The Dragging Crisis, 1979–1986

The death of Josip Broz Tito in May 1980 symbolically marked the end of prosperity based on hefty government investments and extensive economic growth. The rising price of oil on the world market during the 1970s and the resulting debt crisis confronted the self-managed industry with great challenges. After three decades of integration into the world trade system, the Yugoslav leadership had to accept that self-managed industry remained an exporter of technologically obsolete goods with relatively high manufacturing costs.¹ In addition, the interest on loans taken to maintain imports of necessary components and raw materials was rising steeply. In 1981,