Balkans' Newest Leader May Test Serb Strongman's Grip

He's an accused smuggler of black-market goods who allegedly made a fortune busting Western sanctions. He's a former Communist insider dubbed "The Penknife" for his sharp criticism of opponents.

But to many people in this tiny republic, which along with Serbia makes up postwar Yugoslavia, Milo Djukanovic, Montenegro's new pro-Western president, is an emblem of hope.

"Milo is the only man who can save Montenegro from Serbia," said Savo Spadijer, a Cetinje cafe owner, as he raised his fist in the air at the Jan. 15 presidential inauguration. "He's the only one who can make our lives better."

Promising democracy, economic reform, and greater autonomy for Montenegro, Mr. Djukanovic took office in an atmosphere of violence and political instability.

He presides over a mountainous republic of 650,000 people that has a shattered economy, yet he has flashed signs of defiance at the most powerful man in the Balkans, Yugoslav President Slobodan Milosevic.

"Montenegro will fight against the policy of Milosevic in order to avoid the destiny of becoming dependent on Serbia," Djukanovic recently said.

But already Djukanovic's brand of resistance is proving dangerous. More than 10,000 of his opponents, who supported Milosevic ally and former Montenegrin President Momir Bulatovic in the election, protested in the streets of Podgorica for three days leading up to the inauguration. Demonstrators threw rocks and detonated homemade bombs, injuring some 50 policemen. The rally had the tacit approval of Mr. Milosevic.

Sonja Biserko, the chair of the Helsinki Committee for Human Rights in Serbia, warns that a growing desire of Montenegrins to seek independence could lead to the kind of nationalist violence that broke apart Yugoslavia in the early 1990s.

"The propaganda from Belgrade is humiliating the people of Montenegro," she says. "There certainly is a desire for emancipation." Montenegrins, many of whom are heavily armed, say the Belgrade regime is destroying their economy. Their once-booming tourist industry has been hampered by strict federal visa requirements.

It has only been within the past year that Djukanovic has broken ranks with Milosevic and Mr. Bulatovic and come to represent change in a land steeped in history and tradition.

International observers say Djukanovic helped sustain the Montenegrin economy during the war years by smuggling in products. To some people he is a modern-day Robin Hood.

The power struggle between Djukanovic and Milosevic pits a new, postwar lifestyle against the tradition of the countryside. Most Djukanovic supporters live in cities and welcome the spoils of international commerce. They think a rejuvenated tourism industry could support much of their population.

"We don't just want to trade with the world, we want to connect to the world," says Rajko Petricevic, a businessman in the import-export industry. Mr. Petricevic, who drives a Mercedes and carries a mobile phone, has flourished under the chaotic environment created by economic sanctions from the West.

The Milosevic and Bulatovic loyalists, many of whom live in rural northern villages, identify closely with the Serbs, whom they see as their protectors.

"We'll give our blood before we separate from Serbia," says Milan Brakovic, a retired farmer from the town of Bratomozici. Mr. Brakovic, who calls Djukanovic a "thief," hitchhiked to Podgorica to show his support for Bulatovic.

The West has given Djukanovic almost instant approval. Diplomats say they are hopeful that Djukanovic can fuel a wave of reform that might spread throughout the Balkans.

In neighboring Bosnia-Herzegovina, the US welcomed this week the election of pro-Western Prime Minister Milorad Dodik who, with Bosnian Serb President Biljana Plavsic, represents a shift from the influence of Radovan Karadzic, the hard-line Serb and war-crimes suspect.

In Montenegro, Djukanovic has created a significant division within the Yugoslav government, observers say. Montenegro has equal representation in the upper house of the federal parliament and could limit Milosevic's power.

While Serbia remains under economic sanctions that prevent it from receiving international monetary loans, the US already announced it will give Montenegro's new government $2 million for political and economic programs. More money is likely to follow if Djukanovic stays on his current track, said US diplomat Robert Gelbard during a Jan. 12 visit to Podgorica.

But even Djukanovic supporters are careful to guard their optimism, for, as Mr. Spadijer, the Cetinje cafe owner, says, "Milosevic is still the boss of Yugoslavia."