Croatia Is Tense As Local Serbs Vote on Secession

PRESIDENT Franjo Tudjman of Croatia faces grave problems in his efforts to build a viable state, which observers say includes a carve-up with Serbia of war-torn Bosnia-Herzegovina. As a result, he is becoming increasingly authoritarian.

Well-armed Serbs remain entrenched in their territories in Croatia, defying the terms of the accord that ended the seven-month war. They control 35 percent of Croatia and now plan to hold a weekend referendum on uniting their territory with Serb-controlled areas in Bosnia.

Further, a feud is raging within Tudjman's Croatian Democratic Union (known by the initials HDZ) on how to regain those territories, with powerful hard-liners advocating military force.

Tudjman's Bosnian Croat proxies, meanwhile, have suffered territorial losses to their former Bosnian Army allies in fighting in central Bosnia.

Croatia also faces economic sanctions if the Bosnian Croats renew the attacks. The country's economy already is in a serious crisis. Inflation is running at 1 percent a day and unemployment at 20 percent. Production is sputtering, and government debt is widening, fueled by arms spending and the burden of some 750,000 refugees from Bosnia and Serb-held areas of Croatia.

"Tudjman is in an extremely difficult position," says Branko Horvat, an economist and head of the Social Democratic Party.

Even so, most analysts argue that Tudjman retains the grudging support of a majority of Croats because of his success in winning independence and the continued Serbian threat.

"There is no political alternative," says Slaven Letica, a former senior adviser to Tudjman.

But analysts say Tudjman, like his counterpart in Serbia, Slobodan Milosevic, will be compelled by his growing problems to continue tightening his grip on power. They point to his refusal to reform the communist-style economy, the closure or takeover of all important media, restrictions on political freedom, and the sedition trial this week of a far-right opposition leader.

"Tudjman is entering a situation in which whatever he does will be bad," says Ivan Zvonimir Cicak, head of the tiny Croatian Peasants Party.

Deputy Prime Minister Vladimir Seks, regarded as a key leader of the HDZ's extreme nationalist wing, acknowledges that the regime is under "enormous pressure." Mr. Seks reiterates Zagreb's dedication to an internationally brokered return of Serb-held territories inside Croatia. He says it would agree to renew on June 20 the mandate of the United Nations peacekeeping force deployed to protect Serb-held regions under the 1991 cease-fire accord.

But Seks warns that should international diplomacy fail, Zagreb would have to resort to military force to regain the self-declared "Republic of Serbian Krajina."

"There is growing pressure for the second option," Seks says.

That pressure will mount with the certain approval by Serbs this weekend of an internationally condemned referendum on joining their self-declared state with that of the Bosnian Serbs.

Denouncing the referendum as an absurdity, Seks denies that Croatia will launch an offensive to derail the latest Milosevic-orchestrated step toward the unification of all Serb-controlled areas of former Yugoslavia in a so-called "Great Serbia."

In fact, many observers doubt Croatia is militarily capable of defeating the Serbs. They believe Tudjman wants to avoid another war with the Serbs and rely on international negotiations to win a settlement that would grant significant autonomy to Serb-held areas in return for recognition that they were part of Croatia.

But to focus world attention on Croatia, sources say, Tudjman must first obtain peace in Bosnia, where his alliance with the Muslims lasted only while there was a threat of international intervention against the Bosnian Serbs.

When those threats proved hollow, Tudjman and his Bosnian Croat proxies broke with the Bosnian Muslim, backed away from the Vance-Owen peace plan, and are now discussing with the Bosnian Serbs a proposal to divide Bosnia into three separate ethnic mini-states.

But even if the Muslim-led Bosnian government were to agree - which is unlikely - to an ethnic division of Bosnia, Tudjman will be hard-pressed to regain control of the Serb-held areas of his own country.

A territorial tradeoff would be political suicide, and given the failure of Western diplomacy in Bosnia, Tudjman can expect little effective international help and no compromise from the Serbs.