% 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.
The Macedonians are still experiencing a serious security problem where the Albanians are concentrated. A small number of still active guerrillas are causing incidents that threaten an autumn 2001 ceasefire. But, as we shall see, after setting out what is going on and the history behind it, a new solution is being tried out.
The Macedonians greatly benefited at first from the anti-terrorist campaign since 9:11. 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.
But the Albanians still form a disaffected minority of one third or more (nobody quite knows).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 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, 2003, 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 has been in place, with elements from both communities. The international community needs to remain deeply involved, as in Bosnia-Herzegovina.
Update No: 081 (01/02/04)
The Macedonian government, which was formed in September last year, has been reshuffled. In the first major reshuffle of Premier Branko Crvenkovski's government, he replaced four ministers in early November.
The ministers of finance, economy, transport and justice were changed as the government faced a tide of criticism for stalling in the reform process and reducing inflows of FDI. Only $16m was reported to come in during the first half of 2003. He pledged to secure $200m in 2004.
Other criticisms concern the inability of the government to counter the radicalism of those who openly undermine the Ohrid peace deal, some even arguing for ethnic partition. Poor relations between Macedonians and ethnic Albanians in the country will take time to heal.
The president speaks
One person who can be trusted to have pretty sound judgement is Macedonian president, Boris Trajkovski. It was Trajkovski who insisted on Macedonia allowing in Albanian refugees in 1999 to alleviate their plight and to ease the situation in Kosovo. This incurs the West in a debt to the republic.
He is keen to see Macedonia join NATO, which in his opinion would firmly anchor it to the West.
The West to the rescue
But economics are every bit as important as security for the beleaguered country. The Macedonians are in a quandary. Their country is the poorest of the former Yugoslav republics, with a living standard of only one fifth that of the richest, Slovenia. Admittedly Slovenia is the most prosperous former communist country of them all. It is of course in a good situation, while Macedonia is a remote mountainous retreat far from the hub of Europe.
Yet once it held the fate of Europe in its hands, when it was ruled by Philip of Macedon and his remarkable son Alexander the Great, who was himself the father of Hellenism that spread Ancient Greek civilisation across much of the known world and initiated what has come to be known as the West.
For this and other reasons it would be well for the West today to address Macedonia's problems and minister to their resolution. It is an open question how best to do that. The patient needs to help themselves. Overmuch in the form of financial aid can exacerbate the problem of corruption, in which regard Transparency International rates Macedonia as among the ten worst offenders in the world. This does not mean that aid under certain circumstances may not be exactly what Macedonia does need.
FOREIGN ECONOMIC RELATIONS
Kosovo, Macedonia to sign free-trade agreement
The head of Kosovo Chamber of Commerce (OEK), Ismail Kastrati, and his Macedonian counterpart, Dusan Petrevski, announced that a Free Trade Agreement (FTA) would be signed in the near future between Kosovo and Macedonia, KosovaLive web site reported.
A delegation of OEK is visiting Skopje, where their Macedonian counterparts and businessmen received them.
Kastrati and Petkovski promised that the issue of equalizing customs duties would be regulated soon, because Kosovar products are entering Macedonia and paying 10 per cent duty, whereas those of Macedonia pay 1 per cent of duty.
Macedonian products are paying far less because a FTA signed with the then Yugoslavia, significantly privileged the Macedonian products compared to Kosovar ones.
An announcement was also made for a joint investment; namely the Skopje based Ohis detergent factory along with Kosovo's Emona Company will set up a factory in Pristina, which will cost 3.5 million euros.
According to Dusan Petkovski, the import and export of goods between the two countries will be as high as US$130 million.
Macedonian premier sees foreign investments as important for economic growth
Investments present a solution to the unemployment and poor economic activity and therefore the government's priority for the next year is significant increasing of investments in Macedonia, Prime Minister, Branko Crvenkovski, said recently at the first annual meeting of the International Council of Investors (ICI), MIA News Agency has reported.
Pointing out that the economic developments recently have raised optimism, Crvenkovski said the government proved its support of foreign investments in regard to eliminating of all possible barriers.
"We are on the right track today, as our relations with potential investors are not to be based on flattering, but on fair and serious negotiations. We shall promise no privileges but fair and favourable business climate. We do not offer monopolistic status, but fair and loyal competition. Finally, we guarantee that investors will have no chance to deal with corrupt authorities at any level, as the government is determined to protect the interests and rights of all existing and potential investors, who have serious intentions to make profit in accordance with the country's legal system," Crvenkovski said.
Those commitments of the government would be undermined if Macedonia did not become part of the European and Euro-Atlantic integration processes, Crvenkovski said.
ICI president for Macedonia, Vlahos Aristidis, said the investment of capital, knowledge. The experience, time and effort in the country was aimed at turning the hopes and dreams of the people and government into reality within the family of European prosperous nations.
ICI could grant significant assistance and cooperation in any project, act as adviser to the government in meeting of the common goal and an ambassador of good will in promotion of the country's investment potentials, Aristidis said.
Macedonia faces difficult year of negotiations with IMF - finance minister
A difficult year awaits Macedonia in view of the upcoming negotiations with the International Monetary Fund (IMF). The first revision of all the arrangements that Macedonia has had with this financial institution over the past 10 years is to be carried out in April, Macedonian Radio reported recently.
The assessment will determine whether Macedonia is prepared for a new three-year, much more reform-orientated arrangement. "The first IMF mission, which is due to visit in February, is expected to pass off quite smoothly, that is to say, without any major problems or remarks. The reason is that the budget policy for this year will be reviewed," Sonja Madzovska said.
"However, the more difficult, if not the most difficult meeting with the IMF ever, is to follow in April. What has been achieved over the past 10 years will be reviewed then," Finance Minister, Nikola Popovski, said.
"Providing the assessments are positive, we expect to broker the new arrangement in early summer, with one or two missions. If we are lucky and everything goes according to plan, we should sign the new arrangement in the early autumn. I hope that we will see all these procedures through together with the IMF, although this will be very difficult. This means we will have to pay a lot of attention to everything the previous governments have done," he added.
The arrangement will be for a period of three years. Minister Popovski said that the reason is so that they do not have to chase a new arrangement every year. At the same time, the new arrangement will be a challenge, in view of the great capacity for reform that it will require.
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