MILOSEVIC'S FENCES

Serbia's Leader Stays on Top With His Feints and Parries

UPON his return from the Dayton negotiations in November, Slobodan Milosevic triumphantly declared a victory for the forces of peace.

Opposition politicians howled that the Serb president had betrayed national interests and Serb brethren in Bosnia and Croatia.

What Mr. Milosevic alone recognized was that the wells of rabid nationalism, which he himself had drilled, had nearly run dry. Signing the Dayton peace agreement was the latest maneuver in a high-wire act that Milosevic has been walking since leading his country into war, penury, and international disdain. He remains the most powerful man in the Balkans. Although he appears as firmly entrenched as ever, some experts wonder how long he will be able to maintain his firm grip on power.

The key to his latest maneuver was a recognition that the Serbian public was war-weary after all the bloodshed and three-plus years of crippling sanctions. So he pulled out a textbook communist maneuver, raising the friend-or-foe question: You're either with me and for peace or against me and for war.

The opposition was neutralized. Tactics like that have kept Milosevic afloat. He's got instinct and acts decisively, providing the tough leadership Serbs have traditionally admired. His Machiavellian techniques eliminate dissent and keep the politicians off-balance with an occasional purge or arrest.

But most of all, Milosevic is a survivor. ''Milosevic never gives up anything unless he has to,'' says Zarko Korac, an opposition politician.

When he does yield, he's the consummate spin doctor. With state-run media under his thumb, he translates defeats into victories - like the Dayton peace accord, which drew the curtain - at least for the time being - on the drive for a ''Greater Serbia.''

Milosevic had been the first to spot the chink in the communist armor, in 1987, and anticipated the ideological vacuum that would follow. Filling the void was simple: He tapped into the long-denied dream of all Serbs - living in one state - and the enmity toward Croats for the slaughter of hundreds of thousands of Serbs during World War II.

Playing on these resentments, Milosevic incited the Serbs living in Croatia and Bosnia to rebel, funneling arms, men, and cash to back their efforts.

But by early 1993, he saw the insurrection was doomed and that getting the best peace deal he could was the only way to secure his own future. Milosevic began to talk peace, hoping to ease the sanctions imposed by the UN for Serbia's involvement in the war.

His about-face was aided when Bosnian Serb forces began to lose large swaths of territory last fall, and 200,000 Serbs in Croatia were swept off their ancestral land in a two-day Croatian government offensive.

The Dayton accord completed Milosevic's transformation from warmonger to peacemaker. His propaganda machine hails him for liberating Serbia from the international blockade.

Milosevic has capitalized on that momentum. He purged several allies turned dissenters. (See story below.)

With the ruling Socialists preparing for their annual convention in March, the campaign slogan ''Serbia 2000: A Step Into the New Century'' exhorts the public to stick with the man who ''led us out'' of the conflict.

The public seems to be responding. About 30,000 new, mostly young, members from the Serbian countryside have registered with Milosevic's party - perhaps through coercion - since November, according to a party spokesman, Branislav Popovic. ''They know this is the only party that can help solve their problems,'' he says.

Few alternatives exist. The opposition - about 10 parties - remains fractured and ineffectual. Milosevic sets the pace, hammering home his message via television. His competitors give chase, but in desperation settle for slinging mud at the president or squabbling among themselves.

When state television pulled the plug on live coverage of unruly parliamentary debates, the public actually considered it a favor. ''Milosevic may have made some mistakes, but he's the only one I'd vote for,'' says a retired Belgrade woman.

Even so, the future holds serious challenges for Milosevic. The sanctions left half the population unemployed, and Serbia's GNP plummeted to a level closer to third-world nations.

Jump-starting the economy will require an infusion of billions of dollars from the outside. But the West, with the US as head bouncer, has blocked access to financial institutions - an ''outer wall of sanctions'' unless their prime negotiating partner makes certain concessions.

Topping the list is the extradition of Serb war crime suspects to The Hague and ending repression of the Albanian ethnic majority in Kosovo - a volatile province that Serbs consider the cradle of their civilization.

Milosevic may have little choice but to comply. Indeed, last week he indicated he may hand over Bosnian Serb leader Radovan Karadzic to the UN War Crimes Tribunal. But he has refused to turn over Bosnian Serb Army chief Gen. Ratko Mladic, who is revered as a Serbian national hero.

Aside from resuscitating the economy, the post-sanctions era is a path that appears laced with other potential land mines.

* The Yugoslav Army: Milosevic has always viewed the Army high command as a potential challenger and has steadily undermined its influence with purges and budget cuts. Milosevic has instead fashioned the Serb police force into his own private militia. Army officials decry the loss of prestige and funding, but is basically at Milosevic's mercy for both. Several top Army officers have been indicted by the Tribunal, and a showdown with Milosevic could erupt if he attempts to hand them over.

* Refugees: More than 600,000 Bosnian and Croatian Serbs have settled in Serbia. Most have had to be taken in by friends or family. They generally loathe Milosevic for abandoning them, but he's neutralized them by dispersing them throughout the country and depriving them of citizenship, which would entitle them to vote.

* Montenegro: Junior partners in today's Federal Republic of Yugoslavia, Montenegrins grumble about being marginalized and exploited by Belgrade. Any attempt by Milosevic to withdraw Montenegro's political autonomy could create a serious backlash from the tiny republic.

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