>From the beginning of the 1980s on, Yugoslavia had a foreign debt of about $20 billion, declining production, and a worsening balance of trade, along with hyperinflation that reached almost 1,5000 percent in 1989. After a decade of crisis that affected the whole of the ex-federation, Slovenia, the richest republic, had a per capita Social Product *more than twice the Yugoslav average and seven times as high as Kosovo's* (the Serbian province with an Albanian majority). "Better last in the city than first in the village": that was the state of mind often expressed in Slovenia. "The city" was "Europe"; the village was Yugoslavia. Hope of joining the winners' European Union than the other republics was encouraged by ties with Germany, which had become Slovenia's main trading partner and foreign investor. West Germany's share of Slovenian exports rose from 15 percent to 22 percent in 1990, and West Germany's share of imports rose from 20 to 23 percent, while the USSR's share fell to 13 percent of exports and 6 percent of imports. Out of $430 million in foreign capital invested in Slovenia in 1990, $165 million came from West Germany and $104 million from Austria -- and many of the Austrian investments came from West German companies' Austrian subsidiaries. Tensions grew up between the republican governments and the Belgrade central government over management of the foreign debt. Republics' refusal to apply the austerity plan adopted by the government became more determined when the Serbian government began to print more and more money for purposes of its own. Republics were not in a hurry to pay their shares into the federal treasury while it was being used to finance an army that was increasingly seen as a threat. While the gap in per capita income kept widening to Slovenia's advantage and to a lesser extent to Croatia's, these two republics' economists and spokespeople continued to complain about their "exploitation." True, the transfer of resources allocated to the Development Fund was not negligible: 1.94 percent of the Social Product of all public firms was diverted to the fund. During the 1980s the fund made on average 17 percent of investments in eligible areas (nearly 52 percent of investments in Kosovo -- something that the Serb interpretation of "discrimination" fails to take note of). The rich republics in turn had advantages that they failed to take into account. Slovenia finished and then exported products received from other republics at favorable prices. Besides, almost 60 percent of Slovenia's external sales went to the Yugoslavia market as late as 1991. But Slovene nationalists made do with figures that minimized the republics' interdependence. Instead of taking a critical look at the socioeconomic mechanisms at work and the bureaucratic management of the aid, nationalists were content to emphasize the "burden of aid" to the "incompetent" communities of the Yugoslav South. [This strand of separatism might remind New Yorkers of the occasional efforts of the mostly white borough of Staten Island to secede from the rest of the city, which they consider "poorly run". Behind this call is the desire to separate oneself from the "niggers".] They praised the Slovenes' and Croats' "European, civilized, efficient" (Catholic) traditions as opposed to the "Balkan" peoples' traditions -- a form of flattery that won a certain audience in Western Europe. Behind the racist dimension of this discourse was a dismissal of the mutual benefits of federation for the different republics and of the system's advantages for the development republics. Slovene nationalists also underestimated the difficulties in trying to compete at world prices in a capitalist market in crisis. (From Catherine Samary's "Yugoslavia Dismembered" (Monthly Review, 1995) Louis Proyect
