The Communist Party chief said Monday the party must adopt far-reaching economic, constitutional and political reforms to alleviate poverty and calm ethnic and social unrest.

"We need a fundamental renewal of socialism which will throw out everything that is bad and outdated and replace it with new ways," Stipe Suvar said in an opening speech to a meeting of the party's policy-setting Central Committee.The meeting of the Central Committee has been billed as a historic session to approve the most sweeping personnel changes in the four decades since the party came to power.

"The renewal of socialism means taking off its old, tight-il14l,6p4

fitting suit and letting people breathe in new surroundings," Suvar told the 162 members of the committee.

"All of us in this country are faced with a choice - either we all resolve the crisis together, or we all head to destruction," he said in the 70-page speech reported by the state news agency Tanjug and excerpted on state-run radio and television.

Suvar called for expanded private ownership, increased foreign investment and the shutdown of unprofitable state enterprises. He warned of possible layoffs but promised basic welfare for the unemployed.

He said unspecified leading jobs should be opened up to non-party members but made clear the ruling League of Communists has no intention of abandoning one-party rule.

Alluding to widespread calls for personnel changes, he added, "All the incompetent and compromised people must, go and the society must be ensured of a perspective."

Personnel reform was high on the agenda at the meeting.

The expected changes come as Yugoslavia experiences its worst economic and social crisis in 43 years of communist rule. Amid growing ethnic and social unrest, living standards have fallen by one-half since 1980, and austerity measures adopted in May have slashed salaries as prices rise. Inflation is at 217 percent, and the foreign debt stands at $21 billion.

Striking workers have taken to the streets in increasing numbers, prompting alarmed officials to seek permission from the International Monetary Fund to relax the austerity program.

Fourteen of the 23 members of the Communist Party's ruling Politburo could be up for replacement at the meeting, including four senior leaders whose recent resignations will have to be formally accepted at the meeting.

The four are former heads of the party, Bosko Krunic and Milanko Renovica, a leading Communist from liberal northern Slovenia, Franc Setinc, and a senior ethnic Albanian from the troubled province of Kosovo, Kolj Siroka.

Despite wide-spread calls from the Yugoslav public for the session to be televised and broadcasted live, most of the session will be closed, Belgrade radio said.

The dramatic changes are a response to calls from the largest republic, Serbia, and from workers, angered by falling living standards.

Ethnic Serbs want changes allowing their republic, one of Yugoslavia's six, to have more control over the provinces of Kosovo and Vojvodina.

Workers want political and economic changes because they contend the top party leaders are inefficent and corrupt.

The criticism has touched even Suvar, who clashed last week with Slobodan Milosevic, ambitious leader of the troubled republic of Serbia. The clash prompted a wave of requests from Serbian party organizations for Suvar's resignation.

Milosevic's push for greater Serbian control of its two provinces, Vojvodina and Kosovo, and increased central control in general in Yugoslavia has stirred up the current political crisis.

Mass rallies have taken place all over eastern and southern Yugoslavia in recent weeks to press this campaign.

In a recent interview, Suvar said up to one-third of the Central Committee could be replaced at the meeting, which is expected to last at least two days.

If several Politburo members and one-third of the Central Committee do go, it would be the most sweeping change of top personnel since the communists came to power after World War II.

Supporters of Milosevic have said that if radical changes are not agreed on at this meeting, they will demand an extraordinary party congress to try and get the changes they want. The next such forum is not due until 1990.

Non-Serb leaders fear Milosevic is trying to use his mass popularity in Yugoslavia's largest republic to expand the power of the country's biggest ethnic group at the expense of others.