YUGOSLAVIA

As NATO mulls the introduction of ground troops in Kosovo, criticism of such a dramatic escalation is intensifying. Critics believe that the ground-force option would place the North Atlantic Treaty Organization in a no-win situation, with a real possibility of a protracted engagement ending in a Vietnam-like debacle. Could the critics be right? Could a country like Yugoslavia pay for a large-scale war effort? How is Belgrade even able to finance its current campaign in Kosovo?

For the critics to be right, Yugoslavia would have to succeed in three areas. It would have to find the financial and logistic wherewithal to sustain a prolonged war effort. It would have to maintain a high level of civilian and military morale and combat performance in a struggle against technologically superior forces. Last but not least, Yugoslavia would have to secure the political and materiel support of a major international player like Russia.

It is often assumed by skeptics of NATO’s ground-war prospects that Yugoslav President Slobodan Milosevic would continue to muddle through financially, just as he did during the Bosnia and Croatia conflicts, and as he is doing in Kosovo today. But several factors cast serious doubt on Yugoslavia’s economic and financial ability to wage large-scale war. The country’s current financial situation is far worse than it was during the earlier conflicts. Two of Milosevic’s major sources of financing--capital transfers by Serbs working in Western Europe and revenues from the numerous Yugoslav companies operating in Russia--are drying up. Revenues from expatriates, estimated at more than $180 million a year, have declined because the government no longer allows the workers’ relatives free access to their foreign-exchange accounts. Income from the companies in Russia, which are personally controlled by Milosevic’s older brother, Borislav Milosevic, who is also Yugoslavia’s ambassador in Moscow, has shriveled along with Russia’s economy. Yugoslav exports, another source of hard currency, have fallen precipitously.

What’s left is de facto confiscation of the population’s diminishing resources. In recent months, salaries and pensions, which were infrequently paid anyway, have been cut, foreign-currency accounts blocked and new tax surcharges imposed. With Yugoslav civilian industry in shambles as a result of the NATO bombing campaign, the once productive agricultural sector operating in a subsistence mode, economic output halved, and poverty and unemployment rates greater than 50%, Milosevic’s ability to squeeze additional resources from his impoverished populace is finite.

Moreover, the international environment in which Milosevic operates today has changed dramatically, to his detriment. During the Bosnia war, Yugoslavia was able to circumvent the U.N. embargo through massive smuggling from neighboring Bulgaria, Romania and Macedonia, which were then ruled by neo-socialist regimes sympathizing with Milosevic. Criminal gangs associated with the Bulgarian regime, for instance, smuggled tanker loads of oil, weapons and other embargoed supplies seemingly at will. All three countries are now run by democratically elected governments that aspire to join NATO and the European Union.

Finally, one must be mindful of the nature and cost of current Yugoslav operations in Kosovo. The units used there have, for the most part, consisted of paramilitary cutthroats and local police. They excel in murder, rape and pillage against unarmed civilians. None of this costs much money.

It is often remarked that Serbs are united behind Milosevic as never before and are prepared to follow his leadership in an all-out “defense of the fatherland.” Accordingly, the Yugoslav army would put up fierce resistance and, at the least, inflict unacceptable casualties on NATO’s forces, regardless of the country’s finances. Most Serbs are indeed outraged by NATO’s bombing campaign. Unhappiness with the West, though, hardly translates into unqualified endorsement of Milosevic, whom many Serbs consider a brutal dictator and the real cause of much of their misery. This is evident not only in Montenegro, where a majority supports the anti-Milosevic democratic government. It is also detectable in Serbia proper, where Milosevic’s government increasingly resorts to ever harsher methods, including murder, to stifle and destroy independent media and organizations critical of his rule. Last week, Vuk Draskovic, Yugoslavia’s deputy prime minister, was dismissed after threatening street demonstrations against Milosevic.

The Yugoslav military is now in the hands of Milosevic loyalists, after the dictator replaced virtually its entire top brass last year. But it is hardly the finely tuned fighting machine one encounters on Op-Ed pages. Its equipment is at least a generation behind NATO’s. Because the bombing campaign has degraded supply and communications lines, the Serbs would experience command and control problems. When NATO agrees on how to enforce an oil embargo against Yugoslavia, the strain on the army’s resources will significantly magnify, making any large-scale, sustained encounter less probable. Yugoslavia’s ability to supply its forces with oil has already been severely degraded: Its two refineries and all pipelines have been destroyed. In any case, the West’s uncontested air superiority virtually precludes sizable operations by Yugoslav armor and mechanized infantry.

Will Russia, motivated by ethnic and religious bonds with the Serbs, intervene to bail out Milosevic? Ever since Catherine the Great forced the Ottomans in the late 18th century to recognize Russia as the protector of the sultan’s Orthodox subjects (including the Serbs), Russia’s policies have been determined exclusively by Russian imperial interests. More often than not, the national interests of Serbs and others have correspondingly suffered. This tradition continued throughout the Soviet era and for nearly half a century after World War II, when relations between Serb-dominated communist Yugoslavia and communist Russia were hostile.

The strident rhetoric currently emanating from Moscow is largely the voice of injured international pride and of rabid communists and nationalists seeking to exploit the situation for political gain. The Kremlin is well aware that without Western support, it is unlikely to continue to receive aid from the World Bank and the International Monetary Fund. Its rhetoric notwithstanding, Russia has been remarkably unwilling to engage in confrontational behavior. In this, Moscow is reflecting Russian public opinion. Recent polls show that 76% of Russians oppose involvement in Kosovo and only 3% favor a military confrontation with NATO.

What Russia is more likely to do is to extract some kind of payment for its acquiescence to NATO policy, possibly in the form of continued U.S. and Western support for aid from international financial institutions. Recent evidence has turned up, for instance, that Russia abstained from a U.N. veto favoring Saddam Hussein in return for substantial loans from Saudi Arabia and Kuwait, allegedly negotiated by then-Foreign Minister Yevgeny M. Primakov. Last week, the IMF agreed to lend Russia $4.5 billion over the next 18 months, although Moscow will never see the money. The loan allows Russia to avoid default on money it owes the IMF.

True, results of the five-week-old bombing campaign show that Milosevic’s armed forces in Kosovo retain capabilities to resist an invading army. But they have yet to face the kind of military and financial test that a NATO invasion would present.