'Hero' Milosevic tightens his grip

He lost the war but Serbian leader is still strong, writes Andrew Gumbel

Belgrade - In theory, Slobodan Milosevic should be the most hated man in Serbia. Having stirred up the nationalist fervour that led to war in the Balkans, he lost the military initiative and was pushed into signing a distinctly disadvantageous peace treaty in Dayton. Many of those Serbs whose cause he trumpeted so loudly - in Bosnia and in the Krajina - now feel he has betrayed them.

The Serbian economy, meanwhile, is in tatters because of the war and international sanctions. The country is making only an uncertain recovery from the effects of hyperinflation that sent prices spiralling out of control and wiped out savings in 1992 and 1993; industry is chronically depressed, unemployment is high and rising and about half the population is living on or below the poverty line.

And yet, President Milosevic remains in total command of the country. His party, the SDS, looks almost certain to win the November elections.

Since Dayton, Mr Milosevic has taken advantage of his new international image as a peacemaker to tighten his grip on the Serbian media. The only surviving independent television station, Studio B, was nationalised in February, and in recent months his hardline Media Minister, Aleksander Tijanic, has been harassing the dwindling independent press. One of the best-known Belgrade dailies, Borba, has been turned into an organ of the government.

Only a tiny band of Serbian intellectuals has any clear idea of what is going on in the world. Most of the country has been led to believe that Serbia was an innocent bystander in the Bosnian war, that Mr Milosevic is a visionary peacemaker, and that Serbia has been the victim of an irrational international hate campaign. This view is shared by most of the opposition, too. Hardline nationalists and liberal democrats have made strenuous efforts to form a coalition, but their differences have led only to incoherence.

Economically, Serbia is run as a giant government cartel, with ministers and political leaders wielding enormous influence in both the public and the so-called private sector.

According to Slobodan Antonic, of the Belgrade Institute of Political Studies, political clientelism reaches even farmers, who are pushed into political activity as a condition for receiving the seeds they need.One farmer who was canvassed by Serbia's main opposition leader, Vuk Draskovic, said he would not vote for anyone other than Mr Milosevic. "It's nothing personal," he explained. "When you're president I'll vote for you too."

The economy remains the key threat to the established order. Many economists, such as Ljubomir Mazdar of Belgrade University, believe the government's programme to combat hyperinflation is failing because industrial production is still well below pre-sanctions levels, but public-sector wages - mainly for political reasons - are continuing to rise.

"Milosevic's policy is geared to short-term stability, but the long- term problems remain. He is merely postponing the crisis," Professor Mazdar said.

Ultimately, it will be up to the West to decide how much help Mr Milosevic deserves. Sanctions have been suspended, not lifted: institutions such as the IMF and World Bank are still barred from setting up investment programmes in Serbia.

The international community has insisted on a solution to the lingering crisis in Kosovo, as well as a continuing commitment to the Dayton peace process, as the price for new foreign capital. It will be a delicate judgement.

"If things do not stabilise, it could be a tremendous waste of money for the international community," Professor Mazdar commented.