WHILE Polish instability has captured much of America's focus on Eastern Europe, it may well be Yugoslavia, the most liberal of the ``Iron Curtain'' communist countries, that proves to be the more interesting spectacle. Over the last 12 months, Yugoslavia has quietly crept to the verge of civil war. In the last six months, thousands of workers have taken to the streets to protest 200 percent inflation, a rapidly declining standard of living, and stifling economic inefficiency.
In the Kosovo Province in southern Serbia, a longstanding and seemingly intractable dispute between ethnic Albanians and Serbs over control of the region has reached a boiling point - both sides are literally arming themselves in anticipation of inter-ethnic warfare. Economically and politically, the country is facing its greatest challenge since Tito's death.
Yugoslavia has no dearth of proposed solutions - everyone from Central Committee members in Belgrade to farmers in the underdeveloped southern republics will offer up his prescription of how to set things right. Many of the prescriptions are radical; a disheartened economist in a state-run economic institute in Sarajevo told me, ``Wholesale adoption of private enterprise, from the smallest family farm to the largest industry, is the only thing that will save this country.'' What prevents Yugoslavia from adopting, or even contemplating, such solutions is the impotence of its federal government to reconcile regional disputes and to address any of the pressing national issues.
Yugoslavs boast of their country's diversity. The country is composed of six republics and two ``autonomous provinces.'' These entities are radically different; each has its unique ethnic stock, language, history, and in some cases, religion.
Cultural differences are compounded by severe economic inequality among the regions. For example, per capita income in the northern republic of Slovenia is approaching $2,000, eight times that of Kosovo's $250. As a result, each region has different political concerns.
Slovenians, for example, having successfully brought in quasi-free-market mechanisms, are pressing for further economic and political liberalization; Albanians in Kosovo are desperate to gain greater autonomy and to transplant some of the north's wealth down south; Serbs, by far the country's largest ethnic group, are violently determined to reassert their historical claim to Kosovo and subdue what a Serbian professor termed ``Albanian terrorist tactics.''
Nor, since the death of Tito, can such differences be forcibly reconciled by the federal government. Under Tito, squabbles among the republics were tolerated to a limited extent. But when things started to get out of hand, the ``Father of Yugoslav Communism'' would apply an iron fist.
On his death in 1981, a system of ``collective leadership'' with a rotating presidency began - every four years a new leader is appointed from a different republic. The system has failed to produce a leader credible to all ethnic groups and capable of making the country look at its problems in national terms.
Compounding the lack of national leadership is the country's current Constitution - the fourth in Yugoslavia's brief history. It mandates that all federal decisions of significance require a consensus of all eight republics and provinces. Representatives of vastly different regions find difficulty in agreeing on the most simple matters, let alone such fundamental ones as how to address soaring inflation and a $20 billion foreign debt.
As a result, the Yugoslav political system has been paralyzed, with direction coming only on the republic and provincial levels. And these directions rarely coincide. Given a choice, Slovenia and Croatia, wealthy northern republics, would continue their move toward free-market economics, which have greatly augmented their productivity and standards of living.
Macedonia and Montenegro, two such poorer southern republics, would increase the north-south flow of capital, while surrendering little autonomy over how those funds are invested. Kosovo, the poorest of them all and overwhelmingly populated by the ethnic Albanians, might choose any of a number of directions, the most extreme being complete secession from Yugoslavia and unification with the ``ethnic motherland'' - the rigidly Stalinist border state of Albania.
With little federal control and no federal direction, it seems that the gloomy prognosis of a dissident professor (dismissed from the University of Belgrade for his ``extreme Serbian nationalism'') may prove all too accurate: ``Eventually the Serbs, who make up 50 percent of the population, will force the government to send the army down to Kosovo. [With] this, and the tension brought on by the economy, an incident will inevitably occur and bloody civil war will break out.''
The only feasible alternative would be some rapid, and previously uncontemplated, alliance-building among republics. If Slovenia and Serbia were able to forge a union - which would combine the strongest economic and political republics respectively - enough pressure might be exerted on the other republics to reach the consensus needed to address the Kosovo situation. If maintained, such an alliance might ultimately allow the federal government to address the deeper roots of Yugoslav disunity - the weak constitution and economic disintegration.
Without such alliance-formation, however, the federal government will remain incapable of addressing the economic and ethnic crises that are literally tearing the country apart at its eight seams. And thus without such alliance-building, the West should prepare for considerable and worsening instability in a region of the world where instability has the unsettling habit of leading to world wars.