09 July 2008

Questions Hang Over Socialists’ Return to Power

By Eric Jansson
Published by BIRN's Balkan Insight

Even as Serbia’s parliament voted to thrust the Socialist Party of Serbia (SPS) back into the offices of government, the trial of Mihalj Kertes, a central Socialist figure in the nexus of state and criminal interests that held the SPS in power through the 1990s, continued at the Special Court for Organised Crime.

The contrasting fates of the SPS and Mihalj Kertes – the party restored to power, the individual on trial – says much about the state of Serbia less than eight years after the fall of Slobodan Milosevic and his SPS from power in the October 5 putsch of 2000.

The message is not necessarily a coherent one.

On one hand, Serbian President Boris Tadic and his coalition of liberalisers, populists and technocrats, “For a European Serbia”, claim the SPS, a party they condemned in the starkest terms until recently, now has changed in ways that make it a suitable partner in government.

On the other hand, the trial of Kertes and senior gangland personalities for their roles in an alleged cigarette smuggling ring, in which the Milosevic-era customs chief has pled innocent, is predicated upon a very different view of the SPS and the 1990s. Essential to the political success of Tadic and his anti-Milosevic partners since 2000, this view holds that the SPS’s record is characterised by gross abuses of state power and criminal usurpation of state institutions.

The thread linking Tadic’s newly positive view of the SPS to his pro-European movement’s long-damning view of the party’s record in government – and indeed the continued advancement of that view through state institutions such as the Special Court – is not easy to see.

But the question of whether these two views can be reconciled seems certain to hang heavily over Serbia and, in particular, its next governing coalition – at least during its initial period in office.

Since 2000, the SPS has spent eight years in the political wilderness. Following Milosevic’s death in 2006, the party’s new leader, Ivica Dacic, now elected first deputy prime minister and interior minister, started moving the party’s public image out of Milosevic’s shadow.

Although as the party’s spokesman during the Milosevic era he is closely tied to the SPS of the old regime, Dacic’s makeover has basically succeeded.

For instance, association in the popular imagination between the SPS and criminal figures linked personally with Milosevic has arguably faded, although public knowledge of their roles within the party has actually grown. Kertes, for instance, in a separate trial last year, told the Special Court that, as customs chief, he had authorised payments from Customs Administration accounts directly to the SPS.

The party’s ambiguous transition has triggered a public debate over its new nature, even within institutions of government.

Verica Barac, president of Serbia’s Anti-Corruption Council, a state institution founded in 2001 at the behest of Zoran Djindjic, Tadic’s predecessor at the helm of the Democratic Party, told the daily Blic that the SPS remains “unreformed”.

The election of a government pairing Tadic’s pro-European bloc with the SPS represents “the defeat of what we expected would happen after October 5”, Barac said.

Yet even some of Serbia’s most pro-Western, liberal voices acknowledge that the SPS has changed in some ways. “The question is how much,” says Dejan Anastasijevic, a Belgrade journalist whose pro-Western views consistently challenge the prevailing wisdom in Serbia.

“Dacic and most of his crew are pragmatic young apparatchiks rather than war criminals or ideologues. Most of the hard-core gang dropped off with Milorad Vucelic [the party’s vice president under Milosevic], who is now trying to start his own ‘Real SPS’. On the minus side, they never formally condemned anything that Milosevic did, and there are still some pretty nasty characters lurking in the shadows,” says Anastasijevic

For such individuals, whose powerful backstage influence within the SPS has long been essential to the party’s success, the alliance with Tadic may be as uncomfortable as it is for liberal Serbs who remain sceptical of Milosevic’s former party. Both groups suffered the political equivalent of whiplash when learning of the planned marriage of these old rivals.

Borka Vucic, a long-time Milosevic associate and SPS supporter who ran Serbian offshore banking operations in Cyprus during the 1990s, when international sanctions acutely complicated the country’s finances and trade, is among those deeply frustrated by the composition of the new government.

“I remember that Dacic never had any idea for collaboration with Mr Tadic, never. How it has happened in a very short period of time I really cannot understand… It is not natural to have such integration,” she says.

Vucic’s apparent bewilderment at the SPS’s new choice of allies is informed by a unique take on the institutional transitions initiated in Serbia after Milosevic’s political downfall.

Long a senior figure in the state-dominated Yugoslav banking community, Vucic saw her position undercut after the October 5 putsch, when the young economist Mladjan Dinkic stormed into the central bank as a reform-minded governor.

Dinkic accused the evicted regime of systemic, criminal abuses of power. He spoke of “missing billions” in state funds he alleged had been channelled through Cyprus, some of it by Kertes.

At the height of the dispute over missing money, Dinkic spoke openly of the Milosevic regime as a criminal enterprise. Vucic likewise used the word “criminal” to describe Dinkic’s governance of the banking system.

Since then, little satisfaction has been felt on either side of the dispute, which gradually fell quiet with the exception of related revelations in trials like those involving Kertes.

Yet Vucic has not fundamentally changed her view. “No evidence” exists of sanctions busting or state plunder during the 1990s, she says, adding that Dinkic stopped looking for such evidence when he left the central bank in 2003 and “became a politician”.

“We have some evidence about criminality during the war, but we have much more evidence of criminality on the so-called democratic side. The volume is very big,” Vucic says.

The new alliance between Tadic’s bloc and the SPS, and Vucic’s reaction to it, is a reminder of how deep the disputes between these rivals, now allies, remain.

Having submerged such sharp disputes in order to form a government together, can the SPS and its former foes actually make common cause together?

“You would be amazed the differences that can be ignored if a person's lust for political and financial power are strong enough,” says James Lyon, Belgrade-based senior advisor for the International Crisis Group.

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