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Update No: 057

The Macedonians are benefiting from the new climate in world politics since 9:11. An ugly situation was defused in early autumn as a direct result of the campaign against terrorism. Unfortunately it is by no means certain yet that the worst is over.
Unidentified members of the National Liberation Army (UCK), the former ethnic Albanian secessionist movement, whose voluntary disbandment in the autumn raised hopes of a permanent end to discord, issued a threatening statement in mid- January.
The statement came as a major surprise to everyone involved in the peace process, including NATO officials on the spot and other former members of UCK. The statement indicated that certain disbanded members "will organise and reactivate their units" in preparation for renewed clashes with Macedonian forces. The statement was not made by any leader of UCK. But there are obviously discontented elements still around among the Albanians in Macedonia, who comprise about a third of the population.
The insurgency of the rebels began in February 2001 and lasted for nine months. More than 100 people were killed, including 60 Macedonian security forces. It came to an end mainly due to the trust the Albanians came to repose in NATO, which had after all helped their kith and kin in Kosovo in 1999. The militia disbanded in September 2001 after a peace agreement granted the Albanians more rights. But clearly some feel that this has not been implemented fully enough.
In mid-January the ethnic Albanian underground group, Albanian National Army (AKSH) announced its intention to mount new offensives. AKSH representatives noted that the Macedonian security forces had been receiving reinforcements from Serbia, Russia, Ukraine and Croatia. They also accused the Slav-Macedonian fraction of the Skopje government of "legalising paramilitary units under the umbrella of the Orthodox church." This is quite likely to be true.
It was never going to be easy to bring about a permanent concord between the mainly Muslim Albanians and the Orthodox Slavs. But at least a coalition government is in place, with elements from both communities. The international community needs to remain deeply involved, as in Bosnia-Herzegovina. The former Yugoslavia is still not yet definitively pacified.
The Albanians are hoping for a flow of aid, as are the Macedonians. If the West cannot carry the burden of rebuilding a small, but vitally placed nation in the Balkans, then it has little chance of successful nation- building elsewhere.

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ENVIRONMENT

Greece, Macedonia proceed with environmental project agreement

Greece has donated €2m to Macedonia for an environmental project, according to the terms of an agreement signed recently in Athens. The money is to be used for the creation of a waste management centre in the Gevgeljia region, on the border with Greece, IntelliNews reported. The funds are extended under the bilateral Cooperation and Development Programme.

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FINANCIAL NEWS

Macedonia initiates draft budget talks, ratifies World Bank loan

Following a discussion on the bill recently, a Macedonian parliamentary commission for education and science noted that it will insist on changes to the draft budget for 2002. Despite criticising the draft, the members of the parliamentary commission for labour and social policy finally supported it, while their colleagues from the educational body are to demand various amendments.
The bill foresees that over half of the budget expenditures (60bn Macedonian dinars) in 2002 should be designated for the social sector - 26bn dinars for the Pension and Disability Insurance Fund, 13.5bn dinars for social protection and five billion dinars for the employment bureau, IntelliNews reported. The education commission further declared that the allocation for the educational sector, 7.6bn dinars, is too small, down by 2.6 per cent compared to last year.
Parliament ratified a US$15m loan agreement with the World Bank (WB) recently. The bank's board recently approved the loan, which is earmarked as emergency economic assistance to the country, IntelliNews reported.
The funds are to be extended under IDA terms: no interest rate, 20-year maturity and a 10-year grace period. The assembly's endorsement will enable the disbursement of the first tranche of the loan by the end of 2001 and help partially fill the gap in the BoP, deputy Finance Minister, Duljanov, explained.
In another development, the government has endorsed the 2002 macroeconomic policy, setting the GDP growth target at four per cent and the annual inflation rate at 2.5 per cent.
The employment rate is forecast to increase by two per cent, and the average monthly salary by one per cent.
The Cabinet also approved the objectives of monetary policy in 2002, already outlined by the central bank: maintenance of a stable and low inflation rate, stable exchange rate of the Macedonian dinar against the Euro and a 7.4 per cent rise of the dinar component of M2 money supply.

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