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• 1 2025-03-30T06:22:00-07:00 Folder 8 1 plain 2025-03-30T06:22:00-07:00

  Divided​ ​States ​and​ ​Debts

  By Nikidrea T. Rey
  International​ ​history​ ​is​ ​no​ ​stranger​ ​to​ ​border​ ​shifts,​ ​redrawn​ ​boundaries,​ and the​ ​rise​ ​and fall​ ​of​ ​sovereigns.​ ​The​ ​focus​ ​of​ ​such​ ​events​ ​often​ ​follows​ ​the​ ​development​ ​of​ ​emergent governments​ ​while​ ​the​ ​constants​ ​transferred​ ​from​ ​old​ ​states​ ​to​ ​the​ ​new​ ​rarely​ ​receive​ ​significant attention.​ ​Yugoslavia’s​ ​division​ ​into​ ​five​ ​distinct​ ​republics​ ​between​ ​1990​ ​and​ ​1992​ ​left​ ​the​ ​status of​ ​the​ ​predecessor​ ​state’s​ ​international​ ​commitments​ ​inconclusive. These involved​ ​primarily​ ​state-endorsed, bilateral​ ​and​ ​multilateral​ ​agreements​ ​and​ ​foreign​ ​debts.​ ​International​ ​law​ ​protects​ ​the failed​ ​state’s successor​ ​governments​ ​from​ ​forced​ ​entry​ ​into​ ​preexisting​ ​agreements,​ ​but​ ​financial​ ​relationships still remained​ ​unaddressed.​ ​The​ ​U.S. State​ ​Department’s​ ​1968​ ​memorandum​ ​to​ ​extend​ ​credit​ ​to Yugoslavia​ ​via​ ​the​ ​Export-Import​ ​Bank​ ​seemed to have fueled​ ​the​ ​growth​ ​of​ ​an​ ​obligatory​ ​relationship​ ​without dispensation.
  
  The​ ​State​ ​Department’s​ ​request​ ​and​ ​President​ ​Lyndon​ ​B.​ ​Johnson’s​ ​subsequent​ ​approval of​ ​the​ ​memorandum​ ​to​ ​aid​ ​the​ ​communist​ ​state​ ​stemmed​ ​from​ ​the​ ​idea​ ​that​ ​Yugoslavia​ ​was​ ​in need​ ​of​ ​“extensive,​ ​mutually​ ​advantageous​ ​economic​ ​relations”​ ​with​ ​the​ ​United​ ​States.​ ​By​ ​1992, Yugoslavia's​ ​aggregated​ ​debt​ ​to​ ​the​ ​Export-Import​ ​Bank​ ​totaled​ ​$795​ ​million.​ ​This​ ​amount constituted​ ​only​ ​a​ ​fraction​ ​of​ ​what​ ​was​ ​owed​ ​to​ ​the​ ​International​ ​Monetary​ ​Fund​ ​($15​ ​billion) and​ ​the​ ​World​ ​Bank​ ​($2​ ​billion)​ ​in​ ​that​ ​same​ ​year;​ ​debts​ ​to​ ​other​ ​states​ ​and​ ​organizations​ ​remain unnamed​ ​here.​ ​The​ ​extension​ ​of​ ​credit​ ​and​ ​guarantees​ ​to​ ​Yugoslavia​ ​by​ ​the​ ​State​ ​Department opened​ ​these​ ​two​ ​large​ ​lenders​ ​to​ ​pump​ ​huge​ ​sums​ ​of​ ​money​ ​into​ ​the​ ​formerly​ ​communist territory,​ ​and​ ​those​ ​funds​ ​did​ ​not​ ​evaporate​ ​with​ ​the​ ​disintegration​ ​of​ ​the​ ​state. 
  
  Consequently, ​the​ ​onset​ ​and​ ​resolution​ ​of​ ​the​ ​Slovenian​ ​Independence​ ​War, eventually leading to the Yugoslav Wars of the 1990s, resulted​ ​in five​ ​new​ ​republics​ ​inheriting​ ​assets​ ​and​ ​massive​ ​debts. Yugoslavia’s​ ​account​ ​was​ ​divided​ ​and each​ ​of​ ​the​ ​republics​ ​-​ ​​Bosnia​ ​and​ ​Herzegovina, Croatia,​ ​Macedonia,​ ​Slovenia,​ ​and Serbia-Montenegro​. Each new state​ ​was​ ​designated​ ​to​ ​receive​ ​and​ ​repay​ ​a​ ​percentage​ ​of​ ​funds​ ​allocated​ ​to the​ ​former​ ​state.​ ​In​ ​the​ ​years​ ​leading​ ​to​ ​the​ ​separation,​ ​Yugoslavia​ ​experienced​ ​a period​ ​of​ ​debt​ ​addiction.​ ​The​ ​small​ ​communist​ ​state​ ​saw​ ​a​ ​nearly​ ​20​ ​percent​ ​annual​ ​debt increase​ ​from​ ​the​ ​1960s​ ​through​ ​the​ ​1980s,​ ​reaching​ ​an​ ​impressive​ ​high​ ​of​ ​$21​ ​million​ ​owed to​ ​Western​ ​nations​ ​in​ ​1988.​ ​The​ ​ensuing​ ​economic​ ​issues​ ​in​ ​part​ ​fueled​ ​the​ ​Yugoslav Wars that​ ​divided​ ​the country.​