868.10/9–2550: Telegram
The Ambassador in Yugoslavia (Allen) to the Secretary of State
278. Black, President IBRD, told me before he left Belgrade today that during his conversations with Yugoslav government, three possible courses of action were debated at length. These were: (1) Yugoslav Government to depend on its own resources, tighten its belt, and not ask for further foreign aid, (2) Yugoslav Government to depend primarily on US assistance, asking for larger loans and also food grants from US; and (3) Yugoslavia to continue conversations with IBRD in Washington (presumably in endeavor to work out with Yugoslav Government realistic, over-all industrialization and related capital equipment import programs). Velebit strongly championed third alternative, while Vlado Popovic, Ambassador to Washington, [Page 1455] and Milentije Popovic, Minister of Foreign Trade, were opposed. Velebit’s view prevailed and conversations will be continued in Washington.
While there is not yet sufficient basis to judge, foregoing may indicate at least temporary trend away from doctrinaire Communism of Popovic-Djilas1 school to more practical economic views of Velebit.
In separate conversation Rosen told Fowler that talks with Kidric and other Yugoslav officials had been very frank and that latter had shown more inclination than formerly toward flexibility, probably because of the severe jolt given them by the drought.
Black’s visit was highly useful. It acquainted key Yugoslavs with point of view of international organization. He was able to dispel much of their opinion that bank is US institution, and his forthright but pleasant approach created favorable impression. Moreover, I believe Yugoslavs in turn succeeded in increasing Black’s interest in their situation. He left convinced that Yugoslavia should have economic assistance from west, but he remains uncertain that IBRD is proper source of such assistance.
I think it likely Yugoslavs will continue as in past to follow policy which is mixture of all three alternatives suggested in first paragraph.
Sent Department 278, repeated information London 19, Paris 32.
- Milovan Djilas, Secretary of the Politburo of the Yugoslav Communist Party and Yugoslav Minister without Portfolio.↩