Next Step : Fascism Stirs Amid the Ruins of War in Serbia : A future of poverty and repression is the hopeful outlook. The darker one is of the anarchic combat depicted in the futuristic film ‘Road Warrior.’

BELGRADE, Yugoslavia — Critics of the Yugoslav war that has torn Serbia along with the other former republics warn that jobless city dwellers could be forced to burn furniture and books to heat their homes this winter.

If the war is pronounced a victory for Serbia, they say, or even if it just burrows into relative slumber during the cold-weather months, armed criminal gangs freed from the front lines will control the markets for precious commodities such as gasoline, sugar and medicines, as a reward for loyal service in the deadly construction of Greater Serbia.

Those fearful of what lies ahead--Western diplomats here as well as opposition forces and a minority of Serbian intellectuals--worry that borders could be closed to those with Yugoslav or Serbian passports, with the intent of fencing them in to suffer the role of international pariahs. The Western world has already partially isolated the Belgrade leadership it accuses of aggression, by cutting air connections, banning trade and imposing new visa restrictions on visiting Yugoslavs.

Public gatherings and night life are likely to be banned to deter social unrest, say these analysts, who see the stirrings of a fascist society amid the ruins of war. They fear critics of the regime are sure to be arrested, perhaps even shot.

Crippled industries already function only symbolically and are being run by those deemed politically reliable by virtue of their support for the party in power.

Among the horrifying vistas opening up before Yugoslavia’s ostracized Serbs, Western diplomats and Serbia’s decimated intelligentsia say an environment of poverty and repression is the best they can expect.

Most residents of what is left of Yugoslavia--Serbia and Montenegro--cling to faint hopes that they will somehow be rescued and restored to the relative affluence they enjoyed before the war started.

“This will all be over soon, and conditions will be back to normal by autumn,” insists Natasha Markovic, a young clerk at a Belgrade video-rental store, parroting the official line beamed out nightly on state-run TV. She sees the fall in her monthly income from nearly $2,000 two years ago to less than $50 this month as a temporary consequence of misguided sanctions against her country.

“I’m not interested in politics,” is the evasive reply of many Serbs when they are asked what conditions they expect to emerge from the current crisis.

But those who have broken out of the mesmerizing propaganda spell that grips this capital city envision a much more terrifying future. They warn of a society of rival armed forces waging widespread urban warfare with sophisticated weapons and medieval hate.

Belgrade-based diplomats and the thin ranks of the anti-war movement agree that Serbian President Slobodan Milosevic is on the verge of achieving his dream of a Greater Serbia.

Milosevic and his Serbian Socialist Party, however, have steadfastly denied that the Serbian republic is even at war. They have distanced themselves from the Balkan bloodshed and cast the fighting as a valiant defense by Serbs in other republics against perceived threats of genocide and Muslim fundamentalism.

European and other industrialized nations, currently outraged by the carnage in Bosnia-Herzegovina that they blame mostly on Serbs, have been weighing intervention options against the expected costs in money, time and casualties.

But none of the possible scenarios, which range from full-scale military invasion to a pullout, will alter the likelihood that the Balkan Peninsula’s 10 million Serbs face decades of privation.

“We already have here a semi-criminal, semi-mob kind of political life,” says Predrag Simic, a Serbian intellectual who heads Belgrade’s Institute of International Politics and Economics. “The way you now become a ‘good Serb’ is to ‘liberate’ Croatian and Muslim belongings.”

Milos Vasic, a respected Serbian military analyst who has steered clear of the nationalist fever, denounces Milosevic for “encouraging fascists” and warns that the near-term future can only bring worse conditions.

“If Milosevic wins any acceptance of the current state of Yugoslavia, we will have an aggressive, totalitarian regime in Serbia for the next 50 years,” says Vasic. Nevertheless, he forecasts eventual Western recognition of the new Yugoslavia as foreign governments come to the conclusion that accepting the status quo achieved by force is preferable to getting more deeply involved.

What Serbs have won with their war, observes Vasic, “is a lot of poor and devastated territory with borders too long to defend . . . a Greater Serbia in which Serbs have successfully killed off their own sources of income.” Soon, he adds, “we won’t be able to feed our own people, never mind Serbs in Croatia and in Bosnia-Herzegovina.”

Serbian forces have seized one-third of Croatia and nearly three-quarters of Bosnia-Herzegovina, but most of those spoils are the poorest and least productive regions of the occupied republics.

Moreover, artillery and mortar attacks unleashed to drive non-Serbs from the coveted cities destroyed much of the housing and industry in the conquered areas Serbs now control.

Since Milosevic rose to power in 1987 on a wave of nationalist emotion he helped provoke, Serbs have squandered most of their wealth and energy on preparing for and waging war.

Inflation exceeds 150,000% a year. With electricity prices scheduled to double next month and food costs soaring, economists predict that Serbia will overtake the record posted by the pre-Nazi Weimar Republic, in which the cost of living was estimated to have reached an annual acceleration rate of 300,000%.

Industrial production has dropped to 15% of its 1989 level, and output gets worse by the day as U.N. sanctions close markets and choke off spare parts for machinery.

Although organized sanctions-busting has so far staved off serious consequences of the U.N. embargo, economists say that even large-scale smuggling can never be depended on to replace normal supplies.

“Ultimately, Serbia is going to be the new Albania,” predicts a Western diplomat living in Belgrade, referring to Europe’s poorest country. “They don’t seem to see that yet, or maybe they don’t care.”

In Yugoslavia’s confused post-Communist political culture, the economic hardships are feeding political extremism.

Milosevic, a lifelong Communist, is described by those who know him as more of a power-hungry opportunist than a true believer in any cause.

“Keep in mind that his aim is Greater Serbia, not because he believes in it--he doesn’t believe in anything,” charges Dragan Veselinov, head of the National Farmers Party in the Serbian republic of Vojvodina. “He uses the idea of Greater Serbia to provoke war and keep himself in power. He’s a bloody pragmatist and a man without morality.”

Milosevic rarely speaks in public, but through the controlled Belgrade media he has sought to depict Serbs as the victims of an international conspiracy and succeeded in generating patriotic defiance.

The current leadership’s so-far-successful struggle to stay in office against a growing but badly divided opposition has reportedly been aided by private armies and criminal gangs paid off through a shadowy network of monopoly franchises for essential goods.

Each of the Belgrade-based paramilitary forces taking territory in the other former republics is aligned with a political party currently loyal to the Milosevic regime. But as economic collapse makes the pot grow smaller and competition for the wealth heats up among the heavily armed bands, opposition figures warn that the armies could easily begin fighting among themselves. In the case of a public uprising, the forces could be pitted against the people.

Noting that nearly every household in Serbia is armed, Veselinov and Vasic both fear the kind of anarchic urban combat depicted in the futuristic film “Road Warrior.”

“The party in power in this country is not ready to withdraw its primitive elite forces,” says Veselinov. “The rulers will stay in power through criminal ways, by enriching those closest to the leadership. No more than 100 people will suck the blood of the other 8 million.”

Serbs number more than 10 million in the six former Yugoslav republics, with about 80% of them in the republic of Serbia.

To break a cycle of violence and economic chaos, the people brainwashed by propaganda and whipped into a frenzy of killing will have to undergo a kind of “de-Nazification” process, says Simic, the international affairs institute director.

But with most of Serbia and the Serb-held areas of Croatia and Bosnia-Herzegovina still spellbound by potent nationalism, there is not yet any indication that the majority is ready to begin extricating itself from disaster.

So-called ethnic cleansing of territory conquered by Serbs has driven more than 2 million people from their homes, creating Europe’s worst refugee crisis in almost 50 years. Many ordinary Serbs privately denounce the forced expulsions of non-Serbs as disturbingly reminiscent of the Nazi Holocaust, but they remain silent for fear of being accused of disloyalty to the all-powerful regime.

“This country might become a fascist one in the near future,” warns Veselinov. “The international community must prevent this, because if Serbia transforms itself into a fascist state, the whole Balkan area and Europe as well will be threatened with general war.”