Ethnic Conflict : Krajina Trades Pensions for Pride : Rebel Serbs are owed by Croatia. But they’d rather go without than acknowledge Zagreb.

Stevan Sovilj’s lined face and spare frame speak to his need for the $700 monthly pension he is owed for 41 years of work on the abandoned Zagreb-Split rail line, which passes through this rebel Serb stronghold.

He pulls at the loose waistband of his snagged trousers to show that he has lost weight on the $40 he and his family are forced to live on each month amid the hardships of a prolonged rebellion and the haywire prices inflicted by war in the Balkans.

Yet at the mere suggestion that his retirement income could be arriving regularly if Serbs in the disputed Krajina region made peace with the Croatian government in Zagreb, the mild-mannered engineer erupts in a defiant, nationalist tirade.

“Serbs will never be part of Croatia. We cannot live there. We don’t have any money, but we have our own country. It is my right to choose, and I choose to stay here and refuse their money,” the silver-haired pensioner declares with ferocity.

If any residents of this self-styled capital of the rogue Republic of Serbian Krajina can contemplate being governed as part of Croatia, they are keeping those thoughts to themselves.

At the public market, on park benches crowded with homeless refugees, in the dusty sidewalk cafes where the legions of unemployed idle away the daylight, Krajina Serbs insist they are determined to preserve their independence at any cost.

Rather than being worn down by four years of oscillating battle and tension, they seem prepared to wait out the world’s resistance to their claimed statehood and endure any suffering necessary during the standoff in this corner of the wars that have swept the former Yugoslav federation.

Even the allure of pensions owed by the Zagreb government to 60,000 Serbs living in the occupied Krajina region seems unable to sway the rebels to contemplate a compromise and peace.

As recently as four years ago, all residents of today’s Krajina were Yugoslav nationals who accrued pensions payable by the government of their republic within the Yugoslav federation, in this case Croatia. So retirees here in Knin should be collecting their monthly checks from Zagreb.

But with their insistence that Croatia is a foreign country with no political relationship to occupied Krajina, the Serbs of this impoverished and isolated region have effectively renounced their claims to be beneficiaries of Croatia.

Idealists like Zora Zelic, who worked 23 years as a hotel maid in the coastal resorts of Croatia, insist that Zagreb should pay the pensions to Krajina Serbs anyway, noting that retirees who move abroad in most democratic countries continue to receive the pensions they earned during their working years.

In the case of Krajina, however, it wasn’t the pensioners who moved, but the country. Croatia seceded from Serb-dominated Yugoslavia in June, 1991, prompting the Krajina Serbs to grab a third of the Croatian republic’s territory in a bid to form their own state.

With all mail service, telephone communication, financial ties and transport severed by the rebels four years ago, Zagreb would be hard-pressed to pay the Krajina residents even if it wanted to. Authorities have told Western mediators that they would gladly resume paying the retired people of Krajina if the rebels would restore the banking, postal and political links with Croatia necessary to transact the payments.

But implicit in the integration of economic and social institutions would be acknowledgment that they are citizens of Croatia. And virtually no one here seems swayed by the offer of a paycheck to give up the claim to independence.

Pensions are one of seven economic cooperation themes that international mediators hope will entice Serbs and Croats in troubled Croatia to come together for the mutual benefit of their war-weary populations. U.S. and Russian diplomats overseeing reconciliation talks had hoped the promise of a step-by-step return to normalcy would make both sides see reason.

Other proposals that should be advantageous to both sides include reopening the blocked highway between Zagreb and Belgrade, capital of the Serbian-run rump Yugoslavia; restoring the prewar utility networks now severed by the front line; repairing and sharing the proceeds of the Adriatic oil pipeline that passes through both territories, and allowing free movement on the roads and railways that once traversed the region, like the popular rail line that Sovilj spent his career helping to administer.

Yet even the most elementary moves toward cooperation have been rejected by both sides as they posture in negotiations and threaten another round of war.

Croatian President Franjo Tudjman warned in a recent interview that he saw increasing signs “the military option” would be required to recover Krajina--a euphemism for a bloody, all-out assault to conquer the heavily armed rebels.

Milan Martic, the former police officer whom Krajina Serbs elected as president in internationally unrecognized balloting in January, has also indicated to mediators that his people are prepared to resume combat rather than give up their internationally spurned claim of statehood.

The standoff has been destructive for both sides, with Croatia losing millions in unrealized tourist revenue from its empty Adriatic Sea resorts and Krajina cut off from the raw materials and trade links needed to resuscitate its idled industries.

“It doesn’t make any sense for either side to brandish the war sword when there are very real opportunities for cooperation,” said a senior Western diplomat involved in the negotiations. “One can only hope that the politicians will sooner or later act in the interest of their people instead of only for their own political power.”

But it is exactly that quest for influence over a captive fiefdom that drove the Balkan states to war in the first place, with Serbian President Slobodan Milosevic asserting Serbian domination over Albanians in the provinces of Kosovo, and Tudjman following suit by trying to relegate Serbs in Croatia to a second-class status, which along with prodding from Milosevic encouraged them to rebel.

Because both Tudjman and Milosevic have achieved their main political goals of, respectively, gaining international recognition for Croatia and seizing land for a Greater Serbia, neither leader is expected to seriously challenge the status quo.

Despite the logic of reconciliation and the financial boost it would provide both peoples, it remains a dim prospect amid the hostilities and political gamesmanship rampant in Croatia.

And issues like pensions, unhindered travel and income from transporting oil have been made hostages of a political settlement few observers see any chance of emerging in this century.

Balkan Breakdown

After the collapse of the Federal Republic of Yugoslavia, which began in 1991, it broke up into five independent republics--Bosnia-Herzegovina, Croatia, Macedonia, Slovenia and the rump Yugoslavia, which consists of Serbia and Montenegro. Each possesses a variety of ethnic concentrations. The breakdowns:

Bosnia-Herzegovina

Population: 4.6 million

44% Muslim, 31% Serbian, 17% Croatian, 8% other.

Croatia

Population: 4.7 million

78% Croatian, 12% Serbian, 10% other.

Macedonia

Population: 2.2 million

67% Macedonian, 21% Albanian, 4% Turkish, 2% Serbian, 6% other.

Serbia and Montenegro

Population: 10.7 million

63% Serbian, 14% Albanian, 6% Montenegrin, 4% Hungarian, 13% other.

Slovenia

Population: 2 million

91% Slovene, 3% Croatian, 2% Serbian, 4% other.

Source: World Fact Book, 1993

Compiled by Times Research Librarian Paul J. Singleton

Determined Independence

Residents of the rogue Republic of Serbian Krajina insist that Croatia is a foreign country with no political relationship to the rebel Serb stronghold. Krajina, which means edge, covers four non-contiguos areas; the largest area includes the rebels’ self-styled capital, Knin.