1Views on historical experiences vary and change with the passage of time. The fact is that Slovenians have always had an almost mythical attitude to every state formation they have lived in. The same is true of the Second Yugoslavia. In the 1980s and during the time of gaining independence, it became an ‘obstacle' for the development of Slovenia, self-management socialism as the best system became totalitarianism, comrade Tito a dictator, the brotherhood and unity came to an end. The new goal, as already mentioned, became the European Union, the idealized image of which changed after the initial enthusiasm. “Tito is dead, but he does not know it yet”, the legendary Koča Popovic stated cynically already in the mid-1970s. With regards to this statement, the historian Božo Repe wrote that “something similar could be claimed for Yugoslavia - of course from today's perspective, when we are very clever about the past”.44 Yugoslavia went into a crisis already in the late 1970s. One of the main reasons was that after the oil crisis in 1973, it continued to operate as if nothing had happened, instead of acknowledging the crisis and carrying out much-needed reforms.45 In the second half of the 1980s, the standard of living fell to the level of the 1960s. As the system in the 1980s was still organized in such a way that almost everything was decided by the party leadership, and the decisions were then only lead through a “megalomaniac delegate and self-governing structure”, all major political conflicts took place at the top of the League of Communists of Yugoslavia until the late 1980s.46 In 1986, France Bučar wrote: “We live in a world the historical cycle of which is coming to an end.” The critic of Kardelj's management and self-management ideas and one of the originators of Slovenian independence was not wrong in his statement if we remember the events that took place in Yugoslavia later on.47 Indeed, as early as the beginning of 1960s, it became clear that the economic system and the associated critical role of the state in formulating and implementing economic policy were the main obstacles to faster technological development and greater involvement in the international division of labour. Conflicting views on development policies were one of the fundamental problems. It was primarily about a clash of two directions. The first was represented by Serbia, which sought to strengthen the role of the federal state as well as restore the centralist planning system and distribution, and the second by Slovenia and Croatia, which aimed at continuing decentralization and modernization of the economic system. In a way, the economic reform of 1965 represented the victory of the Slovenian direction, as a special working group led by Boris Kraigher was chosen to prepare it. The reform and its measures were promising, at least in the first phase, but the indisputable fact is that the reform failed completely and that it did not achieve the central goal of transforming the economy into a more modern self-governing market economy. Its design was schematic, uncoordinated and ideologically overburdened.48 One of the greatest economic experts of the time, Aleksander Bajt, wrote in the mid-1980s that the reform planners were not yet able to grasp the crucial importance of the market in the economic life, as they looked at the market one-sidedly, so the prices of the products which they paid most attention to never reached their economic levels. After the failed reform, the federal party leadership adopted a stabilization programme, which also failed to meet expectations, as its restrictive measures had short-term effects, caused new setbacks and further increased disparities. In the first half of the 1970s, economic development in Yugoslavia was uneven and the economic trends cyclical and irregular. The culmination of efforts to contain the situation was the 1974 Constitution, which is an important milestone in the development of Yugoslavia, and many see it as one of the most important causes for the state disintegration and its economic problems. The Constitution was adopted by the Federal Assembly in a triumphant and self-satisfied manner, believing that it affirmed one of the supreme achievements of the human spirit. It had a double character: on the one hand, it regulated the organization of the federation and its functioning by strengthening the role of the republics and provinces and reducing the role of centralism, while on the other hand, it emphasized the class-oriented or the so-called worker-oriented character of the Yugoslav society and state with precise normative regulation of socio-economic relations based on self-government and associated labour. The actual division of power in companies, however, was far less democratic than the self-management normative system portrayed it: political authorities played a decisive role, managers had a significant influence due to business information, while workers as formal bearers of self-management were virtually powerless and in a subordinate position. In the early 1970s, a new manner of social planning came into force, based on the idea that the operation of market laws could be more effectively replaced by self-management arrangements between companies, based on the United Labour Act, adopted by the Federal Assembly on 25 November 1976. The economic system, as envisaged by law, according to which the newly transformed socialist companies (tozd - basic organization of associated labour, ozd - organization of associated labour, sozd - composite organization of associated labour) were supposed to coordinate their mutual interests and determine their mutual rights and responsibilities by themselves, did not bring anything positive in practice. The so-called “agreed economy” system strived for the companies to reach agreements with each other instead of competing, which is completely at odds with the principles of the market economy. The companies were thus becoming increasingly uncompetitive abroad and in general, while the prices were rising gradually but constantly. The agreements between basic organizations of associated labour were supposed to replace market rules, and the price of the final product was as high as they calculated and not such as the market was able to bear. The new economic arrangement only gave companies a new external appearance, while the content remained the same. The tozd organizations remained small companies, organized in the old manner. Even in 1986, they were the foundation of the agreed economy and became a symbol and synonym for bad luck. The agreed economy had even more weaknesses, one of which was that the employees in companies spent more time in meetings than actually working. Due to selfmanagement decision-making, the effective working time was halved in 1975 and amounted to up to five hours a day. The agreed economy was maintained until the collapse of the state. The economic system established by the 1974 Constitution and the United Labour Act exacerbated the already disadvantageous situation. At the end of the 1970s, Yugoslavia entered a severe crisis, which deepened in the following years. The year 1980 represents an important turning point in the development of the Yugoslav socialist economy. The apparent successfulness vanished, and despite the efforts of the political leadership, the crisis came to the fore after Tito's death. The main causes of the crisis were indebtedness, outdated technology, trade and balance of payments deficits and huge development disparities. As early as the mid-1970s, Yugoslavia lagged behind the developed European countries in terms of the quality of its management. It had a high inflation rate, the highest employment rate in industry, low productivity, and it also lagged behind in real wages. Unlike the world economy, which aspired to qualitative structural changes and a higher level of development, Yugoslavia's economic policy did not strive for the accumulation to flow into technological development, did not promote productivity, knowledge and exports and did not adapt its production to existing energy sources. It is therefore not surprising that economic indicators in the following years, with inflation at the forefront, only deteriorated.49 The authorities introduced vouchers for the basic necessities. The use of cars was first restricted by the authorities with regards to their registration numbers according to the so-called “even - odd” system (one day only cars with odd registration numbers could be used and the next day only cars with even registration numbers), followed by the introduction of vouchers for petrol. The worst was the energy crisis, as oil imports in the early 1980s were sufficient for just over 290 days of a year. The population was also affected by restrictions on imports, especially on the so-called “luxury” goods, which included, among other things, exotic fruit, coffee, as well as imported alcoholic beverages, foreign magazines and newspapers, and cosmetics. As citizens were crossing the border to buy the mentioned items, smuggling them across the border and using the foreign currency for them, which was desperately lacking, Belgrade bureaucrats introduced the so-called deposit or payment of the border-crossing fee. Some citizens ingeniously wired the deposit to their own account instead of the state one, and the customs officers, whom they had to show the money order form when crossing the border, of course did not check the account numbers for the most part. The introduction of the deposit provoked severe protests; especially the Slovenians, accustomed to the open border, understood it as a restriction of freedom.50 The situation that prevailed was in many ways reminiscent of the war period and the first years after the war.51 The Prime Minister of the Federal Government, Milka Planinc, who was from Croatia, wanted to restore order in 1982-1986 with a resolute policy, but she was too weak and had to constantly give in to strong social pressures and the interests of individual republics.52 When in the late 1990s Planinc reflected on the inefficiency of the federal leadership in dealing with the crisis in the 1980s, she attributed the central blame to the Communist Party. According to her, the latter was the main obstacle to resolving the crisis, as it always tried to find an argument against more radical economic changes due to scepticism about the market, and it engaged mainly in “endless lamentations about the ideological and political situation, about the enemies of socialism, etc.”53 One of the greatest economic experts of the time, Aleksander Bajt, said about Milka Planinc that if she had been allowed to work, she might have settled the situation over time.54
2One of the fundamental causes for the disintegration of Yugoslavia certainly lies in the insurmountable differences in the level of economic development between individual federal units. With development, economic differences were increasing, and the ideas of a new institutional integration of Slovenia as the most developed among them were thus completely pointless.55 Yugoslavia always tried to pursue the policy of reducing differences in the level of development of the republics according to the system of “developed to the less developed”. Bosnia and Herzegovina, Montenegro, Macedonia and Kosovo had the status of less developed. In the middle of 1965, the Federal Fund for Crediting the Economic Development of the Insufficiently Developed Republics and Provinces was established. The Fund's assets were collected as a percentage of the domestic product of the social sector. This was just another of the misguided moves of the economic policy. Namely, the less developed republics and provinces did not accept responsibility for their economic development, they invested their funds only in the development of individual areas and believed that other investments were a common Yugoslav concern. They also did not repay their debts, and the funds received were often used for non-economic purposes. The same was revealed to be true for the Fund for Crediting itself. It should be noted that the development differences in Yugoslavia were in the ratio of 1:7, which in practice meant that Slovenia was seven times more developed than Kosovo and, as the most developed republic, also invested the most. Given the presented facts and the way economic policy was conducted, it is no surprise that Yugoslavia fell into a hopeless abyss of economic crisis.
3The Yugoslav federal governments tried to solve the crisis of the Yugoslav economy by borrowing, but as will be seen below, they did the state a disservice. Until the 1970s, Yugoslavia did not engage in foreign borrowing to a great extent. The problems began in the 1970s, which is evidenced by the fact that indebtedness increased by 17 billion dollars in the period 1972-1981. The highest jump in borrowing occurred in 1977-1982, when the federal government was led by Veselin Djuranovič. The reason for such borrowing was a significant deterioration in the current part of the balance of payments. For instance, the trade deficit increased from $ 1.7 billion in 1973 to as much as $ 7.9 billion in 1979. In addition, indebtedness was also caused by the grandiose investment goals of the five-year social plan for the period 1976-1980. Construction was blossoming during this time. The most famous projects of the period were the aluminium factory in Obrovac, the DINA petrochemical complex and the ironworks in Smederevo. As early as 1982, however, Yugoslavia was no longer able to repay its debts. Nevertheless, the highest political level reached an agreement with the International Monetary Fund on the deferral of the debt and was also taking out new loans. Such actions only deepened the Yugoslav debt crisis and resulted in foreign creditors ceasing to be understanding. The pressure of the latter was growing, culminating in 1986-1988, when Branko Mikulič was the Prime Minister of the federal government. The central problem was the fact that the International Monetary Fund dictated the conduct of economic policy. It forced the federal government to abandon price controls, pursue a restrictive wage and credit policy, and cut public sector costs. In Yugoslavia, creditors' pressure was understood as interference in the internal affairs of the state, which ended with the resignation of Mikulič's federal government in December 1988, the first in the history of socialist Yugoslavia. 1988 was the year when the economic crisis entered its final phase before disintegration.56 The debt crisis that engulfed Yugoslavia was the cause hiding deeper reasons of economic failure. Neven Borak believes that the debt crisis “in the Yugoslav situation heralded the final failure of the Yugoslav development plans and the investment cycle of the 1970s, financed by recycled oil dollars and triggered by estimates that a long-term rise in commodity prices again occurred in the global context”.57 The politicians did not acknowledge the crisis, they talked about “the accumulated problems in the economy”, about “stabilization” and the like. The so-called Kraigher Commission was established, consisting of about 300 economists and politicians from all over Yugoslavia, whose task was to find a way out of the crisis. The word crisis was not used until the mid-1980s, however. It was only in 1985 that the Croatian economist Branko Horvat clearly wrote in his book Jugoslavensko društvo u krizi (Yugoslav Society in Crisis), which provoked strong reactions, that “the political system has become the main obstacle to economic and social development”. The Kraigher Commission basically insisted on the foundations of the economic system of the 1970s, written in the Constitution (1974), on the United Labour Act (1976) and the resolutions of the 10th and 11th Congresses of the League of Communists of Yugoslavia (1978 and 1982) - the latter confirmed the economic stabilization programme, although in relatively frank discussions about individual segments of the economic system, some economists involved in the commission warned that without the introduction of a market system Yugoslavia would not be able to overcome the economic crisis.
4The Slovenian economic situation in the Second Yugoslavia did not differ significantly from the situation in the First. In the time of communism, the Slovenian economy had to subordinate its programmes, operations, production and goals to the demands of the entire state even more than in the past. Nevertheless, Slovenia was and has remained the most economically developed and successful part of the Yugoslav state. As Peter Vodopivec wrote, “communism - as it did elsewhere - managed to modernize and improve social and economic conditions in Yugoslavia as well, but it did not - as the American economist John Kenneth Galbraith pointed out - succeed in reducing the state's economic lag behind its western neighbours”.58 In a system like that, such a thing was very difficult to achieve. A group of Serbian economists, led by the academician Kosta Mihajlovič, considered the collapse of the Yugoslav economy to be the fruit of a Slovenian conspiracy. The latter was said to date back to the post-war “dismantling” of the Serbian industry and its “relocation” to Slovenia. According to this theory, the economic reform of 1965, the Constitution of 1974 and the amendments to the Slovenian constitution of 1989 were only stages in the implementation of the conspiracy. Regardless, it must be pointed out that the conspiracy theory did not have many supporters among “serious” economists.59 There were also those who realized that Slovenia was not for Yugoslavism. “I am probably the first Serbian communist to realize that you Slovenians are not for Yugoslavism, that you are for your independent nation state within Yugoslavia, under specific political conditions”, the Serbian writer Dobriča Čosič wrote in a 1986 letter to Spomenka Hribar.60 The disintegration of Yugoslavia was certainly not merely the result of the extremely tense national, economic and political divisions after Tito's death, but also the consequence of a much longer crisis rooted in contradictions and undemocratic foundations of the Yugoslav political and economic system. A full thirty years of failed reform attempts, however, finally reached its epilogue in 1989-1991.61
1As already mentioned, in 1988, if not earlier, the Slovenian politics finally came to terms with the fact that the development possibilities of the Slovenian and Yugoslav economies were limited and without a future. There were several reasons for such a realization, one of which was certainly that two development “strategies” prevailed in the state, namely the Slovenian and the Serbian one. Slovenia was frequently reproached of being oriented towards the West, towards consumerism and the desire for modernization. How could there not exist such a craving? Since the 1960s, it was possible to get a passport and go “out into the world”, on a trip or a search for an employment opportunity. The Slovenians were massively crossing the border to go shopping, and the long lines of cars wound to and from the Austrian and Italian borders until restrictions were implemented in the 1980s. In practice, the citizens still travelled across the border, buying with foreign currency and “smuggling”. Payment of the bordercrossing fee was introduced, but it often occurred that citizens wired it to their own account instead of the state one. This was a period when citizens increasingly strived for the freedom enjoyed by the Germans and Austrians, for instance, and an idealized image of capitalism was very much alive. In general, the fact that the ‘Gastarbeiters' drove home in Mercedes and BMWs greatly contributed to this. If we skip a decade or so, the idealized image of capitalism, the so-called image of capitalism with a human face, quickly dissipated.62
2In the 1980s, the grey economy increased and the dinar was regularly exchanged for foreign currency. People were building houses and holiday cottages, especially because loans began to gain real value only in the mid-1980s, and Slovenia had almost full employment by the end of the 1980s. It was at the top of the world in terms of the share of employed people in the total population or in the active population, as well as in terms of the share of employed people in industry and mining. On the other hand, with regards to labour productivity, educational structure and standard of living, it was far from the world top. In 1987, only 1.6 percent of the active population was unemployed and 3 percent in 1989. After that, unemployment rose dramatically. It is a known fact today that Slovenians are at the European top when it comes to owning houses, most of which were built precisely in the 1970s and 1980s. It is estimated that there are as many as 168,000 of these houses, and almost half of the owners are retired today. That period was also marked by construction. Most houses from that time have several rooms, two or more floors and a raised attic for an additional apartment, as they were built with the idea of living together with children.63
1In the early 1980s, the construction of Cankarjev dom (the Cankar Centre) was completed, which was the largest investment in culture in the 20th century. Already in the mid-1970s, the idea of building a modern event centre in Ljubljana was presented at a session of the national committee. Radiotelevizija Ljubljana (the Radio-Television of Ljubljana), Ljubljanska banka (the Bank of Ljubljana), Iskra, Emona Ljubljana, PTT Ljubljana and the Investment Institute for the Construction of Ljubljana's Revolution Square also took part in the preparation of the programme, construction, financing and supervision in addition to the Republic, the City and the Municipality of Ljubljana. The Cankar Centre was built by thousands of workers, technicians and engineers, as well as more than two hundred companies that participated in the design, construction, installation, craft and other works. In the spring of 1980, the first cultural and congress events already took place in the Linhart Hall, while the remaining halls were completed in the following years. Among the largest projects of that time or a little earlier was also the construction of the central building of the Medical Centre, which began in 1966, and the modernization of roads. The final investment value of the Medical Centre was 617 million dinars in 1975 (revalued according to the SORS calculation as 153 million euros in 2020). The construction of the central building of the Medical Centre took almost 10 years. In March 1969, a law was passed on the modernization of the road from Šentilj to Nova Gorica, and a decree on the modernization of the road sections Vrhnika - Postojna - Razdrto and Hoče - Levec was adopted. In May 1970, the construction of the first, 30-kilometer-long motorway from Vrhnika to Postojna began, which was opened for traffic in December 1972. After that, between 1970 and 1994, 198.4 km of motorways were built.64
1Among the new products with which Slovenian companies conquered the Yugoslav market under their own or licensed brand, there were quite a few that marked the everyday life of the post-war generations. Apart from the younger generations, who are also familiar with most of these brands, who does not know the Pony bike (Rog Ljubljana), the beverages Ora, Schweppes, Viljamovka, Boonekamp (Talis Maribor), the Gorica mortadella, the Karst prosciutto (MIP Nova Gorica), the Thomy mayonnaise and mustard (Kolinska Ljubljana), the Subrina shampoo, the Mixal washing powder, the Solea cream (Zlatorog Maribor), the Peggy pantyhose (Polzela), the R-4 car (IMV Novo mesto), etc. Until the mid-1970s, a special problem in the promotion of Slovenian brands was the mandatory use of the ‘Made in Yugoslavia' label. As the latter was ranked among the last in the market classification of national brands, the products of Slovenian companies with this label could not break through to a higher price category. For economic reasons, companies such as Elan Begunje, Gorenje Velenje, Kolektor Idrija and Sava Kranj thus preferred to sell their products under foreign brands or through a foreign partner. Until the 1970s, Elan was only able to market its skis abroad to a satisfying degree under the auspices of a wide variety of companies, from Italian to Norwegian, and thus gradually entered the market of global ski manufacturers. It was not until 1977 that Elan put the label ‘Made in Yugoslavia' on its skis for the first time and was able to sell them in 36 countries without issues.
2In 1985, the Chamber of Commerce and Industry of Slovenia prepared a material entitled Quality - An Essential Element of Our Economic Success. The National Assembly adopted it and advocated for its implementation. That year, the redoubled efforts to increase exports revived the interest of business planners and companies in the brands. At the same time, due to the deepening economic crisis and the associated supply reduction, the customer interest in individual brands largely died down in Slovenia. As noted by Dr. Jože Prinčič, the number of registered Slovenian brands of Slovenian companies was close to thousand by 1989, and there were several times more products with new names and images. Despite the mentioned obstacles and predicaments, most of the products of the Slovenian industry bore a brand, whereby foreign names were also used. Numerous companies were among the manufacturers with a recognized brand. The Iskra Kranj trademark was known all over the world, among others. In 1981, its Eta 80 phone (locally called ‘fitipaldi') received the highest international awards for design and remained the world standard for phone design until the end of the decade. Krka Novo mesto developed its own drug technology and protected it with around 400 patents. In the 1970s, Gorenje Velenje became one of the largest manufacturers of household appliances with a modern sales and service department.65 As Ivan Atelšek, the founder and longterm director of Gorenje, told me during our conversation, it often brought tears to his eyes when he realized that despite the poor support from the state and modest capital, they could still compete with large companies. In collaboration with the American Borroughs, they were also able to successfully develop computing and create the first Yugoslav robot. In 1978, Gorenje decided to buy the Bavarian company Körting from Grassau. The purchase of this company was approved by the entire Slovenian political leadership with Edvard Kardelj at the head. The latter told Atelšek at the time of the purchase: “This is a big thing, it just needs to be executed. I hope you have enough strength, which you have already proven.” Atelšek and his team established a large business system, with companies across the country and abroad, employing around 22,000 workers in its golden age. During the time of transformations into basic organizations of associated labour, which were often in conflict with production and economics, he often came in conflict with the politics, which ultimately resulted in his departure from the position of Gorenje’s director.66 The company Alpina Žiri was also highly successful, as it was one of the main manufacturers of ski boots. In the 1980s, it controlled a 5% share of the global ski boot market with its own brand. Radenska Radenci was the fourth largest producer of mineral water in the world. Metalna Maribor established itself in foreign markets with the equipment for hydroelectric power plants and coal mines, and in cooperation with foreign companies, it participated in the construction and implementation of large energy projects on all continents. At the end of the 1970s, Tovarna lepenke in papirja Sladki Vrh (the Sladki Vrh Cardboard and Paper Factory) became a name for quality in the field of paper products, while Industrija usnja Vrhnika (IUV) (the Vrhnika Leather Industry) became the largest producer of pigskin leather in the world in the 1980s.
1In the 1970s and early 1980s, Slovenia managed the economy with a greater degree of care and success than other republics by repaying its loans, taking new ones with caution and relying more on its own resources. Nevertheless, the economic crisis did not bypass it; in some areas, it affected it even more severely than other parts of the state.67 Slovenia was no longer able to play the “locomotive” pulling the entire Yugoslav economy out of the crisis, because the economic policy in Belgrade followed the less developed and underdeveloped “south”, which represented the larger part of the state.68 In fact, the Slovenian economy stagnated already in 1984, and in the first months of 1985, in addition to the polar air, it was also hit by an icy economic “shower”: production fell sharply, exports were slower than imports and prices and wages were growing. The autumn months of that year brought an increasingly “dark” image of managing the economy in our republic. The Slovenian economy was declining in 1986 and 1987 as well, as the growth rates of the social product, industrial production and investments in fixed assets were negative. The falling economic growth did not stop in the following years, but also engulfed companies such as Iskra, Tam, Litostroj, Slovenske železarne (Slovenian Steelworks), SCT and Strojne tovarne Trbovlje (Machine Factories Trbovlje), which were the locomotive of Slovenian development and above-average exporters. The development crisis and the decline in economic activity were accompanied by other negative phenomena: low productivity, foreign exchange illiquidity and rising burdens on the economy; among the sixty different types of contributions and taxes, liabilities to federal funds increased the most. These negative phenomena increased income-sharing disputes, hampered the entry of foreign capital, caused high losses, bankruptcies, the rise of unemployment and the cost of living, reduced the volume and efficiency of investment, and greatly slowed down the quality of economic transformation. The realization was growing that our republic is increasingly lagging behind the developed world. In the second half of 1990, i.e. after the political changes in Slovenia, the situation of the Slovenian economy did not improve. The industrial production increased only in September and October, while in November it stopped again, as did other economic activities. Exports were falling during this period, while imports were rising, investments were declining and unemployment was growing. In September 1990, prices began to rise, and in October, due to excessive spending by the public sector, financial problems began, which were joined by the general dinar illiquidity in November - also due to the “attack” of the population on foreign currency deposits.69
2The extensive materials of the Slovenian Executive Council in the 1980s, that is during the mandate of Janez Zemljarič (1980-1984) and then Dušan Šinigoj (1984-1990), show that “the Executive Council was mainly concerned with directing the Slovenian economy to the west ‘at any cost' - by providing funds to repay debts, by terrible administration, due to which during the entire 1980s, the planes to Belgrade were full of businessmen who flew there for various permits, and by unsuccessful attempts to protect the Slovenian economy from the immense greed of the federal treasury (initially, this concerned disaster relief, the organization of expensive international sporting events and other non-budgetary items, but gradually also funds for the underdeveloped, the financing of the Yugoslav People's Army and other budget items.).” Zemljarič's government had to deal with the oil and debt crisis at the Slovenian level, while Šingoj managed to increase the volume of foreign trade, but also the deficit. Despite the crisis, however, neither of the two governments (except partly in the last period of Šinigoj's mandate) had to face organized union resistance. Even in the first half of the 1980s, the number of short-term strikes was lower than in the 1970s. The United Labour Act did not even provide for how conflicts should be resolved. It was not until the strike rules were formulated in 1987 that discussions on amending the Act began, and at the end of the 1980s, trade union pluralism also began to develop gradually.70 In 1985, the Slovenian political leadership finally realized the need to abandon the defensive policy towards the federal centre. It was then that they recognized the need to be more active and determined. The long-term plan for the economic development of the Socialist Republic of Slovenia in 1986-2000 was the first prominent result of a more active attitude of Slovenian politics towards Belgrade, as one of its priorities in the economic field became limiting the cooperation of the Slovenian economy with the economies of other republics and its closer connection with the developed Western world. In 1987, Slovenia realized that it was no longer possible to support the measures of federal bodies, because this would mean the collapse of the domestic economy. The following year, however, Slovenian politics apparently came to terms with the fact that the development possibilities of the Slovenian and Yugoslav economies were limited and without a future. There were several reasons for this realization, two of which were decisive. The first was that two development “strategies” prevailed in the state, the Slovenian and the Serbian. According to the first man of the League of Communists of Slovenia, Milan Kučan, the Slovenian strategy was based on technological innovation and development, with a society open to the world, while the Serbian one advocated closed society and autarky. The second reason, however, was the debate on amending the federal constitution.
3At the end of 1989 and the beginning of 1990, a number of events took place that began to push Slovenia on the path of economic independence. In September 1989, the Slovenian Assembly adopted the amendments to the Slovenian Constitution, which included Slovenia's economic sovereignty. In December of the same year, Serbian economic war against Slovenian companies broke out, which caused more than a hundred million dollars in damage to the Slovenian economy and served as a proof to the Slovenian politics that the federal government does not and cannot prevent arbitrary measures by individual republics.71 According to a survey by the Chamber of Commerce and Industry of Slovenia (GZS), 229 Serbian companies severed ties with Slovenian companies, affecting especially the export of textiles, furniture, white goods, electrical appliances, cosmetics and food industry products. In 1988, Slovenia bought goods worth 2.1 billion dollars in Serbia or 8.8 percent of all purchases and sold goods worth 2.6 billion dollars or 8.1 percent of all sales. The financial claims of Slovenian companies to Serbia amounted to more than 205 million dollars. According to the estimates by the Chamber of Commerce and Industry, if sales to Serbia fell by 100 percent, production in Slovenia would decrease by 15 percent and net wages by 13.8 percent, which were rather high numbers even during the crisis (calculations were also made for smaller percentages of the decline in trade). Serbia acted selectively and carried out the blockade where it caused the least harm to itself; it counted on the fact that Slovenia's countermeasures would not be so quick and effective and that the boycott would therefore achieve its purpose. The boycott was supervised by political institutions, and it was accompanied by demands for the removal of leading personnel in those companies that still cooperated with Slovenia. The suspension itself also had a broader dimension and purpose: to block the Yugoslav economic reform initiated by Markovič at the time.72 One of the aims of the blockade was also to prove that Slovenia could not survive without the Yugoslav market. It is necessary to take into account that those opposing the secession of Slovenia often claimed that “the tendencies of economic independence contradict modern world trends, that the Slovenian economy is too small, that it has a reliable market for selling expensive and poor industrial products in Yugoslavia, as well as for cheap purchases of raw materials and labour”.73 Markovič's perception of Yugoslavia, which he envisioned as a “convoy” in which speed had to be adjusted to the slowest ship, was also decisive. This vision was accepted in Slovenia as threatening and unacceptable. The Slovenian government responded to these interventions and threats with a delay. Its measures (suspension of payment of part of the money to federal funds, Declaration on the Regulation of Relations of General Importance for the Republic of Slovenia and other) showed a connection between the need for a more independent economic development and the demand for the transformation of Yugoslavia into a confederation.74 Due to the fact that Markovič's economic reforms also failed, the Slovenian political leadership was forced to take even more decisive action.
4The autumn months of 1989 were marked by the demands for an antiinflation programme and quite a few stabilization plans were prepared. One of these plans was the one by Jeffrey Sachs, who was at the height of his fame at the time due to the elimination of Bolivian hyperinflation. Sachs was an economist who, as we know, left deep traces not only in the Yugoslav but also in the Slovenian economy. Another similar plan, created almost a month before Sachs', was designed by the Slovenian economist Velimir Bole from the Institute of Economics of the Faculty of Law. The latter plan is almost completely unknown to the Slovenian public and, despite being presented to the President of the Federal Executive Council and a group of his advisers, it was never taken seriously. Only Neven Borak presented Bole's idea in more detail in his book, which, as he wrote, he found necessary, especially because modesty and some unwritten rules prevented Bole from doing it himself. Bole's plan presupposed two phases in the stabilization process, and the peculiarity of his idea was the introduction of a dual currency as a means of creating full indexation of the economy and at the same time preparing for its transition to operating in the low-inflation conditions. The third plan, which was used in practice, was conceived by Ante Markovič.75 Unfortunately, it ended in complete failure. Upon the beginning of his tenure, Markovič reawakened a ray of hope that the situation in the country would improve. He announced the independence of economic entities and the reduction of state regulation and its “normativism” as his priorities. However, despite the disastrous results in the following months, the federal government did not rush to prepare an anti-inflation programme, nor a comprehensive strategy of global economic restructuring. The anti-inflation programme presented by the government in December 1989 was no longer based on a gradual curbing of inflation, but on shock therapy - unilateral and drastic economic measures, with which prices were expected to increase by only 13 percent next year. Markovics Programme of Economic Reforms and Measures, which were to be implemented in 1990, was based on the convertible dinar and a fixed exchange rate, on restrictive monetary and financial policy, on the liberalization of prices and markets, and on the wage freezes at the level of November 1989. The programme received general support at home and abroad and was at the same time the subject of a warning from the economists that “there might not be much left of it” in half a year. By May 1990, Markovic managed to significantly reduce inflation, but he failed to halt the decline in production and exports and to restore the joint Yugoslav market, which was the foundation of state unity in his vision. When the programme had to be perfected in June, he gave priority to political decisions (promotion of political programmes and parties), which were supposed to ensure the formation of a new socialism and its third path. These long-term solutions, accompanied by a few completely misguided moves in the summer months (omission of exchange rate adjustments, wage increases in the federal administration, selective lending to agricultural companies), were unsuitable for the current situation and even harmful for the consolidation of the achieved stabilization, resulting in the programme failing in the autumn of 1990. In January 1991, Markovic prepared a minimum programme for the functioning of the state during the transition period, which no longer had any influence on the further development of events.76
5Solving the crisis was more like putting out a fire than looking for the real causes of it. On the one hand, governments were opting for restrictive measures in the field of supply, and on the other hand, for compromises in changes of the economic system. Although there were more and more discussions about the market economy and the so-called market mechanisms, the agreed economy remained in place.77 The Yugoslav social crisis of the 1980s exposed the ideological, political and economic collapse of socialism. As Bogomir Kovač wrote, socialism was “undoubtedly the most influential social ideology of the 20th century, initially offered as a rounded political-economic system (socially-owned property, planning, division of labour, direct political democracy), when in fact it became a political project of the communists of how to win and maintain the economic power in society”.78 The crisis of the early 1980s had thus revealed the impotence of the socialist economy, but it took almost a decade for the final realization that it could not be reformed. The disintegration was the result of the establishment of a normal state of the conflict of interests and the realization that “there is no Tito after Tito”.79 Janez Drnovšek also believed that the 1980s were the years when a mental shift occurred in people and they began to believe and work for the values that distinguish the Western world: “I think we all started thinking about this in the 1980s. At least I was thinking a great deal about it when it became more and more clear that we were falling behind. Throughout the 1980s, the Yugoslav state stagnated, especially in the field of economy. It was becoming clear that changes had to occur, and democratic values were becoming increasingly important. It was an awakening, not only in Slovenia, but in the entire Central and Eastern Europe. In Slovenia, the aspirations for change were largely due to the backwardness and lack of prospects that the previous regime and the previous state had shown especially in the last decade. It was obvious that there was no way out.” Drnovšek also pointed out the following about the socialist system or period: “The socialist era had obviously brought some advantages, perhaps even greater social security to some classes who find it harder to make ends meet in a competitive market system. In the long run, however, the socialist system was less successful and less competitive than the current one, which is why it did not survive. In an independent state, we then had to make up for the period when we lagged far behind the growth of developed European countries.”80 The last President of the Presidency of the Socialist Republic of Slovenia and the long-time President of the Republic of Slovenia Milan Kučan also took a stance on the break-up of the SFRY. During his speech to the businessmen in November 2005 in Graz, Austria, he said: “The break-up was the result of a long-lasting political, economic and value crisis of a former multinational, multicultural federation based on the ideology of the socialist self-government. The crisis was largely an expression of the general crisis of the European communist world generated by the Soviet Union with its essentially Bolshevik system, adapted to the conditions of the Cold War and the bloc's measurement of political and military power and maintaining the balance of fear.”81 The economic situation in which Yugoslavia found itself was an important factor in the dissatisfaction of the Yugoslav nations, and it is not surprising that economic circumstances “created fertile ground for fuelling economic and political nationalism and accusations of exploitation”, as pointed out by Borak.82
1On the basis of the Political Association Act83 and the Assembly Elections Act84, the Slovenian political space was finally formed in the beginning of 1989. The opposition associations and socio-political organizations transformed into classic political parties, and the president of the assembly, Miran Potrč, called elections for 8 April 1990.85
2The key act in the formation of the Slovenian democratic space was the decision of the opposition associations to no longer participate in the so- called “round table” and to form a joint organization. The representatives of the Slovenian Democratic Union (Slovenska demokratična zveza - SDZ), the Slovenian Christian Democrats (Slovenski krščanski demokrati - SKD), the Slovenian Social Democratic Union (Socialdemokratska zveza Slovenije - SDZS) and the Slovenian Farmers' Alliance (Slovenska kmečka zveza - SKZ) met on 27 November 1989 at the home of the president of the Slovenian Farmers' Alliance Ivan Oman and signed an agreement to form an opposition coalition. Demos - Democratic Opposition of Slovenia (Demokratična opozicija Slovenije) was thus established. On 4 December 1989, Demos formalized an agreement between three parties (SDZ, SDZS, SKD) and one alliance (SKZ) and introduced itself to the Slovenian public with a statement by Jože Pučnik that their aim was to take responsibility for the Slovenian state and “therefore win power”. Demos was also joined by the Greens of Slovenia (Zeleni Slovenije). The parties signed an agreement on the establishment of Demos on 8 January 1990 for the purpose of joint participation in the parliamentary elections. The Slovenian Small Businessmen's Party (Slovenska obrtniška stranka) and the Grey Panthers Party (Stranka sivih panterjev) later joined Demos as well. In the autumn of 1989, the former leading socio-political organizations began to transform into parties as well: the Association of Socialist Youth of Slovenia (Zveza socialistične mladine Slovenije - ZSMS) retained its acronym and changed its name to For the Freedom of the Thinking World (Za svobodo mislečega sveta), while the Socialist Alliance of the Working People of Slovenia (Socialistična zveza delovnega ljudstva Slovenije - SZDL) was renamed the Socialist Alliance of Slovenia (Socialistična zveza Slovenije) in early January. The League of Communists of Slovenia (Zveza komunistov Slovenije - ZKS) was renamed as the last among the political organizations in power.86 However, the Slovenian communists bearing a new name won only 17.3 percent of the vote and almost the same share of seats in the elections for the socio-political assembly and thus had to concede victory to the opposition. In Slovenia, there was no change at the top of the Communist Party, but its public positions visibly changed.87 Demos thus succeeded, but even its leaders did not believe in winning the election. In November 1989, the president of Demos, Jože Pučnik, considered it a success if the opposition made it to the Slovenian parliament at all and consolidated itself as a strong faction. He expected that Demos would only learn the techniques and skills of political work after the first election, and that its victory in 1994 was much more realistic.88 On June 25, the party adopted three key independence documents, and six months later a new constitution, which introduced a classic parliamentary system with a new representative and legislative body called the National Assembly. Only a short time later, Demos disintegrated and classic party antagonisms erupted, resulting in Peterle’s government falling as well. The new government, which then lasted until the first parliamentary elections, was formed in April 1992 by Janez Drnovšek.89
44. Repe, Razmere v Sloveniji [Situation in Slovenia] (manuscript).
45. Meier, Viktor. Zakaj je razpadla Jugoslavija [Why Yugoslavia Collapsed]. Ljubljana: Science and Journalism Centre, 1996 (Hereinafter: Meier, Zakaj je razpadla Jugoslavija [Why Yugoslavia Collapsed]), pp. 26-43.
46. Repe, Razmere v Sloveniji [Situation in Slovenia] (manuscript).
47. Bučar, France. Resničnost in utvara [Reality and Illusion]. Maribor: Obzorja, 1986, p. 5.
48. For more details, see Prinčič, Jože, Borak, Neven. Iz reforme v reformo. Slovensko gospodarstvo 1970-1991 [From Reform to Reform. Slovenian Economy 1970-1991]. Ljubljana: Faculty of Social Sciences (Hereinafter: Prinčič, Borak, Iz reforme v reformo [From Reform to Reform]), 2006, pp. 127-143.
49. Lorenčič, Aleksander. Gospodarske razmere v Jugoslaviji v obdobju 1968-1988: na poti v razpad [Economic Conditions in Yugoslavia in the Period 1968-1988: On the Road to Disintegration]. In: Čepič, Zdenko (ed.). Slovenija - Jugoslavija, krize in reforme 1968/1988 [Slovenia - Yugoslavia, Crises and Reforms 1968/1988]. Ljubljana: Institute of Contemporary History, 2010 (Hereinafter: Lorenčič, Gospodarske razmere v Jugoslaviji [Economic Conditions in Yugoslavia]. In: Čepič (ed.), Slovenija - Jugoslavija [Slovenia - Yugoslavia]), pp. 261-270.
50. Repe, Božo. Slovenci v osemdesetih letih [Slovenes in the 1980s]. Ljubljana: Historical Review Collection - 23, Association of Historical Societies of Slovenia, 2001 (Hereinafter: Repe, Slovenci v osemdesetih letih [Slovenes in the 1980s]), pp. 10-12.
51. Čepič, Zdenko. Gospodarska kriza [Economic Crisis]. In: Čepič, Zdenko et al. (ed.). Slovenska novejša zgodovina 2, Od programa Zedinjena Slovenija do mednarodnega priznanja Republike Slovenije 1848-1992 [Slovenian Contemporary History 2, From the United Slovenia Programme to the International Recognition of the Republic of Slovenia 1848-1992]. Ljubljana: Mladinska knjiga/Institute of Contemporary History, 2005 (Hereinafter: Čepič, Gospodarska kriza [Economic Crisis]. In: Čepič et al. (ed.), Slovenska novejša zgodovina 2 [Slovenian Contemporary History 2]), pp. 1151-1153.
52. Repe, Slovenci v osemdesetih letih [Slovenes in the 1980s], pp. 10-12.
53. Vodopivec, Peter. Od poskusov demokratizacije (1968-1972) do agonije in katastrofe (1988-1991) [From Democratisation Attempts (1968-1972) to Agony and Catastrophe (19881991)]. In: Čepič, Zdenko (ed.). Slovenija - Jugoslavija, krize in reforme 1968/1988 [Slovenia - Yugoslavia, Crises and Reforms 1968/1988]. Ljubljana: Institute of Contemporary History, 2010, p. 22.
54. Meier, Zakaj je razpadla Jugoslavija [Why Yugoslavia Collapsed], pp. 26-43.
55. Štiblar, Franjo. Razvoj trgov Ex-Jugoslavije [Development of Markets of Ex-Yugoslavia]. Gospodarska gibanja [Economic Trends], No. 267, 1995/12, Institute of Economics, Faculty of Law (Hereinafter: Štiblar, Razvoj trgov Ex-Jugoslavije [Development of Markets of ExYugoslavia]), pp. 23-43.
56. Lorenčič, Gospodarske razmere v Jugoslaviji [Economic Conditions in Yugoslavia]. In: Čepič (ed.), Slovenija - Jugoslavija [Slovenia - Yugoslavia], pp. 270-273.
57. Borak, Neven. Ekonomski vidiki delovanja in razpada Jugoslavije [Economic Aspects of the Operation and Disintegration of Yugoslavia]. Ljubljana: Science and Journalism Centre, Spekter Collection, 2002 (Hereinafter: Borak, Ekonomski vidiki [Economic Aspects]), pp. 137-138.
58. Vodopivec, Peter. Od Pohlinove slovnice do samostojne države. Slovenska zgodovina od konca 18. stoletja do konca 20. stoletja [From Pohlin's Grammar Book to an Independent State. Slovene History from the End of the 18 th Century to the End of the 20 th Century]. Ljubljana: Modrijan, 2002, p. 385.
59. Mencinger, Jože. Slovensko gospodarstvo med centralizmom in neodvisnostjo [Slovenian Economy between Centralism and Independence]. Nova revija [New Magazine], Vol. IX, No. 95, March 1990 (Hereinafter: Mencinger, Slovensko gospodarstvo [Slovenian Economy]), pp. 490-495.
60. Repe, Razmere v Sloveniji [Situation in Slovenia] (manuscript).
61. Prinčič, Borak, Iz reforme v reformo [From Reform to Reform], p. 613.
62. Lorenčič, Aleksander. Life in the Second Yugoslavia through the Prism of Selected Indicators: The Slovenian Experience. In: Review of Croatian History. 2015, Vol. 11, No. 1, pp. 101-120.
63. Lorenčič, Aleksander. Od »cokle« za razvoj do EU: osemdeseta - leta, ki so porodila spoznanje, da so razvojne možnosti izčrpane [From the “Obstacle” for Development to the EU: The Eighties - The Years that Gave Birth to the Realization that Development Opportunities are Exhausted]. Mladina. [Printed ed.]. 27 November 2020, special No. of Mladina - Zgodovina, rojstvo države, 1. del [History, the Birth of the State, Part 1] (Hereinafter: Lorenčič, Od »cokle« za razvoj do EU [From the “Obstacle” for Development to the EU]), pp. 32-37.
64. Ibid.
65. For more details, see: Lorenčič, Aleksander, Prinčič, Jože. Slovenska industrija od nastanka do danes [Slovenian Industry from Its Inception to the Present Day]. Razpoznavanja/ Recognitiones: Institute of Contemporary History, Ljubljana, 2018 (Hereinafter: Lorenčič, Prinčič, Slovenska industrija [Slovenian Industry]).
66. Lorenčič, Aleksander. Atelšek, Ivan. In: Šterbenc Svetina, Barbara (ed). Novi Slovenski biografski leksikon [New Slovenian Biographical Lexicon]. 1st ed. Ljubljana: Založba ZRC, 2013, Vol. 1: a, pp. 284-285, portrait.
67. Prinčič, Jože. Gospodarski vidiki osamosvajanja Slovenije (1986-1991) [Economic Aspects of Slovenia Gaining Independence (1986-1991)]. In: Perovšek, Jurij et al. (ed.). Slovenska osamosvojitev 1991. Pričevanja in analize. [Slovene Independence 1991: Testimony and Analysis]. Brežice Symposium: Association of Historical Societies of Slovenia/National Assembly, 2002 (Hereinafter: Prinčič, Gospodarski vidiki [Economic Aspects]. In: Perovšek et al. (ed.), Slovenska osamosvojitev [Slovene Independence]), pp. 33-56
68. Repe, Božo. Jutri je nov dan. Slovenci in razpad Jugoslavije [Tomorrow is a New Day. Slovenes and the Disintegration of Yugoslavia]. Ljubljana: Modrijan, 2002 (Hereinafter: Repe, Jutri je nov dan [Tomorrow is a New Day]), p. 134.
69. Prinčič, Gospodarski vidiki [Economic Aspects]. In: Perovšek et al. (ed.), Slovenska osamosvojitev [Slovene Independence], pp. 33-56.
70. Repe, Slovenci v osemdesetih letih [Slovenes in the 1980s], pp. 12-13.
71. Prinčič, Gospodarski vidiki [Economic Aspects]. In: Perovšek et al. (ed.), Slovenska osamosvojitev [Slovene Independence], pp. 33-56.
72. Repe, Jutri je nov dan [Tomorrow is a New Day], pp. 141-142.
73. Mencinger, Slovensko gospodarstvo [Slovenian Economy], pp. 490-495.
74. Prinčič, Gospodarski vidiki [Economic Aspects]. In: Perovšek et al. (ed.), Slovenska osamosvojitev [Slovene Independence], pp. 33-56.
75. Borak, Neven. Spočetje ekonomske samostojnosti [Conception of Economic Independence]. Ljubljana: Science and Journalism Centre, Forum Collection, 1992 (Hereinafter: Borak, Spočetje ekonomske samostojnosti [Conception of Economic Independence]), pp. 19-31.
76. Prinčič, Gospodarski vidiki [Economic Aspects]. In: Perovšek et al. (ed.), Slovenska osamosvojitev [Slovene Independence], pp. 33-56.
77. Čepič, Gospodarska kriza [Economic Crisis]. In: Čepič et al. (ed.), Slovenska novejša zgodovina 2 [Slovenian Contemporary History 2], pp. 1151-1153.
78. Kovač, Bogomir. Rekviem za socializem. Ekonomske reforme v socialističnih državah. [Requiem for Socialism. Economic Reforms in Socialist Countries]. Ljubljana: DZS, 1990, p.143.
79. Mencinger, Slovensko gospodarstvo [Slovenian Economy], pp. 490-495.
80. Možina, Jože. »Politika postane manj pomembna«. Pogovor z Janezom Drnovškom [“Politics Becomes Less Important”. Conversation with Janez Drnovšek]. Revija Ampak [Ampak Magazine], Vol. 4, No. 4, April 2003 (Hereinafter: Možina, »Politika postane manj pomembna« [“Politics Becomes Less Important”]), pp. 26-30.
81. Speech by Milan Kučan.
82. Borak, Ekonomski vidiki [Economic Aspects], p. 194.
83. UL SRS [Official Gazette of the Socialist Republic of Slovenia] (Hereinafter: Official Gazette of the Socialist Republic of Slovenia), 42/1989.
84. Ibid.
85. Babič, Blaž. Predvolilni gospodarski program koalicije Demos [Pre-Election Economic Programme of the Demos Coalition]. Prispevki za novejšo zgodovino [Contributions to Contemporary History], Vol. XLVIX, No. 2, 2009 (Hereinafter: Babič, Predvolilni gospodarski program koalicije Demos [Pre-Election Economic Programme of the Demos Coalition]), pp. 171-172.
86. Čepič, Zdenko. Volitve aprila 1990 [Elections in April 1990]. In: Čepič, Zdenko et al. (ed.). Slovenska novejša zgodovina 2, Od programa Zedinjena Slovenija do mednarodnega priznanja Republike Slovenije 1848-1992 [Slovenian Contemporary History 2, From the United Slovenia Programme to the International Recognition of the Republic of Slovenia 1848-1992]. Ljubljana: Mladinska knjiga/Institute of Contemporary History, 2005, pp. 1283-1290.
87. Šušteršič, Politično gospodarski cikli [Political and Economic Cycles], pp. 198-210.
88. Pesek, Rosvita. Osamosvojitev Slovenije. »Ali naj Republika Slovenija postane samostojna in neodvisna država?« [Independence of Slovenia. “Should the Republic of Slovenia Become an Independent and Sovereign State?”]. Nova revija [New Magazine], 2007, p. 121.
89. Gašparič, Jure. Državni zbor 1992-2012: o slovenskem parlamentarizmu [National Assembly of the Republic of Slovenia 1992-2012: About Slovenian Parliamentarism]. Ljubljana: Institute of Contemporary History, 2012, p. 25.