It has not turned out that way. If Milosevic lost the war in Kosovo, he’s clearly winning the battle for survival in the Balkans. Not only did he manage to pull his army out of Kosovo largely intact, he supplied his people with electricity through the winter. In fact, Milosevic has gone on a rebuilding spree. He boasts that his government has rebuilt 38 road and railway bridges (out of 64 damaged or destroyed during the bombing), 470 housing units, eight schools, five hospitals and two animal farms. The state-run news agency Tanjug reports that 140,000 workers employed in 200 companies worked on the reconstruction, and the regime says rebuilding is underway at 76 more sites. The government-owned Zastava factory that makes Yugo cars and weapons, almost destroyed during the NATO bombing, recently announced that it produced 3,242 cars and 180 trucks in the first quarter of this year. Advertisements for the new Yugos appear daily, emphasizing Milosevic’s “victory” more than the company’s famously rickety autos.

Some of those reconstruction figures are suspect. But Milosevic’s efforts in Serbia may well be outstripping what the United Nations is achieving in Kosovo. It took the United Nations till March to get Kosovo’s postal system restarted, and parts of Pristina still suffer electricity and water shortages nearly a year after the war ended.

In surveys, Milosevic’s approval rating, while lower than ever–17.2 percent in a poll last month–is still higher than all opposition leaders’ combined. Meanwhile, the fragmented Kosovo Liberation Army isn’t polling much higher among Kosovars.

How has Milosevic reasserted power and rebuilt–despite his nearly total isolation? Mainly by coercion and imposing “reconstruction taxes.” He has also called in chits from rich industrialists close to the regime.The dictator, who recently indicated he doesn’t intend to give up power, may also have injected some of his own money from offshore accounts. The Serbian state media, meanwhile, regularly reports on the achievements of “our builders.”

Many Serbs, of course, find the propaganda laughable. “People still live very bad lives. Salaries are very small and pensions are late,” says Zarko Korac, leader of the pro-Western Social Democratic Union Party. Still, he concedes, “There is always a tendency to underestimate Milosevic.” Just about everyone–including NATO–always has.