When world leaders met at a Sarajevo summit on Friday, they set in motion a strategy of providing generous economic aid to Balkan countries while still isolating Yugoslav President Slobodan Milosevic.
The leaders also reinforced a message to the Serbian people in Yugoslavia: They must depose their leadership before they can receive foreign aid for reconstruction.
But whether Serbs heard the message is another story. "The message was not effective at all, because nobody knows about the conference, probably less than 5 percent of the population," says Ognjen Pribicevic, a well-respected political analyst in Belgrade. "This conference was as important to us as an earthquake in Uganda. If people from the outside don't understand this, they don't understand anything about Serbia."
Yugoslavia, which is made up of Serbia and Montenegro, is on the brink of economic collapse. "Serbia and Serbs are in a cage," he says. "We are completely cut off from the world."
Eight years of war have turned the former Yugoslavia - which a decade ago was first in line to join the European Union - into the poorhouse of Europe. As punishment for Serbia's involvement in the wars in Croatia and Bosnia, the United Nations imposed economic sanctions on Belgrade in 1992. Hyperinflation rampaged uncontrollably until Dragoslav Avramovic, head of the central bank, put a cap on it in 1994.
The Economics Institute in Belgrade estimates that $36 billion was lost through UN sanctions alone, and that real unemployment - which includes the underemployed and those who have been put on leave - has reached the 50 percent mark.
Certain sanctions were gradually lifted after the signing of the Dayton peace accords in 1995, but 11 weeks of NATO airstrikes this year have compounded problems in the Serbian economy. More than 100,000 people lost jobs after their factories were destroyed in airstrikes, the Economics Institute says in a study prepared for the UN.
Yet Yugoslavia is key to the region's economy. The Balkans' main land transportation route is through Serbia, linking the Black Sea, Greece, and Turkey with Western Europe. The Danube River, one of Europe's central waterways, also runs through Yugoslavia.
These vital thoroughfares, which NATO airstrikes damaged and impeded, will not receive Western reconstruction aid, to some Serbs' dismay. "We expect a lot from the stability pact [the Western aid package]," says Srboljub Antic, an economist in Belgrade. "But the main problem is that we are at the center of the region. Without Serbia, it cannot be a full success."
Russian officials also have been critical of the West's approach to Mr. Milosevic, who was not invited to the conference. But President Clinton and others have remained firm: "I hope that before long Serbia, too, will participate in this economic reconstruction," Mr. Clinton told students at a Sarajevo school in Bosnia-Herzegovina. "But I do not believe that we should give reconstruction aid to Serbia as long as it rejects democracy and as long as Mr. Milosevic is in power."
Observers in Belgrade say that Milosevic's credibility to fix the economy is wrecked. The dire economic situation is a leading cause for continuing antigovernment demonstrations in several Serbian cities.
Against this backdrop, a group of independent economists is emerging in Belgrade as a powerful nonpartisan player. Last week the G-17, as the group is called, made public a "Stability Pact for Serbia," which calls for the resignation of Milosevic and a one-year transitional government headed exclusively by technocrats.
The G-17 names Sept. 1 as the deadline for the formation of a provisional "government of experts" headed by a person who holds the public's trust. Mr. Avramovic, who is widely popular for successfully beating back hyperinflation, is often mentioned as a potential candidate.
After its one-year mandate, this government would agree not to get involved in politics.
Both the Serbian Renewal Movement and the Alliance for Change, the two most significant opposition groups in Serbia, have shown their support for the G-17 plan. The key, however, is getting Milosevic's ruling Socialist Party to agree to it.
"At the moment it doesn't look possible that the Socialists will accept it," says Pribicevic, the political scientist. "But heating and power shortages in the winter will pressure Milosevic to accept a provisional government. I believe it's the only solution."
Anti-Milosevic forces are now counting on the West to exert pressure on the Belgrade regime to step down quietly. Mr. Antic, who is a leading economist in the G-17, says that Milosevic, who was indicted by The Hague war-crimes tribunal last spring, could be offered a "Karadzic solution." Radovan Karadzic, also an indicted war criminal, has disappeared from the Bosnian Serb political scene but has not been arrested.
"The West has to find a way to support opposition parties here," says Mr. Antic. "Another fragmentation of Yugoslavia, which could be bloody, would postpone the development of southeast Europe only further."
The United States has pledged $10 million to aid the democratic opposition in Serbia and enable broadcasts there of the Voice of America and Radio Free Europe.
At the Sarajevo summit, Clinton announced a package of $700 million in aid, trade programs, and business incentives to the Balkans. Humanitarian aid has not been ruled out to Serbia.
(c) Copyright 1999. The Christian Science Publishing Society