd loans and direct iiantfrrt from the federal fwerinviii a> well aimFrom other pnitinci TheI filet j! Ilocuineentl> taggmcd that reruimenii of loan* made SOnbe postponed untilwave ihe province due* not omcnilj have ibe re-touree- to meet the* obligation*



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