Visiting Home, Panic Vows to Forge Peace in Balkans

Outgoing Yugoslav Prime Minister Milan Panic was appointed Wednesday as a “roving ambassador of peace” for the troubled federation when he leaves office in early February.

Panic’s appointment to the newly created post by Yugoslav President Dobrica Cosic came as the Orange County businessman began a weeklong return visit to the United States. On Wednesday, he visited ICN Pharmaceuticals Inc., the international drug conglomerate he founded in 1960.

Panic, a naturalized U.S. citizen, has been on leave from the Costa Mesa-based company since July, when he accepted Cosic’s nomination to the premiership of the Yugoslav federation.

In an hourlong interview, Panic vowed that although he lost the premiership in a December vote of no-confidence and a subsequent race to unseat his rival, Serbian President Slobodan Milosevic, he would return to Yugoslavia and work to end the bloodshed in the Balkans.

“I accept the role of ambassador of peace,” he said. Panic declined to elaborate on what duties he would assume in that post. But a company spokesman later said that Panic would likely continue to meet with world leaders and United Nations officials to promote a peaceful end to the civil war.

Panic, who has met most leaders of Europe during his brief tenure as prime minister, is scheduled to visit members of the Clinton Administration transition team this week in Washington before returning to Belgrade to prepare for his transition from office.

He is expected to seek assurances that outside military intervention--such as U.N. enforcement of a Bosnian no-fly zone--will be avoided as the warring factions struggle to work out a peace accord.

Panic said that he doesn’t regret leaving the comfort of his company and his posh mansions in Newport Beach and Pasadena for the rough-and-tumble politics of his homeland. Panic defected from then-communist Yugoslavia in 1955.

Although peace was not obtained during his tenure as prime minister for the rump federation, which includes Serbia and Montenegro, he insisted that “we have made considerable success in many ways.”

Among successes Panic boasts are prisoner exchanges, increased peace talks and international participation in them. Still, Panic will leave the premiership with the war in Bosnia unchecked.

In sometimes stirring words, Panic described the rivalries that exist among the warring factions, including Serbian rebels and Bosnian Muslims, and the causes of the violence that has taken thousands of lives in the region.

“It’s a really complex problem,” Panic said. “It’s much more difficult than I thought when I went there.”

Panic lashed out several times against claims of national autonomy by all groups involved in the fighting, saying that one of the root causes of the warfare came because the world community, including the United Nations and the European Community, did not act soon enough to try to keep the federation together.

“Help always came too late,” Panic said. “If the world heard me from the very beginning without doubting and questioning, we would have peace already.”

Instead, Panic said, world leaders inflamed the situation early on by recognizing the breakaway states of Croatia, Bosnia-Herzegovina, Slovenia and Macedonia.

“Nationalism is sickening,” he said. “Croatian nationalism, Serbian nationalism, Muslim, Bosnian . . . all those nationalisms make me sick to think of. In my vocabulary, I don’t have that word anymore.”

Panic said military force--by warring factions within the Balkans or by outside nations--is not the answer.

Instead, he proposed an economic organization to tie the newly emerging Balkan states together. Patterned after the European Community, the former Yugoslav republics could join economic forces with surrounding nations, such as Albania and Romania.

“Economics are going to be the issue of that area, not borders,” said the self-made millionaire, referring to the recent lowering of borders between most European countries.

Eventually, Panic said, the proposed Balkan union could apply for membership to the 12-member European Community.

“I am a businessman, I am not a politician,” Panic said. “Neither am I a diplomat. I am a Californian who takes things very pragmatically and wants to solve them. I tried and I did a number of things.”

As a successful businessman, Panic said he took a month to consider the invitation to become head of the faltering federation. When it became public knowledge that he had been offered the premiership, Panic went into virtual seclusion, canceling all public appearances and avoiding the media.

He said that he was drawn by an altruistic desire to help his suffering Yugoslav brethren. On the other hand, he knew how dangerous it would be. Despite the risk, he accepted.

In August, less than two months after taking office, Panic was with a convoy of journalists traveling through Sarajevo when a sniper shot and killed ABC News producer David Kaplan.

Nevertheless, Panic said he has not taken extraordinary safety precautions. He decided against wearing a bullet-proof vest and rides in an unprotected Mercedes-Benz limousine once owned by Yugoslavia dictator Josip Broz Tito.

More accustomed to quiet board rooms and luncheon dates at exclusive Orange County restaurants, Panic found himself in the thick of the worst outbreak of warfare in Europe since World War II. Everywhere he went, he drew large audiences, anxious to listen to him speak about the need for peace.

“The crowds were unbelievable,” Panic said animatedly. “They came to see me wherever I went. I couldn’t believe it.”

Fending off an earlier vote of no confidence in September, Panic said he saw his popularity grow steadily. He also became more and more at odds with Serbian President Milosevic. Indeed, he believed his popularity had risen and his reputation as a moderate peacemaker had been solidified enough to challenge Milosevic in a presidential election a month ago.

Panic said he lost the December election because of fraud by his opponent. In fact, Panic said a report by a U.S. political consulting firm, Penn & Shoen Associates Inc., described the contest as “marked by a systematic, ongoing, and persuasive fraud that makes the stated result illegitimate.”

Panic on Wednesday was uncharacteristically soft on his rival, even though Milosevic is widely regarded as the cause of the region’s unrest. Most recently, Milosevic has been accused of supporting Serbian rebels in Bosnia.

“He is the product of the old system,” Panic said about Milosevic. “They needed a change. I offered them a change. But the election was a fraud.”

Panic, who declined to discuss details of ICN’s business while still on leave, nevertheless remains the company’s chairman of the board. This precarious balance--remaining a titular head of a company whose future is in part tied to the future of a country he now leads--has left some investors and company officials aggravated.

The balance has also caused the company to suffer financially.

In June, when Panic considered the premiership, stock prices for ICN and its chief subsidiary, SPI Pharmaceuticals Inc., began to dive. ICN stock lost 16% of its value during that period. At the same time, SPI stock lost 20%.

The company, which has a controlling interest in Belgrade-based ICN Galenika, has been limping along ever since, while its stock value has continued its decline.

ICN stock on Wednesday closed at $6.25, down 12.5 cents a share from Tuesday’s close, while SPI stock closed at $10.875 a share, down 12.5 cents from the previous day.

In addition, the company recently slashed its dividend 75% because of poor earnings, caused largely by international sanctions against the Yugoslav federation. Galenika, purchased in 1991 and once considered ICN’s crown jewel, has been unable to secure raw materials for drug production because of the sanctions.

Galenika President Velimir Brankovic is among Panic’s more recent detractors. Other Galenika officials reportedly would like to see Panic become more involved in making sure that the Belgrade investment is secured.

Panic gives no assurances or guarantees that Galenika or any of his companies’ other Eastern European ventures will survive the prospect of nationalistic strife in the post-communist world.

He did say, however, that he intends to someday return to active duty at ICN and its subsidiaries, SPI Pharmaceuticals Inc., ICN Biomedicals Inc., and Viratek Inc.

For the time being, he said he is not ready to give up the adventure. As ambassador of peace, Panic said that he hopes to be instrumental in forging the eventual peace in his homeland.

“The most important thing for me is peace,” Panic said. “Everyone wants peace. That is my major issue.”