LETTER FROM BUDAPEST. Yugoslavia balks at far-reaching change

Yugoslavia is at a standstill. The country that initiated ``openness'' long before Mikhail Gorbachev has an air of being left behind by glasnost and by what many see as emergence of a ``revisionism.''

This is not to dismiss earlier Yugoslav achievements: the move from collectivization to mainly private farming, decentralization of industrial management, equal rights for its many nationalities, and a generally more tolerant way of life.

Radical as these were in their time, they were, however, still changes within the system rather than changes of the system. The ruling party is still unwilling to compromise over its ultimate monopoly. Yet it is increasingly evident that this is the major obstacle to fulfilling even accepted ideas like market competitiveness and worker self-management.

Thus, while pioneer Yugoslavia balks at more change, the Soviet Union and Hungary (the East bloc's own first reformer), which seem to be doing the reforming.

Hungary recently had its first enterprise bankruptcy. Next year it will launch the first personal income tax system in a communist, centrally controlled economy. In Yugoslavia a just-enacted bankruptcy law should, in theory, apply to several thousand lossmaking undertakings. Fewer than 100, however, are earmarked. Moreover, the latest and biggest of this year's escalating strike wave, this time at the Rijeka shipyard, was just ended with pay concessions the economy can ill afford. Political fears of unemployment explain the concessions. Similar doctrinal thinking is delaying development of a private business sector that already employs half a million people and is capable of absorbing at least half of the million and more jobless.

In theory, an expanded private sector is government policy. Prime Minister Branko Mikulic has recently trie to persuade Yugoslavs who have done well in the West to invest in Yugoslavia. But in practice it proves somewhat different, as a Yugoslav engineer who had worked successfully for years in Canada explained on Belgrade television recently.

He apparently ``came home'' last year with $1 million, the necessary equipment, and a desire to ``help'' his native land by setting up a window-washing enterprise to serve the numerous glass-tower blocks mushrooming in all cities.

``My plan,'' he told viewers, ``could employ 200 people or more.'' To date, he is defeated by the law limiting a private business to 10 employees.

For years the authorities have debated raising the maximum for private farmers above the 10 hectares (25 acres) set at the time of decollectivization. But hard-line ideologists still see a kulak (``rich peasant'') behind every ear of corn when liberals urge allowing efficient farmers up to 25 or 50 hectares of arable land in the plains.

Similar prejudices about a ``return to capitalism'' continue to block real progress in joint ventures between state companies and Western investors, a process initiated 20 years ago. Recently controls on profits, transfer, and repatriation of capital were eased. But enough restrictions remain to make businessmen cautious.

Nine of everything

Yugoslavia, it has long been said, has ``nine of everything.'' That is, a federal government and ``equal'' administrations in six republics and two provinces. Each republic has its own Communist Party, under the mantle of the national party. On any national issue, only one local government need veto something of major federal interest to prevent it becoming law.

Not only veteran dissident Milovan Djilas sees Yugoslavia's progress as a matter of democratization. A host of ``liberals,'' who have never agreed with his specific conflict with the regime, see a genuinely pluralistic society in place of the present immobility at the top as the only way out - that is, changes, not just modifications of the system.

An article on Yugoslavia in the Aug. 5 Monitor was labeled a ``Letter from Budapest.'' It should have said a ``Letter from Belgrade.''