BACK TO BELGRADE

Milosevic is edging into Ceausescu country. He’d be a goner today were it up to the average Radovan and Natasha. But the Balkans has its own rhythm.

Taxi drivers, on learning I am an American, hold Clinton and Milosevic jointly responsible for a senseless war. A banker who has met Milosevic several times repeats the mantra “three wars in ten years,” adding, “We’ve lost them all — it’s insanity.”

This is a city on edge, self-pitying, mired in anger, unable to connect the war’s causes with its results. Only a few I spoke to could see past Milosevic and the crumpled economy to a murky future in Europe. Nor, with Russian troops rumbling through Belgrade, were people aware that NATO is occupying Kosovo. Even fewer knew that Milosevic has been indicted for war crimes by the Hague tribunal — issues that will be back to haunt.

For Milosevic, it’s more than a question of whether the center will hold — his survival, in the near term, requires that he find a way to offset and contain pressure from both the nationalist right and Western-oriented left. Equally serious is the alienation of two core institutions, the security forces and the church. Though Milosevic still controls the army and police, there is growing bitterness in the ranks. A senior military commander, smarting at the defeat delivered by the Alliance in a war he wanted no part of, told me the army was “embarrassed in the final days by a bloated KLA that acted as NATO’s shock troops in southern and western Kosovo.” Disputes between the paramilitary police and the military, which were rife before March 24 and then dampened by the bombing, have erupted again with a vengeance.

For its part, the Holy Synod of the Serbian Orthodox Church on June 15 called for a new government, saying: “We demand that the federal president and his government resign in the interest and salvation of the people, so that new officials, acceptable at home and abroad, can take responsibility for the people and their future as a National Salvation Government.” The church thus underscored its support for the people and the nation, and separated their interests from those of Milosevic. Interestingly, the church, which is most powerful in the countryside, moved to disassociate itself with Milosevic only one day after deputy premier Vojislav Seselj resigned, distancing his rural-based Serbian Radical party from the government. And so in one week the regime’s rural root was bruised, if not broken.

Both Milosevic and the radical nationalist Seselj, who rejected the peace agreement, have exploited the Serb instinct to take defeat as a sort of victory — a syndrome that goes back to the Battle of the Black-bird Fields in Kosovo when the Ottomans overwhelmed Serb defenders in 1389. It was not the defeat that lived on but the heroic struggle to block the Muslim advance that became the stuff of folklore and grade school skits. Both men have artfully elicited these emotions in the past decade, playing on Serb bitterness about sanctions and the country’s pariah status in Europe. But for Milosevic, at least, with the public frustrated over the “dismemberment” of Serbia, this gambit is wearing thin.

Factions in Belgrade are hardening, and Milosevic’s room for maneuver has sharply narrowed. Some of Belgrade’s seasoned tea-leaf readers suspect the Seselj resignation is a Balkan bargain — not at all what it seems. They believe Seselj and Milosevic are joined at the hip, that the resignation is an arrangement allowing Seselj freedom to criticize and draw off rising nationalist emotion. They say Seselj will consolidate the nationalist base but not attempt to topple the government, at least for now. They believe he wants to avoid responsibility for administering the devastated economy and knows, in any case, he would be unacceptable to the West as an aid recipient. Moreover, Milosevic has the keys to a closet full of skeletons and private financial arrangements benefiting Seselj that would be put at risk were he to move against the government.

The resignation, moreover, allows Milosevic to move toward the pro-Western Vuk Draskovic, leader of the Serbian Renewal Movement, who urges that common ground with the West be explored. Milosevic believes this more moderate cast will perhaps dampen Western determination to snub him on reconstruction talks. Draskovic told me that “peace means reconciliation and democratic reform with full cooperation with the European Union and the U.S. — but we must have economic aid.”

Draskovic’s “engagement” camp is bolstered by Bogoljub Karic, minister without portfolio. Karic, an enigmatic Kosovo-born Serb entrepreneur with investments in Russia, Eastern Europe, and Yugoslavia and links to the Milosevic family, wants direct relations with Washington and rapid movement to a market economy. While aspects of his background are questionable — the British Foreign Office says “He’s not dinner-party material” — he has supporters in Washington and is opposed by the old-line socialist clique. Moreover, he has drawn support from the Group of 17, an independent group of economists who advocate a currency board, dual circulation of dinars and deutsche marks, and a reformed banking system that would issue credit in marks to stop debt repayments in inflated dinars. Most important, Karic has developed an independent following among those who seek a transitional figure and a break with the regime.

Though Milosevic’s tactics have bought him some time, critical to his survival is whether he can deliver reconstruction aid and by what mechanisms it is provided. Group of 17 economists told me 1998 industrial production was 38 percent of 1989’s and this year’s industrial production will be 45 percent lower than last year’s because of the bombing. They calculate that if reconstruction aid is withheld, an isolated Serbia will need 16 years to return to pre-bombing conditions. Were that to occur, analysts forecast a humanitarian crisis this winter, wide-scale unemployment, suppression of the opposition, the flight of intellectuals, and conditions allowing Milosevic to turn against the Alliance frustration properly directed at him — all outcomes unacceptable to the West. Yet if aid is provided through the government, Milosevic will use it to offset these and more specific political pressures as he did in 1996, when workers stayed home rather than join student demonstrations in return for the government’s paying their back wages and pensions.

One aspiring political figure emphasized, “If you want Serbs to be part of Europe, bypass the government and send reconstruction money through non-governmental organizations or a multilateral commission. Raise people’s expectations, reach the workers and farmers who want to restart their lives, labor leaders and others. The priorities are electricity, the bridges, and the people who lost jobs. But of paramount importance is access to the media. We need private television stations and newspapers to tell the people what has happened and to get early elections.”

Milosevic is already using the crisis to present the West with the dilemma of dealing with an indicted war criminal — and pointing to meetings, like the ones with Finnish president Ahtisaari and Russian envoy Chernomyrdin, as proof the indictment is peripheral and his leadership is viable. The challenge for the Alliance is to emphasize the indictment — by arresting indicted Bosnian war criminals Mladic and Karadzic — while providing aid, including assistance to free media, rapidly through NGOs. The decision will then be Milosevic’s — to be marginalized or to stand in the way of his country’s recovery. And if taxi drivers, bankers, and the staff of the Metropole hotel are any indication, standing in the way — even surviving at all — will be difficult as factions clash, sympathy for Serb refugees spreads, and the facts become known about NATO’s humiliating occupation of Kosovo, the extent of Milosevic’s war crimes, and the gravity of his indictment.

Stefan Halper is a syndicated columnist and former White House and State Department official.