How US Can Still Tweak Serb Leader

Slobodan Milosevic is the Balkans' biggest powerbroker. So when the international community - and especially the United States - wants something done in the region, they go straight to him.

Or at least they used to. And Mr. Milosevic used to have good reason to pay attention: A United Nations-imposed economic embargo cut off Serbia and Montenegro - the provinces that make up Milosevic's modern Yugoslavia - from trade with the world, crippling their economies. It was this embargo that brought Yugoslavia to a standstill and forced Milosevic to renounce his support for rebel Bosnian Serbs and sign the US-sponsored 1995 Dayton peace accords.

As of this month, however, the embargo lever is gone: After Bosnian elections were carried out and certified as legitimate, the embargo had to be dropped.

But the international community still has a laundry list of issues it wants Milosevic to help resolve. So it is marshaling other tools at its disposal - most importantly the remaining so-called "outer wall" of sanctions that bars Yugoslavia's membership in international financial institutions.

Milosevic "is in desperate need for money. He will accept all kinds of things," says Milan St. Protic, an analyst with the independent Center for Serbian Studies in Belgrade. "He's in serious need of Western support to remain in power."

A seat in the UN and the International Monetary Fund (IMF) would boost the credibility of the present-day Federal Republic of Yugoslavia as a successor to the former Socialist Federal Republic of Yugoslavia.

It would also give a green light to foreign investors and allow Serbia and Montenegro to renegotiate their debts as well as secure credits with the other lenders.

Among the issues on the US and its allies' list:

*Handing over war criminals. Milosevic is seen as one of the few regional leaders who could force indicted Bosnian Serb war criminals Radovan Karadzic and Gen. Ratko Mladic to go to trial in front of the International War Crimes Tribunal at The Hague.

*Keeping peace in Kosovo. This small southern region was the genesis of the Balkan war. In fact, it was there in 1989 that Milosevic stirred up nationalist Serb sentiments against the Kosovo Albanians, which boosted his power, sped up the disintegration of Yugoslavia, and eventually let to war. But as the West is desperate to avoid another war, it wants the conflict kept calm.

To that end, Milosevic signed an agreement last month with the ethnic Albanian leader Ibrahim Rugova that allows the return of almost 400,000 Albanian students and teachers to schools. For six years, Kosovo Albanians protested Serb rule by running their own school system.

"What matters is that education [is now] under the authority of Kosovo itself," says Fehmi Agani, vice president of the Democratic League of Kosovo, the ruling Albanian political party in Kosovo's parallel government.

The US Congress recently passed laws tying the lifting of the outer wall of sanctions to reestablishing Kosovo's autonomy, boosting human rights in the region, and allowing international monitors back to the province.

*Dividing assets among the successor states to the former Yugoslavia. This tricky issue is key to avoiding further hostilities. The parties met earlier this month in Brussels to discuss the division of property, the most valuable of which are some $70-billion-worth of arms and military supplies from the former Yugoslav National Army.

So, while the West keeps pressing its list of issues - and may even impose more - many speculate Milosevic may comply out of economic desperation.

"Lifting of the sanctions is no reward, it is the end of punishment," Mr. St. Protic says. "What is he being awarded with? Membership in the IMF is no award, it's a status. Where's the deal? Something is not being revealed yet. We'll see how long he remains in power and how far the West goes in supporting Milosevic."