The party's over for Belgrade: International sanctions and war are having a devastating effect on the economy of Serbia, writes Marcus Tanner in Belgrade

WHEN Dobrila Milosavljevic, a Belgrade pensioner, entertained her son and grandson to lunch, she once served a traditional Serbian slap-up meal of roast meats followed by rich sweet puddings. 'Now if my son wants to come he has to bring the ingredients himself,' she said.

It has a taken a long time for the war to reach Belgrade. While Serbian forces were bombarding Vukovar in Croatia two years ago, Belgrade cafes less than 70 miles away were bursting with youths chattering about water-skiing holidays in Montenegro and the delicious pastries sold at the newly-opened French cafe, Delifrance.

The Serbian capital had the smell of a boom town. Thousands of fighters from the Bosnian battlefronts had returned in new cars looted from factories near Sarajevo, wearing gold bracelets and Swiss watches taken from dead Muslims.

Today the money is spent and the sound of laughter, clinking glasses and patriotic songs has died away. Belgraders have woken up to the ruinous cost of war and sanctions.

In Knez Mihajlov, the imposing turn-of-the-century pedestrian street built as the showcase for the Serbian capital, elegant shoppers have given way to seedy refugees from Bosnia and Croatia and ne'er-do-wells, who busk, hawk American cigarettes and exchange hard currency for the now virtually worthless Yugoslav Dinar.

Many shops are boarded up and in derelict side streets pensioners can be seen rummaging in rubbish bins for crusts and cigarette ends. At dawn long lines of shoppers snake down the pavements. They are seeking the growing list of items now sold only for coupons, such as cooking oil and milk.

All these goods are for sale in privately owned stores and peasant markets but Belgraders, earning average salaries worth less than 30 Deutschmarks (pounds 12) a month, can rarely afford them. A survey showed that most basic foodstuffs fetched higher prices in Belgrade than in London. Worst off are the refugees: 'They are getting only a third of the food they need,' said Miladin Mirilov, a local expert on nutrition. 'We are in danger of becoming a sick nation.'

While the worsening economic crisis has strangled Belgrade's once frenetic restaurant scene, a rocketing crime rate scares those who still have bulging wallets off the streets after dark. At the luxurious Hyatt Hotel lonesome waiters pad across the pile carpet in a vast deserted foyer. 'Everyone is trying to emigrate - I am looking for a post on a Norwegian cruise liner,' said Alexandar Jovic, a waiter.

'I am sick of seeing long faces and my salary has dropped from 1,000 Deutschmarks a month to just 50. If it was not for tips I would not survive.'

Belgrade was once the flagship for McDonald's in Eastern Europe, with four outlets - all jammed from morning til midnight.

Today notices reading 'Closed due to UN sanctions' hang outside two of the branches while at the those still working only ice-cream and hamburgers are available.

Even the French fries are off the menu. Why? 'Sanctions,' snapped the waitress - a curious answer, as Serbia grows plenty of potatoes.

At the Delifrance, the staff stood guard over a single apricot tart that lay unsold in the display section. The price, DM3, was beyond the reach of most shoppers.

Newspapers that gave long lists of fashionable eateries now devote columns to publicising dreary war recipes for people cooking at home, with cute names, such as 'embargo torte' and 'sanctions pie'; they contain no eggs, nuts or chocolate.

At what is left of Belgrade's smart dinner-party set, the topic is not who is emigrating, but who is not.

Inevitably the crisis has created some growth industries: a host of shady companies have sprung up, offering to fix up Serbs with a new life in South Africa. There has also been an explosion in adverts purporting to be from housewives and students offering 'discreet relaxation' to gentlemen for an average of DM50 an hour.