YU army not seen defying Belgrade on pay

BELGRADE, Dec 31, 1999 -- (Reuters) Yugoslav army officers in Montenegro are unlikely to accept an offer of hard currency salaries from the Western-leaning republic's government without Belgrade's approval, analysts said on Thursday.

But the proposal is an important psychological move in a growing struggle between Yugoslav President Slobodan Milosevic and Montenegro, which is increasingly fed up with its position as the last republic left with Serbia in Yugoslavia.

Montenegro on Wednesday offered to pay the officers in German marks - which it introduced as a parallel legal tender last month alongside the failing Yugoslav dinar - on condition the army helped bypass a trade blockade from Serbia.

The army had no immediate response to the offer, the latest attempt by the republic to extract itself from the influence of Milosevic's government in Belgrade, which analysts say has been trying to strangle Montenegro's embryonic economic autonomy.

Some observers saw the proposal as an attempt by Montenegro, which has threatened to declare independence if the federation is not reformed, to lure the army to its side.

"Belgrade and Podgorica are competing for the loyalty of the generals. You can see that in the decorations handed out by Milosevic and now this offer from Montenegro," said Predrag Simic, an analyst from Belgrade's Institute of International Politics and adviser to opposition leader Vuk Draskovic.

Montenegro has already managed to wrest the customs service from federal control simply by paying the salaries of customs officials Belgrade was having trouble affording.


Analysts agreed getting hard currency salaries was an attractive prospect for the officers, who had seen their living standards fall dramatically since the introduction the parallel currency slashed the value of their dinar salaries. But they said the commanding officer of the Montenegro-based Second Army was loyal to Milosevic and even if he was tempted to defy him, the condition of supplying goods in return would make that hard without the agreement of his bosses in Belgrade.

"I thought it was going to be just a straightforward offer to exchange dinars for marks, but that condition makes it impossible to realize," said an analyst from the Institute of Social Sciences Center for Sociological research.

"Everything is centralized here in Serbia and the army couldn't buy goods without the agreement of the bosses," said the analyst, who declined to be named.

Mladjan Dinkic, founder of Serbia's G-17 group of independent economists, said Montenegro was keen to start paying the army in marks to stop what he said was a financial war being waged by Serbia, which does not let Montenegro transfer dinars.

"The Montenegrin government is justifiably suspicious that many more dinars were brought into Montenegro than were needed to pay out the army salaries. In this way, Serbia is creating price instability to try to show the dual currency system is inefficient," he said.


Another analyst, based in Montenegro, said Milosevic might allow the officers to accept the offer so as to maintain their loyalty.

"The Second Army command is loyal to Milosevic, but one never knows with the army, who controls whom. You never know who will turn his back on whom," leading Montenegrin economist Nebojsa Medojevic said by telephone from Podgorica.

"Milosevic is aware of that and wants to improve the living standards of the army in Montenegro so that loyal officers can control dissatisfied ones," he said.

Simic was not sure whether Milosevic would give his tacit approval but agreed the army was unlikely to defy Belgrade.

"The army is an institution that is highly disciplined. I would be surprised to see any undermining or taking of a different position to the president of the state," he said.

"I think it (the proposal) is part of the positioning for a crisis which might break out in the next few months," he said.

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