THEATRE / Some profit, little honour: How do you run a national theatre in a nation that's falling apart? Paul Allen reports

In early middle age Ljubisa Ristic might reasonably have expected to be enjoying the creative and material rewards of being a Major European Director, a natural successor to Brook, Bergman or Strehler. Instead he's running a National Theatre - though of which nation it's not quite clear - which depends on one actor's ability to operate the currency black market to keep even its stars half-way solvent.

The reason Ristic still makes his life in Subotica - a city of 150,000 people in Vojvodina, part of the Serbian federation - is that he is an anachronism on at least three counts. He is a Utopian Communist; a Sixties hippie who says he doesn't understand what it means to say someone is or is not talented so long as they 'live right'; and he still believes in the idea of Yugoslavia, if not as a state then at least as a cultural space.

That means art that uses all the individual Balkan voices to answer collective Balkan needs. In this remnant of the National Theatre of Yugoslavia are Serbs, Croats, Hungarians, Macedonians, Slovenes and Bosnians, as well as an Englishwoman, a Mexican and a Georgian. In a land where language is an explosive issue 'having all these bloody foreigners with all their bloody languages' is a kind of defusing mechanism.

This shows in the eclectic repertoire, which currently ranges from Sophocles' Antigone to a sub- Ayckbourn sexual comedy of the Siberian suburbs by Alexander Vampilov. One of the more remarkable productions is an adaptation of James Joyce's Portrait of the Artist as a Young Man.

It includes a reflective U2 song, a harangue by Bernadette Devlin (as was), seminary scenes in which student priests flap like crows at shameless women, and detailed pictures of shabby Dublin life a century ago - so far, so Irish. At the end, Joyce removes his clothes and faces upstage to a huge grey wooden wall: it falls to the ground with a tremendous crash revealing - when it is performed in the open air - a great vista of pine trees, to which Joyce lopes in his bid for artistic freedom.

Like all theatrical images, it can sound crude in the telling. The point is that Joyce's need to leave Ireland and the imperatives of family, church and state is as vivid in the Balkans as it is academic for us in Britain. This is not Ristic's own production but a first effort by a student, Sasa Gabic, to whom Ristic has typically given his head. Freedom as an artist is what Gabic most wants too.

Ristic will let anyone join the company if the company accepts them. Students, barely more than children, arrive with horror stories from Sarajevo. The young British director Alison Woods turned up two years ago looking for theatre that seemed less thin than the mainstream here. And there are veterans from the era when all actors in Communist countries had jobs for life.

When Ristic insists that they 'live right, then they will do right work' he is talking about their living and working relationships with each other, a readiness to commit and support. It pays off in a visual, director-based theatre. But you lose the ability of British actors to flesh out personal psychology, and irony is not a strong suit.

Ristic's own Richard III, for instance, is shorn of all its monologues. Richard loses his wit, his charm - he doesn't seduce Lady Anne over her husband's corpse, he rapes her. The play is reduced to little more than an hour and is performed outside as a great procession in a park by a lake (the audience tagging along). Instead of a hump, Richard has an immense black 'cloak of state'. Surrounded by drums and torches (one of which set fire to the cloak when it was being filmed for television: time was short, so they beat out the flames and kept filming), he walks on short and uneven stilts. Then this dark angel, as Ristic calls him, meets Richmond, who wears white wings. The result is less like Shakespeare than an expressionist production of a Greek tragedy, and it is powerful.

Ristic's fierce humanism has only a certain political astuteness to defend it apart from the work. And this, although it attracts large audiences, especially of the very young, no longer commands the worldwide attention that his Missa did a decade ago. This tackled the taboo subject of the time, Titoist Communists putting Stalinist Communists in concentration camps in the great split of 1948. It sold out for two years in Yugoslavia and financed a trip to the West which made more money still. Demanding theatre is commercial theatre in this country.

The UN embargo keeps Disney cartoons off children's TV and Ristic's work from being seen in London, Berlin or America. It is also destroying the Balkan economies. For their wages to be worth anything, theatre workers change them into Deutschmarks when they get them, buying back dinars at inflating rates as the month goes on. This side of things is looked after by a comparatively minor actor who took to the black market with assurance, except for the time he supplied Ristic himself with counterfeit dollars. This led to an embarrassing scene on a visit to Holland. Somehow I don't see Richard Eyre getting into that kind of scrape.

'Kaleidoscope: This Theatre Is My Country Now', Radio 4, Saturday 20 February, 7.20pm

(Photographs omitted)