% of GDP
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: 076 (28/08/03)
The Macedonians are and always were the poorest of the former Yugoslavians. They then suffered gravely in the 1990s from the wars waged by Serbia, by far their most important trading partner. Yet they feel themselves to be a great people, the descendants of Alexander the Great. The conqueror of the known world no less.
The Macedonians have greatly benefited from the anti-terrorist campaign since 9:11. There is still a serious security problem in the republic, the Albanians forming a disaffected minority of one third or more(nobody quite knows). The top ranking NATO force- commanders committed themselves to keeping their troops in the troubled Balkan republic after the 'Amber Fox' mission ended in March.2001. An ugly situation was defused in early autumn of that year as a direct result.
Unfortunately it is by no means certain yet that the worst is over. There have been recent incidents involving Albanian activists in Kosovo, about which the world now knows so much. Unidentified members of the National Liberation Army (UCK), the former ethnic Albanian secessionist movement, whose voluntary disbandment in the autumn of 2001 raised hopes of a permanent end to discord, subsequently issued a threatening statement.
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 and came as a surprise to many of its former members. But there are obviously discontented elements still around among the Albanians in Macedonia.
History of the conflict
The insurgency of the rebels began in February 2001 and lasted for nine months. It ended after more than 100 people were killed, including 60 from the Macedonian security forces, 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.
Macedonian government adopts programme for stimulating investment
The Macedonian government has adopted a programme for stimulating investments in Macedonia, aimed at improving productivity and competitiveness, which will make the country an attractive place for investing, MIA News Agency has reported.
The programme contains principles for a modern, open and competitive economy, indiscrimination, as well as principles for making a stable and democratic economic environment. It also includes investments' promotion, the right of free transfers in investment and expropriation protection, predictable and transparent legislation without administrative barriers, objectivity, efficiency and transparency of the court system. A struggle against corruption, bribery and partiality, as well as creating a tax policy favourable for investments and development of investment conditions in accordance with the EU Stabilization and Association Agreement are also encompassed with the programme.
Promotion of an agency for foreign investments is also part of the programme. Its priority task will be to review the main domestic sections and subsections with solid investment potentials and to connect them with the interested investors.
Stable macroeconomic environment, democratic and economic reforms, inexpensive and qualified manpower, favourable conditions for the investors, geographic vicinity to bigger regional and European markets and crossing of the Corridors 8 and 10, as well as solid infrastructure, are investment priorities.
However the war conflict in this region, small domestic market, low income per capita, highly-centralized country, old industrial technology, rigid labour market and judicial inefficiency are weaknesses for attracting investments.
In the next period Macedonia should also make reforms in the areas, such as registration procedure of a companies, labour legislation, building permits issuance and customs administration. The government is to meet these obligations by the end of 2003.
IMF official says Macedonia has met conditions to obtain further loan
Finance Minister Petar Gosev and Franek Rozwadowski, head of the IMF mission, have held a news conference at the Macedonian Finance Ministry, MTV1 has reported.
Sveto Nikolovski followed the news conference for the TV station and reported on Rozwadowski's assessment of the realization of Macedonia's obligations stemming from the standby arrangement signed in April.
Sveto Nikolovski said: "The IMF mission head has assessed that Macedonia has met all the objective criteria necessary to obtain the second instalment of the standby arrangement. The Washington-based IMF Board of Directors is to reach a formal decision on the use of the second instalment in a session scheduled for early October. IMF head Rozwadowski has assessed that the Republic of Macedonia has met all the objective criteria, with the exception of those referring to the health sector.
In Rozwadowski's view, the IMF mission will be concerned if the entire budget savings are spent by the end of the year. According to the mission head, this may have negative effects on the budget. The fund's recommendation is that all the savings be spent in a more even manner.
Finance Minister Petar Gosev voiced satisfaction with what had been accomplished within the arrangement in the first half of the year. Gosev said that these were initial results, which would ensure the projected economic growth by the end of this year. Gosev said that the budgetary savings amounted to around 500m denars.
As far as the banking sector is concerned, National Bank Governor, Ljube Trpeski, said that better results than planned had been achieved.
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