The other target of NATO strikes

On the surface, the Serbian economy is still working. Stores have food. Workers have paychecks. And city buses, running on diesel fuel, still plow through the main boulevards, leaving behind choking trails of black exhaust.

But beneath a veneer of calm, the Serbian economy appears to be on the road to collapse. More than two weeks of NATO airstrikes have severely damaged eight factories. As many as 10 bridges on main transport routes have been destroyed, including two in the northern city of Novi Sad that now block the Danube River. And some nine fuel depots have exploded in giant balls of flames.

It could take decades for this country to recover. "I expect a real mess," says a Belgrade University economics professor, who asked that his name not be used. "It's amazing that we don't even have shortages now."

Yugoslav officials have been trying to put a brave face on economic forecasts - to prevent widespread panic and to show NATO that bombs will not destroy them. They are keeping prices artificially low, allowing about 10 gallons of gas per car owner per month, and putting the squeeze on black-market smugglers.

It is a continuation of their defiance, which grows daily.

"We can't be satisfied with normal production and work," Slobodan Milosevic, the Yugoslav president, reportedly told his top ministers Saturday. "We need to work harder and better than ever before. We need to find new jobs for those workers [whose factories were destroyed]."

Even before the war with NATO, the Yugoslav economy was nearing the breaking point - although figures are hard to come by as Yugoslav and Serbian officials release little reliable economic data.

Not even taking inflation into account, annual gross domestic product had dropped 50 percent from its 1990 level - to about $14 billion. Trade was down; factories were outdated.

Now, the situation appears even bleaker. Many of Yugoslavia's top factories have both civilian and military components, meaning they have been and will be targeted by NATO bombers. One example is the Zastava factory in the central city of Kragujevac, which produced civilian cars and military supplies. It was bombed last week, and an estimated annual output of more than 10,000 vehicles will surely stop.

But the greatest economic destruction of the bombing will be felt indirectly. In the province of Vojvodina, the northern breadbasket of Yugoslavia, it is questionable whether there will be a harvest this summer. Economists are unsure whether there will be enough fuel for the farm machines and whether crops can be transported - both internally and for export.

According to US information from 1995, 80 percent of the cereal production of the former Yugoslavia comes from the fertile plains of Vojvodina.

The province also produces cotton, oil seeds, chicory, and fodder crops to support beef and dairy industries.

Eventually, Yugoslavia will likely have to rely on foreign aid, but most of their allies are too poor to provide much. Russia and Belarus have their own economic problems, as does China. The Serbian half of Bosnia may be able to funnel some help, but it too is missing out on major international aid because of its hard-line politics. Montenegro, the tiny pro-Western Yugoslav republic, is another potential conduit for aid, but its leaders are tied up in a political showdown with Mr. Milosevic.

The best hope comes from Greece, a NATO country torn between the military alliance and sympathy for a fellow Christian Orthodox neighbor.

Most of the countries with real money to spare are also in NATO.

"That's a big problem," says a Western diplomat, now in Hungary since embassies here closed. "As long as Milosevic is in power, it will be hard for the US to help."

Making matters worse for Yugoslavia, it is surrounded by countries that have aspirations to join NATO - Macedonia, Bulgaria, and Romania. Hungary, to the north, is already a member. Other bordering countries - Albania and Croatia - are considered enemies.

One convoy of some 70 Russian aid trucks on its way to Yugoslavia was already stopped Saturday in Hungary. The Hungarians were concerned that the Yugoslavs could use the vehicles for military purposes.

It remains to be seen whether these countries will allow smuggled goods to pass their borders, as they did in the early 1990s, when Yugoslavia was under heavy economic sanctions for its role in the Bosnian war.

For the Serbs, however, economic crisis is nothing new. In 1993, they had one of the highest inflation rates in the history of the world. Salaries were about $2 per month, and some people lived off butter and dough.

But analysts say economic collapse is unlikely to lead to an uprising against Milosevic.

"This will be a question of survival," says the economist. "These people have been trained in that for the last 10 years. Survival is all they think about - not uprisings, not coups. They cannot fight guns with their bare hands."