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macedonia

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  MACEDONIA

REPUBLICAN REFERENCE

Area (sq.km)
24,900

Population
2,046,209

Capital
Skopje

Currency
Dinar

President
Boris Trajkovski

Private sector
% of GDP

45%

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Background:
International recognition of The Former Yugoslav Republic of Macedonia's (FYROM) independence from Yugoslavia in 1991 was delayed by Greece's objection to the new state's use of what it considered a Hellenic name and symbols. Greece finally lifted its trade blockade in 1995, and the two countries agreed to normalize relations, despite continued disagreement over FYROM's use of "Macedonia." FYROM's large Albanian minority and the de facto independence of neighbouring Kosovo continue to be sources of ethnic tension.

Update No: 060 (18/04/02)

Back from the brink
The Macedonians are in a new situation. They have pulled back from the brink of full-scale civil war, now much under the influence of Western advice. NATO Secretary General Robertson played an important role here, as did the Americans.
Another Bosnia or Kosovo was not wanted. There is a need for constant dialogue to prevent an outbreak of violence. Various ethnic Albanian forces have not totally given up the goal of fighting for independence in the northern areas they control.

Western involvement: US or Europe?
The Macedonians have greatly benefited from the anti-terrorist campaign since 9:11. There is still a serious security problem in the republic. The top ranking NATO force- commanders have committed themselves to keeping their troops, led by Germany in the troubled Balkan republic after the 'Amber Fox' mission ends in March. Amber Fox provides security for EU monitors supervising the return of refugees to towns and villages after last year's fighting.
This will not necessarily mean an end to an EU role. Javier Solana, the EU's foreign policy chief, and Spain, holders of the rotating EU presidency, want to take over a commanding position in military operations in Macedonia as part of the European Security and Defence Policy (ESDP).
The US, dominant in NATO, is averse to the ESDP of the EU, which, it fears, portends a lessening of its hegemony over transatlantic military matters. It is almost certainly wrong, given its stupendous lead in technology and financial clout. But a showdown between the US and the EU on the issue is imminent, being fought by proxy (as is the US's wont these days with all its wars) between those responsible for NATO forces and for potential ESDP ones on the ground in tiny Macedonia.

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FOREIGN LOANS & AID

Donors pledge US$515m aid for Macedonia

International donors approved a US$515m aid package for Macedonia, more than double the amount expected, to help it recover from last year's fighting between government forces and ethnic Albanian rebels, Reuters has reported. 
The European Commission and the World Bank organised the one-day pledging conference to reward authorities in the tiny ex-Yugoslav republic and ethnic Albanian leaders for respecting a peace deal sealed last August to end seven months of violence. 
"This meeting has demonstrated strong and continuing support for Macedonia and gives the country and its people a chance to move forward," Reinhard Priebe, a senior official of the EU's executive Commission, told reporters. 
Monies pledged include US$274m for macroeconomic assistance, support of reconstruction and implementing last August's framework agreement. Donors promised a further US$241m for "general economic development purposes in 2002," the Commission and World Bank said in a joint statement. 
Macedonian Prime Minister Ljubco Georgievski, regarded as one of the hardliners in last year's conflict, welcomed the pledges, which in total would mean every inhabitant of the small land-locked state receiving more than US$250 each. 
"I am convinced that by virtue of this donors' meeting we will leave behind us political and economic insecurity and turn a new page of economic prosperity and accelerated economic development in our country and the region as a whole," he said. 
The Commission alone contributed 104 million euros and the 15 member states of the European Union a further 103 million euros in total. The World Bank provided US$50 million of aid. 
Some 38 countries and 19 organisations attended the meeting. 

U.S. praises Macedonian amnesty, promises cash

The United States has promised Macedonia significant aid after the former Yugoslav republic approved an amnesty for ethnic Albanians who fought government forces in a six-month conflict last year Reuters has reported. 
The vote satisfied a main plank of a Western-backed peace accord agreed at the town of Ohrid and opened the door to a healthy U.S. pledge at an international donors conference in Brussels. 
State Department spokesman, Richard Boucherm said he commended Macedonia for the move, adding, "It's an important milestone in the fulfilment of the Ohrid agreements and a key ingredient for peace and reconciliation of Macedonia." 
He joined the European Union and NATO in hailing the vote that followed months of opposition from nationalists who, like many Macedonians, resent pardoning people they regard as terrorists. "Together with our ongoing efforts to restore regular multiethnic police presence throughout the former conflict areas, the amnesty law reflects the positive progress being made towards full implementation of the framework agreement," Boucher said, referring to the peace deal.
The ethnic Albanian rebels say they fought only to gain better rights for Macedonia's sizable minority. 
Western diplomats had argued that granting the amnesty was essential to drawing a line under the conflict and getting back to normality after a conflict that brought the country to the brink of all-out civil war. 

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FINANCIAL NEWS

Macedonia's economy to grow, but reforms needed-IMF

The International Monetary Fund has said that Macedonia's economy was forecast to grow this year, but that a number of reforms would be necessary to ensure that growth became sustainable, Reuters said in a report. 
The Washington-based lender said that although it welcomed the country's six-month stabilisation programme, Macedonia will face a number of challenges such as spending pressures in the medium term. 
The fund forecast that growth will average 4.0 per cent this year, up from a negative 4.6 percent last year. Inflation should remain in check at around 2.5 per cent in 2002, the IMF estimated, down from 5.3 per cent. The lender said that inflation in Macedonia had mainly been driven by high food prices. 
The fund said that Macedonia should strengthen its spending management and control further, and suggested that the country set up a framework to monitor budget spending. 
The lender added that the National Bank of Macedonia, who tightened monetary policy earlier this year in the face of foreign exchange losses, should continue to lower interest rates on its bills and that a more flexible fiscal policy would help cope with any potential shocks to the economy. 
Macedonia was also encouraged to see a number of structural reforms through, which would sustain economic progress. 

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