Yugoslavia-DEFENSE AND THE NATIONAL ECONOMY

From 1948 until well into the 1980s, Yugoslavia devoted a considerable proportion of its national resources to defense. By all indicators, the economy was fairly military-oriented, considering the country's modest overall level of development. Yugoslavia's nonaligned foreign policy made a high military budget necessary, because the country had no alliances guaranteeing military assistance. But the Yugoslav situation resembled that of other communist states such as Cuba, the Democratic People's Republic of Korea (North Korea), and Vietnam, which also received considerable amounts of Soviet arms and military equipment without being members of the Warsaw Pact.

On several occasions in the 1980s, the YPA leadership stated that the country's economic crisis and diminished resource allocations to the military directly affected the quality of YPA weapons, equipment, and personnel, thereby weakening YPA ability to provide a reliable defense against external threats. On the other hand, critics of the YPA contended that the military still spent the major portion of the country's resources, and that military spending was a major factor in the economic crisis that persisted and worsened in Yugoslavia through the 1980s.

In 1990 much of the YPA weapons inventory was obsolete. In previous years, weapons had been stockpiled from both foreign acquisition and domestic production. But for long periods, Yugoslavia's nonaligned status precipitated partial embargos by both East and West. NATO and the Warsaw Pact were cautious about selling Yugoslavia advanced weapons that could reach hostile third parties. By 1990 Yugoslavia had strengthened its domestic arms manufacturing, and that year it claimed that 80 percent of new weapons came from that source. But both sources remained problematic; imports were expensive and politically vulnerable, but domestically produced weapons were generally of lower quality. Also, importing equipment from many different manufacturers complicated standardization, maintenance, and logistics. Critics complained that arms purchases abroad and domestic military production were too expensive and were incompatible with long-term economic stabilization. The military, on the other hand, argued that arms procurement helped acquire or develop technologies of value in the production of civilian goods.

Data as of December 1990