VZCZCXRO9864
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #1927/01 3320750
ZNR UUUUU ZZH
R 280750Z NOV 06
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 9803
INFO RUEHPS/USOFFICE PRISTINA 3595
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEHNSC/NSC WASHDC 1256
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 02 BELGRADE 001927 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: PGOV KDEM SR YI PREL
SUBJECT: "Long Live Serbia" -- DSS Plumbing the Depths of 
Serbian Populism 
 
REF: 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) Campaigning under the slogan "Long Live Serbia," 
PM Kostunica's DSS has made it abundantly clear that its 
election campaign will revolve around "patriotic" issues, 
especially Kosovo.  Its coalition with populist mayors from 
central Serbia (including a close associate of assassinated 
war criminal Arkan) signals an effort to exploit localized, 
conservative movements to increase its mandate. However, a 
number of these junior coalition partners have dubious 
pasts and dubious democratic credentials.  The more DSS 
provides an umbrella for these local chieftains, and the 
more DSS ratchets up nationalist rhetoric on Kosovo as the 
central theme of their campaign, the harder it will be for 
the democratic bloc parties to form a future government 
that will be constructive following a Kosovo final status 
settlement. 
 
Kostunica's New Coalition With Questionable Characters 
--------------------------------------------- --------- 
 
¶2. (SBU) Prime Minister Kostunica's DSS announced that it 
plans to enter into a pre-election coalition with "New 
Serbia" (NS), led by Minister of Capital Investment Velimir 
Ilic, as well as United Serbia (JS) and the Serbian 
Democratic Renewal Movement (SDPO).  The election ticket 
will be listed as "DSS-NS Vojislav Kostunica," with their 
slogan "Long Live Serbia!"  The List for Sadzak, supported 
by Suljeman Ugljanin, will run aone in the election but 
observers believe Ugljann will receive financial support 
from the DSS durng the campaign and will align with the 
DSS in te future parliament. The DSS announced that it 
will campaign on what it calls the successful record of the 
Kostunica government -including adoption of the new 
constitution, and keeping Kosovo within Serbian borders. 
The DSS coalition plans to complete its election list on 
November 24. 
 
¶3. (SBU) In courting these localized micro-parties, DSS is 
betting on its populist coalition allies to add a 
significant number of votes in central Serbia to the DSS- 
led ticket.  The DSS coalition partners include local 
leaders who control their own regional fiefdoms by 
exploiting frustration over low living standards and 
fanning the flame of nationalism.  An ancillary benefit to 
the DSS is that these depressed regions are fertile 
territory for exploiting passions over Kosovo - the main 
DSS campaign theme.  The ability of DSS to capture these 
populists has no doubt been greatly facilitated by the 
hasty departure from the political scene of Bogoljub Karic, 
whose populist PSS had been polling at some 11-12 percent - 
mostly at the expense of DSS and the Radicals.  Karic and 
his business interests were systematically decimated by the 
government, ostensibly for alleged corrupt practices. 
 
Fertile Soil for Populism 
------------------------- 
 
¶4. (U) Polls consistently show that low living standards, 
unemployment, and other economic issues are overwhelmingly 
the greatest concerns for Serbs, especially outside of 
Belgrade.  While about 30 percent have traditionally 
embraced extreme nationalism and Radicalism to vent their 
frustrations, this trend has not shown growth since the 
fall of Milosevic.  The remainder of the dispossessed 
(known locally as "transitional losers") has grown 
frustrated with the democratic parties, which many voters 
characterize as corrupt, ineffective, and inclined toward 
needless squabbling.  Additionally, many democratic leaders 
are regularly described as distant and aloof from their 
constituencies and rarely make an effort to reach out to 
the public outside the confines of Belgrade.  In 
municipalities throughout central Serbia, populist leaders 
have arisen who at least appear to listen to their 
constituents and attempt to deliver tangible, if simplistic 
and short-term, benefits. Many interlocutors in these 
cities told poloff that these local parties/leaders draw 
equally from supporters of the Radicals as well as from 
established democratic parties. 
 
Snapshot: Local Populist Leaders 
-------------------------------- 
 
¶5. (U) Dragan "Palma" Markovic, head of the JS and mayor of 
 
BELGRADE 00001927  002 OF 002 
 
 
Jagodina, is perhaps the most controversial member of this 
new coalition.  Palma was co-founder of the SSJ together 
with accused war criminal Zeljko "Arkan" Raznatovic and was 
one of the commanders of Arkan's paramilitary group, the 
Tigers.  After the wars, Palma developed a business empire 
which included a transportation company and the populist 
television station Palma Plus, which served as his own 
propaganda tool.  Palma is known for employing various 
populist measures at the local level, including providing 
free medicine to the elderly, chartering 55 buses for 
supporters to attend a music festival, and even building a 
small zoo.  Palma has also secured lucrative government 
contracts for his trucking firm and openly solicits bribes 
from local business owners.  The undisputed master of 
Jagodina, Palma can probably deliver 15,000-20,000 votes to 
the coalition.  The DSS is defending its coalition with 
Palma by arguing that the JS has no ties to the party of 
Arkan and is building strong ties at the local level. Palma 
highlights the fact that both he and Kostunica are both 
from villages in the central Serbian region of Sumadija. 
 
¶6. (U) In the rust-belt town of Kragujevac, by contrast, 
SDPO leader and Mayor Veroslav "Verko" Stefanovic is a 
pragmatic politician who stays away from ideological 
battles. He was a co-founder of the SPO with Vuk Draskovic, 
but split off last year to form the SDPO, taking with him 9 
of the original 13 SPO MP positions in the last parliament. 
Stefanovic is considered to be a populist who has secured 
support from Belgrade for the local Zastava plant, thus 
playing to his local base by making a tangible difference 
on the ground.  Stejanovic is also active in the Standing 
Conference for Towns and Municipalities. Estimates are that 
Stefanovic could deliver some 30,000 votes for DSS, though 
these are likely to be on his personal appeal, not any 
affiliation with SPO (which is widely seen as Draskovic's 
sole domain). 
 
¶7. (U) Suljeman Ugljanin, mayor of Novi Pazar and head of 
the List for Sandzak (LZS) and the SDA, recently developed 
strong ties with Kostunica to support his battle with 
regional rival Rasim Ljajic - despite Kostunica having 
previously discounted Ugljanin as a Bosniak separatist. 
Ugljanin is widely believed to utilize undemocratic methods 
to maintain control at the local level.  Kostunica's 
government undemocratically dissolved the local assembly in 
Novi Pazar, the regional capital, after they approved a 
recall motion against Ugljanin, while two LZS MPs, 
initially on the DS ticket, switched allegiance to DSS. 
 
¶8. (U) Velimir Ilic, current minister for Capital 
Investment and head of the NS, is a larger than life 
personality who provides the link between Belgrade and 
Kostunica and the mayors at the local level (Ilic is a 
former mayor of Cacak).  Allegations of corruption have 
been leveled against Ilic, and he has also been involved in 
public fisticuffs and episodes of harsh verbal abuse with 
journalists and other figures.  Ilic and the NS' role in 
the government have been critical in securing support for 
Cacak and central Serbia, which has prospered greatly - 
some would say, disproportionately - from government 
infrastructure projects. 
 
Comment 
------- 
 
¶9. (SBU) More cynical analysts believe DSS is showing its 
true colors by entering into a coalition with local 
powerbrokers in order to play on nationalistic sympathies 
over Kosovo and thereby secure a strong mandate after the 
parliamentary elections.  Many of these leaders, including 
Ilic and Palma, are nationalistic and/or corrupt, and will 
share the DSS appeal to patriotism and victimization.  The 
DS has told us that they believe Kostunica's association 
with Palma will be a net loss for the DSS, arguing that it 
will repel urban DSS supporters.  We have seen no evidence 
to suggest this is true. 
 
POLT