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                                                                                THE BALKANS, Page 47

Leaky Sanctions


The embargo against Yugoslavia is tightening, but the wrong
people are hurting, and the prospects for peace are no better

By JAMES L. GRAFF KALOTINA - With reporting by Michael
Montgomery/Belgrade


    On a rainy night last week, a line of 21 gasoline tankers
waited at the Bulgarian border post of Kalotina to cross into
-- and allegedly through -- Serbia. Pero, the burly driver of
one of the rigs, had the papers to prove that he was hauling his
32 tons of gasoline to Bijeljina, one of the first Bosnian
towns overrun by Serbs last spring. But his truck was emblazoned
with the name and address of a firm in Sid, 25 miles north of
Bijeljina and inside the sanction-bound state of Serbia. Despite
their suspicions that Pero and his colleague were bootlegging,
the Bulgarian customs officials could legally do nothing but
wave them through to Serbia.

    So much for the U.N.-imposed economic sanctions that were
intended to force the Serbs to end their belligerent ways.
Bulgarian officials estimate that 100,000 tons of crude oil and
gasoline have passed into Serbia by rail alone since the embargo
was imposed on May 31. Add to that heavy truck traffic and
considerable small-time smuggling, and it becomes clear that the
ban is not working very well. "We are following the sanctions
to the letter," says customs official Christo Christov at
Kalotina, "but considering the amount of traffic through here,
the Serbs are going to get through the winter just fine."

    Perhaps they will, but finally the noose seems to be
tightening. Last week the U.N. Security Council approved plans
to bar all shipments of strategic goods through Serbia and
Montenegro, including fuel, steel and chemicals. NATO and the
nine-nation Western European Union last week authorized a naval
blockade to intercept sanction-busting vessels in the Adriatic
Sea beginning on Tuesday this week. Bulgaria and Romania have
started patrolling the Danube and inspecting suspicious cargoes.
In addition, Bulgaria has banned petroleum exports to all
former Yugoslav republics. "The sanctions regime won't plug all
the loopholes," said a Western diplomat in Belgrade, "but
things will begin to hurt very quickly."

    The question, however, is who will be hurt. Even in its
newly sharpened form, the embargo remains a blunt instrument.
So far, it has done nothing to stop the war still blazing in
Bosnia-Herzegovina. The popularity of Serbian President Slobodan
Milosevic has sunk, but he sits as firmly as ever in the saddle.
What the sanctions have done is deepen the state of economic
extremis for most people in Serbia and Montenegro. By the end
of the year, estimates Austrian trade official Karl Syrovatka,
550,000 working people will be carrying the burden of 750,000
unemployed, 1.4 million on ostensibly temporary layoffs and 1.1
million pensioners. Between September and October alone in the
two remaining republics of the former Yugoslavia, industrial
output dropped one-quarter. Last week the Crvena Zastava
industrial works in Kragujevac closed down the assembly lines
for the Yugo automobile; the only production unit still
functioning makes weapons.

    Yet not everyone is suffering. War profiteering and
sanction busting provide a fabulously lucrative business, mainly
for the high-life set. Belgrade's hotel bars and nightclubs
swarm with frantically showy crowds. The illicit trade has
fueled a criminal scene peopled by many of the same characters
who provided weapons, money and leadership to Serbs in Bosnia
-- with the tacit support of the Milosevic regime. "It's like
prohibition in the U.S.," says Dobrivoje Radovanovic, director
of Belgrade's Criminological Institute.

    In the run-up to Dec. 20 elections, politicians are
putting different spins on the sanctions. Milosevic continues
to bank on national outrage at Serbia's "victimization," as he
has done with evident success in the past. At the same time, he
has made sure that the full brunt of the stiffened sanctions
will fall only after the elections: thanks to illegal shipments
in recent weeks, diplomats and analysts say that Serbia's
petroleum reserves are sufficient to meet basic needs for the
next month or so. In a rare public statement during a visit to
an oil field earlier this month, Milosevic said, "Serbia will
neither freeze nor go hungry, nor will it place its state and
national interests at the mercy of [foreign] pressure.''

    In also condemning the sanctions, Yugoslav Prime Minister
Milan Panic aims to focus public frustration squarely on
Milosevic and his policies as the root causes of the embargo.
"The sanctions should be lifted," Panic says, "because they are
hurting the innocent and enriching the warmongers who support
Milosevic." But since the opposition is still riven into
bickering factions, unseating the wily Milosevic remains a long
shot. Barring an unlikely breakthrough toward a diplomatic
solution to end the agony of Bosnia, the sanctions will
continue. Their real bite will probably be felt in midwinter --
with Milosevic still in power.

    Will they have any effect when that happens? Not without
more clarity about the sanctions' goals, observes Jezdimir
Vasiljevic, the mercurial businessman who organized the
Fischer-Spassky chess match and who has entered the gasoline
business in a big way in recent months. "The people don't
understand what they can do to end the sanctions," says
Vasiljevic, who will announce his own nonpartisan bid for the
Serbian presidency this week. "The West has to tell the people
the conditions. Milosevic is the problem. He has a first name
and a last name -- the West must point to him now, before the
election." Afterward, Vasiljevic says, it could be too late to
head off social unrest -- not only in Kosovo and Macedonia, but
in Serbia itself.