324 The Presidential Years
in the party than they.^307 The election of this triumvirate put to rest the rumors
that had persisted over the prior few weeks in Belgrade that Tito might resign
as secretary general of the LCY and settle for the party’s presidency. He spoke
about his plans for the future at the press conference on 13 December, saying
that he felt fit enough (and indeed looked it) to continue leading the party.^308
Another Economic ReformTito described the new reform envisaged by the Eighth Congress as a cut into
the social tissue, “as a surgery,” and everyone was aware that it would not be
painless.^309 In fact, it was not just a correction of the system, but a comprehen-
sive plan that would take several years to implement. The Yugoslav leaders
dealt with the errors of the past, aiming to change not just the economy but
also the political and ideological structure of both party and state. They were
not building on sand, since after the war the country had experienced notable
progress and modernization. The income per capita had reached five hundred
American dollars (still modest, but better than ever before), the infrastructure
was more or less sound, and the earnings from tourism approached 100 million
dollars a year. Yugoslavia had a foreign debt of a $1.2 billion, but its industry was
growing rapidly; like Japan, it was one of the fastest growing economies. This
favored progressive urbanization and the influx of peasants into the proletarian
masses, which gave the young a chance to escape traditional country life and
discover the world. “This was such a leap,” wrote Dušan Bilandžić, “that it did
not happen for centuries.”^310
Between 23 and 24 July 1965, the Federal Assembly approved thirty laws on
economic reform. Departing from the practice of communist states, Tito de-
centralized the authority for decision-making, introduced “market socialism,”
and started replacing party hacks with professional managers. The proposed
goals concerned an increase in production, technological modernization, re-
duction of costs, and the viability of enterprises in the hope of reaching inter-
national markets with Yugoslav products. For this purpose, it was decided that
enterprises could dispose of 70 percent of their earnings as they saw fit. The
government also wanted a quick improvement in balance of payments, fiscal
consolidation, and debt reduction, and counted on the help of the United States,
Great Britain, France, Italy, and the Soviet Union for assistance.^311 The dinar
was devalued with the intention of achieving convertibility and increasing ex-
ports.^312 For Yugoslavia to do this was a bold, unprecedented move. The state
subvention was abolished and, at the same time, import duties were increased
by 20 percent. Considerable importance was attached to tourism, so borders
were opened and visas eliminated in spite of a lot of internal opposition.^313