The food vanished first. As word spread that the government was drastically raising prices, panicky shoppers snapped up sugar, flour and cooking oil by the crateload, quickly clearing grocery-store shelves. Decorum went next. Chanting "Down with prices!," 5,000 striking steelworkers hurled tin cans and hunks of bread at officials in the southern city of Skopje in the first organized labor protest to hit Yugoslavia since it became a Communist country, in 1945. Cowed officials promptly doubled some wages. In a no less startling outburst, the press and even some Communist leaders intensified calls for the resignation of Prime Minister Branko Mikulic, 59. Amid the turmoil, the devalued Yugoslav dinar plunged nearly 25% on world currency markets.
From one end of Yugoslavia (pop. 23 million) to the other last week, the nation that Josip Broz Tito rebuilt from the rubble of World War II seemed to be nearing collapse. An unruly amalgam of six republics, two autonomous provinces and more than a dozen languages, Yugoslavia has been divided against itself since it was founded in 1918. But the charismatic Tito brought unity to Yugoslavia and took it out of the Soviet orbit. Before he died in 1980, after 35 years in power, Yugoslavia appeared to be a model of innovation -- and a proudly neutral nation wooed and respected by both East and West.
Since then, however, economic woes and regional strife have gradually torn the country apart. While neighboring Hungary and the Soviet Union are moving slowly ahead, Yugoslavia is stumbling backward. Some 1,000 strikes have flared since Belgrade first froze wages in February. The country is staggering beneath nearly 200% inflation, the highest in Europe, and a 15% unemployment rate that only a few European countries exceed. At the same time, Mikulic is desperately trying to finance $19 billion in hard-currency debt. "This is perhaps Yugoslavia's greatest crisis in almost 40 years," said a Western diplomat long resident in Belgrade. "All the indications are that Mikulic cannot survive. But the bigger question is whether the entire country is now heading toward chaos and unrest."
Yugoslavia's economic turmoil was echoed last week in Poland and Rumania. In Warsaw consumers scoured shops for bargains after the government proposed price hikes that would double food costs and triple energy bills. Poles will vote on the reform package, aimed at reviving the tottering economy, in a national referendum this Sunday. In Rumania police reportedly broke up protests by some 5,000 workers in the city of Brasov, demonstrating against harsh labor conditions and growing food shortages.