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Will Elections Change the Pace of Economic Reform in Serbia? - 2002-09-23

Two years, marked on October 5, after a popular uprising forced dictator Slobodan Milosevic to yield power, Serbs are to vote for a new president. While Sunday's election is evidence that democracy is taking root in Serbia, analysts worry that the results could slow the pace of needed economic reform.

It is a contest between varying strains of nationalism and pragmatism.

Election posters are everywhere. The debate is spirited on television and in newspapers.

The pragmatist is Mirojlub Labus, the government's chief economic reformer. A handsome, middle-aged economics professor, Mr. Labus puts European Union membership at the top of his agenda. He has the support of young professionals and is the preferred candidate of western diplomats.

The leading nationalist is Yugoslav President Vojislav Kostunica. He is a vocal advocate of Serb national pride. He even suggested regaining control of the Serb part of Bosnia, although he had to backtrack on that statement.

Mr. Kostunica is the constitutional lawyer who defeated Slobodan Milosevic in federal elections two years ago. Mr. Milosevic's unwillingness to accept his electoral defeat prompted the revolution that swept him for power.

As the Yugoslav federation is phased out, Mr. Kostunica's current office will no longer exist. He is Serbia's most popular politician, but it is generally said in Belgrade that he is not much interested in the economy.

Milko Stimac heads the research institute that was instrumental two years ago in persuading Mr. Kostunica to challenge Mr. Milosevic. "Kostunica's party is not very good in economics," said Mr. Stimac. "Their most prominent economist worked for the former regime, for Milosevic. He is now the finance minister in the [Kostunica-endorsed] shadow government."

Three other presidential candidates are even more nationalistic than Mr. Kostunica. But Mr. Milosevic's party is not a factor in this election.

No one candidate is expected to win the majority needed for first round victory. It is expected that Mr. Labus and Mr. Kostunica will move on to a runoff two weeks later.

In that likely contest, Mr. Kostunica is the clear favorite. Analysts speak of the presidential election as a mere warm up for Serbian parliamentary elections that most expect to be held within eight months.

Should Mr. Kostunica win the Serbian presidency, observers say Zoran Djindjic, a pragmatist and Labus ally, will be under increased pressure in the parliamentary election. Mr. Djindjic leads the Democratic Opposition of Serbia, an 18-party coalition that won the 2000 parliamentary elections.

Rory O'Sullivan, the head of the World Bank mission in Belgrade, says the economic reformers around Mr. Djindjic and Mr. Labus have accomplished more in 18-months than was done anywhere else in post-communist Europe.

"As we look back now and see what has been achieved over the last 18-months, we can only be extremely impressed by the sense of purpose, by the energy, and the determination of the reformers here so far. Because they have achieved an enormous amount," Mr. O'Sullivan said.

But many Serbs have not yet seen the benefits of the economic reforms that held the currency solid, started privatization, restored basic public services, and reactivated commerce. The average Serb, earning $160 a month, is not impressed.

Sunday's Serbian election will be observed by monitors from the Organization for Security and Cooperation in Europe (OSCE).