by Adam LeBor
The following year, Yugoslavia ratified a new constitution, which was to have a major effect on the course of Yugoslav history. The class struggle was fading, and the nationalist one was stirring. At this time, the very notion of what Yugoslavia actually meant was changing. The anger and resentment the 1974 constitution provoked among Serb nationalists later helped fuel Milosevic’s rise to power. It also accelerated the decentralisation of Yugoslavia and the subsequent weakening of the federal power structure. It encouraged the competing nationalists in each republic to press for an ever larger slice of the federal cake. Arguably, it heralded the break-up of Yugoslavia itself.
Under the 1974 constitution Yugoslavia remained a federal state composed of six republics – Serbia, Croatia, Bosnia-Herzegovina, Slovenia, Macedonia and Montenegro – and two autonomous provinces within Serbia: Kosovo in the south and Voivodina in the north. But it devolved further power away from the centre, that is the federal capital Belgrade, to the six republics and the two provinces. Each of these had its own Communist Party, national bank, judicial system and so on. Kosovo and Voivodina essentially became republics in all but name. The republics were given the power of veto over any piece of federal – that is, nationwide – legislation of which they did not approve. Yugoslav citizens were even required to choose citizenship of one republic, as well as being a citizen of Yugoslavia itself. The kljuc, or key, system was supposed to prevent the domination of any one republic within the federation. It was based on representatives of the different republics filling federal posts on a rotating quota basis. This was similar in principle to the positive discrimination policies of universities in the United States, which favour minority students and set aside a number of places for students of different ethnicities.
But by setting quotas for each republic, and forcing Yugoslavs to define their own national identity, the key system bolstered the very nationalism it was supposed to counter. Each republic increasingly began to consider its own interests rather than those of Yugoslavia as a whole. Here again was the classic contradiction of the Yugoslav ideal, in fact the age-old problem of running an empire of ethnically diverse provinces. A strong centralised state that suppressed the six republics’ political power would eventually trigger a resentful nationalist backlash. But a weak, decentralised state that offered the republics greater autonomy would encourage them to press for more, until ultimately they demanded independence.
The answer to this contradiction was the emergence of a strong Yugoslav identity and loyalty that could counter nationalism. To some extent this did begin to happen. Mixed marriages were increasingly common. What could the child of a Serb father and Croat mother be except a Yugoslav? By 1981 over three million people out of the total population of twenty-two million were either in a mixed marriage, or the children of such a union. A distinct Yugoslav culture was also emerging that reflected the complexity and cultural sophistication of the new state. A post-war generation of writers such as the Nobel laureate Ivo Andric, or the Serbian-Jewish author Danilo Kis were widely read from Slovenia to Macedonia. Rock groups such as Sarajevo’s Blue Orchestra and Belgrade’s Fish Soup toured the whole country to a rapturous reception, sometimes selling half a million copies of their latest release. Daring and avant-garde theatre companies led by directors such as Ljubisa Ristic began to gain an international reputation.
Serbs bought holiday homes on Croatia’s Adriatic coast. Slovenes went white-water rafting in Montenegro. But the question of the viability of the Yugoslavia idea will be debated for decades. Certainly its roots were deeper in sophisticated cities such as Belgrade, than in the villages and mountains. But Belgrade was not just the capital of Federal Yugoslavia, it was also the capital of Serbia. Serbian nationalists became increasingly angry at how their republic was being steadily weakened. Tito had constructed post-war Federal Yugoslavia’s system of republics to prevent the country being dominated by Serbia, as pre-war Royal Yugoslavia had been. There was particular resentment in Serbia over the quasi-republic status of Kosovo and Voivodina, which were physically part of Serbia but were outside Serbia’s political control with their own seats in the Federal presidency. Kosovo and Voivodina had a say in the government of Serbia, but Serbia had no control over them. Not only Federal Yugoslavia, but Serbia itself was being steadily weakened.
Tito’s experiment in constitutional decentralisation was certainly brave and innovative. But even a state that was reasonably ethnically homogenous, with its own cohesive national identity, would have had problems governing in such a complex system. Yugoslavia was neither homogenous nor cohesive. Nationalism – once deliberately re-animated – would prove a powerful and more durable ideology than Yugoslavism.
4
The Capitalist Years
Slobodan in America
1978–82
Two things impressed me about him: his readiness to listen and his readiness to learn.
Mihailo Crnobrnja, economic advisor to Milosevic, 1974–89.1
While Milosevic paper-pushed at the Belgrade city hall, his kum Ivan Stambolic was running Tehnogas. Tehnogas produced gases for industry, such as oxygen and argon. Stambolic soon brought Milosevic over to Tehnogas, and by the early 1970s Milosevic held a senior management post. Although working for Tehnogas was not as prestigious as working for the gigantic steel works and car factories in which Communist countries specialised, for Milosevic this was still a promotion. Tehnogas was a Yugoslav-wide company, with branches in Croatia, Bosnia and Macedonia as well as Serbia. It was well regarded internationally, a flagship Yugoslav enterprise.
It was understood that Milosevic was Stambolic’s designated successor, and when Ivan left Tehnogas, Milosevic took over as president. Milosevic knew little about economics and even less about producing industrial gases. But he was a fast learner, according to Mihailo Crnobrnja, then an economic consultant at Tehnogas. A US educated professor of economics, Crnobrnja worked as a consultant at Tehnogas. He was one of Milosevic’s key economic advisers from 1974 until 1989, when he was appointed Yugoslav ambassador to the European Union. Milosevic was a quick and adept student. ‘His learning curve was in most cases very rapid. There were very few things that he needed to have repeated. If he was not dynamic, if he did not listen, I would not have bothered to work with him for so long.’
Milosevic’s approach to managing Tehnogas was unusual for those times. Although it was a liberal dictatorship, Yugoslavia still functioned on Communist principles of command and control, imposed from the top down. Yugoslav managers often tended to bark out their instructions and regard questions or alternatives as insubordination. Milosevic had adopted this approach at university, where he had a finely developed sense of his own status, according to Nebojsa Popov. On a visit to a motorway construction site, Milosevic refused to don the customary workers’ clothes or even loosen his tie, as it would diminish his prestige. And he did not like his new nickname, ‘Boban’. In Serbia, like all Slavic countries, names are usually reduced to a diminutive, especially by friends and family. When Popov and his colleagues addressed Milosevic as ‘Boban’ he refused to answer, as he thought it lacked gravitas. The more serious sounding ‘Slobo’ was more acceptable, he decided.
But there was none of this pomposity at Tehnogas, at least when dealing with senior managers. Milosevic wanted to do well, and was certainly intelligent enough to realise that he, and Tehnogas, would flourish if he drew on the expertise of those who had greater knowledge and experience. Age and family responsibilities also played a role. The callow university youth had matured. Milosevic’s approach was thoughtful and considered when chairing board meetings, said Crnobrnja. ‘Throughout my working relationship with him, he generally preferred to listen and conclude at the end. He did not intervene often, and only on very few occasions did he set the agenda in advance by using the technique of “this is what I want to hear from you”.’
Yet others, less useful to the chairman of the board, saw a different persona. The veteran Belgrade journalist Milos Vasi
c, then a young reporter for the news weekly Nin, was despatched to interview two Tehnogas engineers who had developed an innovative recycling process. Milosevic insisted on sitting in on the interview. He was cold and unwelcoming. ‘What I remember most of all was his very limp handshake, like giving you a cold fish. He would not let them talk to the press alone, but sat there probably not understanding a word of it. His behaviour was very arrogant to those men,’ Vasic remembered. ‘They were technically his subordinates, but in other aspects were much better men than him. Milosevic made a very distinct negative first impression.’2
Milosevic became a skilled industrialist, but he found his true metier as a capitalist when he left Tehnogas to become president of Udruzena Beogradska Banka (UBB) in 1978. A conglomerate of nineteen banks, UBB was one of the most important financial institutions in Yugoslavia, with extensive links abroad, including an office in New York. Milosevic asked Mihailo Crnobrnja to come with him, and set up a centre for economic research. Milosevic thrived at the bank. He quickly grasped the essential principles of high finance and capitalism and, with Crnobrnja’s assistance, soon mastered his brief. He looked set for a successful career in finance, at an exciting time when Yugoslavia was opening its commercial and trade links with the West.
There was then no talk at home of a career in politics for her husband, claimed Mira. Milosevic was happy at UBB. Their paths were set. ‘Fundamentally, he has the personality of a bank manager. He never thought much about being involved in politics. The structure of his personality can be described as a manager of a bank, although a modern and up-to-date bank, not an old-fashioned one, like a village bank. I saw myself then as a professor at the university, and a writer in the field of sociology. I saw him as a man in economics and finance, and that is the truth, if you want to believe it, believe it. I really don’t know how these things happened to us.’3
At that time in Yugoslavia bankers, like all managers, were divided into two castes: the professionals, and the ‘party’ people. The professionals were trained experts who made their career in banking, who studied and understood the world of finance. The party bankers were loyal Communists, whose appointments were approved by the party. The right party connections such as Milosevic had, together with the support of Ivan Stambolic, could ensure a high position in a bank, a foreign trade company, a state utility like Tehnogas, all without any previous experience whatsoever. Milosevic, though, was well regarded by his peers in other banks. ‘Communists always presented themselves as universal kinds of experts, but Milosevic was not like other bankers that appeared from political circles,’ said Aca Singer, who was also making a name for himself as a banker, at the rival Ljubljanska Banka. ‘I was interested in what kind of a banker he was, so I asked his associates, because subordinates always give the best estimate of their superiors. They told me Milosevic was very organised and he rose very quickly as a banker. He really wanted to learn the world of banking, and how it worked. But it would have been better for him, and better for the people here, if he had stayed as a banker.’4
Milosevic’s move to UBB was well timed. In 1979 the World Bank and International Monetary Fund held its annual meeting in Belgrade. Many westerners were keen to meet one of the new generation of Yugoslav bankers, who would drag the country’s financial system into the twentieth century. At a meeting hosted by the then US ambassador to Belgrade, Lawrence Eagleburger, Milosevic met a small group of half a dozen top figures, including David Rockefeller of Chase Manhattan Bank. He easily held his own in the world of high-level international finance, said Mihailo Crnobrnja. ‘There was a discussion for twenty, or twenty-five minutes. Milosevic spoke in very good English. He was not dogmatic, and I would say that he made a strong impression on David Rockefeller with what he had to say.’
UBB had opened an office in Manhattan, and Milosevic began to travel frequently to New York. There he grew to understand the West, how it works, and the value placed on good faith, and honesty perhaps better than any other Balkan politician. He learnt to schmooze and glad-hand, skills that served him well when western leaders courted his support. Milosevic admired the American ‘can-do’ ethos, in stark contrast to the torpor that often characterised Balkan communism. Wall Street, Rockefellers, Eagleburgers, all this was heady stuff for the boy from Pozarevac. There was also here a hint of the inferiority complex that even now bedevils the region’s politicians. Leaders of small eastern European countries want nothing more than to be accepted as equals by the superpowers. In later years Milosevic always relished getting a telephone call from President Clinton, or a visit from the pugnacious American negotiator Richard Holbrooke, whose ‘cut the crap’ straightforward approach Milosevic found greatly appealing. In the banking world, he first found the respect he wanted.
At this time Mihailo Crnobrnja was UBB’s chief economist. He became Milosevic’s guide to the United States. ‘He was fascinated by the efficiency, by the technical sophistication that he met every step of the way.’ The long hours at university spent dissecting the power structures of the Communist party gave Milosevic an analytical understanding of organisations and hierarchy that was also useful for capitalism. Blessed with a good memory, Milosevic always prepared thoroughly for meetings, and even spoke without notes. ‘When we met other bankers, Milosevic was sufficiently eloquent and knowledgeable to have them listen, not just out of courtesy, but with attention. I remember him as a man who did the job of a high-level banker well.’
Milosevic wanted to see more of the United States. He and Crnobrnja hired a car for the weekend. They drove to Boston and also visited Harvard, which Milosevic compared favourably with his own alma mater, Belgrade University. He joked that ‘Now when people ask me about my education, I can legitimately say I spent some time at Harvard!’
Despite her own leftist leanings, Mira was immensely proud of her husband’s achievements ‘He was a brilliant banker. Although I don’t know much about banking, and I know nothing about finance, I saw that he looked like one of the future bankers of the world. He very quickly understood the ideas and skills of banking. He thought that to work in banking and the economic sector was to be at the top of one’s career. He communicated with the most important bankers in the world.’
While it seems disingenuous to claim, as Mira does, that Milosevic never thought about a career in politics, there is an interesting ambiguity about Milosevic’s capitalist years. Many accounts of Milosevic’s career have portrayed him as single-mindedly dedicated to the pursuit of political power throughout his life. Certainly at school and during his university years he was a dogged apparatchik. But Milosevic’s workplaces after university are not classic stages on the path to power in a Communist state. In a one-party system the only way up the political ladder is through the party. This was the path taken by Milosevic’s contemporary, the Slovenian leader Milan Kucan. By 1978, when Milosevic took over UBB, Kucan was already president of the Slovene parliament. Kucan was steadily progressing on the long march through the institutions.
Milosevic was not. Tehnogas was a prestigious company but it brought no real political base with it. And to move from Tehnogas to a bank – in what was still a Communist country – was a curious choice. ‘Where in socialism or communism, does a banker become head of state?’ said Mihail Crnobrnja. ‘It is unheard of. If you want to become head of the party, or head of state, you become a small political apparatchik, then a bigger and bigger one until you make it to the politburo. Politically speaking, Milosevic sat in relative oblivion for seventeen years, from 1967 to 1984.’
Of course Milosevic was ambitious, and wanted to build his political contacts. But Milosevic’s life and career – at least at this time – like that of most people, was defined by luck, choice and opportunity as much as ruthless determination. Ivan Stambolic’s influence certainly helped as well. It is notable that Stambolic also left Tehnogas for a position at a government commercial office. A new class was evolving in Yugoslavia, of technocrats, of adept managers with some understanding of
how business and economics really worked, skills that would also be vital for a future generation of political leaders.
By this time, the Milosevic family had long left the concrete wastelands of New Belgrade. The family had moved into a comfortable three-room flat on December 14 Street, in Belgrade’s city centre. But while there was more space, it was still comparatively modest, for a bank president with a wife and two young children. Marija was at school, and she now had a brother, Marko, born in 1974. Apart from Milosevic’s frequent travel abroad – and his return was eagerly awaited by his children, not least for the presents he brought – the Milosevic family life was similar to that of their friends, said Mira. ‘We were surrounded by people of the same opinion. We did not differ much from the general atmosphere we all lived in.’
Belgrade then was a buzzing, cosmopolitan city. Its grand avenues offered a fine selection of contemporary theatre, and both Yugoslav and foreign cinema. Unlike other eastern European capitals, there was also a good selection of restaurants offering plentiful local produce. It was bright and livelier than dismal Bucharest or comparatively sleepy Budapest. Romanians and Hungarians came to Yugoslavia, amazed at the range and choice of goods on offer and the variety of foodstuffs. Milosevic himself was quite a gourmet, according to Dusan Mitevic. He loved eating seafood, for which Yugoslavia is famous, washed down with dry white wine, and also liked roast lamb and baby piglet on a spit. Like Tito, Milosevic enjoyed a glass of whisky. Tito’s favourite brand was Chivas Regal, but Milosevic was less choosy. In many ways he was a typical Serb, who relished a bountiful spread of food and drink, and good company with whom he could enjoy it.’ Mira was a trickier case, as Milosevic’s friends soon discovered. ‘They have very different tastes and it is difficult to please them when they are together,’ said Mitevic. ‘It is difficult to give her something to eat, because she is very fussy.’5
