Books on Macedonia
% of GDP
Update No: 090 (27/10/04)
The political situation is becoming tense. A vital referendum
looms on November 7th on the controversial issue of a territorial re-organisation
of Macedonia that would go far to satisfy the aspirations of ethnic Albanians,
but vexes many of the Macedonian nationalists. It is the brainchild of the
present coalition government, led by Prime Minister Hari Kotov, which replaced a
more nationalist one two years ago, whose constituent parties are now in
Hari Kostov's interview with Southeast European Times
It is the constitution that is the basis for new laws on decentralisation aimed
at creating ethnically diverse, financially stronger and politically more
powerful municipalities, Premier Kostov said in the interview with Southeast
"The Macedonian government is meeting constitutional obligations for
further implementation of the Framework Agreement. Decentralisation is seen as a
significant step toward a stronger democracy and the Euro-Atlantic integration
of Macedonia. I believe all the citizens in Macedonia are aware of these
processes, which should not have a destabilising effect on the country. Instead,
they emphasise the democratic approach to solving problems, which we have
already proved by signing the Framework Agreement and having it implemented in
the constitution and laws," Kostov said.
"The security situation in Macedonia should not be connected with the
referendum despite individual -- I would say, unserious -- statements by some
political parties. The security situation is stable, and this is also the
opinion given by responsible international institutions. The government and
responsible ministries will provide the conditions for citizens to cast their
votes in a democratic and safe atmosphere."
A group of just over 20 opposition lawmakers of the Internal Macedonian
Revolutionary Organization (VMRO-DPMNE), the Liberal Party, and the Democratic
Party of the Albanians (PDSH) moved a vote of no confidence on 15 September,
with the referendum clearly in mind, but other issues also to the fore. Gjorgji
Trendafilov of the VMRO-DPMNE said a no-confidence motion was the only way to
raise some questions regarding the governing Social Democratic Union's (SDSM)
poor record. Zarko Karadzoski, who authored the initiative, cited declining
industrial production, high unemployment and security problems. "The
government failed to keep up with the process of NATO and the EU
integration," Karadzoski said, "[and] has made Macedonia a
marginalized country in the Balkans and the wider neighbourhood".
Macedonian Prime Minister Hari Kostov's government survived the no-confidence
motion easily. On September 18th, 22 MPs voted for the motion, while 67 opposed
As a result, the prime minister and his cabinet will be secure for the next
three months. Under the constitution, no further no-confidence motions can be
tabled during that period.
Defending the government's performance, Kostov said the opposition is split over
economic and political policy and on how to implement reforms needed for
integration. "I call upon the opposition to reach consensus on the way to
the EU and NATO and act jointly with us to that end," Kostov said.
"Macedonia will join the EU when it finishes its responsibilities at
Opposition in a quandary
The opposition's poor showing reflects a deeper internal struggle. The
initiators of the no-confidence motion failed to get the backing of all
lawmakers of their own party, the VMRO-DPMNE. But there are fault lines running
through other opposition parties, such as the PDSH, as well. Not all opposition
MPs signed the motion. Some argued that the timing was not right, and that the
top priority was the upcoming referendum on Macedonia's new territorial
According to Gjorgi Ivanov, a professor of political science at Justinian I
Faculty of Law in Skopje, the motion was doomed from the start because of the
opposition's failure to agree on it. Only one faction in the VMRO-DPMNE -- that
which is loyal to ex-Prime Minister Ljubco Georgievski -- signed on to the
The opposition also demonstrated lack of preparation, Ivanov said. "We
heard trite phrases and discussions without anyone saying which key points the
government should focus on."
"If you analyse the results of the debate and the issues touched, it is
obvious that the whole motion was promoted by Georgievski's wing -- which wanted
to distance itself from the current VMRO-DPMNE leadership. The submitters of the
initiative knew at the very beginning that they would not have the majority. I
believe one of their goals was to turn the attention away from the upcoming
referendum, and direct the government's energy away from EU integration,"
The conservative VMRO-DPMNE still suffers from the long-standing feud between
former Prime Minister Ljubco Georgievski on the one hand, and former Finance
Minister Nikola Gruevski, who succeeded Georgievski as party chairman, on the
other. The rift between Georgievski and Gruevski resulted in the foundation of a
new party, the VMRO-Narodna, by Georgievski's followers in July.
Some Macedonian media speculated that the no-confidence motion was masterminded
by Georgievski to wrong-foot Gruevski, who had reportedly planned to move a
no-confidence motion after the referendum against the government's redistricting
plans, which is slated for 7 November. Gruevski's plan must now be postponed, as
the constitution provides for a 90-day period between two no-confidence motions.
Whereas Georgievski has kept a low profile in the leadership struggle, Gruevski
is trying to stay in the headlines. With his latest interviews and editorials,
Gruevski attacked the government, mainly for its performance in the
administrative reform and its economic policy.
It is clear that the VMRO-DPMNE -- independent of who is its leader -- wants to
return to power, which it lost in the parliamentary elections two years ago. But
the big question is who will be its ethnic Albanian coalition partner.
In a long interview with the Bulgarian news agency Fokus, the ethnic Albanian
party, PDSH Chairman Arben Xhaferi said on 16 September that a successful
referendum against the government's redistricting plans would inevitably result
not only in early parliamentary elections, but also in new negotiations to
revise the 2001 Ohrid peace agreement and establish some form of
"soft" international protectorate over Macedonia. "Unlike the
Macedonian politicians, I have a positive attitude towards this solution,"
Regarding the VMRO-DPMNE, Xhaferi said his own party is now having difficulties
finding a potential ethnic Macedonian coalition partner, since most parties have
lost their clear ideological profile. "The VMRO has [given up] its
[conservative] doctrine, has lost its essential nature as the VMRO, and turned
into a DPMNE [Democratic Party for Macedonian National Unity] only,"
Xhaferi said, adding that the loss of the VMRO's ideological underpinnings has
led it to make "unpredictable political decisions." The original VMRO
was a Macedonian national-liberation movement against the former Ottoman Empire
founded in the late 19th century.
Macedonian media interpreted Xhaferi's statements as a clear sign that he would
prefer a VMRO led by Georgievski rather than by Gruevski, who wants to transform
the VMRO-DPMNE into a European-style moderate conservative party.
Georgievski's followers, for their part, also say they would prefer to form a
coalition with the PDSH. Vera Janevska, who leads the VMRO-Narodna, said the
coalition of the VMRO-DPMNE and PDSH, which governed the country between 1998
and 2002, functioned much better than the current coalition government of the
SDSM and BDI. "We, as the ideological successors of the VMRO-DPMNE [headed
by Georgievski], are convinced that, working with the PDSH, we would find a much
better approach to [redistricting] than the one forced upon us by the SDSM and
the BDI," Janevska said.
Gruevski reportedly told VOA that the PDSH leans towards Georgievski's wing of
the VMRO-DPMNE, adding that he expects a new Albanian party to emerge because
the PDSH has lost support among ethnic Albanians.
However, it remains to be seen whether Xhaferi's PDSH will remain united.
Xhaferi's recent appeal to his followers to support the referendum was not met
with unanimous approval. PDSH Deputy Chairman Menduh Thaci, who is often
regarded as the party's grey eminence, told the media on the sidelines of a
party convention in Tetovo on 17 September that the party will not call on its
members to support the referendum.
Government wants to create favourable economic environment, Kostov says
Meanwhile the business of government goes on. And, as US President Harding
said in his time, the main business of government is business.
The planned industrial growth and revival of production have not been achieved
at the expected pace because of the incomplete sale and failed restart of the
so-called 'loser' enterprises (above all, the mines and smeltery in Veles) and
bankrupt enterprises," Premier Kostov said in the interview with Southeast
"The physical scope of industrial production declined by 10 per cent,
expected investments did not materialise, and a number of business partners were
lost in 2001. As a result of improved economic ambience, industrial production
recorded a 3.5 per cent increase in 2003. This year, Macedonia is recording
again a decline in industrial production because of inactive significant
capacities, which are in the sales phase," Kostov said.
"Activities are being directed at improving competitiveness, developing the
base sectors in the industrial branches, improving the economic environment and
creating conditions for improved economic activity and exports. Implementation
of the National Programme for restructuring and conversion of the steel industry
is of special importance. Industrial production is expected to achieve a
significant increase. As for the issue of high unemployment rates, a trend of
constant increases in the number of job seekers ceased in the first seven months
of this year, according to data. Moreover, a gradual decrease in the number of
jobless people has already been noticed in the past months," the Macedonian
Kostov said that the government has changed its approach to attracting FDI,
emphasising the importance of a stable economic environment, targeting and
selecting specific investors and enabling private sector leadership to
contribute to the development of the Macedonian economy.
"A programme for stimulating investments in Macedonia has been drafted. It
outlines the existing investment climate and existing economic, legal and
political barriers that hamper investment. An action plan aimed at influencing
the investment climate and increasing Macedonia's competitive position as a
location for investment has been developed. Other measures, including
promotional and informational activities, have been taken," Hari Kostov
In the interview he pointed out that in 2003, FDI in Macedonia amounted to 77.6m
euros, an increase of 13.8m euros compared to 2002. The first six months of 2004
have seen FDI totalling 68.6m euros, and there are realistic prospects of
increasing this amount by the end of the year
Macedonia starts negotiations for new arrangement with IMF
The structural reforms will be the focus of negotiations between the Macedonian
team and the International Monetary Fund (IMF) Mission, which started recently
with mission chief Franek Rozwadowski, In Focus reported.
"The new program is aimed at structural reforms, which are essential for
attracting foreign investments and the country's economic growth,"
Rozwadowski said before the start of negotiations.
"The fiscal and budgetary policy for 2005 is due to be agreed in this first
round of the negotiations," Finance Minister, Nikola Popovski, said.
He reiterated that the position of the Macedonian side in the talks would be a
long-term, three-year arrangement with adequate IMF financing of the balance of
Popovski also said that the final agreement for the arrangement would be
completed after two or three months.
Sweden to open embassy in Skopje in 2005
Sweden plans to open an embassy in Skopje in the autumn of 2005, which is going
to alleviate the procedure of issuing visas, said Macedonian Foreign Minister,
Ilinka Mitreva, following a meeting with her Swedish counterpart, Laila
Freiwalds, who recently visited Macedonia, the Daily News Service reported.
"Sweden supports Macedonia's wishes for membership of the European Union
and I believe that the bilateral cooperation between the two countries is
excellent," Freiwalds said. She explained that Sweden would open its
embassy in 2005 to keep up the good relations.
"We are now in the process of getting closer to the status of a candidate
for EU membership by answering the questionnaire that came to Macedonia on
October 1st. Macedonia made progress in coming closer to NATO too,"
Minister Mitreva said. She stressed that Sweden will support Macedonia in all
the stages of its journey to the EU. Sweden is going to offer expert aid in
answering the questionnaire of the European Commission.
Minister Mitreva informed that they also discussed the Balkan Fund, which 170
businessmen have recently formed in Sweden. Five billion Swedish crowns will be
invested in the Balkan countries. The focus in Macedonia will be on the shares
on the Macedonian Stock Exchange.
Greek Finance Minister, Molyviatis, visits Skopje
Greek Foreign Minister, Petros Molyviatis, arrived in Macedonia recently for a
two-day visit, MIA News Agency reported.
Molyviatis was scheduled to meet his Macedonian counterpart, Ilinka Mitreva,
Prime Minister, Hari Kostov, President Branko Crvenkovski and leaders of several
political parties, Greek Foreign Ministry spokesman, Giorgos Koumoutsakos said.
"The Minister will reiterate Greece's interest not in illusory but real
solutions (to the name dispute), acceptable to both parties," Koumoutsakos
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