834707315

The Federal Executive Council, as well as other political and State forums, were immediately warned of the existing defects as well as the unavoidable consequences. During the first two years these warnings were mainly orał and of an internal character. Characteristic in this respect is a memorandum of the Institut of Economic Studies of April 1967 which ended with this forecast:

»As a result. .. total per capita production, and with it the standard of living, will be stagnant in 1967. However, the pressure of unemployment and the undeveloped regions, insistance on corrections in distribution of personal incomes, the need to avoid discrediting the reform by stagnation of production and the standard of living will lead to an increase of the balance of payments deficit and continuance of a morę liberał credit policy. Thus the cycle will enter into the upswing phase. In so far as by then an anticyclical policy is not formulated, in 1969 there will occur a downturn of the cycle, and in 1970 we will have a new reform«.

After such internal warnings remained without any effect whatsoever, publication of economic analyses and coming out into the public were begun. In the Spring of 1967 the Scientific Section of the Yugoslav Association of Economists organized a conference in Ljubljana on conditions for stabilization of the Yugoslav economy. There the learn-ed and wider public were acąuainted for the first time with the fact that pronounced business cycles operate in Yugoslavia, that this is not recognized by economic policy makers and that an anticyclical economic policy does no exist. At the conference it was emphasized that the rccession would soon end, that in the course of 1967 there would occur a turning of the cycle upward, that the acceleration of production would continue until the middle of 1969 and that after that there would occur a new slowing down of growth.³ As can be seen from the presented graphs, these forecasts were shown to be completely correct.

At that time the losses which the economy suffers because of the slowing down of growth owing to mistaken economic policies were calculated and published. In 1967 alone the economy thus lost about 1,000 billion old dinars. (Owing to breakdown of the economic struc-ture instead of normalization of expansion to about 11%, industrial production was reduced to a negative ratę of growth). The loss of 1,000 billion dinars annually represents a sum several times greater than all annual tederal investments, which are said to threaten the economy’s reproductive capacity. In relation to such losses the siphoning of funds from republic to republic - which provokes great national tensions -is shown as insignificant.

At the begining of 1968 the Institute of Economic Studies organized a closed symposium for representatives of science, the economy, State and political bodies from all republics. The meeting practically unani-mously accepted the judgement of the economic situation and the pro-

* Ekonomist, 1-2 (1967), 212-213.

534