Panic woos workers with call for change

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MILAN PANIC, the moderate challenger in Serbia's elections, toured grimy factories yesterday in a bold attempt to wean the country's industrial heartland from its allegiance to the nationalist President, Slobodan Milosevic.

Clambering on to an oil can to address thousands of workers in Nis, southern Serbia, the diminutive millionaire whose avowed aim is to turn Serbia into California, said: 'It is time for a change.'

'I have come to see your conditions and to find out what are your salaries,' he said. 'We don't get any salaries,' the workers roared back, laughing. Outside the plant in the pouring rain, brawny workers clustered round Mr Panic's limousine and pawed it admiringly. 'He doesn't need to steal our money,' said one worker. 'He's got enough of his own.'

If Mr Milosevic's only serious opponent for the post of Serbian president is to stand any chance of winning the 20 December ballot, he will have to erode his rival's power-base in cities like Nis. It voted by almost 4-1 in favour of Mr Milosevic in previous elections. Even now, residents are likely to elect the ruling Socialists over the divided opposition.

Tens of thousands of residents swarmed into the main square of Nis to hear Mr Panic declaiming from a hotel balcony about the need for peace, prosperity and German-style wage packets. It suggested that many people in Nis and other working-class cities are tiring of Mr Milosevic's depressing message of war, nationalism and endless belt-tightening.

'I only came because I was curious,' was the explanation of more than half of those asked why they were there. Far from the reach of Belgrade's independent television and radio stations, most people in Nis remain ignorant about opposition leaders and programmes.

But growing poverty, caused by Western sanctions, has turned many workers against Mr Milosevic. The two biggest factories in Nis once employed 50,000 workers - almost half the adult male population. Now most plants stand idle. The workers are forced to take semi-permanent holidays, on salaries worth only pounds 20 a month. Crippled by the hostile state media, Serbia's ramshackle opposition, even with Mr Panic to pep it up, has only slender hopes of unseating Serbia's leader.

The election is seen at home and abroad as the last chance for Serbia to pull back from war, isolation and deepening poverty. A Milosevic triumph on 20 December may well be followed by fresh sanctions, possibly including sealing the border, cutting off telecommunications and the expulsion of Yugoslavia from the United Nations. It would strengthen the hand of those countries demanding military intervention against Serbs in Bosnia.

In spite of a rapid fall in support in big cities, many Serbs in villages respond to Mr Milosevic's message that war and poverty are a necessary price to pay for uniting Serbs in one state. And he has delivered military victories. A third of Croatia and more than two- thirds of Bosnia are under Serbian control and awaiting absorption into a 'union of Serbian states'. The West has blustered about borders being unchangeable, but Mr Milosevic was not fazed. Many Serbs respect him for that. On the campaign trail this week, Mr Milosevic said: 'Serbia will never suffer cold, go hungry, or die of fear. Let those who threaten us today remember that.'

If Mr Panic forces Mr Milosevic into a second round, many Serbs fear a bloodbath. Mr Milosevic and his Socialists are unlikely to cede office to an opposition coalition which they say takes orders from the CIA and the Vatican. The police force, totally loyal to Mr Milosevic, and believed to number 48,000, is ever-present on the streets of Belgrade, heightening the atmosphere of menace.

A close run in the poll may force the army into deciding the outcome. Their commander is the Yugoslav President, Dobrica Cosic. But a large segment of the army is known to back Mr Milosevic, and may be willing to use any means to keep him in power.

SARAJEVO - Bosnia's Muslim forces claimed a major victory against Serbs by capturing a strategically vital hill north of Sarajevo after four days of fierce fighting, Reuter reports.

Muslim fighters said they had secured Zuc hill overlooking a road between the Serb strongholds of Ilidza and Vogosca. But a Serbian army spokesman denied the claim, saying the Muslims had not reached the peak.