Handover of Milosevic seen as victory for economic sanctions

It is no coincidence that Slobodan Milosevic's first full day in a prison cell in The Hague will be the same day that international…

It is no coincidence that Slobodan Milosevic's first full day in a prison cell in The Hague will be the same day that international donors convene to pledge up to $1.3 billion to help prop up the war-crippled Yugoslav economy.

Policy analysts in Washington described the delivery of the deposed Serbian leader to the war crimes tribunal as a triumph for the US-led use of economic sanctions and incentives as tools to bring war criminals to justice.

At a meeting last month in Washington, the US Secretary of State, Colin Powell, told the Yugoslav President, Vojislav Kostunica, that Washington would boycott today's donors' conference unless action was taken on Milosevic's handover.

According to Daniel Serwer, a former US envoy to Sarajevo who is now a Balkans specialist at the US Institute of Peace, the ultimatum tipped the balance in Belgrade against Milosevic.

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"Kostunica did not want this to happen," Mr Serwer said. "Kostunica takes as his power base the same base as the Milosevic regime. The people who decided this were in the Serbian government, who weren't going to make economic progress dependent on Milosevic."

Since Milosevic's fall from power in October, the US had been criticised by some European officials for its insistence that war criminals should be handed over to The Hague before the "outer wall" of international financial sanctions against Yugoslavia could be lifted.

Critics of the policy said it would undermine the new government, and therefore help Serbian Socialist Party activists attempting to restore Milosevic to power. However, Britain, France and Germany stood with Washington to present a united front.

Ivo Daalder, a Balkans specialist at the Brookings Institution, said Milosevic's handover represented a vindication for the policies of Mr Powell's predecessor, Madeleine Albright.

"Albright won the debate, in that she made Milosevic the problem," Mr Daalder said. "From early 1999, there was a very conscious effort by the US, supported by most European states, to make Milosevic the point man.

"It has happened quicker than everybody thought. There had been a sense that the new government should be given a breathing space," he added. "But this is vindication that measured conditionality was the right approach . . . The important thing is that the US and the EU fundamentally agreed on this, and it changed the debate in Yugoslavia to: Do we want Milosevic or money?"

The full removal of sanctions is also dependent on the handing over of 14 other senior Serbs indicted for war crimes.

Europe has long been keener than the US to restore Yugoslavia to international respectability, and its Balkan stability pact has acted as a magnet for other countries in the region.

Slovenia, the first Yugoslav republic to break away, is deep into negotiations to join the EU. Croatia and Macedonia both have special relationships with Brussels and may also one day join the union.

Yugoslavia's economy has been devastated by 13 years of of Milosevic's economic mismanagement and the international sanctions imposed over the wars that started with the break-up of the communist country in 1991.

The EU has insisted ever since Milosevic's overthrow last autumn that it believed he would eventually be brought to justice and that the country's new leaders knew they were bound by international law, which says suspected war criminals must be handed over.

Last night's handover seems likely to make pledges more rather than less generous. The European Commission has already set aside $190 million in its 2001 budget for Serbia and Montenegro, a sum that could rise with contributions from the 15 EU member-states and the European Investment Bank.

Diplomats in Brussels have said Washington might put up some $106 million, comprising $65 million for Serbia, $33 million for Montenegro and the remainder to help refugees.

The World Bank is expected to provide nearly $600 million over a three-year period.