I have just watch this excellent documentary on Yugoslavia called The Weight Of Chains (2011). I was not very well informed on that region’s history. After listening to the documentary it appears that not many people in the west will be, due to the media. But my question is regarding a specific aspect of the conflict and that was in 93-94 Yugoslavia suffered the most severe case of hyper inflation in history (at that time). At the same time they were under international economic sanctions. Was the hyper inflation a symptom of the international sanctions or did the international sanctions exasperated the economic depression and due to this they printed more and more money which caused the hyper inflation. It seems a bit like a chicken and egg problem. But then i thought that there has been other countries in history that have had international sanctions that were similar that did not go into hyper inflationary depressions. So if Yugoslavia had not printed more and more money would there have been hyper inflation?
Well i say excellent, what i mean is that it is well produced and as i was not very well informed of the history of that region, i learned a lot. But the premise of the documentary is debatable.
He basically says that Yugoslavia used to have a great economy and it was a different kind of socialism (whatever that means, as he does not explain) then outside influences and internal influences who wanted conflict between ethnic groups destabilized the region. In doing so they created conflict that created the opportunity for outside investors to buy up all the resources and factories within the region, which he says is the main reason for the destabilization. To put it very basically.
Interesting to see the viewpoint of the Belgrade Yugonostalgic left married to American-style documentary making. These guys are probably the most capable of objectivity of any locals that you will find, albeit not without their own oddities of course.
Well yes, post-WWII Yugoslavia had pretty much the same growth that Western Europe had, except its starting point was lower.
Well that is one of their quirks. Leftists have this tendency to see economic reasons, especially for corporations behind everything nefarious. That was more of a side effect than any real reason for meddling.
They are not really connected in the cause-effect sense. Hyperinflation was the worse in 1993-94, but there had been ridicilous levels of money creation for years before that and even before the break up. I think the first six months of 1990 saw an inflation rate of 1000% or something similarly ridicilous. In a sense that was a blessing as it wisened people up to the whole racket so that by the late 1980s most savings were in German Marks (a tradition never discontinued afterwards in any of the successor states) and so did not get wiped out whole later on.
I was having a discussion on another forum, the reason i created this thread, the guy was saying that the printing money was a sympton of hyper inflation. Which i disagreed with and went on to try and argue the case that you can not have hyper inflation without printing money. The guy argued that it was the external factors that caused the hyper inflation and not the printing of money.
Things were a bit wacky yes. You actually had large factories creating fiat currencies of their own and inflating them to high heaven by circulating wagonloads of promissory notes. Eg there was the Agrokomerc affair that ran a little wild in the 1980s.
Marko, it’s very interesting to get your inside story.
One thing worthy of note is how little you heard about the monetary policies of the then Yugoslavia in the press back in the days. I still remember the first time I got to Yugoslavia, back in the early '80s. A relative had invited me to go there on his boat, we left from near Venice and arrived to a small harbor between Umag and Piran, don’t remember the name. We were paying in foreign currency (don’t remember if it were Deutsche marks or US dollars) and I was stunned by how damn cheap everything was, from the mooring fee to fuel for the boat. Later I learned we got such good deals because everybody there was just starving for hard currency. Another thing that hit me (it was my first contact with “real” Socialism) was how barren and empty stores were. Yes, it was a small fishing village so there wasn’t much in the way of luxury, but it was striking to see the ice cream refrigerators completely empty.