Yugoslavia and Albania mend fences and build a rail link

Those touchy Balkan neighbors, Yugoslavia and Albania, seem to be deciding that economic cooperation makes more sense than wordy ideological warfare.

For nearly two months, the polemics about Kosovo, scene of last year's violent unrest among Yugoslavia's Albanian minority, have subsided.

The province itself has been quiet since its university students staged minor demonstrations on the anniversary of the March 1981 riots.

And work is about to begin on the rail link Yugoslavia and Albania have talked about for years but frequently postponed. It will be only 32 miles long. But for Albania it is especially significant, for it will constitute its first rail link outside its own borders.

The line is to run from Skhoder, the main town of northern Albania, to Titograd, the capital of Yugoslav Montenegro.

Titograd is on the electrified, 300-mile express main line between Belgrade, the Yugoslav capital, and the south Yugoslav port of Bar.

Work on the Skhoder-Titograd railroad is to begin in July. The line is to be ready for traffic by the end of next year, allowing Albania to move its goods much more rapidly into Yugoslavia --and on northward to Austria and the other middle and northern European countries with which it has found more trade outlets since the 1970s.

The uproar over Kosovo threatened a serious setback to trade. But now, in addition to the railroad, the two governments have concluded agreements aimed at maintaining exchange at the levels achieved in 1980-81. They hope to facilitate commercial traffic over the borders by lifting all taxes on freight transport.

Moves are afoot to improve air traffic, which at present is operated only by the Yugoslavs; Albania does not yet have international passenger aircraft. It might be put on a reciprocal basis by Yugoslavia leasing planes until Albania can build up its own airline.

Both countries need better economic ties and stand to gain from them. They have been divided by ideology for 30 years. A limited normalization began during the '70s, but it has always been subject to fresh outbursts.

The 1981 polemics over Kosovo were almost as sharp as the ferocious hostilities of the initial Stalinist rupture. Albania accused the Yugoslavs of subjecting the million Albanians who make up the bulk of the Kosovo population to lower standards of living than other Yugoslavs.

The Yugoslavs professed to see the hand of Albania behind swelling Kosovar protest against political discrimination and economic disadavantage. (The first complaint has some vailidity, but the economic claim overlooks the massive federal aid the province has been receiving for 15 years.)

Kosovo student agitation for republican status for the province--putting it on a par with Serbia and the five other republics--stung the Belgrade government into direct official charges that Albania was behind the demand. Officials alleged that Albania was working against Yugoslavia's ''territorial integrity'' and was inciting the local population to ''irredentism and counterrevolution.''

These charges came mainly from Serbia. Though a minority in Kosovo, Serbs historically have dominated the province's administration. Other republics indicated they thought the Serbs had overreacted and had led the federal government into doing the same.

Since February, Belgrade has cooled its attitudes, reassured Albania of its respect for its independence, and proffered good-neighbor relations regardless of politics.

Albania's living standards may still fall short of Yugoslavia's. Its people have lived austerely since the war. But the country has no debts - foreign credits are prohibited by law--and its economy is trouble-free compared with Belgrade's present inflation and $18 billion debt to the West.

Albania, moreover, is an exporter of agricultural produce. It confidently projects a 6 percent yearly growth in both industry and agriculture under the economic plan that will take the country up to 1985.

New projects include the big Koman hydropower plant on the Drini River in the north, which will boost already meaningful sales of electricity to Yugoslavia and other Balkan states. Later electricity may even be exported to Austria.

Yugoslavia, with 10 times the population, has a much bigger economy that Albania, and it has a highly diversified and internationalized trade. The International Monetary Fund says its economy is strong and flexible enough to manage the debts.

But the accord for $130 million of trade this year with Albania and the prospect of the new railroad are as regionally important for Yugoslavia as for the small neighbor on its southwestern border.