IBNA Interview/FYROM with many unknowns and without solutions

IBNA Interview/FYROM with many unknowns and without solutions

University professor and economy expert in Skopje, Prof. Dr. Nehat Ramadani talks, in an interview for IBNA, about the current developments in FYROM, especially in the domain of economy and development, focusing on the general developments in the country

Interviewed by Naser Pajaziti

In FYROM, there are constant political development which relate to cross ethnic relations. How do you see the current situation?

In Macedonia, the political situation in the country is not very clear, it’s full of unknowns and without any solution. The political situation becomes even more unclear when there’s no internal synergy, as Albanians try their best to show tolerance, understanding, loyalty and commitment for the solution of the political problems of Macedonia, while the other side follows a policy of isolation, exclusion and blockade toward regional incentives and/or global incentives of the state. In other words, the fact that Albanians are doing more about the state than Macedonians are, this has led the country in a gridlock. Albanians are more interested for the country to become a NATO and EU member than Macedonians. Being a parliamentary democracy, Macedonia is currently not being helped by the boycott of Macedonian opposition parties, which do not recognize the result of the recent parliamentary elections. The functioning of parliament without an opposition is a handicap for democracy itself.

Being a known expert of economic affairs, where do you see the economy of the country?

Economy of Macedonia is one of the weakest economies of the region. The unemployment rate (around 29% or one in three people unemployed), where the most affected category is youth with an unemployment rate of 54%, this has significantly aggravated the social situation in the country. This situation has brought high levels of unemployment, which according to official data, is estimated to be around 30% of population, while if we see it from an ethnic point of view, Albanians and other non Macedonian ethnic groups are most affected by the level of unemployment and poverty. Economy of Macedonia is also characterized by tax evasion and informal economy, which according to analyses, amounts to 20% of GDP. Public debt is in constant rise and now it accounts for 45% of GDP. Lack of transparency with public expenses and especially compromised tenders further deteriorate the economic situation in the country. Moreover, political tensions with neighbors have further contracted the regional market for Macedonian products and services and as a result of this situation, we can say that the economy of Macedonia inclines toward imports, with a high trade deficit (around 1,7 billion Euros or 22% of GDP), thus causing a general gridlock of economic development in the country.

What’s the key problem that is preventing the economic development?

I believe that there are many problems. The first one is the problem with the neighboring countries and here, I would mention the dispute about the name “Macedonia”, which is contested by Greece. Then we have the problem of the language, nation and history with Bulgaria, the problem of the church with Serbia, cross ethnic conflicts with Albanians who often cause tension with Albania and Kosovo and all of these situations have caused a state of uncertainty in the country and they have discouraged entrepreneurial incentive in general. Another issue relates to added bureaucracy, which doesn’t offer a favorable environment of doing business. Macedonia has a relatively small market (around 2 million people) which is not integrated in Southeastern Europe and which is not attractive for foreign businesses or domestic businesses. Lack of expertise in the labor market which has been caused by individuals who leave the country (the brain drain phenomenon) for a better pay, mainly in Western European countries or across the ocean, make it more difficult to overcome the economic situation in the country. The loss of traditional markets from the independence of Macedonia, financial and economic crises of the recent years, has certainly caused an economic slowdown for the country.

Must state authorities urgently engage to find financial means for capital investments in the domain of infrastructure and the functioning of free economic zones?

I believe that state authorities must manage public funds in an optimal way and with more care. Capital investments must be more balanced and be spread out throughout the country. It’s said to see suburban areas of Skopje inhabited by Albanians, which often complain of the lack of sewage systems, kindergartens, schools, health centers, public lighting, while on the other hand, there are remote villages with very small Macedonian communities which have a proper infrastructure. As far as free economic zones are concerned, they’re in initial stage and it’s been several years that such incentives are coming to life.

On the other hand, there are non capital investments such as “Skopje 2014”…

“Skopje 2014” is compromising for the country and for all policy makers. Above all, it’s a non capital project and its implementation during the years of economic crisis, has had a cost of hundreds of millions of Euros and this has further worsened the economic situation in the country. Instead of narrowing the social gap, this project has increased poverty in the country. This project aims to conceal the history of Macedonia and such thing is even contested by Macedonians up to a certain extent. If we also bear in mind the ecological dimension, this project has cemented the center of Skopje and the central square of the city is over burdened. In other words, there are no Albanians in Macedonia who are not against this project, but what’s sad is the fact that this project is being realized through the taxes paid by Albanians too.

Do you think that the government has a concrete program and is it able to manage the crises or problems and how do you see the near future?

The government has its own program, but it can be characterized as a populist program with a social focus which doesn’t really have many development elements. I can say that there’s not an honest objective to overcome the economic situation in the country. As I said above, I see the near future with many unknowns, as the country faces different crises, such as political, economic and social crises. This also depends on the approach and the engagement of those who have been elected to govern.

Dr. Nehat Ramadani is currently a professor of the State University of Tetovo. He has a rich experience in the Southeast Europe region, by leading several international organizations such as USAID, UNDP, SNV-Netherlands Development Organization, EC (European Commission) and others. He has over 10 years of experience as a university lecturer in the domain of economy in several universities in the region (Kosovo and FYROM)