Building Ships and Surviving Late Socialism: The Shipyard "Uljanik" in Pula in the 1970s and 1980s

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Abstract

This paper analyses business strategies to survive the economic crisis of late socialism in
Yugoslavia. It takes one of Yugoslavia's flagship exporter enterprises, the shipyard "Uljanik" in
Pula as a case study. It argues that the most widespread response to growing economic difficulties in the 1970s and 1980s was a strategy of muddling-through. Yugoslavia, while aiming to become an exporter of industrial goods, never actually managed to adapt its domestic economic institutions to that goal. "Uljanik", like the other shipbuilders in Yugoslavia, produced mostly for export yet failed to earn profits. Domestic conditions and the political over-determination of industry prevented the implementation of measures to increase efficiency. "Uljanik", for example, expanded capacity and hired new workers even at a time when the global demand for ships was depressed after the 1974 oil-price shock. Employment and other social functions turned out to be more salient than any business rationale. Since the mid-1970s this made "Uljanik" dependent on customers, such as the Soviet Union or Third World countries that did not pay in hard currency, or did not pay at all. Frequent illiquidity was the consequence. The paper present the ship-building industry as a case in point for the increasing tensions between Yugoslavia's institutional set-up and its integration in the international economy, and for the unwillingness of policy-makers to affect structural change. The country failed to build resilience for mediating the outfall of global economic crisis.