Yugoslavia was not a totalitarian state, at least not in the sense of the Communist bloc style: it was a socialist state run by a Communist party, and it it is true that it wasn't as free as the Western Europe. On the other hand, the amount of freedom in Yugoslavia was an anomaly for such a state: if you keep out of politics you were free to do as you please, and there were even some small forms of private entrepreneurship. You could travel the world freely. Take up any job. Seek work abroad. Own a car or two. Have your private land and your private house.
Computers in Yugoslavia weren't banned outright: in fact, almost every Republic in Federation (Yugoslavia was a federation) had at some point at least one company producing computers using local knowledge and expertise; it was the time of 8-bit computing era, and while the computers weren't as good as Commodore and Spectrum, or Apple II or Atari ST, they were produced nevertheless and used in schools; some more professional ones (running CP/M) were used as business computers as well.
Given the fact that the state was a conservative one, there was slight paranoia when it got to computers and computing power: for a really long time, any machine that had >=64K of RAM memory was banned, due to the fear that the powerful computing device could be used by the enemy to calculate trajectories for big guns, or even calculate effects of a nuclear blast. (no, I'm not making up this one :-)
People used to contraband ZX Spectrum and Commodore 64 (banned, mind you! 64K!) computers into the state and sell them for extra profit. The customs officers were not iron-fisted, so there was a prolific number of those 8-bit computers in Yugoslavia, and the market for pirated games was so huge, some people bought cars or even houses with the profits. There was a relatively limited market for computers made in Yugoslavia, mainly because they were regarded as inferior to the Western computers, and every kid wanted "the real thing".
I'm not saying that Voja Antoni does not know what he's talking about. He's a hell of a legend here, one of the first generation of hackers that influenced a great number of younger people to become successful professionals today. It's just that the situation while certainly not free, wasn't a totalitarian Soviet-style big brother state that banned things it did not understand. Quite contrary, Yugoslavia was more open to learning new things than any of the ex-Yu states are today.
Maybe the best description of the times would be of a state that was "curiously afraid" of those new things, them computers.