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CRISIS IN YUGOSLAVIA

NATO Raids' Fiscal Impact May Be Catalyst for Peace

Yugoslavia: Members of ruling circle whose businesses have suffered are advocating a compromise on Kosovo.

May 13, 1999|RICHARD BOUDREAUX | TIMES STAFF WRITER

BELGRADE, Yugoslavia — Bogoljub Karic knows an opportunity when he sees one.

In the 1970s, he and his four siblings plowed their teen rock band's earnings into a workshop making street signs and farm tools in their parents' garage. In the 1980s, he exploited Communist-era reforms to move into banking and insurance. In the crony capitalism of the 1990s, he used his connections to grab a controlling share of Yugoslavia's first cellular phone network.

Today his conglomerate is paralyzed, as is much of an economy already suffering from mismanagement and sanctions, by seven weeks of NATO bombing. But Karic sees a way out. The 45-year-old tycoon, who is also a Serbian government minister, has emerged as a vocal advocate of compromise to end the punishing conflict over Kosovo, a southern province of Serbia, the dominant Yugoslav republic.

While Yugoslav President Slobodan Milosevic cautiously tells visitors that he is "quite open to negotiations" with the West, Karic's comments in an interview Wednesday suggest support within the ruling circle for more concessions than Belgrade has offered so far--if the North Atlantic Treaty Organization first halts its offensive.

"Compared to NATO our country is tiny, but we have our pride just as big countries do," Karic said. "If the leaders of the big countries would overcome their vanity and stop the bombing, we could make a deal. They could accept 10% of what we're proposing and get a deal.

"NATO could claim a great victory, and so could we."

Whether Milosevic is so eager to settle is hard to know. Top-level decision making in Belgrade, the Yugoslav and Serbian capital, is opaque, divorced from public debate. Karic and his older brother Dragomir are often counted among Milosevic's trusted advisors, but Bogoljub Karic says he "can only guess" what's on the president's mind.

Still, news on state-run television lately has shifted its emphasis from NATO's bombing around the country to the diplomatic efforts to stop it. Officials and well-placed commentators have begun to hint at the outlines of a deal Milosevic could live with.

The opportunity Karic sees is the draft of a peace plan outlined last week by the Western powers and Russia--the Group of 8--that softens some NATO demands. Russian envoy Viktor S. Chernomyrdin, who met in Moscow with U.S. officials Wednesday, is expected to come to Belgrade at some point to discuss the draft with Milosevic.

"We should seize on this and start negotiations immediately," Karic said, speaking like an executive accustomed to quick decisions. "We have the solid foundation of a deal in that Group of 8 document. The details could be worked out within a week."

Talk in Belgrade of a compromise began last month after it became clear that neither NATO nor the Yugoslav army would give in quickly. NATO began bombing March 24, trying to halt a crackdown on Kosovo's ethnic Albanian majority. NATO is demanding the return of hundreds of thousands of Albanians forced out of Kosovo.

Bratislav Grubacic, political analyst and editor of Belgrade's VIP Daily News Report, said the government was prepared at first to endure up to a month of airstrikes.

"After that," he said, "people around Milosevic realized that they needed a way out in order to save their businesses and their wealth. The Karic brothers have a lot of common sense but no political ideas except their money."

Bogoljub Karic, a blunt-spoken man sporting a thick mustache and a finely tailored suit, gave an hourlong interview at the headquarters of a foundation linked to his BK Group International. He had moved from an office at BK Television last weekend after NATO missiles struck the nearby Chinese Embassy and the Hotel Jugoslavia.

An air-raid siren went off during the interview, punctuating the tycoon's lament that his conglomerate, which reports $500 million turnover in Yugoslavia, is "in a terrible crisis," with 500 of its 4,000 employees laid off and another 1,000 to follow this week.

"Friends and relatives of my employees call me every day begging me not to fire them," he said. "But if I don't, we'll all be bankrupt. My bank is not operating. Insurance no longer exists; what can we insure? The whole house is tumbling down, even though we have not been hit directly by a NATO bomb."

Karic said the threat to his business prompted him and his brother to assume public roles in Belgrade's effort to force a halt to the allied airstrikes.

Early this month, Karic helped the Rev. Jesse Jackson persuade Milosevic to free three U.S. servicemen who had been captured along the Yugoslav-Macedonian border in late March. His brother has met with U.S. and Russian lawmakers.

U.S. officials say the air assault will continue as they press their demands for a settlement, including withdrawal of all Yugoslav forces and deployment of an international peacekeeping force with NATO at its core.

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