At Home, Milosevic Uses Iron Fist While Acting as West's 'Peacemaker'

A red star still perches atop the presidency building in Belgrade, a fading ornament left over from decades of Communist rule. It marked the 35-year reign of Josip Broz Tito, whose power extended across all of Yugoslavia.

But today Serbian strongman Slobodan Milosevic sits in the president's seat. During his tenure, Yugoslavia has collapsed into ethnic statelets; Serbia's economy has been devastated by sanctions and four years of war; and Serb nationalism - once the decisive political and military force in the Balkans, directed by Milosevic himself - has proven to be a false rallying cry.

The Serbian president's policies are now twofold and contradictory, say Western diplomats and Serb analysts here.

On the one hand, Mr. Milosevic is desperate for international recognition of his regime, and to use his status as a peacemaker - bestowed by the West when he forced Bosnian Serbs to negotiate last autumn and signed the Dayton peace accord on their behalf - to encourage investment to jump-start the Serb economy.

On the other hand, Milosevic is harking back to the political control promised by that old Communist star on his presidency building. He is ensuring that his grip on the country is more absolute than Tito's ever was, and is revoking some privatization and free-market measures.

Serb critics charge that Milosevic is behaving like an African dictator by concentrating power into the hands of a trusted wealthy elite, without concern for ideology.

More cuttingly, graffiti have appeared in Belgrade that blends Milosevic with Romania's notorious cold-war dictator, Nicolae Ceausescu. It reads simply: "Miloescu."

"Internally, Milosevic is increasing his antidemocratic policy," said a Western diplomat. "This is an oligarchy, where an in-bred group controls the state, the ruling party, and the economy. If they continue, there will be no investment here."

By all accounts, Serbs are tired of war, sanctions, and Serbia's pariah status - they want to lead normal lives. To that end, Milosevic last week shuffled his government. The new ministers say they aim to integrate Serbia with the world.

But a different signal came just days before. Milosevic fired central bank president Dragoslav Avramovic, who in 1994 helped rein in the 313 million percent inflation. Avramovic had recently argued for cooperation with Western donors.

Yugoslavia was once so integrated that it took the input of three separate republics to make a single bullet. Its break-up five years ago devastated the economy, and sanctions on Serbia dealt the final blow here. Even the lifting of sanctions - after Milosevic signed the Dayton accord - has brought few dividends. Furthermore, help from Western lending institutions is dependent on Serbia's cooperation with the War Crimes tribunal at The Hague and on ending repression of Albanians in the southern province of Kosovo.

Milosevic has so far stalled on both issues.

"Serbs have a tremendous capacity to absorb punishment," says a senior Western diplomat. "People have lower expectations now, but sooner or later they are going to look around them and ask 'Why are we living like this?' Milosevic can't blame sanctions forever."

Serbia's retrenchment is not limited to the economy. Milosevic's leadership will be voted on in December elections, and divisions within the opposition are likely to bring him victory. And although not very popular in Belgrade, where he put down a 1991 uprising with tanks, he has a strong power base in rural villages.

Milosevic also controls the media. He has closed most independent newspapers TV and radio stations. A few are permitted in Belgrade. And the office of the New York-based Soros Foundation, which funds independent media efforts, was also shut down.

The root of Milosevic's continuing rule, though, is the 100,000-strong police force, which serves as a loyal counterweight to the army. The US State Department says it is "guilty of extensive, brutal, and systematic human rights abuses."

It has, however, recently exchanged its intimidating dark camouflage uniforms for short-sleeve, powder-blue uniforms. Despite this transformation, few Serbs think its purpose has changed.

Taped on the office wall of one of Belgrade's few independent journalists is a line from Joseph Conrad's book, "Victory." It could easily be Milosevic's motto: "Diplomacy without force in the background is but a rotten weed to lean upon.