Finishing Off Serbia

July 7, 1998 • Commentary
By Gary Dempsey and Jeffrey Brown

BELGRADE, Serbia — Dusan Protic’s grimace tells it all. With economic sanctions levied against his country last month and the prospect of additional measures this summer, Protic fears for the future. The 27‐​year‐​old lawyer vividly remembers the long food lines and runaway inflation that accompanied the 1992–1995 sanctions that crippled the Serbian economy during the war in Bosnia.

“The sanctions primarily hurt the general population, not [President Slobodan] Milosevic and his inner circle. Everyone else suffered,” Protic explains. “You could work a job and get paid, but what for? When you did have money, it was worthless because of inflation.”

Protic’s criticisms are commonplace in Serbia these days. Nevertheless, the Balkan Contact Group, representing the United States and five European nations, has once again imposed sanctions. They froze Serbia’s assets abroad and banned new foreign investment in the country. The Contact Group wants Milosevic to negotiate with ethnic Albanian leaders to stop the escalating violence in Serbia’s southern province of Kosovo. More than 200 people have died in clashes there since February, when Serbian forces began a crackdown on separatists in the predominantly ethnic Albanian region.

But Milosevic’s track record suggests that new sanctions will do little to force him to do what the West wants. Around the world, economic sanctions have effectively impoverished nations, but they’ve done little to force the hand of dictatorial leaders. Serbia, like Iraq, Burma and other countries with repressive regimes, lacks a strong middle class and private business sector. Without those internal sources of political pressure, Milosevic has little incentive to give in to sanctions‐​backed Western demands.

Moreover, Milosevic’s grip on power actually tightened when sanctions were imposed on Serbia in 1992. The United Nations imposed both an economic embargo and an arms embargo. The economic embargo resulted in an international blockade of imports and exports, except food and medicine, for three years. The sanctions also restricted air travel and participation in international sporting, scientific and cultural events.

The failure of world‐​record‐​length street protests in Belgrade in 1996–1997 illustrated just how unshakable Milosevic’s grip on power had become.

While doing little to weaken Milosevic, the sanctions did give Serbia a quick lesson in black marketeering. Many observers here say it was Milosevic’s close ties to the country’s mafia‐​run black market that made the period under sanctions so profitable for him and his regime.

“People with a decent amount of money could bribe customs officers from Hungary, Romania, Bulgaria and Macedonia and therefore could import anything they wanted,” explained Kamenko Pajic, a photojournalist who was forced to close his publishing company and flee to Slovenia, and eventually England, in 1995. “[Milosevic] and his circle became enormously rich, monopolizing illegal imports.”

The failure of world‐​record‐​length street protests in Belgrade in 1996–1997 illustrated just how unshakable Milosevic’s grip on power had become.

“After the long protests last year, people are tired of politics and have no faith in Milosevic or the regime,” Protic said. “They have their own personal problems to deal with.” Protic sees little hope that new sanctions will change people’s sense of futility. Many believe that new sanctions will once again benefit Milosevic personally and politically. He controls several newspapers and television stations, and the sanctions will allow him to blame external forces for his failed economic policies. Leading Cuban émigrés in the United States have long pointed to similar tactics used by Castro’s regime to explain away Cuba’s economic woes.

Others in Serbia believe that new economic sanctions will actually worsen the volatile situation in Kosovo; they worry that sanctions will signal Kosovar separatists that the West will not allow Belgrade to resist secession.

Most of all, people here fear that time is running out for them, but not for Milosevic. Feeling indiscriminately punished by international sanctions and helpless to effect political change, those who have not already left are looking for a way out — especially young people.

They “have no hope in either the West or in Milosevic. Sanctions this time will finish the process of emigration,” Pajic warns. “I am afraid that the bottom line will be that Serbia will become as empty and hopeless a place as Albania,” the poorest country in Europe.

In the end, imposing new economic sanctions on Serbia will prove counterproductive, impoverishing its citizens, enriching Milosevic and draining it of those most receptive to democratic change — its youth.

About the Authors
Gary Dempsey is a foreign policy analyst at the Cato Institute and Jeffrey Brown is a freelance reporter living in the Czech Republic.