A Moment of Reckoning If Serbia Continues to Disregard Norms of International Behavior, It Will Face Political and Military Sanctions and Devastating Economic Isolation

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WITH Serbian President Slobodan Milosevic's fraudulent victory in the Dec. 20 elections, Belgrade is bracing itself for a political and economic crisis that could spark fratricidal bloodshed and the disintegration of the remnants of Yugoslavia.

Mr. Milosevic, the prime culprit in the Yugoslav wars, did everything to assure himself of victory at the ballot. He maintained a tight monopoly over state TV, used state property for election campaigns, and successfully played the various opposition groups off of each other. The democratic parties proved to be weak, lacking influence outside the large cities and unable to forge a unified bloc.

The millionaire eccentric, Milan Panic, appointed federal prime minister by Milosevic last July, decided to challenge the president. But Mr. Panic was outwitted by Milosevic, who delayed his registration as a candidate for the Serbian presidency and blocked his access to television.

In addition to regaining the Serbian presidency, Milosevic could gain a sufficient majority in the federal and republican assemblies to once again form a coalition government with the ultra-radical "loyal opposition." With this election exercise, Milosevic intends to neutralize dissent by quasi-legislative means, regain domestic prestige, and resist international pressures for change. But the results of his victory will prove painful for the country and catastrophic for its citizens.

International ostracism will escalate to total isolation as sanctions are broadened and more strictly verified along all Yugoslav borders. Land routs may be closed entirely, Serbian foreign assets and bank accounts frozen, communication severed, and all Western embassy staff withdrawn. Complete and enforced sanctions will push Serbia toward economic breakdown and social disorder. Milosevic has been able to buy off workers and farmers by printing money and giving temporary tax concessions. He has encouraged the expansion of a vast black economy fueled by war profiteering, arms smuggling, and plunder from conquered territories in Bosnia-Herzegovina. But when the bottom falls out, living standards will plummet and goods will become unavailable.

Social turmoil will heat up political conflicts and spur a desperate struggle for power and privilege between the economic mafias, the radical paramilitary formations, and dispossessed workers and urban residents. If chaos and disorder become rampant, the federal Army could be drawn into the fray, leading to firefights between federal units, Serbian police, and paramilitary gangs. A military coup may then be the only viable solution.

FOR sanctions to be eased or stricter UN embargoes avoided, Milosevic will need to make some major concessions on the international arena. Serbia and Yugoslavia must recognize the independence and territorial integrity of Bosnia-Herzegovina as a first step toward a political settlement in that republic. …