Yugoslavia [1987-1988]

117 Pages·1988·6.453 MB·English

by  OECD

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YUGOSLAVIA
ORGANISATION FORECONOMIC CO-OPERATION ANDDEVELOPMENT
Pursuanttoarticle 1 oftheConventionsignedinParison 14lh December,
1960,andwhichcameintoforceon30thSeptember, 1961,theOrganisation
for Economic Co-operation and Development (OECD) shall promole
policiesdesigned:
- toachievethe highestsustainableeconomicgrowthandemployment
andarisingstandardoflivinginMembercountries,whilemaintaining
financial stability, and thus tocontribute to thedevelopment ofthe
worldeconomy;
- to contribute to sound economic expansion in Member as well as
non-membercountries in the processofeconomicdevelopment; and
- to contribute to the expansion of world trade on a multilateral,
non-discriminatory basis in accordance with international obliga¬
tions.
The original Member countries of the OECD are Austria, Belgium,
Canada, Denmark, France, the Federal Republic of Germany, Greece,
Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain,Sweden,Switzerland,Turkey,the United Kingdomand the United
Slates. The following countries became Members subsequently through
accessionatthedatesindicatedhereafter:Japan(28thApril, 1964),Finland
(28thJanuary, 1969), Australia (7thJune, 1971) and New Zealand
(29th May, 1973).
The Socialist Federal RepublicofYugoslavia takespart in someofthe
workofthe OECD (agreement of28thOctober, 1961).
Publicégalement en français.
©OECD, 1988
Application forpermission toreproduceortranslate
allor part ofthispublicationshould be madeto:
HeadofPublicationsService, OECD
2,rue André-Pascal, 75775 PARIS CEDEX 16, France.
Table of contents
Introduction 9
I. The 1987 Resolution and results 11
Conjunctural policies 12
Failure to curb inflation 18
Stagnation of output and employment growth 22
The balance of payments 28
II. Stabilization programmes and structural reforms 33
Recent measures and reforms 35
Pending institutional and structural reforms 45
III. Competitiveness and foreign trade 50
Foreign trade and development strategy 50
Foreign trade regime 52
Foreign trade structure 53
Export performance 58
New measures 64
IV. Current trends and short-term prospects 66
Official targets and economic policies in 1988 66
Recent indicators and uncertainties 73
V. Conclusions 75
Notes and references 80
Annexes
I. Price-control regime 85
II. Export performance - market share analysis 86
III. Export performance of manufacturing activities 91
Statistical annex 98
Tables
Text
1. The Federal budget 13
2. Consolidated public sector accounts 14
3. Selected monetary indicators 15
4. Prices and wages 20
5. Household income 23
6. Demand and output 24
7. Employment 25
8. Foreign trade 30
9. Balance of payments in convertible currencies 31
10. External debt in convertible currencies 32
11. Comparative performance 33
12. Geographical distribution of foreign trade 54
13. Commodity composition of foreign trade 56
14. Export concentration indices 57
15. Export performance 59
16. Export performance in the OECD area by main characteristics
of manufacturing activities 62
17. Share ofexports of manufactures 63
18. Economic Resolutions and outcomes 67
Annexes
Al. Price control regime since 1986 85
A2. Yugoslav merchandise exports to world and OECD area 88
A3. Classification of exports of manufactures 92
A4. Yugoslav exports of manufactures to the OECD area 93
Statistical annex
A. Social product 98
B. National product and expenditure 99
C. Gross product at factor cost by industry 100
D. Gross fixed investment 101
E. National income and household account 102
F. Agriculture 103
G. Industrial production 104
H. Labour force and employment 105
I. Prices and wages 106
J. Consolidated balance sheet of all banks' excluding financial
and other organisations and internal banks 107
K. Imports and exports by commodity groups 108
L. Imports and exports by area 109
M. Balance of payments 110
Diagrams
Text
1. Changing structure of bank deposits 16
2. Interest rates 17
3. The wage-price spiral 21
4. Job-seekers and unfilled vacancies 27
5. Exchange rates 29
6. Profits, losses and bankruptcies 37
7. The pattern of trade receipts and payments 55
8. Relative unit labour costs and export performance 61
9. Conjunctural indicators 72
Annexes
Al. Decomposition of the growth differential - World 89
A2. Decomposition of the growth diferential - OECD 90
A3. Decomposition of the growth differential of manufacturing sector 94
A4. Decomposition of the growth differential by main characteristics
of manufacturing activities 95
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BASIC STATISTICS OF YUGOSLAVIA
THELANDANDTHEPEOPLE
Totalarea(1000sq.km) 256 Netincreaseinpopulation, 1971-1986(1 000),
Agriculturalarea(1000sq.km) 1986 142.0 annualaverage 180
Forestarea(1000sq.km) 1986 93.0 Tolalpaidemployment(1986, 1000) 6716
Population(30.06.1986, 1000) 23270 ofwhich:
Republics: Industry 2625
Serbia 9657 Building 586
Croatia 4665 Agriculture(socialsector) 239
BosniaandHerzegovinia 4356 Activepopulationinprivateagriculture
Macedonia 2041 (1986, 1000) 2200
Slovenia 1932
Montenegro 619
Majorciliés(1981, 1 000):
Belgrade 1470
Zagreb 856
Skoplje 505
Sarajevo 449
Ljubljana 305
PRODUCTION
Grossnationalproductatfactorcost(1986, OriginofGDPin 1986(percentofGDP):
billiondinars) 22073.2 Agriculture,forestryandfishing 13.4
Grossdomesticproductperhead(1986,USS) 2588 Miningandmanufacturing 37.6
Grossfixedcapilalformation: Building 7.3
1986(billiondinars) 5047 Other 41.7
1986(percentofGNP) 21.2
GOVERNMENT
Governmentconsumption(1986, Generalgovernmentrevenue,includingsocial
percentofGDP) 14.3 security(1986,percentofGDP) 32.2
FOREIGNTRADE
Structureof Structureof
exports imports
in 1987 in 1987
(percenl) (percent)
Food,drinks,tobacco 8.7 5.8
Raw materials and semi-finished
goods 44.4 59.7
Finishedmanufactures 46.9 34.5
THECURRENCY
Monetaryunit:Dinar CurrencyunilsperUS$,averageofdailyfigures:
Year 1987 742.34
May 1988 1934.29
Note:Aninternationalcomparisonofcertainbasicstatisticsisgiveninanannextable.
This Survey is based on the Secretariat's study
prepared for the annual review of Yugoslavia by the
Economic and Development Review Committee on
4th May 1988.
After revisions in the light ofdiscussions during the
review, final approval ofthe Surveyfor publication was
given bythe Committeeon 7thJune1988.
The previous survey of Yugoslavia was issued in
January 1987.
Introduction
SinceYugoslaviawas lastexaminedbytheEconomicand Development Review
Committee in November 1986 the performance of the economy has remained
unsatisfactory. According to preliminary estimates, total output in 1987 was even
marginally lower than the previous year, labour productivity fell significantly and
averagenetrealearningsinthesocialisedsectorunderwentanunprecedenteddropof
some 20per cent in the course of the year. At the same time, inflation accelerated
dramatically, with the twelve-month increase in consumer prices attaining 167 per
cent by December 1987, almost doubling within one year. The one more reassuring
featurewas the re-emergenceofa relatively comfortablecurrent external surplus in
convertible currencies ($1 billion) which, however, owes more to severe import
restrictions than to buoyancy of real exports.
In order to break the vicious circle ofstagflation, the authorities have taken or
announced a series of new measures. Tighter price and income controls were
introduced in November 1987 to arrest serious tendencies to runaway inflation. At
thesametime,moredeterminedinitiativeswereundertakentospeeduptheprocessof
structural and institutional reforms. The Economic Resolution for 1988 foresees a
modest recovery of output and labour productivity but envisages further, if small,
cutsinrealincomes.Abigquestionmarkhangsovertheinflationoutlook.Thepartial
pricefreezehas notbeen particularly well adhered toand the risk ofan accelerating
price/wage spiral remains. In May an important programme for liberalising prices,
importsandforeignexchangemarketswasannouncedandatthesametimemeasures
weretakentolimitthegrowthofwages,publicspendingand monetaryaggregatesup
to the end of 1988.
Parti of this Survey reviews economic developments in 1987 with particular
emphasisonthefailuretoarrestinflationarypressure. Part IIprovidesanoverviewof
unsolved systemic weaknesses and recent corrective moves in some critical areas.
PartIII is devoted to structural problems in foreign trade and international
competitivenesswhich have constituted serious and recurrent constraints on growth