This report examines the roles played by Western International Financial Institutions (IFIs), intelligence agencies, militaries and strategic interests in the break up of the Yugoslav Republic.
The Yugoslav wars occurred between 1991 and 2001, and involved several conflicts leading to the breakup of Yugoslavia. The Socialist Federal Republic of Yugoslavia was created at the end of World War II, and consisted of Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia, Slovenia and Kosovo.
Setting the Stage
A Political and Economic Crisis
In 1980, longtime dictator of Yugoslavia, Josip Broz Tito died, leading to a leadership crisis.
By 1982, the Yugoslav debt had grown to 20 billion dollars, so the US Ambassador in Belgrade, Lawrence Eagleburger, created a group of individuals known as the “Friends of Yugoslavia” who organized a set of “rescue loans” by the International Monetary Fund (IMF) and World Bank.[1] However, that same year, the IMF and World Bank had created a new loan agreement, entitled Structural Adjustment Programs (SAPs), which gave the IFIs total control over a country’s economic and even many political decisions. The effect of the SAPs was that they “wreaked economic and political havoc… The economic crisis threatened political stability … it also threatened to aggravate simmering ethnic tensions.”[2]
In 1989, Slobodan Milosevic became President of Serbia, the largest and most powerful of all the Yugoslav republics. Also in 1989, Yugoslavia’s Premier traveled to the US to meet President George H.W. Bush in order to negotiate another financial aid package. In 1990, the World Bank/IMF program began, and the Yugoslav state’s expenditures went towards debt repayment. As a result, social programs were dismantled, the currency devalued, wages frozen, and prices rose. The “reforms fueled secessionist tendencies that fed on economic factors as well as ethnic divisions, virtually ensuring the de facto secession of the republic,” leading to Croatia and Slovenia’s succession in 1991.[3]
Beginning the Break-Up of Yugoslavia
In 1990, the US intelligence agencies released a National Intelligence Estimate (NIE), which predicted Yugoslavia would break apart, erupt in civil war, and placed blame on Serbian President Milosevic.[4]
Germany was the first to recognize the independent states of Slovenia and Croatia, pressuring its Western allies to follow suit.[5] This resulted in the Ten Day War in Slovenia, where the Yugoslav army moved against the Slovenian forces in late June of 1991. After the battle, the European Community recognized Slovenia on January 15, 1992, the UN did so on May 22, and Slovenia subsequently joined the EU in 2004.
In 1991, conflict broke out between Yugoslavia and Croatia, when it, too, declared independence. A ceasefire was reached in 1992. Yet, the Croats continued small military offensives until 1995, as well as participating in the war in Bosnia. In 1995, Operation Storm was undertaken by Croatia to try to retake the Krajina region. A Croatian general was recently put on trial at the Hague for war crimes during this battle, which was key to driving the Serbs out of Croatia and “cemented Croatian independence.” The US supported the operation and the CIA actively provided intelligence to Croat forces, leading to the displacement of between 150,000 and 200,000 Serbs, largely through means of murder, plundering, burning villages and ethnic cleansing.[6] The Croatian Army was trained by US advisers, and the general on trial was even personally supported by the CIA.[7]
