YUGOSLAVIA'S federal government under Prime Minister Ante Markovic has become the protector and guarantor of the unity of this divided nation. As if above the fray between the republics and nationalities that threatens to tear Yugoslavia apart, the government marches onward in a radical attempt to reform this country and keep it together.
``Our goal is to make Yugoslavia economically efficient and politically free,'' says Deputy Prime Minister Zivko Pregl.
In the process, the traditionally weak federal government is creating a new, much more influential role for itself in the face of strong forces favoring far-reaching decentralization.
But, contrary to the increasing nationalism and independence in the country's six republics, the nation has rallied around the main symbol of Yugoslav unity, Mr. Markovic. He has become by far the most popular and trusted politician in Yugoslavia. In the latest poll in the leading daily Borba, Markovic received support from 72 percent of those responding - easily beating his main opponents, Serbian strongman Slobodan Milosevic, with 21 percent, and Croatia's nationalist president Franjo Tudjman, with only 7 percent.
Just one year old, the Markovic government has launched radical economic reforms to stabilize currency and control inflation. Political reforms are expected to follow - with free, nationwide, multiparty elections in November to form a new federal parliament.
``We started with the economic reforms but are now shifting to the political system,'' says Mr. Pregl. If we win these elections we will change Yugoslavia so radically that whoever succeeds Markovic cannot go back.''
The Markovic government has met with resistance from many who fear that a modern, democratic and more centralized Yugoslavia will limit their own powers and independence. The new Croatian president, Mr. Tudjman, almost scoffs at the planned federal elections in the fall, calling them unimportant. And in Bothvenia and Serbia - together with Croatia the most powerful and influential of the republics - there is also strong resistance to and fear of the Markovic government's attempts to transform Yugoslavia into a modern European nation.
Pregl, an economist from Slovenia who is a member of the reformist Communist Party in his home republic, says it was necessary to start with the economic reforms: ``If we had begun with the political reforms, we would not have succeeded.
``But we were aware when we launched the economic reforms that we planted the seed which would lead to free elections. The Yugoslav reforms are not complete without these elections, and they, in turn, are necessary conditions for economic reforms to be successful.''
The economic reforms launched at New Year have worked. The local currency, the dinar, is well on its way to full convertibility. Inflation, which last year was 1,250 percent and stood at 64.3 percent as late as last December, currently is down to zero, although it is expected that the overall goal for this year, 13 percent, may not be achieved.
Pregl says the core of the stabilization policy is the convertible dinar. The core of the development policy launched last week is privatization of the economy. Foreigners can now own 100 percent of Yugoslav companies, and there are already 300 completely foreign-owned companies in the country. Over 1,200 joint ventures have been started this year. In the capital of Belgrade, an estimated 50 new private enterprises are started every day.
But the reforms have some negative consequences. Unemployment, already around 13 percent, or 1.3 million people, will go up as a result of sharply increasing bankruptcies. Industrial production has dropped; there is fear that the lifting of the price and wage freeze will spur inflation. There is a grave lack of capital, although the hope is that the privatization of the economy and recent agreements with the International Monetary Fund and the World Bank will alleviate this problem.
Markovic's government has created a new faith and confidence among the Yugoslavs - what he calls ``psychological security.''
The Communist Party has been an obstacle to economic reforms for the last 20 years, says Pregl. Also, people were not ready to pay the price for reform. ``Now they see that there is no other way,'' says Pregl, ``and there is a belief again that we can solve the problems.''
The federal government is only one of a myriad of political forces in Yugoslavia now. But today it is the driving force behind the reforms. Whether the Markovic government succeeds depends to a large extent on the willingness of the leaders in the various republics to cooperate and jointly seek a Yugoslav solution to the problems.
Pregl says the new, strongly nationalistic leaders in Slovenia and Croatia have been toning down their rhetoric since their election victories this spring, and seem ready for dialogue. He adds: ``This government will survive if it is useful. ... And Yugoslavia will survive.''