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PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHBW #0363/01 1171458
ZNR UUUUU ZZH
P 271458Z APR 09 ZDK
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC PRIORITY 1216
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEHNS/NSC WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 BELGRADE 000363 
 
DEPT FOR EUR/SCE (P. PETERSON) 
 
SENSITIVE 
SIPDIS 
 
E.O.12958: N/A 
TAGS: PGOV PREL PINR SR
SUBJECT: SERBIA:  HIGH-FLYING BELGRADE MAYOR DJILAS BUILDS BRIDGES 
AND FIGHTS CORRUPTION 
 
REF:  BELGRADE 357 
 
BELGRADE 00000363  001.2 OF 002 
 
 
Summary 
------- 
 
¶1.  (SBU) In an April 21 meeting, Belgrade Mayor Dragan Djilas - a 
strong candidate to be a future Prime Minister - shared with the 
Ambassador his achievements in his first seven months in office in 
both the infrastructure and social spheres, the political challenges 
he faces due to his efforts to curb corruption, his desire to bring 
back direct election of mayors, and his frustration over the Usce 
Shopping Center and Port of Belgrade scandals and the controversy 
over Roma settlements in Belgrade.  He also explained why he will 
have to postpone a planned 'sister city' trip to Chicago.  End 
Summary. 
 
Achievements 
------------ 
 
¶2.  (SBU) Mayor Djilas rattled off an impressive list of projects 
underway or soon to begin, including a $200 million Danube River 
bridge to be financed by the Chinese, an agreement to build 12 new 
kindergartens and three new schools, plans for new health clinics, 
the purchase of 30 new trams and 70 new trolleys, and planning for a 
new light-rail system.  (Djilas told us that he faced opposition 
from Infrastructure Minister Milutin Mrkonjic of the Socialist 
Party, who favored a prohibitively expensive metro.  He added that 
his recent trip to Moscow had been related to Eurosong rather than a 
possible metro deal, as the press had reported.)  He was working 
hard to preserve these projects, as well as pensions, in the face of 
huge budget cuts; the city budget was just cut another $103 million; 
combined with recent exchange rate losses, it represented a 1/3 cut. 
 He was trying to spread out costs over two years to make the key 
projects feasible, but could not do that indefinitely.  One notable 
success had been raising heating prices by 36% to approach market 
prices, a long-overdue step that had increased budget revenue. 
 
The Political Cost of Curbing Graft 
----------------------------------- 
 
¶3.  (SBU) Djilas told the Ambassador that he had created many 
enemies in Belgrade, including within his own Democratic Party (DS), 
by cutting back on "profitable business opportunities" associated 
with public contracting; he mentioned one case where he refused to 
authorize an asphalt contract that was twice as high as it should 
have been.  He had also cut the salaries of 30 top managers at 
Belgrade Put (roads) from $1700-2300/month down to $1300/month; he 
claimed most of them were party appointees with no expertise. 
Djilas commented that people very high in the DS were among those 
"just waiting for him to make a mistake."  As a result of this 
pressure, Djilas was worried about the May 31 elections for the 
Belgrade DS leadership.  He was also concerned about how well 
Aleksandar Vucic and the Progressive Party (SNS) were doing in the 
local polls; they could eat away significantly at DS's numbers in 
the June 15 by-elections in the Belgrade municipalities of Vozdovac 
and Zemun (a traditional Radical stronghold). 
 
¶4.  (SBU) Despite these concerns, Djilas said a recent poll in 
Belgrade showed his popularity rating at +36% -- higher even than 
President Tadic -- because people were seeing results.  Saying he 
was satisfied with his current position, Djilas told us he wanted to 
remain Belgrade's mayor for at least a full term in order to finish 
the important projects he had started.  "I have no need to become 
Prime Minister," he said.  (Comment:  That is, not yet.  Djilas is 
widely seen as a possible successor to the current - rather 
colorless - PM, Mirko Cvetkovic.  End Comment.) 
 
Direct Election of Mayors Needed 
-------------------------------- 
 
¶5.  (SBU) Belgrade's city government is far from ideal, however. 
Djilas complained that the system of indirect local elections 
introduced in 2008, in which the majority coalition in the city 
assembly chooses the mayor, had left him with a narrow margin in the 
city assembly and six coalition partners who had constant demands. 
(Deputy Mayor Milan Krkobabic of the Pensioners' Party was 
particularly difficult, he said.)  Praising Aleksandar Vucic (SNS) 
as someone easy to work with, Djilas said he would prefer to be in 
coalition with the SPS and either the Progressives or Ceda 
Jovanovic's Liberal Democratic Party (LDP). 
 
¶6.  (SBU) Longer term, Djilas plans to push for the local election 
law to be changed to permit the direct election of mayors, in order 
to create more functional city governments.  He hoped for new 
municipal elections in 2010, which would create a healthy 
alternation of national and local elections every two years. 
 
BELGRADE 00000363  002.2 OF 002 
 
 
 
Scandal Headaches 
----------------- 
 
¶7.  (SBU) The recent controversy over the Usce Shopping Center and 
Port of Belgrade projects spurred by B-92's "Insider" program had 
become a huge headache, Djilas said.  He was frustrated that he had 
to "cover" for the people in office five years ago who signed the 
privatization deal for the land where the Usce Shopping Center had 
been built.  The problem with the Port of Belgrade traced back even 
further: Djilas said the problems there began 35 years ago when the 
land did not revert to the city of Belgrade as planned; now the 
situation was too complicated to resolve quickly.  As a result of 
the controversy, Djilas said he had completely stopped signing off 
on new land privatizations until a new law being drafted by 
Environment and Urban Planning Minister Oliver Dulic was passed to 
clarify the rules. 
 
¶8.  (SBU) When asked about the recent controversy over the 
demolition of an illegal Roma settlement in New Belgrade (reftel), 
Djilas expressed frustration that the NGO community had criticized 
his actions; he described efforts to achieve lasting solutions to 
the Roma community's problems rather than leaving them in 
rat-infested cardboard shacks.  He detailed a plan to place 20 new 
prefab container homes (with heat, plumbing, and electricity) in 
each of Belgrade's municipalities, enroll the resettled children 
into school, and provide access to health care.  He also said that 
Roma would be eligible to apply for 65 new social apartments that 
the city had just completed, commenting that if the NGOs truly 
wanted to help they should sit down with Roma families and help them 
fill out the applications. 
 
Chicago Sister City Visit Postponed 
----------------------------------- 
 
¶9.  (SBU) As a result of the difficult political situation in 
Belgrade, Djilas had decided to postpone a planned 'sister city' 
visit to Chicago; his deputy mayor would go instead.  He hoped to be 
able to reschedule for any time after June.  Part of the reason he 
could not go was the fact that he had few staff that he could count 
on; of his ten top people, five were from coalition partners and 
three were chosen by others in DS - only two are people he knew and 
trusted.  "If I leave for seven days, who knows what I'll come back 
to," he said. 
 
Biographic Information 
---------------------- 
 
¶10.  (SBU) Dragan Djilas (no relation to Tito's advisor of the same 
name) was born in 1967 in Belgrade and received a BS in mechanical 
engineering from Belgrade University.  He was one of the founders of 
B92 Radio, one of the first media outlets to oppose Milosevic's 
regime, and led student demonstrations against the regime in 
1991-1992.  During the late 1990s, Djilas developed a successful 
career in marketing as co-owner of one of the major marketing 
agencies "Multicom;" he now owns stakes in several major marketing 
firms.  His business acumen is criticized by populist foes who label 
him a "tycoon," and praised by allies as proof that he is a 
real-world problem-solver.  Djilas joined the Democratic Party in 
2004, winning election to the Executive Board soon thereafter.  In 
2006, he was elected DS City Board President.  Djilas managed the 
National Investment Plan, Serbia's main development program, from 
2007-2008.  He was elected Mayor of Belgrade during the Belgrade 
City Assembly session on August 19, 2008.  Djilas is also the 
founder and vice-president of the humanitarian agency "Nasa Srbija" 
("Our Serbia"), which provides assistance to war orphans.  Divorced 
from -- but still politically allied with -- Milica Delevic, the 
head of the government's European Integration Office, Djilas has two 
daughters and speaks fluent English. 
 
Comment 
------- 
 
¶11.  (SBU) When Djilas took office last fall, it was not clear 
whether would be able to make the transition from the private sector 
to local government, or would become frustrated with the bureaucracy 
and return to his (quite lucrative) business interests.  It now 
appears clear that Djilas is in it for the duration; even though he 
has not yet gotten the city government running the way he'd like it 
to, he has demonstrated tangible results and enjoys popular support. 
 If he can successfully navigate the minefield of public corruption, 
his tenure could benefit the citizens of Belgrade and open the door 
to a run at the Prime Minister slot.  End Comment. 
 
MUNTER