BELGRADE, Yugoslavia -- It may seem like a scene out of "Alice in Wonderland," but wealthy U.S. businessman Milan Panic -- a one-time defector from Yugoslavia who has now been appointed its prime minister -- firmly believes he can end the civil war and bring peace and democracy to his old country.
Last week, on his first day in office, Mr. Panic, 62, set out to assert himself. When British Foreign Secretary Douglas Hurd put him on notice that he would meet only with Serbian President Slobodan Milosevic, during a visit to Belgrade, Mr. Panic told Mr. Hurd bluntly that he would stop him from coming.
"Milosevic is finished with foreign affairs," Mr. Panic said in an interview. "This country is run by Milan Panic. If that means confrontation with England, so be it. They've talked to Milosevic and it's only brought more bloodshed. I am offering peace. Why don't you give me a chance to succeed? Hurd can meet with Milosevic, of course, but he must also meet with me."
Mr. Hurd backed down. Mr. Panic's point had been made: This newest and most improbable player in the Yugoslav arena intends to be taken seriously.
It is not difficult to see why so few believe that the wealthy magnate (1991 salary of $6.5 million) can be a serious player. Secretary of State James A. Baker III told him privately that he was going to be "chewed alive" in the Machiavellian world of Balkan politics. This is also the prevailing opinion among diplomats here.
Mr. Panic has not helped himself with his pronouncements, which sound like naive American talk. He likes to hand visitors a tiny booklet (in English) on respecting the U.S. Bill of Rights.
This and his talk of a multiethnic, multireligious society, democracy, respect for law and order, and free speech strike a somewhat surreal note in a country tearing itself apart in an orgy of nationalist fanaticism.
But the naive exterior hides a shrewd operator who has created a pharmaceuticals empire by being, as one aide put it, "tough, smart as a whip and with a memory for the finest detail, right down to a gnat's eyelash."
Insiders say that he views his job in Yugoslavia as the "ultimate corporate takeover" and that his initial preoccupations are not with any program but with grabbing the levers of power.
On his first day in office, Mr. Panic (pronounced Pawn-nish) named himself defense minister and set up an office in the army general staff headquarters, where he plans to operate three days a week. He told the generals that all orders would now come from him.
He also wants to have a firm grip on the ministries of interior and foreign affairs. He announced that he was stopping all aid to the Serbian paramilitary groups in Bosnia-Herzegovina.
Mr. Panic intimates that he expects confrontation with Mr. Milosevic, although he has for now confined himself to saying, "God help him if he gets in my way." He intends to treat the Serbian strongman, he added, as a U.S. president would treat a state governor.
The interview was conducted in the air-conditioned apartment he rents in a glass-and-concrete complex recently built to house foreign businesses and to symbolize Belgrade's increasing modernity. He has furnished it with Louis XVI furniture, hung his own paintings and laid out coffee-table books about the Serbs and Dubrovnik (now a part of independent Croatia) as well as copies of Fortune magazine.
The Serbian president may have misjudged Mr. Panic. He needs a figure like Mr. Panic to help buy time and defuse foreign criticism -- as well as in trying to have painful U.N. trade sanctions lifted. The Serbian leader, who has outwitted all opponents to date, met Mr. Panic several times when Mr. Panic, as chairman of ICN Pharmaceuticals, bought the ailing Yugoslav state pharmaceuticals company Galenika in 1990. Mr. Panic paid little money, got a five-year tax holiday and has turned Galenika into a profit-spinner.
Mr. Panic says that without Mr. Milosevic, he would not have been able to acquire Galenika. But that does not mean he will not take on Mr. Milosevic.
It is clear that Mr. Milosevic engineered Mr. Panic into the job, although Mr. Panic insists there was no formal approach from Mr. Milosevic. Mr. Milosevic first eased in the new president of the new rump Yugoslavia. Dobrica Cosic, 71, a novelist, was appointed because of his popularity with many sections of society, including many opposition intellectuals.
That enabled Mr. Milosevic to defuse some internal criticism. It was Mr. Cosic, a former Milosevic mentor, who asked Mr. Panic to take the job of prime minister.
Critics charge that Mr. Panic's business background is shady and point out that he has been involved in several lawsuits, usually settled out of court. In one case, Mr. Panic had to pay a hefty fine for false advertising of an AIDS drug.