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Sweeping economic measures proposed in Yugoslavia

By NESHO DJURIC

BELGRADE, Yugoslavia -- Prime Minister Ante Markovic outlined to Parliament Friday sweeping reforms designed to stimulate private enterprise, ease state intervention and pull Yugoslavia out of its worst economic crisis.

In an 80-minute report to a joint session of the two-chamber legislature in Belgrade, Markovic said the proposed program is aimed at 'creating a completely new system of new Socialism' based on 'political democracy and economic efficiency.'

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He appealed to legislators to approve the entire package of measures because only as a whole could it stop spiralling annual inflation, which in August hit 894 percent and could reach 1,500 percent by year's end.

'The struggle for economic and political reforms cannot be won without sweat and tears,' he said. 'But, if every man understands what this struggle will bring to him, his family, his company, republic and Yugoslavia, I am convinced he will engage himself in this struggle.'

Markovic, 64, said under the program. private enterprise will be stimulated, the economy will be separated and freed from political influence and the state will intervene in economy only in rare cases, similar to Western free-market economies.

Private, foreign, state-owned and mixed enterprises in Yugoslavia would be treated the same under the proposed changes, he said, adding that companies, whether private or state-owned, will work on a strictly commercial basis which will mean bankruptcy for those that lose money.

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The prime minister said he was aware free-market economic rules would lead to additional social tensions with bankrupt companies leaving many workers jobless, and proposed that local governments, with assistance from the federal government, organize social welfare programs for the unemployed.

Referring to the power struggle among feuding leaders of Yugoslavia's six republics and two provinces Markovic said, 'In the name of common sense, our responsibility to the people, young generation, future and history, let us turn to solving real problems so we can catch up with the world.'

'Yugoslavia, looking towards Europe and the world, has other problems from those that divide us today and make us small and powerless in the eyes of the world,' he said. 'All of us together have the right to a better future, and it depends only on us, so all of us are on a historic test in that respect.'

Markovic said if all the proposed measures are approved by parliament and strictly implemented, the annual inflation rate could be held under 1,000 percent this year with prospects to begin dropping next year.

He boasted his government succeeded in cutting down debt to Western creditors from $19 billion to $16.9 billion in July after Yugoslavia repaid $2 billion of principal and interest rates during the first eight months of 1989.

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The prime minister also said Yugoslavia has liberalized prices and imports in an effort to make companies competitive on the open world market, but added his country needs about $1 billion of foreign credits by the end of the year for a recovery program of commercial banks and companies.

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