The Kingdom of the Serbs, Croats, and Slovenes, having inherited formidable economic problems after the Great War, must repair war damage, repay debts, eradicate feudalism by passing land reform, integrate differing customs areas, currencies, rail networks, and banking systems, and make up for shortages of capital and skilled labor.

The agricultural sector, which employs over 75 percent of the Yugoslav population, undergoes a radical reform that fails to relieve nagging rural poverty.

Before the war, German, Austrian, and Hungarian families owned sprawling estates in Slovenia, Croatia, and Vojvodina; Turkish feudalism remained in Kosovo and Macedonia; Muslim landlords in Bosnia owned large farms worked by Christian sharecroppers; some Dalmatians remained tenant farmers in a system devised in Roman times; and Serbia was a chaotic blend of independent small farms.

The Yugoslav government has erased remnants of feudalism, but the peasants receive plots too small for efficient farming to support the rural population.

Yields fall; poverty and ignorance dominates most of the peasantry.

Industrialization and emigration does not ease overpopulation.

In the industrial sector, the kingdom concentrates on extracting raw materials, expanding light industry, and improving its infrastructure.

Insufficient domestic capital forces the Yugoslav kingdom to seek foreign investment.

The government sells mining rights to foreign firms and borrows heavily to build roads and rail lines, power plants, and a merchant marine.

Despite steady economic growth based on the food industry, mining, and textiles, the kingdom remains substantially undeveloped and falls far behind the rest of Europe.

Divergent economic interests and the widening differences in development of Croatia and Slovenia with the less developed southern regions exacerbate Serbian-Croatian tensions.

The development disparity especially embitters many Serbs, who believed that their sacrifices in the war have benefited former enemies more than themselves.