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It is the opposition's worst nightmare: Having demanded early elections all year, now Milosevic looks set to call them, but under the worst possible conditions.

Also Today A "boneheaded" bombing A former Army intelligence officer claims he knows what the CIA meant to hit when it hit the Chinese Embassy in Belgrade. By Laura Rozen

Milosevic normally prepares for elections by distracting and worrying the population with violence -- in Kosovo, in Montenegro -- which scares enough of the old people to vote for the strongman. Then he gets ahold of some of the millions of dollars the regime stole from Yugoslav banks years ago and stashed in foreign bank accounts, and brings it back in time to pay off pensioners, the police, army and anyone else on the state payroll.

This year Milosevic has another potential target group of new voters for his Socialist Party: some of the 700,000 Serbian refugees who have been displaced by his failed war bids in Croatia, Bosnia and Kosovo, and who are living miserably in Serbia.

Suddenly, some 50 of these poor refugees a day are being granted Yugoslav citizenship, according to opposition politician Goran Svilanovic. What's the implicit catch? That they vote for the man who gave it to them.

Milosevic has recently managed to get hold of enough hard currency to stave off hyper-inflation for the next six months, so that he can pay off pensioners, police and the army and hold elections within that time. According to leading dissident economist Mladjan Dinkic, some $300 million mysteriously moved from China to Belgrade in December. The regime first tried to explain the money as a gift of the Chinese government, then coyly suggested it was a loan.

"It could not be a gift, that's for sure," says Dinkic, who heads the G17 group of independent economists in Belgrade. "Because China does not give financial gifts, it's not that rich. My opinion is this is money of Serbia's political establishment that was transferred abroad, first to Cyprus, and other countries, and then to China, and it was being repatriated here in December."

The value of the Belgrade-Chinese relationship -- which has blossomed in the wake of NATO's accidental bombing of China's Belgrade embassy last spring -- became clear this week, as Milosevic ordered his Socialist Party branch offices to begin preparing their "voter rolls" for elections, possibly as early as later this month.

Under the Yugoslav constitution, Milosevic must call Serbian local and Yugoslav federal elections by November. Serbian parliamentary elections -- perhaps most critical for unseating Milosevic's ruling coalition -- are due to be held in 2001, but the opposition has been demanding that they be held this year as well.

The pillars of Milosevic's election strategy are making payoffs and creating a fear of war among his population. Not only does he have the Chinese government loan at his disposal, but he is also benefiting indirectly from the United Nations oil-for-food program for Iraq -- which allows Saddam Hussein to sell about $1 billion worth of oil a year and use the cash to buy humanitarian supplies of food and medicine. Recently, a key Yugoslav military procurement agency was granted permission to sell $100 million worth of wheat to Iraq. In fact, the Yugoslav company is the very same one that the U.S. meant to hit when it accidentally hit the Chinese embassy.

Analysts have wondered how, after his loss of Croatia, Bosnia and Kosovo, Milosevic could manage to find some place with which to cause another conflict and distract his population of 10 million impoverished, war-weary and sanctions-burdened people from blaming him for their misery. He has found two ways.

His special forces have infiltrated northern Kosovo, in particular the northern Kosovo city of Mitrovica, and he has put many Serbs in that ethnically divided city on Belgrade's payroll. Thus he has found agents for continuing to stir up ethnic violence even under a Kosovo controlled by 50,000 NATO-led peacekeeping troops.

Next page | What's an opposition desperate to get rid of Milosevic to do?