Two things impressed me about him: his readiness to listen and his readiness to learn.
Mihailo Crnobrnja, economic advisor to Milosevic, 1974–89.1
While Milosevic paper-pushed at the Belgrade city hall, his kum Ivan Stambolic was running Tehnogas. Tehnogas produced gases for industry, such as oxygen and argon. Stambolic soon brought Milosevic over to Tehnogas, and by the early 1970s Milosevic held a senior management post. Although working for Tehnogas was not as prestigious as working for the gigantic steel works and car factories in which Communist countries specialised, for Milosevic this was still a promotion. Tehnogas was a Yugoslav-wide company, with branches in Croatia, Bosnia and Macedonia as well as Serbia. It was well regarded internationally, a flagship Yugoslav enterprise.
It was understood that Milosevic was Stambolic’s designated successor, and when Ivan left Tehnogas, Milosevic took over as president. Milosevic knew little about economics and even less about producing industrial gases. But he was a fast learner, according to Mihailo Crnobrnja, then an economic consultant at Tehnogas. A US educated professor of economics, Crnobrnja worked as a consultant at Tehnogas. He was one of Milosevic’s key economic advisers from 1974 until 1989, when he was appointed Yugoslav ambassador to the European Union. Milosevic was a quick and adept student. ‘His learning curve was in most cases very rapid. There were very few things that he needed to have repeated. If he was not dynamic, if he did not listen, I would not have bothered to work with him for so long.’
Milosevic’s approach to managing Tehnogas was unusual for those times. Although it was a liberal dictatorship, Yugoslavia still functioned on Communist principles of command and control, imposed from the top down. Yugoslav managers often tended to bark out their instructions and regard questions or alternatives as insubordination. Milosevic had adopted this approach at university, where he had a finely developed sense of his own status, according to Nebojsa Popov. On a visit to a motorway construction site, Milosevic refused to don the customary workers’ clothes or even loosen his tie, as it would diminish his prestige. And he did not like his new nickname, ‘Boban’. In Serbia, like all Slavic countries, names are usually reduced to a diminutive, especially by friends and family. When Popov and his colleagues addressed Milosevic as ‘Boban’ he refused to answer, as he thought it lacked gravitas. The more serious sounding ‘Slobo’ was more acceptable, he decided.
But there was none of this pomposity at Tehnogas, at least when dealing with senior managers. Milosevic wanted to do well, and was certainly intelligent enough to realise that he, and Tehnogas, would flourish if he drew on the expertise of those who had greater knowledge and experience. Age and family responsibilities also played a role. The callow university youth had matured. Milosevic’s approach was thoughtful and considered when chairing board meetings, said Crnobrnja. ‘Throughout my working relationship with him, he generally preferred to listen and conclude at the end. He did not intervene often, and only on very few occasions did he set the agenda in advance by using the technique of “this is what I want to hear from you”.’
Yet others, less useful to the chairman of the board, saw a different persona. The veteran Belgrade journalist Milos Vasic, then a young reporter for the news weekly Nin, was despatched to interview two Tehnogas engineers who had developed an innovative recycling process. Milosevic insisted on sitting in on the interview. He was cold and unwelcoming. ‘What I remember most of all was his very limp handshake, like giving you a cold fish. He would not let them talk to the press alone, but sat there probably not understanding a word of it. His behaviour was very arrogant to those men,’ Vasic remembered. ‘They were technically his subordinates, but in other aspects were much better men than him. Milosevic made a very distinct negative first impression.’2
Milosevic became a skilled industrialist, but he found his true metier as a capitalist when he left Tehnogas to become president of Udruzena Beogradska Banka (UBB) in 1978. A conglomerate of nineteen banks, UBB was one of the most important financial institutions in Yugoslavia, with extensive links abroad, including an office in New York. Milosevic asked Mihailo Crnobrnja to come with him, and set up a centre for economic research. Milosevic thrived at the bank. He quickly grasped the essential principles of high finance and capitalism and, with Crnobrnja’s assistance, soon mastered his brief. He looked set for a successful career in finance, at an exciting time when Yugoslavia was opening its commercial and trade links with the West.
There was then no talk at home of a career in politics for her husband, claimed Mira. Milosevic was happy at UBB. Their paths were set. ‘Fundamentally, he has the personality of a bank manager. He never thought much about being involved in politics. The structure of his personality can be described as a manager of a bank, although a modern and up-to-date bank, not an old-fashioned one, like a village bank. I saw myself then as a professor at the university, and a writer in the field of sociology. I saw him as a man in economics and finance, and that is the truth, if you want to believe it, believe it. I really don’t know how these things happened to us.’3
At that time in Yugoslavia bankers, like all managers, were divided into two castes: the professionals, and the ‘party’ people. The professionals were trained experts who made their career in banking, who studied and understood the world of finance. The party bankers were loyal Communists, whose appointments were approved by the party. The right party connections such as Milosevic had, together with the support of Ivan Stambolic, could ensure a high position in a bank, a foreign trade company, a state utility like Tehnogas, all without any previous experience whatsoever. Milosevic, though, was well regarded by his peers in other banks. ‘Communists always presented themselves as universal kinds of experts, but Milosevic was not like other bankers that appeared from political circles,’ said Aca Singer, who was also making a name for himself as a banker, at the rival Ljubljanska Banka. ‘I was interested in what kind of a banker he was, so I asked his associates, because subordinates always give the best estimate of their superiors. They told me Milosevic was very organised and he rose very quickly as a banker. He really wanted to learn the world of banking, and how it worked. But it would have been better for him, and better for the people here, if he had stayed as a banker.’4
Milosevic’s move to UBB was well timed. In 1979 the World Bank and International Monetary Fund held its annual meeting in Belgrade. Many westerners were keen to meet one of the new generation of Yugoslav bankers, who would drag the country’s financial system into the twentieth century. At a meeting hosted by the then US ambassador to Belgrade, Lawrence Eagleburger, Milosevic met a small group of half a dozen top figures, including David Rockefeller of Chase Manhattan Bank. He easily held his own in the world of high-level international finance, said Mihailo Crnobrnja. ‘There was a discussion for twenty, or twenty-five minutes. Milosevic spoke in very good English. He was not dogmatic, and I would say that he made a strong impression on David Rockefeller with what he had to say.’
UBB had opened an office in Manhattan, and Milosevic began to travel frequently to New York. There he grew to understand the West, how it works, and the value placed on good faith, and honesty perhaps better than any other Balkan politician. He learnt to schmooze and glad-hand, skills that served him well when western leaders courted his support. Milosevic admired the American ‘can-do’ ethos, in stark contrast to the torpor that often characterised Balkan communism. Wall Street, Rockefellers, Eagleburgers, all this was heady stuff for the boy from Pozarevac. There was also here a hint of the inferiority complex that even now bedevils the region’s politicians. Leaders of small eastern European countries want nothing more than to be accepted as equals by the superpowers. In later years Milosevic always relished getting a telephone call from President Clinton, or a visit from the pugnacious American negotiator Richard Holbrooke, whose ‘cut the crap’ straightforward approach Milosevic found greatly appealing. In the banking world, he first found the respect he wanted.
At this time Mihailo Crnobrnja was UBB’s chief economist. He became Milosevic’s guide to the United States. ‘He was fascinated by the efficiency, by the technical sophistication that he met every step of the way.’ The long hours at university spent dissecting the power structures of the Communist party gave Milosevic an analytical understanding of organisations and hierarchy that was also useful for capitalism. Blessed with a good memory, Milosevic always prepared thoroughly for meetings, and even spoke without notes. ‘When we met other bankers, Milosevic was sufficiently eloquent and knowledgeable to have them listen, not just out of courtesy, but with attention. I remember him as a man who did the job of a high-level banker well.’
Milosevic wanted to see more of the United States. He and Crnobrnja hired a car for the weekend. They drove to Boston and also visited Harvard, which Milosevic compared favourably with his own alma mater, Belgrade University. He joked that ‘Now when people ask me about my education, I can legitimately say I spent some time at Harvard!’
Despite her own leftist leanings, Mira was immensely proud of her husband’s achievements ‘He was a brilliant banker. Although I don’t know much about banking, and I know nothing about finance, I saw that he looked like one of the future bankers of the world. He very quickly understood the ideas and skills of banking. He thought that to work in banking and the economic sector was to be at the top of one’s career. He communicated with the most important bankers in the world.’
While it seems disingenuous to claim, as Mira does, that Milosevic never thought about a career in politics, there is an interesting ambiguity about Milosevic’s capitalist years. Many accounts of Milosevic’s career have portrayed him as single-mindedly dedicated to the pursuit of political power throughout his life. Certainly at school and during his university years he was a dogged apparatchik. But Milosevic’s workplaces after university are not classic stages on the path to power in a Communist state. In a one-party system the only way up the political ladder is through the party. This was the path taken by Milosevic’s contemporary, the Slovenian leader Milan Kucan. By 1978, when Milosevic took over UBB, Kucan was already president of the Slovene parliament. Kucan was steadily progressing on the long march through the institutions.
Milosevic was not. Tehnogas was a prestigious company but it brought no real political base with it. And to move from Tehnogas to a bank – in what was still a Communist country – was a curious choice. ‘Where in socialism or communism, does a banker become head of state?’ said Mihail Crnobrnja. ‘It is unheard of. If you want to become head of the party, or head of state, you become a small political apparatchik, then a bigger and bigger one until you make it to the politburo. Politically speaking, Milosevic sat in relative oblivion for seventeen years, from 1967 to 1984.’
Of course Milosevic was ambitious, and wanted to build his political contacts. But Milosevic’s life and career – at least at this time – like that of most people, was defined by luck, choice and opportunity as much as ruthless determination. Ivan Stambolic’s influence certainly helped as well. It is notable that Stambolic also left Tehnogas for a position at a government commercial office. A new class was evolving in Yugoslavia, of technocrats, of adept managers with some understanding of how business and economics really worked, skills that would also be vital for a future generation of political leaders.
By this time, the Milosevic family had long left the concrete wastelands of New Belgrade. The family had moved into a comfortable three-room flat on December 14 Street, in Belgrade’s city centre. But while there was more space, it was still comparatively modest, for a bank president with a wife and two young children. Marija was at school, and she now had a brother, Marko, born in 1974. Apart from Milosevic’s frequent travel abroad – and his return was eagerly awaited by his children, not least for the presents he brought – the Milosevic family life was similar to that of their friends, said Mira. ‘We were surrounded by people of the same opinion. We did not differ much from the general atmosphere we all lived in.’
Belgrade then was a buzzing, cosmopolitan city. Its grand avenues offered a fine selection of contemporary theatre, and both Yugoslav and foreign cinema. Unlike other eastern European capitals, there was also a good selection of restaurants offering plentiful local produce. It was bright and livelier than dismal Bucharest or comparatively sleepy Budapest. Romanians and Hungarians came to Yugoslavia, amazed at the range and choice of goods on offer and the variety of foodstuffs. Milosevic himself was quite a gourmet, according to Dusan Mitevic. He loved eating seafood, for which Yugoslavia is famous, washed down with dry white wine, and also liked roast lamb and baby piglet on a spit. Like Tito, Milosevic enjoyed a glass of whisky. Tito’s favourite brand was Chivas Regal, but Milosevic was less choosy. In many ways he was a typical Serb, who relished a bountiful spread of food and drink, and good company with whom he could enjoy it.’ Mira was a trickier case, as Milosevic’s friends soon discovered. ‘They have very different tastes and it is difficult to please them when they are together,’ said Mitevic. ‘It is difficult to give her something to eat, because she is very fussy.’5
Like Gordon Brown, Milosevic spent some of his spare time reading economics books, to further master his financial brief. His trips to the United States had also given him a taste for American writers such as Ernest Hemingway. Mira recalled: ‘He prefers American literature, mostly of the mid- and second half of the twentieth century.’ Mira herself loves Russian literature the most, preferably heavily laden with a good dose of Slavic angst. Dostoevsky is her favourite author. In Crime and Punishment and The Brothers Karamazov can be seen an echo of the extremes of tragedy, truth and moral fulfilment that resonate through her schoolgirl favourite of Antigone. Mira takes a romantic view of the qualities of the Russian classics. ‘They have a noblesse, a nobility of the soul, which only Slavs can understand. It’s partly irrational, but we are also prone to forgive, without any reason, for we understand everything. An irrational emotional life, and an imbalance between reason and emotions, is a Slavic trait.’ She also made the implausible claim, considering the course of recent events in Yugoslavia, that ‘Slavic people who live in these areas have shown the least disrespect for other nations and other ethnic communities that they lived with.’
By building his international contacts, Milosevic was also following a wider trend among the Yugoslavian leadership. The 1970s were the golden years of Yugoslavia’s diplomatic prestige. Belgrade was a centre of the non-aligned movement, composed of countries from the developing world which had emerged from foreign colonial rule but did not want to join the Soviet bloc. According to Yugoslav history books the movement was born in 1956 at a meeting between Tito, Prime Minister of Egypt, Gamal Abdel Nasser, and Jawaharlal Nehru, Prime Minister of India, on the island of Brioni, where Mira Markovic took her annual holidays with her father Momir. (Others date its inception to a summit in Bandung, Indonesia, the year before.) The movement was part of Tito’s diplomatic balancing act, a third way between the Soviet bloc and the West. Tito watched both East and West warily, flitting back and forth like a village girl at a folk dance considering her suitors.
Non-aligned summits brought to Belgrade heads of state and diplomats from across Asia, Africa and the Middle East. Surrounded by gun-toting female bodyguards in tight-fitting combat uniforms, Colonel Gaddafi rode in on a white horse. In the late 1970s the Soviets unsuccessfully tried to hijack the non-aligned movement, through their client state Cuba. But Tito easily outmanoeuvred the clumsy Russian leaders, said Zivorad Kovacevic, who, as mayor of Belgrade between 1974 and 1982, was frequently present at Tito’s meetings with foreign leaders. Tito’s considerable international prestige allowed him to exhibit a low-key and understated style in his dealings with other foreign leaders, such as Algerian president Houari Boumedienne.
Boumedienne had arrived in Belgrade for a meeting of foreign ministers on the eve of the non-aligned summit in Havana in 1979 but was unwell. Tito did not trouble his guest with excessive protocol and unnecessary pleasantries. ‘Boumedienne was very pale, and you could see he was in pain and suffering. There was silence for five, then ten minutes. Tito simply said to Boumedienne that the summit meeting would start the next day. He asked Boumedienne not to let the Cubans make trouble. Boumedienne told him not to worry. That was it,’ recalled Kovacevic.6 ‘Boumedienne was a good French student. He knew all the procedures and the rules. Each time the Cuban foreign minister tried to take the floor, Boumedienne said the item was not on the agenda, told them not to make speeches, asked for a motion. It was a total fiasco for the Cubans, and everyone understood what was happening. For me this was symptomatic of Tito’s approach. He did not bother his guest, he gave him a simple message, and it was sufficient. Tito was able to be very jovial and pleasant.’
Tito was Yugoslavia’s greatest strength. He had built the state, knocking nationalist heads together, breaking with Moscow, turning to the West and opening Yugoslavia’s borders. He had implemented the rotating key system, economic self-management and non-alignment, the three foundations of national, economic and foreign policy. His central role, however, was also Yugoslavia’s greatest weakness. While Tito took an active role in politics, his prestige and authority was enough to keep his fractious satrapies together. But in the late seventies his involvement in affairs of government and state reduced, as age and infirmity took a growing toll on his health and energy. Seeking comfort not confrontation, he preferred entertaining foreign dignitaries in his string of villas, hunting lodges and mansions to Belgrade’s political infighting. There the young lions circled, as the leader of the pride aged, and slowly weakened. Still he was unchallenged, and his word was law.
Sometimes there was no need for Tito to even speak to make his wishes known, as former Belgrade mayor, Zivorad Kovacevic, discovered when Tito asked to see him. So much milk was being sold to Greece at a profit, that there was not enough for the capital’s schoolchildren. Embroiled in a political battle over the issue, Kovasevic publicly threatened to resign. The president asked to see him at eleven o’clock the next day. But when he arrived he found that Tito’s office was empty. Eventually, Tito’s chief of cabinet appeared and said that Tito had gone to his villa at Brioni. This was puzzling, so the official asked why he had been called in if Tito was not there. Tito’s chief of cabinet said he had left something for his visitor.
It was a signed picture of the president. Kovacevic was baffled and said that he had not asked for a signed picture. Then he saw that it was personally dedicated, by name, with Tito’s best wishes. Kovacevic returned to his office and his political enemies asked how his meeting with the president had gone. When they saw the signed picture, it was understood by all that no more milk would be diverted for sale to Greece. Supplies soon resumed to Belgrade’s schoolchildren.
This episode encapsulates the Tito era as he reached the end of his life. Such was the power of his name that a mere photograph, with an absolutely unremarkable dedication, was enough to rescue Belgrade’s mayor, and ensure supplies of milk for the city’s schoolchildren. There was no need for telephone calls, or meetings. It was subtle, Ottoman in its simplicity, the work of a sultan rather than a Communist dictator. But the sultan was in Brioni, not Belgrade, running his empire by remote control. There was no son, no successor nominated to take over after his death. Tito’s closest allies could not provide a new leader for Yugoslavia. Leaders such as Petar Stambolic or Draza Markovic were approaching the end of their political careers. Milosevic, like many, sensed the need for a generational change.
In May 1980, Tito died. During his last few months in hospital in Ljubljana he was kept alive by medical technology and received few visitors other than official delegations. But he was mourned in pomp and circumstance. His remains were sent across the country on a funeral train, draped in red, before being buried in Belgrade. From Macedonia to Slovenia, his citizens wept genuine tears: for themselves, for their country, and perhaps for the future they saw coming. Like all good Yugoslavs, Milosevic left his portrait of Josip Broz in place on the office wall after his death. For the moment there was no suitable replacement. Such a picture had saved Belgrade’s mayor, but it would not be enough to save Yugoslavia.
Meanwhile, Milosevic needed to learn more about the technicalities of controlling money flow. Crnobrnja had taught Milosevic about economics, but for the mechanics of loan financing and syndicated credits he needed another mentor, Borka Vucic. Now in her seventies, Vucic is a former teenage partisan turned capitalist. She boasts of knowing hundreds of bankers throughout the world and keeps a silver plate once given to her by Barclays Bank. ‘Borka Vucic was a great teacher. She was the best banker in Yugoslavia, and she helped Milosevic because she was already working at Beogradska Banka when Milosevic arrived. Under her Milosevic learnt a lot, how to think in a western way about the economy,’ said Dusan Mitevic.
Vucic was a moderniser who wanted to remodel Yugoslavia’s creaking state-owned and subsidised banks into financially viable institutions. But such ambitions were hard to implement when there were no clear principles defining the Yugoslav economy, and it did not observe basic economic laws of supply and demand. The doctrine of workers’ self-management eventually degenerated into total confusion over who owned or managed what. So complicated did this system become that the Law of Associated Labour, which governed the system in the 1970s, had 671 articles.
The combination of state funds and no clear chain of responsibility for their disbursement encouraged local financial kingpins to build their own mini-economic empires. The policy of economic decentralisation encouraged the growth of patronage and nepotism. Party bosses would sanction the building of a factory for political reasons, to bring jobs and boost a local economy, even if it might be totally unviable economically. The system soon became mired in endemic corruption, and the situation was not helped by Yugoslavia’s six republic governments each arguing for a larger slice of the federal economic cake. The capitalist reality was much clearer: western loans and financial aid kept Yugoslavs in fridges.
Milosevic was known as a loyal official of the Communist system that had created this economic mess. Unlike Crnobrnja, who had worked with Milosevic at Tehnogas, Vucic and other managers at Beogradska Banka were initially frightened of Milosevic. They believed he would immediately sack them, according to William Montgomery, a US ambassador to Belgrade who was the American embassy’s banking specialist in the late 1970s. He knew both Borka Vucic and Milosevic well. ‘Borka Vucic was our primary contact. I liked her, she and the rest of the bank’s management were trying to make the bank more modern. We had good relations with her.’7
The fears of Vucic and her colleagues were groundless. Not only Yugoslav bankers such as Aca Singer, but also westerners observed how deftly Milosevic played the system to boost both Beogradska Banka and his own standing. Bolstered by his support in the Communist Party, he boldly dragged Beobank into the harsh world of genuine capitalist economic competition. The old comrades muttered, but with Ivan Stambolic behind him, Milosevic seemed impregnable. ‘He took a very active interest. He established relations that enabled Beogradska Banka to make great progress in terms of being a more western bank, and to compete with other banks. His position in the Communist Party gave him freedom of movement to allow Beobank to be more western orientated than other banks,’ said Montgomery.
Borka Vucic and Milosevic soon became close. Vucic’s son had died at the age of twenty-six, and she poured her maternal instincts into looking after Milosevic. ‘There was a strong emotional bond. Milosevic became her substitute son, and he accepted her, although the tie was more on her side than his. He loved her dearly, although not as a mother, though by age she could easily have been his mother,’ said Crnobrnja. Milosevic preferred strong-minded women, although Mira would never have countenanced too strong an emotional attachment with another woman. Milosevic, like many Balkan men, knew when it was easiest to submit to female authority.
Together with Mihailo Crnobrnja and Borka Vucic, Milosevic travelled in 1981 to Washington, D.C. for an IMF meeting. The two men were chatting in Milosevic’s room when Borka Vucic walked in and noticed that Milosevic’s trousers were crumpled. Vucic immediately offered to press them. ‘Don’t be silly, there is room service here, call them up and they will iron them,’ he replied. ‘No, no, they don’t know how to iron trousers,’ she proclaimed. Crnobrnja, who watched the exchange with amusement, recalled: ‘She practically forced him to say, OK, OK. With this mother-hen behaviour she wanted to take care of him, from ironing his trousers to who knows what else.’
Still, for many it all looked too good to be true. Was Milosevic really a Balkan version of Armand Hammer, the American millionaire financier who had helped bail out his friend Lenin when the Soviet economy appeared about to crash? What was he really up to? From the outside it was hard to disentangle the conflicting strands. Serbia’s political heritage of Balkan double-dealing crossed with Communist half-truths makes its politics even more opaque than they seem. ‘Milosevic always had his own agenda. He had a kind of reserve about him, you never knew quite what was on his mind,’ said Montgomery.