Immediately following the establishment of a multi-party parliamentary political system and the attaining of independence, the people and all political parties in the Republic of Macedonia embraced the European orientation, with a permanent view towards the free western world and towards America.
The awareness has prevailed in Macedonia that in order to create an economically viable country with a high standard of living, it is above all necessary to put into practice the international democratic norms that are firmly asserted in the Macedonian Constitution and laws. The aspirations to have the democratic ambiance become an integral part of the everyday life of the Macedonian citizens is evident, and this has become our national pride.
Definite economic advantages
In the sphere of the economy, Macedonia had certain advantages that enabled the country to pass through the period of transition much easier than other Eastern European countries.
It is a known fact that as a former Yugoslav republic, there was a difference between the political systems of Macedonia and the communist eastern European countries. This is best illustrated by the example of Slovenia, a former Yugoslav republic that surmounted the reforms much faster and much less painfully with the help of international assistance.
Regretfully, Macedonia did not receive such swift international assistance. The democratic processes in Macedonia were much more advanced and more liberal than those in the East, especially in the area of the economy.
Accepting a market and liberal economy in Macedonia was not such a major shock as it was in the East. Just the opposite, our citizens readily awaited such changes, because the prevalent understanding from the past was that such an economic system was more advanced and more just. Macedonia was ready for transition, because in around 40 years, it had adopted many elements of a market economy, where profit was a main interest and private ownership was not a taboo.
For example, for over four decades, more than 80% of the arable land was in private hands. Small factories, work shops, services, and restaurant facilities also had been privately owned for quite some time. Even the most major enterprises, although socially owned, operated under the logic of profit.
Liberal economic laws
This is why, immediately after the establishing of the new multi-party political system in Macedonia and following the passing of the new, more liberal economic laws, there was a boom of new small business being established. In the course of just one year, in a country of about two million, over 50,000 private businesses were formed, most often with just a few employees and most often in the area of trade. The private initiative has taken effect and a large number of companies seeking profit are now opening their own production capacities as well.
Presently implemented in Macedonia is the law on privatization, by which a large number of important socially-owned enterprises have become fully privatized. From the passing of the Law to the present, about 800 big, medium and small enterprises have been privatized.
About 200,000 employees, which equals about half of the workforce, have already become shareholders in their own companies. By the final implementation of the law, i.e. by the time of full privatization, it is expected that Macedonia will have about 300,000 shareholders, which represents a solid percent of the overall number of 450,000 employees that are officially employed. More precisely, by the end of the process of privatization that is expected to be finalized in teh course of this year, over 90% of all the resources and all economic capacities of the country will be in private hands.
Understandably, such growth of private initiative has caused a burst of investment activities as well. The investments of the state are aimed at constructing modern roads, infrastructure facilities, airports, artificial lakes, hydro-electric plants, railway connections with neighboring Bulgaria, while private capital and joint ventures with foreign partners are mainly oriented towards constructing production capacities or joint trade ventures.
The new roads are facilitating faster communication between East and West, i.e. between Turkey-Bulgaria-Macedonia-Albania-Italy. Furthermore, the end of the war in Bosnia and Herzegovina has reopened and revived the north-south communications, i.e. Yugoslavia-Macedonia-Greece, which is in effect the closest route to Western Europe.
The factories and industrial capacities built previously in Macedonia were suited to the needs of the former Yugoslavia, a country with a population of 22 million. Following the dissolution of Yugoslavia and especially as a result of the war, the international sanctions against Yugoslavia and the unilateral blockades of Greece towards Macedonia, many of these factories stopped production, which even now is difficult to revive because of the difficulties in marketing these goods in the markets of the former Yugoslavia.
The beginning of this year marked a certain revival of industrial production. After years of stagnation and downfall, there are signs of growth in output and growth in exports which is the main orientation of the Macedonian economy.
The advantage of the Macedonian economy is that the exchange rate of the domestic currency for hard currency is stable. Inflation is small and is measured with one digit figures - 7% to 8% annually; labor is not costly and moreover, the state stimulates foreign and provides investment benefits.
From a geographic point of view, Macedonia is the ideal place on the Balkan Peninsula for opening industrial capacities, for branch offices and consignation facilities that would gravitate towards a market of 30 to 40 million consumers. More precisely, the capital of Macedonia, Skopje, is less then an hour away by road and rail from Serbia, Albania and Bulgaria. Neighboring Greece is also less than two hours drive away.
Macedonia has developed relations with the International Monetary Fund and the International Bank for Reconstruction and Development and is very regular in meeting all of the obligations that it has towards these two institutions.
Taken from The New York Times, September 24, 1996, for fair use only.
For further information on the subject, turn to the Homepage of the Macedonian Privatization Agency.
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