Leaky Sanctions

By JAMES L. GRAFF KALOTINA

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.

With reporting by Michael Montgomery/Belgrade