This is a false dichotomy: Either your country is an "economic powerhouse", or you're living in a mud hut, with nothing in between. A country can be a good, decent place to live, where people's basic needs are taken care of, with opportunities for modest life improvements for those who want them, without being an economic powerhouse (and all of the bad that comes with that).
> Despite facing numerous challenges, including political instability and external pressures, the Yugoslav economy achieved significant growth and modernization during its existence, with a particularly strong emphasis on education, health care, and social welfare
You need bricks to make a house. Where are you going to get the bricks from? You need lumber to build a stick frame house. How are you going to saw the lumber? Where are you getting the steel for the saws? Where are you getting the nails from?
Those all come from economic powerhouses.
The steps from mud huts to modern buildings came from economic powerhouses.
Only some parts were industrialized. Most of the the best companies were existing before Yugoslavia. They were nationalized after the revolution, the owners killed or they escaped to the west. Very little new industry was developed by the regime itself.
