Friday, October 22, 1999 Published at 17:06 GMT 18:06 UK
Losing Kosovo but keeping power: Sloba and Mira
A friend says: 'You have to understand the Mafia'
Phil Rees reports for the BBC's Correspondent programme on the key reason why President Milosevic and his influential wife Mira Markovic remain in power despite losing Kosovo.
"The West does not understand Milosevic. His behaviour is anti-logical. He does not conform to the norms that western journalists and politicians apply."
I was drinking coffee with Nenad Djordjevic, once a close friend of Mira Markovic, wife of Yugoslavia's president, Slobodan Milosevic: "Milosevic thrives on isolation. The more the West applies sanctions, the stronger his position becomes."
It was an autumn morning in Budvar, an elegant seaside town in Montenegro.
Djordjevic pleaded innocence regarding his own case. He then went on to spend two hours describing different scams and moneymaking schemes employed by Milosevic's ministers and supporters. On my notepad, he piled zeros onto figures for funds illegally pocketed by prominent Serbian officials.
"The only way to understand Milosevic and Mira" he said, "is to understand the Mafia".
Never a nationalist
In the West, Milosevic is considered a nationalist. In fact, Milosevic has never been concerned with Serb nationalism. He exploited the plight of the Serb minority in Kosovo to gain power but ever since has used Kosovo as a vote bank to deliver seats for his party in the Serbian Parliament.
One of the key reasons why Milosevic did not accept a compromise over Kosovo was the consequence that would have for his power base in Belgrade.
"Milosevic is not a nationalist. He has given away Serbian lands for years," says Alexsandar Tijanic, a burly man with a square jaw and short hair, cropped in military-style.
At one time Milosevic's Minister for Information, he wrote an open letter last year calling for Milosevic to resign. The text chronicled the damage Milosevic had done to Serbia during his rule. It also said that corruption had entered the heart of Government.
The Serbian economy was cut off from the outside world after the United Nations imposed sanctions in 1992, during the war in Bosnia. Since then, Milosevic and Mira have exploited the economic isolation to create their alternative world.
Tijanic described how the couple had instigated "a social revolution" in Serbia that made Milosevic into a Godfather.
"They chose about 10,000 people who were loyal to the regime. These people were allowed in a very short time to accumulate great wealth. An extremely rich new economic class emerged, made up of people worth tens of millions of pounds".
The money came from smuggling opportunities and business monopolies granted by Sloba and Mira. The couple treated state industry and government concessions as a source of largesse for their followers. The distinction between the legal and the illegal blurred.
Nebojsa Covic was the former Mayor of Belgrade and one of the few men to have broken with Milosevic on a matter of principle. "The central aim of Milosevic's policies is to sully everything that surrounds him. He buys, places you in a role, and once he has done that it is very difficult to go back and free yourself from those claws" said Covic.
Most of the wealthy in Serbia have made money illegally and Sloba and Mira use this knowledge to deter those who might consider disloyalty. The couple have compiled files on both friends and foe - files that contain evidence that could be used in a court of law.
Dusan Mitevic was a friend of Sloba and Mira for three decades. "They use everything" he told me, "whatever contributes to them achieving their political interests. Blackmail, bribery, patronage. Everything is used, everything is allowed in the game."
Nenad Djordjevic - who I later found out owns the hotel where I was sipping coffee - was a secret policeman in the old Communist regime.
He reminded me that Milosevic retains absolute control of today's secret police. "While Serbia remains isolated," he said, "Sloba and Mira can do what they want and will remain in power for years".