Beginning in the mid-1970s, Yugoslavia made considerable progress in replacing imports with cheaper domestically manufactured military equipment. As Yugoslav military equipment approached the quality of European equipment, international sale of such products became a potential source of hard currency for the Yugoslav economy (see Arms Sales , this ch.). By 1990 Yugoslav industry was providing about 80 percent of basic military equipment and some advanced systems. But that figure included mostly infantry weapons, antitank systems, armored vehicles, boats and ships, and relatively simple components. Although the objective was to keep pace with the best armaments in NATO and Warsaw Pact inventories, this goal was hindered by the tremendous financial and technological obstacles facing all of Yugoslav industry in 1990. The Yugoslav arms industry upgraded or modernized existing systems when possible, extended the service life or improved the effectiveness of major weapons systems, and shared research and development breakthroughs with civilian industry to maximize economic impact. Yugoslav arms industries operated somewhat differently from other economic enterprises. Article 281 of the Constitution empowered the federal secretary for national defense to regulate associated labor and selfmanaging organizations involved in defense production and research. A 1979 law on domestic defense industries consolidated many enterprises producing arms and other military equipment. It also provided the federal secretary for national defense more direct control over the activities of those enterprises. Domestic defense production in the 1970s had been hampered by the relative autonomy of many highly interdependent industries. As many as 240 loosely associated enterprises produced necessary parts for a single complex weapons system. The 1979 law weakened the principle of self-management in defense production enterprises, citing their special role in national security. The law severely circumscribed the right of employees to set prices for their products. This provision allayed military concerns about the inflation and escalating arms costs caused by worker wage demands. Workers continued the formal process of setting prices, but only under strict guidelines issued by the federal secretary for national defense. The federal secretary also prepared an arms import program. Funds from the defense budget had to be allocated if foreign exchange earnings from arms exports did not match the cost of arms imports. The secretary was responsible for arranging credit or payment terms with foreign governments or suppliers.

The ground forces were the first priority in Yugoslavia's arms procurement plans. The most urgent requirements were replacement of obsolete armored forces and improvement of mobile defense infantry weapons, including antitank and antiaircraft systems, to compensate for infantry manpower cutbacks. In 1990 Yugoslavia also was developing its own military aircraft and helicopters. Improved target detection and designation systems were sought.

In the late 1970s, the Soviet Union granted Yugoslavia a license to build the T-72 tank. The Yugoslav version, designated M-84, went into serial production in the late 1980s. According to Yugoslav sources, the M-84 had a computerized fire control system, electronics, and a laser rangefinder comparable to those of advanced NATO and Warsaw Pact models. It featured protection against armor-piercing shells, a low silhouette, and a defensive alarm system to warn the crew when the vehicle was illuminated by enemy radar, infrared, or laser target designators.

By contrast, the Yugoslav M-980 armored combat vehicle was an entirely domestic design. When initially fielded in 1975, it was one of the world's most advanced models, rated on a par with the Soviet BMP-1 or French AMX-10. The amphibious M-980 carried an eight-man infantry squad, a driver, and a gunner. It was armed with Soviet AT-3 antitank guided missiles, a 20mm cannon, and 7.92mm machine gun, and powered by a Snecma diesel engine. The Yugoslav BOV was a particularly versatile domestic armored reconnaissance vehicle configured with a number of mounted antitank and antiaircraft weapons systems.

Yugoslavia produced its first fighter aircraft in 1950 and followed it with many trainers and experimental aircraft in later years. In the mid-1960s, the Galeb and Jastreb fighters were the first domestically manufactured jet aircraft. In the 1970s, Yugoslavia produced the Super Galeb light attack aircraft and began to work jointly with Romania to develop its first sophisticated domestic fighter/attack aircraft, the Orao. A single Rolls Royce Mk 632 Viper turbojet engine powered the Super Galeb, which carried two twin 23mm cannons, 57mm and 128mm rockets, and cluster bombs. Its total ordnance load capability was 2,000 kilograms. The Orao incorporated both domestic and foreign technology, including twin Rolls Royce Mk 633-41 Viper turbojet engines. The initial prototype was ready in 1974, and serial production began in 1980. Performance of the Orao was very similar to that of the Alpha jet used by NATO forces.

Although it represented a considerable advance for Yugoslav military aviation, the Orao had some significant shortcomings. It was limited to subsonic performance, carried a relatively light weapons load of 2,500 kilograms, lacked air-to-air missiles, and offered a short combat radius of 400 kilometers. By 1990, fewer than 100 had been built, and plans to build a new multirole fighter cast doubt on the future of the Orao program.

In the 1980s, the Ivo Lola Ribar Machine Industry of Belgrade began manufacturing French Aérospatiale SA-342 Gazelle helicopters under license. Called the Partisan, this was the first domestically produced rotary-wing aircraft. It could carry four launchers for AT-3 antitank guided missiles.

In 1990 Yugoslavia had a solid technological and manufacturing base for producing other weapons systems; the main weak points of this base were in electronics and guidance technologies. Yugoslavia cooperated with Sweden to produce laser rangefinders and gun sights. Its arms industries used Soviet, Czechoslovak, and United States models to achieve selfsufficiency in rifles, machine guns, light antiarmor rockets, mortars, and artillery pieces, and to provide a substantial portion of boats and landing craft used by the YPA. The Soviet Osa class served as a design model for Yugoslav missile boats, which were powered by British turbine engines and armed with French-supplied Exocet antiship missiles. The Yugoslav 501-class landing craft was a versatile platform capable of transporting three tanks and two platoons of troops or two eight-gun artillery batteries. It also could serve as a coastal minelayer. But in 1990, Yugoslavia still relied on the Soviet Union and a number of Italian, Spanish, Swiss, and Swedish arms firms for weapons and electronics to outfit the ships and boats built in Yugoslav shipyards.

Domestic production of antitank systems was a high priority because such systems were not easily available elsewhere. The Soviet Union was reluctant to provide Yugoslavia its more advanced antitank guided missiles, which might be used later against its own main battle tanks. The United States had declined to sell TOW missiles because Yugoslavia had failed to abide by the terms of previous arms transfers.

Data as of December 1990

NOTE: The information regarding Yugoslavia (former) on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Yugoslavia (former) Domestic Arms Production information contained here. All suggestions for corrections of any errors about Yugoslavia (former) Domestic Arms Production should be addressed to the Library of Congress and the CIA.