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world average (which in 1960-1967 amounted to 4.9°/o).¹² In the last five years the country returned to the deoelopment trends of prewar Yugoslavia.

In such conditions an enormous growth of unemployment had to occur. The calculation is very simple: if productivity of labor rises at a ratę of 5%, the transfer of labor force from the village amounts to 2'/2°/o annually, and the increase of the urban force is over l^l/2%, then non-agricultural production must increase morę than 9% annually if the existing open and hidden unemployment is not to increase. That condition was indeed fulfilled before 1960, but no longer after 1964. In 1968 327,000 persons sought employment, or 9.4% of the total employed. Immediately before the war there were 10% un-employed.¹³ Therefore we seem to be approaching the prewar norm also in that respect. According to the relative number of unemployed we hołd the record in Europę.¹⁴ The situation is in fact significantly morę serious, for several hundred thousands of our workers are employed abroad. At the beginning of 1970 there were about 700,000 of our workers abroad. In the middle of the year it was estimated that 13% of the total active population of Croatia - the republic with the most intensive emigration - was abroad. It was forecast that by the end of the year about 850,000 of our citizens will be working abroad. Today all of Yugoslav industry and mining does not employ many morę workers than the number of those who seek employment or work abroad. Can a socialist system long maintain such a situation?

The situation summarized in the above table led the Institute of Economic Studies to try once morę to do something. In October 1969 a memorandum was sent to the Federal Executive Council with a judgment of the economic situation, a forecast for 1970 and a design for a program of short-run and long-run stabilization policy. The ex-ceptionally critical naturę of the situation and the need for urgent action were emphasized. That memorandum was not published to avoid disclosure of the gravity of the situation having an unfavorable effect on carrying out of the government’s economic policy. The gov-ernment did not accept the warnings and advice of the Institute. Of course it had the right not to do so. Citation of this fact is not con-ceived as a criticism of the Federal Executive Council. Perhaps the FEC did not have real possibilities of undertaking anything. It is a matter for Parliament to judge that and to undertake the necessary measures. Here it is desired solely to emphasize that it was necessary to do something and that under normal conditions this was the task of the government. The failure to bring action now makes it necessary to publish the warnings and compare them with what happened in the course of the last year.

^,ł Pearson Report: Parlners in Development (New York, 1969), p. 27.

i* I. Vinski, »Privredna reforma i zaposlenost*. Pregled, 6 (1969), 637.

¹⁴ OECD, Main Economic Indicators.

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