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Yugoslavia was not buddies for long with the Soviet Union, (they had a somewhat less disastrous idea for socialism), as a result, they didn't really get much support after that, and wasn't offered the technical package for the Kalashnikov.
So what do they do when they want it? Simple, an undercover agent in Russia simply steals an AK and smuggles it home in a suitcase, and Zastava reverse engineers it. The result is their own AK, mostly the same as the Russian in the ways that matter, though with some changes to suit Yugoslavia's preferences and manufacturing, furniture will not interchange, for instance.
This one has a bakelite magazine inserted, Yugoslavia only ever made steel magazines, but it does look nice, doesn't it?
