ABSTRACT
The Balance of Trade and the Balance of Payments since the debt shock Let us start with the good news. As Table 7.1 shows, the Balance of Payments on current account was back into surplus by 1983, with the deficit on Balance of Trade cut to less than half its 1981 level. The current account has remained in surplus ever since, and by 1986 the suficit totalled nearly $lbn, as the Trade Balance deficit fell to just $O.6bn. For hard-currency trade taken by itself the picture is less favourable, but the period 1983-6 probably yielded a cumulative surplus on that trade of around $1.5bn (WEFA 1988: 3, 139). Thus by 1983 Yugoslavia was earning enough from commerce with the rest of the world to pay the interest on her international loans, and have a little left over for repayment of principal or consolidation of reserves. But perhaps the most striking figures from Table 7.1 are those for exports. Exports in 1986 were at exactly the same level as they had been in 1982. The very substantial improvement in the Balance of Trade and the Balance of Payments between those two years was almost wholly due to a sharp cut in the level of imports. The bare figures seem to suggest, then, a continued failure to turn export-propulsion policies into hard export earnings, but some success on the import substitution side. Before going further with our analysis, however, let us look at how the Yugoslav government formulated its ideas about adjustment priorities in the post-debt shock period.
