BELGRADE -- Trying to get a seat on one of the few international flights touching down daily on Belgrade airport's pot-holed runway is an increasingly difficult task.


Western business executives are rushing to rump Yugoslavia's capital to secure a place in what many expect will eventually become one of the most promising races for recovery in southeastern Europe.


Japan's Toyota Motor Corp. has plans to build a car plant in the region. France's Alcatel is trying to take part in the planned modernization of the country's ailing telephone system, and Germany's Siemens stands ready to modernize the frail power supply.


"Potentially, we are talking about many millions of dollars in new contracts," says Rudolf Bertsch, Siemens's executive director for Central and Eastern Europe.


New business won't come overnight. Rump Yugoslavia, comprising Serbia and Montenegro, remains an international pariah state with little or no access to cross-border money flow, its economy hanging by a thread.


"It all depends on the financial conditions," says Bertsch. "The question is how quickly they will get access to international financing facilities."


Most of Yugoslavia's estimated $1 billion in foreign assets remains frozen abroad, and a legal wrangle over who is going to pay an estimated $4 billion in foreign debt has yet to be resolved.


Yugoslavia once was the most Western-oriented and prosperous of Eastern Europe's command economies. Until the economic decline that affected all the communist countries began to accelerate in the 1980s, living standards vastly outpaced those of its neighbors.


Four years of war in the Balkans have changed all that. Rump Yugoslavia's industry is reeling from the loss of its old markets and the effects of 3 1/2 years of a crippling UN trade embargo, suspended only last month.


One of history's worst bouts of hyperinflation, with prices surging 113 million percent per month in late 1993, destroyed economic structures and pushed much of the population below the poverty line. Corruption and black-market profiteering is rife.


Belgrade's roads are bumpy, its houses run-down and using the phone system, even to make just a local call, can be a trying experience. "The need for infrastructure projects is immense," says Siemens's Bertsch.


Sensing a change in the prevailing wind, former communist managers, presiding over enterprises that often have come to resemble little more than scrapyards, admit that only foreign capital can help them get back on their feet.


"We are in negotiations with customers and partners abroad to help us finance getting started," says Dusko Matkovic, general manager of steelmaker Sartid. "We will need some help."


Experts believe the country will need at least $2 billion annually in foreign help over a period of five years to get its economy back up to speed. Even then, few expect production to reach its pre-war level before well into the next decade.


Yet unless foreign investors are convinced that President Slobodan Milosevic's hardline socialist government is willing to embark on the long road to a free market and rid the system of its communist-style corruption, few are likely to start reaching for their checkbooks.


"All depends on foreign capital," says Miroljub Labus, economics professor at Belgrade University and vice president of the opposition Democratic Party. "But there won't be any foreign investment or aid without massive privatizations."


Hurdles to foreign investment are high and plentiful. Just last year Serbia's parliament passed a law that forbids foreigners from acquiring controlling equity stakes unless they have been granted special approval by the government.


Such legislation mirrors the fears of many managers of state-owned companies, who may well find themselves out of a profitable job if their enterprises come under foreign control.


"We wouldn't mind if foreign partners can make decisions, such as what our cars should look like, but they shouldn't be able to decide whether to shut down a factory," says Srboljub Vasovic, president of the Zastava group, maker of Yugo cars and the country's biggest industrial conglomerate. "We'd like to keep the majority wherever we can."


Such sentiments aren't likely to please potential foreign investors. Unless there is a sea-change, the prospects for an inflow of new cash are bleak.


"No one is prepared to hand out presents. Everyone wants to make a profit," concedes Vasovic.


With access to the world's capital markets blocked until the issue of ex-Yugoslavia's foreign debt is settled, commercial credit is the only hope for getting the much-needed cash.


"It will be very difficult to get funds because of the country risk," says Milos Milosavljevcic, president of Yugobanka, the country's biggest bank. "The only way will be through commercial credits."


Milosevic's willingness to allow far-reaching privatization and restructuring of state-owned enterprises, accounting for some 80 percent of the country's industrial capacity, could be the litmus test for the economy's future.


The ambitious ruler's survival may well depend on speedy economic revival and a swift improvement in living standards.