More than three years after Serbia's reformists overthrew the regime of Slobodan Milosevic, Belgrade appears to be at a crossroads again. The strong showing of the Radical Party in December's parliamentary elections, combined with a fractured reformist vote and increased apathy among citizens, threatens to doom Serbia to an unstable political future and jeopardize its prospects for Euro-Atlantic integration. The political situation in Serbia may also complicate efforts by the United States and the international community promote overall political and economic stability throughout the region.

On March 17, 2004, Daniel Serwer, director of the Balkans Initiative and Peace and Stability Operations, testified before the U.S. House of Representatives Committee on International Relations, Subcommittee on Europe on "The Current Situation in Serbia and Montenegro."

The following is a summary of his statement made before the subcommittee. The views expressed below are those of the author, not the U.S. Institute of Peace, which does not take positions on policy issues.

Mr. Chairman, thank you for once again giving me the opportunity to testify before you at an important moment. The moment is important both for Serbia, which is setting a new course, and for the United States, which needs to re-examine its policies towards a country crucial to the future of the Balkans. I am here to offer you my personal views—the U.S. Institute of Peace does not take positions on policy issues—on how Serbia got to its current unhappy situation and what the United States should do about it.

Before beginning, I would like to note with great regret two important events in Serbia's modern history. The more recent is the fire that has caused enormous damage to Serbia's treasured Hilandar monastery in Greece. While thankful no lives were lost, I join with other Americans in expressing sympathy for the damage to this holy site. The second is the assassination one year ago of Serbian Prime Minister Zoran Djindjic, an event that set Serbia back years in its efforts to modernize and democratize.

The promise of October 2000 is unfulfilled

We can all recall with pleasure, Mr. Chairman, October 5, 2000, the day on which Serbian citizens flooded Belgrade's streets to insist on recognition of the presidential election results. Slobodan Milosevic, master architect of the Balkan wars of the 1990s, was swept from power. His successor as president of the Yugoslav Federation was Vojislav Kostunica, a legal scholar esteemed not only for resistance to Milosevic but also for personal integrity and probity. A few months later, elections in Serbia brought to power as prime minister Zoran Djindjic, a pragmatic and forward-looking reformist.

These two figures are emblematic of two poles in Serbian politics. Kostunica aims for continuity and upholds traditional values, including those embodied in the Serbian Orthodox Church and the Serbian state. Djindjic was more secular, aiming to modernize Serbia and bring it into Europe and trans-Atlantic institutions. Together, they managed to convince the citizens of Serbia that it was time to jettison Milosevic and end a decade of war and impoverishment.

They did not stay together long. The two men had different ideas about the pace and depth of reform. With the important exception of the police, Djindjic pressed ahead, supported on the economic front by the G17 Plus. Supported by the military, Kostunica held back, giving priority to national issues—the relationship of Serbia with Montenegro and with UN-controlled Kosovo. Djindjic sent Milosevic to The Hague in June 2001 over Kostunica's objections and began efforts to vet the judiciary, but by the time of the prime minister's assassination reform had ground to a halt.

There was a second wind of reform following the assassination. Serbia rounded up a large number of underworld figures who allegedly collaborated with remnants of Milosevic's police and other security forces in killing Djindjic. A vigorous new defense minister, Boris Tadic (now leader of Djindjic's Democratic Party), undertook the first serious military and defense ministry reforms. But rather than joining forces with his erstwhile reformist allies, Kostunica chose to precipitate new elections. The second wind of reform petered out and Serbia went to the polls.

Serbia has taken an unhappy turn

There are many ways of interpreting the December 2003 election results, but this much is clear: pro-democratic forces, including Kostunica's governing coalition and Djindjic's party, declined, as did Milosevic's Socialists. The Radical Party, which represents the worst excesses of Serbian nationalism, gained dramatically. Fed up with half-hearted and halting reform that failed to produce results in the three years since the overthrow of Milosevic and generated its own share of corruption, Serbs turned back towards an aggressive, anti-Europe, and anti-reform political creed. They may even choose, later this year, a president of Serbia who leads an unreformed Radical Party still headed by a Hague indictee awaiting trial.

If Kostunica's moderately nationalist party had joined forces with the more extreme nationalist Radical and Socialist parties, they could easily have formed a governing coalition with a coherent ideological basis: the refusal of Serbs to live as a minority in someone else's country and their insistence on changing borders to consolidate Serb populations and the territory on which they live. European and American pressure has prevented this kind of "Greater Serbia" idea from emerging. But we should be under no illusions about the jury-rigged alternative. Kostunica now leads a minority government supported by Milosevic's Socialists. The only proven reformist face of this government is G17 Plus, which will no doubt plow ahead on economic reform but will have little weight on political and diplomatic issues.

The course Kostunica has set is clear: he continues to focus on national issues like Montenegro and Kosovo. He proposes dividing Kosovo along ethnic lines. Though he promises a crackdown on corruption, he has offered little in the way of reform of the security services, the police, and the judiciary. He seems inclined to reverse Djindjic's lustration of the judiciary, and he has done more to purge Djindjic's supporters from government than Milosevic's. Even if he wanted, Kostunica cannot move on military, police, or security service reform while supported by the Socialists, who will protect the remnants of the Milosevic regime still ensconced there. Likewise, he has pledged not to transfer war criminals indicted by the Hague Tribunal for command responsibility.

Serbia's current course in my view does not serve its interests, which require accountability for past crimes, establishment of the rule of law, and eventual entry into the EU. A Serbia that refuses cooperation with The Hague is a Serbia that cannot enter Partnership for Peace and cannot expect a stabilization and association agreement with the EU. A Serbia that refuses to acknowledge UN authority over Serb-populated areas of Kosovo (as required by Security Council Resolution 1244), and tries to establish facts on the ground that will lead to partition, will have little sympathy when it complains about others proposing to alter borders. A Serbia that restrains Kosovo Serbs from participating in the process by which Kosovo seeks to meet the standards the international community has set is a Serbia that does not want to solve problems but instead creates them. A Serbia that promises to try war criminals but then concentrates its efforts on lower ranking perpetrators will not convince anyone of its sincerity.

To summarize, Serbia has taken an unhappy turn. There is no immediate security threat to its neighbors, but the United States needs to recognize that Serbian democracy is in trouble, and that spells trouble for the whole region.

The United States needs to respond

Since the fall of Milosevic, the United States has taken a soft approach to Serbia. Except for the spring of 2001, when the United States played hardball and insisted on the transfer of Milosevic to The Hague, Washington has provided Belgrade with benefits without asking much in return, in order to avoid undermining pro-democracy reformers. This has meant three successive certifications so that Serbia could continue to receive bilateral assistance. It has also meant re-establishment of normal bilateral trade relations and re-entry into both regional and global international organizations. While Serbs complain not enough has been done for them since Milosevic's fall, $1.3 billion from the IMF and hundreds of millions more in World Bank loans and private investment funds, in addition to the Paris Club write-off of two thirds of Yugoslavia's official debt, say differently.

This soft policy has failed. Annual certifications to allow U.S. assistance have encouraged Belgrade to delay, obfuscate, and hope eventually to escape its obligations. Serbia now finds itself with perhaps a dozen indicted war criminals on its territory, an extensive parallel structure not only of social but also security services in Kosovo, and a lingering relationship with Bosnian extremists that protects important Hague indictees and delays drawdown of U.S. troops. Instead of a Serbia governed by the rule of law and interested in protecting its vital interests and finding its rightful place in Europe and in trans-Atlantic institutions, we find a Serbia with doubts about Europe, territorial nostalgia, and romantic notions of historical and ethnic rights. Serbia still regards itself as a victim, not a perpetrator, and therefore does little to make amends for Milosevic's misdeeds.

The time has come for a more effective U.S. policy. We should judge Serbia not by its intentions, or its promises, or the declarations of its leaders, but by its actions. Prime Minister Kostunica has impeccable nationalist credentials—he can use them to send indicted war criminals to The Hague, as Prime Minister Sanader is beginning to do in Croatia. The administration has unfortunately signaled, through war crimes chief Pierre-Richard Prosper, that it will be sufficient if Serbia sends only Ratko Mladic to The Hague. This is a serious error: if they can send him, they can send them all. Dragging this process out one by one, as we have done for three years, is a mistake.

But so too is trying to get it done on our own. U.S. bilateral assistance to Serbia of $100 million per year is too small to give us much leverage. Withholding it will enable those who resist The Hague to blame Serbia's troubles on the United States and drive a wedge between the United States and the EU. We need EU support. It is the EU that is forcing Zagreb's hand. It can also force Belgrade's hand. Instead, the EU is planning to provide 200 million euros to Serbia on March 25, just days before the United States needs to make its own decision. International assistance is not a right but a privilege. When both the United States and EU agree to withhold assistance and block IMF loans, all the war criminals in Serbia will go to The Hague. U.S. diplomacy needs to get busy making that day happen.

That will also be the day that Kostunica's government loses support from Milosevic's Socialists—a day some would say is to be feared because new elections would strengthen further the Radical Party. I have little concern on this front. Kostunica always has the option of bringing the Democratic Party into his government. He has so far preferred Milosevic's support to that of a bona fide reformer like Boris Tadic. I am also confident that if the Radicals were to come to power, both the United States and the EU would deal decisively with them—we would then have no reason at all to hold back.

Help the people, not the government

Mr. Chairman, we should not be surprised that the broad coalition of democratic forces that overthrew Milosevic has broken up. It was from the first fragile and fractious, torn between traditionalist and modernizing forces. Nor should we be too disappointed that in these recent elections Serbia has turned backwards—this has happened in other transitions, since reform is unable to produce tangible benefits in only a few years. We need to be patient, but we should not lower our expectations or move the goal posts.

We need also to recognize that there is more to Serbia than political leaders and political parties. The courageous activists, the energetic vote-counters, the tenacious human rights advocates, the dignified diplomats who resisted Milosevic are still there, spread throughout civil society and hoping for a better future. We abandoned this group after October 2000, imagining that their role had been played out and we could rely on the government to institute reform. This was a mistake. Civil society is not just a force with which to overthrow dictators, but also an essential watchdog over democracy. The decision of Otpor and G17 Plus to become political parties has left a giant hole in the center of Serbian civil society. It is time we shifted our assistance definitively to filling this hole and reweaving the fabric of reform-minded non-governmental organizations.

Refocusing our efforts on civil society is likely to produce improved results, though it may take time. The Serbian government may not want to transfer indictees to The Hague, but there are human rights organizations and independent media outlets prepared to campaign in favor of doing so. Belgrade resists the return of Serbs to areas of Kosovo where they are not the majority, but there are displaced peoples' associations who would explore the opportunity. The official Belgrade/Pristina dialogue may be unproductive, but there are student groups and youth organizations willing to engage constructively with their Kosovar counterparts. The justice system may still be mired in corruption, but there are professional associations prepared to do their part in cleaning up the remnants of the Milosevic regime. We need to turn back to the people and aspirations that made the October 2000 changes possible and pursue the opportunity to build the civic institutions that will ensure Serbia's capacity to deal with its own problems over the long term.

Policy Options

Let me summarize what I would suggest as U.S. policy towards Serbia for the future:

1. Redouble assistance to reformist forces in Serbian civil society, shifting all U.S. assistance funds to democratization efforts, which are exempt from cut-off.
2. Expect the Serbian government's full support for peace in Bosnia and Kosovo, including Serb participation in Kosovo's effort to meet international standards.
3. Insist on the transfer of all Hague indictees.
4. Refuse to certify Serbia if the Congress' conditions are not met.
5. Work with the EU to cut off its assistance, as well as IMF and World Bank aid.

This more vigorous policy would begin to reverse the drift toward ineffectiveness of the last few years and help Serbia stay on course towards Europe, no matter what government is in power.

The views expressed here are not necessarily those of USIP, which does not advocate specific policy positions.