Saturday, February 24, 2007

Macedonia - Kosovo border demarcation won’t be easy

Skopje. In spite of the international support and the inclusion of the demarcation of the Macedonian border with Kosovo in the UN plan for the province, experts say that the process won’t be easy, the Macedonian television A1 reported. Besides, Kosovo is establishing a s a new state, which will want to start talks with Macedonia on demarcation.
“Macedonia has specialists, money and will to do that, but a political decision has to be taken about the participants in the talks”, Milje Milenovsi from the Macedonian Interior Ministry said.
Experts say that the borders in the Balkans are the most controversial ones in Europe. Macedonia has to solve the problem about the demarcation of the border with Kosovo for the purpose of its EU integration.

Macedonia’s name not a criterion for EU, NATO

Skopje. Macedonia’s name dispute with Greece is not on the list of criteria for the country’s EU and NATO membership, Macedonian President Branko Crvenkovski said, the Macedonian newspaper Dnevnik writes. He stressed that by the Interim Accord between the two sides in 1995Greece had promised not to impede Macedonia’s integration in international organizations. Crvenkovski stated that Macedonia should not allow itself any blunders when responding to possible provocations and the Macedonian policy should not instigate unnecessary provocations.

Macedonia’s Prosecution seals investigation on President Trajkovski's death

Skopje. The Macedonian Public Prosecution Office sealed the investigation into the cause of death of President Trajkovski and eight members of his entourage, concluding that the plane crashed as a result of pilots' mistake, the Macedonian agency Makfax reported.
Confirming that it stands behind the Skopje Prosecution Office's rejection of the two special police reports calling for setting out new investigation, the State Prosecution Office practically closed the case concluding that the crash occurred as a result of an accident.
"The contents of the obtained documents pointed out that the plain crash occurred due to crew's mistakes during the procedure of approaching to the Mostar Airport, that had taken place in unfavorable weather conditions, dense fog and clouds", Prosecution Office's announcement says.
"The mistakes include deviation from the landing procedure, even though the pilots confirmed to the Mostar control tower they will comply with the procedure", Prosecution Office's explains.
The announcement further says that the arguments received by the Crime Sector with the Public Security Office on 7 February 2007, "neither contain information that might bring into question the decision of the Skopje Prosecution Office, nor offer any additional evidence relevant to establishing the cause of the crash".
The plane crash took place on 26 February 2004 in the vicinity of Mostar, where the Macedonian delegation led by the President Boris Trajkovski was to attend an Economic Forum.
The results of the official investigation carried out in 2004 indicated that the crash occurred as a result of pilots' mistake, however, a series of elements left room for suspicion, which prompted Macedonian Interior Ministry to set out a new preliminary investigation in late 2006.

Unlikely Entrepreneur Creates Macedonia’s First Authentic Irish Pub

At first, Mark Murphy’s story might seem common enough; Western peacekeeper stationed in the Balkans falls in love with local girl whom he meets on the job. However, what happened after for this Irish soldier and resident of Kumanovo, a city of 100,000 in Macedonia’s northeast, is much more remarkable. For rather than returning home with the emigrant native daughter, a scenario witnessed countless times since the Yugoslav wars of the 1990’s, Murphy stayed on to create a business, becoming an improbable investor in a small country by bringing a bit of his own culture to it- appropriately enough, in the form of an Irish pub, The Harp.

Although it has only been operating for about two months, The Harp has become a popular place. While Macedonia already has several Irish pubs, the new one of Kumanovo is the most authentic. Murphy spent loving attention to details, decking out the spacious, two-floor bar with clan insignia, Celtic symbols, Irish flags and, of course, Irish music. Unlike the many Macedonian cafés with their bland décor and identical pop or techno music, the Harp has a warmth to it reminiscent of what you might find in Cork or Galway or Dublin- with the exception, of course, of the Macedonian language that prevails in it.

irishpubkumanovointerior.JPG The pub has been full quite often during its opening run and has started to attract ‘regulars.’ What’s most unusual, considering the average Macedonian eating habits, is that some of these regulars are coming in for the famed full Irish breakfasts. The Harp also offers an extensive menu of local and international food for lunch and dinner as well. Murphy makes a perhaps embarrassing but ultimately positive revelation: he recently ran out of Guinness. “Have you ever heard of an Irish pub without Guinness?” he laughs. Fortunately the problem has been rectified.

While Murphy’s is a story of love and adventure, it is also a cautionary tale for any individual foreign investor interested in coming to Macedonia. The encounters that Murphy has had over the past year since deciding to open the bar have run the gamut from petty officials fishing for bribes to racketeering from armed thugs. However, by standing his ground, Murphy has been far braver than could be expected from the average foreigner.

Of course, the 29-year-old Irishman is not just any foreigner. A member of the Irish Special Forces and specialist sniper, Murphy has patrolled the volatile front lines in East Timor, disarmed a Hezbollah fighter in hand-to-hand combat on the Lebanese-Israeli border and served in always interesting Kosovo before coming to Macedonia. Compared to these experiences, Kumanovo thuggery was almost a joke.

Macedonian officialdom has been known for bribery and the new pub was not excluded. The usual array of inspectors, most of them not even sure what they were inspecting and without the proper qualifications, bore down on the bar to measure the ceilings, check the ventilation and even, following a tip from confused locals, hunted for a non-existent bathroom shower. Indeed, many of the complaints were fairly petty. “Some people in the building even protested when I wanted to paint my stretch of the outside walls green,” he laughs. “The old people were shocked, saying ‘who does he think he is, to come in here and paint the walls green?’”

irishpubkumanovocouch.jpgMore seriously was the intimidation from a local security company that was angered when Murphy agreed to hire a different one. The former sent a gang of heavies down to smash up the place and then, late in the night, toss a petrol bomb in the window. Murphy wasn’t fazed. “I yelled down the street after the fellow who threw it: ‘so what! this is a normal day in Belfast for us, you know.”

Indeed, the racketeers were consternated by the nonchalant reaction of the Irishman. They could not have known much about Murphy’s prior military training (he comes from a military family and served in the armed forces since the age of 17). Later, it turned out, the security company boss came and informed the Irishman that his display of strength was akin to leaving a calling card. “He said he wanted us to hire his company,” recalls Murphy. “I said, ‘well why didn’t you just come and talk to us?’ It was like a foreign concept to them.”

Murphy is adamant that small foreign investors in conspicuous industries such as his cannot operate in Macedonia without local support. “Unless you are a huge international company that can count on support from the government and foreign embassies,” he says, “it’s just too risky. Without the protection from my girlfriend’s family, it would have been impossible.” As James Joyce once said of Ireland itself, Macedonia is a nation of begrudgers, where people are often more interested in damaging the personal or business success of their neighbors than in doing something constructive for themselves. This hard truth is only really apparent, Murphy believes, when you get below the surface level of society. “The local people are very nice and hospitable- until they feel like you could be a threat to them.”

irishpubkumanovosymbols.jpg Yet after making the first hard steps, he has expanded the necessary local support base from his new family through his hiring practice. The Harp employs 16 people, “which means that when you add in their families and close relations, it’s about 200 people who are being looked after.” And, unlike many employers in Macedonia, Murphy pays the health insurance for his staff. In the early days he had to get rid of a couple of young workers for petty theft and sluggish service, but those who hung in and proved themselves are happy with their work, and the tips.

In light of the more serious issues, distribution problems with beer suppliers have been just an annoyance, though an expensive one. The main problem is that for the large European breweries, such as the all-important Guinness, Macedonia is a tiny dot on the map and supply thus has to be re-routed from middlemen outside of the country. Murphy had to cajole a regional distributor who was dubious about supplying his little bar into working with him. However, having done so much business so fast, he proved that the bar would be a worthwhile distribution point.

One of the notable elements of The Harp is its extensive menu- making it a competitor on the Kumanovo restaurant scene as well as a bar. The soldier proudly points out that he instructed his cooks on how to prepare all the dishes in advance, and he is adamant about the freshness of the rations: in what is probably the only such example in the country, the menu contains a note informing customers that all of the meat served has been inspected by a government-certified vet.

But there is another element of Kumanovo’s new Irish pub that is perhaps even more important than the quality of its food and drink. The brutal truth is that, aside from some nightlife, this small, ethnically-mixed city is coarse and almost bereft of attractions. The Harp is important, therefore, in that it has added to the city’s sense of community and entertainment scene in a novel way. “We get the best people in Kumanovo here, the nicest people,” the owner attests. “People who are friendly and understand what we’re about.”

That said, the unusual success story of The Harp could even serve as an example for the country in the big picture. “Everyone is welcome in my bar, no matter where they’re from, no matter what their nationality,” says Murphy- “so long as they abide by the rules of the bar. That’s all we ask.”

Struga Mayor accuses Canoski of illegal building of mosque

Struga Mufti's Office has set out illegal constructions works on a mosque with funds provided by Fijat Canoski, Struga's Mayor Ramiz Merko accused today.

The foundations of the future mosque have been laid yesterday in the vicinity of the European University, whose owner is Canoski, Makfax's correspondent reported.

No license has been issued for building of a religious object at this location, Merko said. He announced taking measures for halting of the illegal construction.

According to the Mayor, the building of a mosque threatens to tighten the inter-ethnic tensions in Struga. Therefore, the local authorities will urge competent ministries and the Islamic Religious Community to take action.

Representatives of the local Mufti's Office confirmed that a mosque is due to be build at the stated location, however, they refused to comment Merko's accusations before checking thoroughly the entire documentation.

Greece relies on U.S. for Macedonia dispute

Athens. Greece will have to look to the U.S. for support over the Macedonia name dispute, Macedonia daily Utrinski vesnik writes citing Greek Ethnos.
Greece, which has committed to back Macedonia’s NATO and EU membership but under the FYROM name, is now in the latest stage a crucial decision. If vetoed Macedonia could turn to the U.N. Security Council where three of the permanent members -- the USA, Russia and China, have recognized Macedonia under its constitutional name. This would be the most humiliating ending for Athens as only Greece and the EU would continue to use the FYROM name. Athens might call a referendum on the matter, Ethnos writes.

Macedonia invites investment from Qatar

Macedonia has called on Qatari businessmen to make investment in the country. The Macedonian Second Deputy Premier, Zebvko Jenkoloviski, who was here on a brief official visit, yesterday urged Qatari businessmen to visit his country and explore investment opportunities.

Macedonia is set to enforce new laws to encourage foreign investment, the second deputy premier said. He said a free trade zone has already been set up in his country where foreign investors enjoy tax holiday for 10 years.

Jenkoloviski and officials accompanying him met Qatari businessmen at the Qatar Chamber of Commerce and Industry (QCCI) premises. Present were the QCCI Chairman, Sheikh Khalifa bin Jassim Al Thani, his deputy, Abdul Aziz Al Emadi, and Mohamed Ahmed Tawar Al Kuwari, treasurer, among others.

The meeting focused on ways to further economic cooperation between Qatar and Macedonia. Qatar on its part urged Macedonian businessmen to explore investment opportunities here. Al Emadi in his address urged the visitors to brief Qatari businessmen on the banking system in Macedonia and explain how foreign investment was protected.

Macedonian police accuses State officials in fraud amounting to EUR 50,000

Skopje. The economic crimes department of the police in Skopje pressed charges against A.L., Director of the Council for Accreditation of Macedonia and G.Z., Director of the Institute for Accreditation of Macedonia for malfeasance in office, the correspondent of FOCUS News Agency reported.
The two directors are suspected for having illegally acquired more than 2.8 million denars /61 denars = 1 Euro/ in the period 2004 – 2006.

Crvenkovski says Macedonia is not part of Kosovo issue

Macedonia is not part of the Kosovo issue and it cannot tie its future and destiny with developments on Kosovo, Macedonian President Branko Crvenkovski said in an interview for Radio Deutsche Welle.

"Not developments on Kosovo, but in Macedonia are those that hold key to stability of our country", Crvenkovski said

The Head of State further said that he understood fully the solidarity and loyalty of the
Albanian population in Macedonia toward ambitions of the Kosovo's Albanians.

"Nonetheless, the loyalty toward ones own state should be stronger than the one toward the fellow-countrymen", Crvenkovski said.

He reiterated that Martti Ahtisaari's plan, as it was presented, is acceptable for Macedonia.

"We will support the plan, provided that no alterations that would affect Macedonia's interest take place during the negotiating process", Crvenkovski said.

He concluded that if no mistake in the crucial multy-ethnic relations is made, Macedonia will retain the basis for economic development.

39 police, customs officers arrested for alleged corruption

SKOPJE, Macedonia: Macedonian authorities arrested 39 police and customs officers during a large corruption crackdown Friday, officials said.

The arrests were made at four crossings on the borders with Greece, Bulgaria and Serbia, Deputy Interior Minister Voislav Zafirovski said.

He said special police units searched the detainees' homes, cars and offices to gather further evidence, while nine more suspects were being sought.

The suspects allegedly demanded bribes in exchange for not levying taxes and dues on goods being carried across the border, said Ljupco Todorovski, director of Macedonia's National Public Security Bureau.

"The operation is still under way," Todorovski told The Associated Press.

He said the arrests followed a two-month surveillance operation, after authorities received complaints from travelers.

The small Balkan country is under pressure from European Union officials to tackle corruption if it is to receive a starting date for EU entry talks.

Croatian military delegation visits Macedonia

The current security challenges in the region will dominate the talks with the visiting Croatian military officials.

Croatia's high-level military delegation, led by Deputy Chief of Staff Lieutenant General Slavko Baric, arrived in Skopje on Thursday.

On Thursday, Croatian military officials met with Macedonian Army Chief of Staff, Lieutenant General Miroslav Stojanovski. The interlocutors expressed content with the excellent military co-operation between the two countries as well as the co-operation among the signatory-countries of the US-Adriatic Charter.

Macedonian military officials discussed with their Croatian counterparts about the transformation of the ARM and military reform, and they also exchanged experience about the participation in NATO-led peacekeeping mission.

In the course of the visit, which will run till February 25, Croatian delegation will tour the Allied Operational Command in Kumanovo and the 1st Mechanized Infantry Brigade Command in Stip.

World Bank approves $5,5 million grant to Macedonia

Board of Directors of the World Bank approved the implementation of the sustainable energy project in the Republic of Macedonia.

The project will be financed by through a Global Environmental Fund (GEF) grant of $5.5 million, with additional $24.7 million expected to be provided by private commercial banks and users of the project, WB Office in Macedonia said.

The project for renewable energy resources development will assist the country to develop institutional capacities and the necessary financial mechanisms.

The goal of this project is to assist the creation of a renewable energy technology market which would help the country be more competitive and at the same time reduce country's dependence on energy imports.

Macedonia fined over slow courts in 2006

Macedonia has been fined by the European Court of Human Rights over the slowness of its courts in 2006 and the country has to pay EUR 90.000 fine for violation of the right to court trial within a reasonable term.

In its latest report, the Macedonia's Helsinki Committee says the Macedonian courts are slow and inefficient.

"These verdicts confirm the protracted proceedings in national courts. The bitter aftermath of slow courts thwart the citizens to exercise their rights within reasonable deadline," the report says.

Macedonia's Helsinki Committee said the verdicts of the European Court of Human Rights are prompted by "inaction of judicial system, focus on "more" important issues and non-compliance with the timetable for launch of court documents".

Right time to promote Macedonia in EU is 2008-2009: Slovenia

Skopje/Ljubljana. The real time to promote Macedonia’s EU bid is between 2008 and 2009, the Slovenian Foreign Minister Dimitrij Rupel said in an interview for Utrinski vesnik. In his opinion there is a real possibility for Macedonia to start accession talks as early as 2008 despite widespread scepticism to further EU amplification. Croatia will join first, followed by Macedonia, Rupel said.

Turkish heroin truck seized on Macedonia border

SKOPJE, Macedonia-Authorities seized 33,5 kilograms (740 pounds) of heroin on Macedonia's border with Bulgaria and arrested two suspected smugglers, police said Friday.

The drugs, with an estimated street value of €400,000 (US$525,000), were found in a Turkish truck carrying electric equipment at the Deve Bair border crossing.

Police arrested the truck driver, a Turkish citizen, and an ethnic Albanian man suspected of organizing the shipment.

Macedonia is a conduit for drugs headed for the European market.

Police in January found 483 kilograms (1,000 pounds) of cocaine in a truck near the border with Kosovo, in a record haul worth €45 million (US$59 million).

Ten Questions About Macedonia

Ten Questions You Wanted Answered About Macedonia - But Never Dared to Ask:

1. How Big is the Macedonian Market?

2 million consumers

10 million consumers

20 million consumers

60 million consumers

Most People answer…

2 million consumers


Through its well developed and growing system of symmetrical and asymmetrical array of free trade agreements – Macedonia gives you direct access to well over 600 million consumers in the region – from Turkey to Slovenia.

2. What is Macedonia's Biggest Market?

Former republics of Yugoslavia and especially the Federal Republic of Yugoslavia

The European Union and especially Germany and Greece

Turkey and the Arab World

Central Europe

Most People answer…

The former republics of Yugoslavia and especially the Federal Republic of Yugoslavia.


Macedonia's biggest market by far – almost 60% of its trading volume, both exports and imports – is the European Union. Its position is comparable to the Czech Republic in that more than 75% of its international trade is conducted with either the European Union or with the USA.

3. Macedonia's GDP Per Capita is…

700 US dollars

1,100 US dollars

300 DM

Almost 2,000 US dollars

Most people answer…

About 700 US dollars.


Even in 1998, Macedonia's GDP per capita was 1,865 US dollars per capita. Adjusted to purchasing power (PPP) and taking into consideration the informal sector of the economy – Macedonia's GDP per capita is probably c. 5,000 US dollars per annum.

By comparison – the Czech Republic non-PPP adjusted GDP per capita in 1998 was also 5,000 US dollars.

4. Macedonia's Level of Corruption is…

Exceedingly high

Very high

Like South Europe

Like Africa

Most people answer…

Very high.


According to Transparency International, Macedonia's level of corruption is MEDIUM (66th place out of 99 countries in its 1999 report), below many countries and even below some members of the European Union. It has one of the lowest rates of violent crime and property crimes in the world – though, unfortunately, property crimes and drug-related crimes are on the rise as modernization proceeds apace.

5. The Level of Wages in Macedonia is…

Very high, comparable to the European Union

Very low, comparable to Africa

Comparable to other countries in transition

Comparable to other developing countries

Most people answer…

Comparable to other developing countries.


Macedonia's workforce – one of the most well educated in the countries in transition – is much cheaper in RELATIVE terms than the workforce in other countries in transition. The average salary in Macedonia is comparable to most other countries in transition and is around 400 euros a month. BUT, the productivity of the Macedonian worker, as measured by GDP per worker is much higher. Macedonia produces (without the informal sector of the economy) c. 3.5 billion euros a year with c. 350,000 active workers. This is c. 10,000 euros per worker. The salary paid to a Macedonian worker constitutes, therefore, 20% of his product.

6. Macedonia is…

Investor friendly

Investor averse

So-so, not different to other countries in transition

Investor indifferent

Most people answer…

Investor averse.


Investors ignored Macedonia mainly if not only because of geopolitical external shocks. Despite this, Macedonia succeeded to attract almost 200 million US dollars in 1997-8 only. Another 200 million were invested in 1999, the year of Kosovo and the refugee crisis. Macedonia is the first to have legislated a law for free economic zones and it has an impressive array of tax and investment incentives in place. By implementing a one-stop shop concept, it is doing its utmost to isolate the prospective investor from red tape and potential official corruption. It is gradually but steadily injecting added transparency into the investment and procurement processes. And it is transforming itself into a free trade hub and the axis of a regional free trade zone in conjunction with its neighbours with which it is now on historically unprecedented friendly terms.

7. Property Rights in Macedonia are…

Non existent

Poorly developed and protected

Like in all other countries in transition

Adequately developed and protected

Most people answer…

Poorly developed and protected.


Despite the fact that Macedonia has a fine legislative infrastructure, its courts and its bureaucrats, its banking system, its collateral system and its property registrars are all poorly developed and dysfunctional to varying degrees.

This is a top priority of the last few administrations. Legislation is adapted, law enforcement agents – especially judges – are educated, mortgage registration, collateral registration, company registrars – all is being revamped. The aim is to provide investors with maximal protection of their rights and property.

Today the main problem is not securing property rights or due process. The main problem is the DELAY, the TIME LAG and the BACKLOG in doing so. This is an improvement over the past – but it is still a sorry state.

Still, Macedonia being the small and informal country that it is, the office of every minister and every civil servant is open to investors, who are provided with unparalleled access to the highest level of government.

Moreover: Macedonia never had problems of currency convertibility, repatriation of profits or investments or default. Its debt is medium by international standards (60% of GDP, most of it long term and to multilateral and international financial institutions). It has 9 months of imports in foreign currency reserves. Its debts are trading at 75% of their face value – better than most developing countries, a sign of international confidence in its obligations. It has recently become only the second country in the world to prepay its Paris Club debts.

8. Macedonia's Infrastructure is…

Decrepit and inadequate

Like in other poor countries

Sufficient but not well maintained


Most people answer…

Like in poor countries.


Don't forget that Macedonia was a part of one of the most sophisticated markets in the world – the Former Yugoslav Federation. Its infrastructure is insufficient and often badly maintained – but not uniformly so. Some types of infrastructure are highly developed, even by European standards. For instance, there are more than 100,000 mobile phone subscribers in a workforce of less than 750,000 people. Macedonia has one of the most developed wireless networks in Europe – it far surpasses the systems of Central Europe. It is rich in electronic media. The Internet is gaining ground though penetration is still low. It has a few German-quality autobahns – connecting Macedonia to its neighbours and, in a few years, to every country in Europe, West and East.

9. Macedonia is Isolated and in a War Zone

No American multiple choice here.

Yes, Macedonia is situated in a turbulent area.

But it is also an area bigger and more naturally endowed than Central Europe.

And - with the exception of the skirmishes with a segment of its Albanian minority in 2001 - Macedonia has never been involved in any war activities.

It has always been an island of stability and smooth democratic transition.

It hasn't been isolated for years now. Its neighbour Greece is one of its greatest trading partners and investors. Its other neighbour Bulgaria has signed with it a series of economic collaboration agreements, including a free trade agreement.

With the advent of the reconstruction of the Balkans, Macedonia is a uniquely positioned multi-ethnic society, with Albanians and Macedonians in its government. Trusted by all its neighbours, it is bound to become a pivotal player in the stability and growth of this part of the world.

10. Macedonia's Orientation is Not Clear

It has always been the same:






All these come today bundled with democracy and one model or another of free market economy.

Macedonia has adopted both enthusiastically.

It is a pro-Western, pro-European country aspiring to become a member of the Euro-Atlantic structures. Hopefully, it will.

Macedonian Foreign Minister meets CE Secretary General Terry Davis

Skopje. The Macedonian Foreign Minister Antonio Milososki met today in Strasbourg with the Council of Europe Secretary General Terry Davis, a correspondent of FOCUS News Agency reported citing the Macedonian Foreign Affairs Ministry.
Milososki expressed his gratitude for the cooperation of the Council of Europe in the democratization process in the country. The minister informed about the current situation in the country and the European integration reforms underway.
The Religious Communities Bill is expected to receive a positive assessment by the Council of Europe's advisory body, the Venice Commission, Milososki pointed out.
Terry Davis expressed his satisfaction at the pace of democratization in Macedonia and the successful Sarai municipal elections. The CE Secretary General accepted an invitation to the Inter-religion Dialogue Conference to be held in Ohrid in October 2007.

Third anniversary of President Trajkovski's death

The events dedicated to marking of the third anniversary of President Boris Trajkovski's death will kick off late Friday by opening of a Youth Forum in Skopje. In the following days, the International Foundation "Boris Trajkovski" will organize a series of forums, workshops and seminars.

A commemoration ceremony and promotion of a documentary on Trajkovski's abundant political career are scheduled to take place on Sunday.

The central event - 2nd International Political Forum - will be held on Monday, 26 February, the day of the anniversary of President Trajkovski's tragic death.

Numerous politicians, businessmen and religious leaders from Macedonia and abroad are due to take part at the Forum, which will be organized by the Foundation under auspice of the Macedonian PM Nikola Gruevski.

The former President of the Republic of Macedonia, Boris Trajkovski, was killed in a plane crash that took place in the vicinity of Mostar on 26 February, 2004.

The incident left six members of Trajkovski's entourage as well as the two pilots dead.

In principle Macedonia EU entry talks may start in 2008

Launching of Macedonia's talks for the European Union membership depends on the country's reforms process. In principle the accession talks may start in 2008, Slovenian Foreign Minister Dimitrij Rupel told to a group of Macedonian journalists on Wednesday.
- Slovenia on its part will support this policy, which I do not believe will be simple. The situation within EU is rather complex, accompanied by enlargement scepticism. However, we have all supported the conclusions of Thessaloniki Summit, which say that Western Balkans belongs to Europe, Rupel said.
He considers that the real time for launching Macedonia's EU entry talks is in 2008/2009. It may happen during Slovenia's Presidency with the Union - January 1, 2008 - pointing out that it is not up to Slovenia only.
Commenting the recent visits of Euro-enlargement Commissioner Olli Rehn to Macedonia, Rupel said his words should be taken very seriously.
- He has seen many countries on their way to membership and his words are not ill intended, but aimed to stimulate people to address serious problems. I do not dare to criticise the Macedonian Government, but would like to point out that bringing one country closer to the EU is a serious job that should be done, Rupel said.
He also reminded of the general EU recommendations to all candidate countries, which include solid administration, democratic organization, rule and respect of human rights.
Rupel considers that the Ohrid Agreement offers an opportunity for Macedonia to join the union, as the country has been working truthfully on multiculturalism and real minority rights.
Rupel also reiterated Slovenia's support of Macedonia's aspirations to join NATO.
- NATO leaders have commended Macedonia's achievements at the Riga Summit, Rupel said, adding that NATO on its part expects from Macedonia to cooperate, contribute to the stability of Southeastern Europe. This year Macedonia is also expected to boost its cooperation with NATO and increase its presence in the Alliance's operations, Rupel said.
Rupel expressed hope that member countries of the Adriatic Group could join NATO together.

Germany, Macedonia to sign agreement on financial cooperation

Representatives of the Macedonian and German Governments are due to sign today an agreement on financial cooperation for the project "Improving of small- and middle-size private enterprises".

Macedonian Finance Minister, Trajko Slavevski, and the German Ambassador to Macedonia, Ralf Brett, will sign the document on the behalf of their Governments.

Germany has approved a concession loan totaling 7.699.000 euros (30-year, 2% fixed rate), as well as non-repayable financial aid of 523.000 euros intended for accompanying measures necessary for institutional support of the businesses bank that will execute the loan.

Gruevski says Macedonia won't cave in to Greece's pressure to change its name

Macedonia will not cave in to Greece's pressure to change its constitutional name, Macedonian PM Nikola Gruevski said today.

Giving an address before members of the Macedonian Rotary Clubs, Gruevski slammed Greece's policy as being based on blackmails.

"I don't think it's a good policy when one country blackmails a neighboring state. There was a period when Greece used to impose embargos and blockades, but it all turned futile", Gruevski said.

"The name of the Republic of Macedonia will never be changed by exerting pressures and resorting to blackmails. On the contrary, I think the right way to reach the final solution is to continue the talks in the United Nations and to restrain from putting obstacles, which by the way, is in collision with the 1995 Interim Agreement", the Prime Minister said.

As regards Kosovo, Gruevski said that Macedonia has to put its national interests as the basis for the state's policy on this issue, pointing out that any solution that is acceptable for Europe would be acceptable for Macedonia also.

He reiterated that Martti Ahtisaari's plan provides for thorough and permanent resolving of the issue of demarcation of Macedonia's northern border, Macedonian Radio reported.

Concerning the problem with communication between the government and the opposition, Gruevski accused the other side of blackmailing specifying that the opposition set four conditions for establishing of the dialogue.

Siemens to set up software center in Macedonia

German electronic giant Siemens will invest in a software development center in Macedonia.

Siemens's regional manager for development, Vasilis Kastanis, and the Macedonian vice-prime minister in charge of economic issues, Zoran Stavrevski, announced this today in Skopje.

The software center, which will be located in Skopje, plans to employ 10 to 20 persons in the initial stage of the project, Kastanis said.

According to Stavrevski, opening of the Siemens's software center stands as a proof of increasing interest of the foreign companies to invest in Macedonia.

"We expect for the software development center in Macedonia to grow and to supply large portion of Siemens's demand", Stavrevski said.

He expressed hopes for broadening of the cooperation with Siemens to the fields spanning transportation and healthcare.

Kastanis underlined that his company has great confidence in Macedonia's potentials.

"The facility to be set up in Macedonia will be part of the company's global network, spread across 190 countries throughout the world", Kastanis said.

Friday, February 23, 2007

Macedonians Wait Months for Bulgarian Visas

It sounds speedy enough. You dial 05805855 on a February morning and book an appointment with the Bulgarian consulate - in May.

This is how Macedonians have been obtaining visas for Bulgaria since January 1, when Sofia introduced travel restrictions on entry from non-EU countries.

Until a month-and-a-half ago, Macedonians traveled freely to Bulgaria. But after Bulgaria joined the European Union, it was obliged to harmonise its border policy with that of other member countries.

Sofia delayed enforcing the restrictions until the last moment. It also promised to compensate for the new impediment by introducing a free, easy, fast-track visa procedure for neighbours from Macedonia and Serbia.

But the thousands of Macedonians who have been trying since January to obtain visas from Bulgarian consulates say the procedure is neither simple nor fast. Obtaining individual tourist or business visas now involves submitting lists of documents and takes more than two months.

The only alternative is to use the services of travel agencies who claim they can get visas in days.

After the stressful start to the new regime, which saw long queues stretching outside the consulates, the Bulgarian consulates set up the call centre so that people could avoid queuing.

But callers have been disappointed to find out that the next available appointments with the Bulgarian consular officials are usually no earlier than April if they are using the consulate in Bitola and May if they are applying to Skopje.

The result has been a drastic fall in the number of Macedonians traveling to Bulgaria by a factor of about 80 per cent.

Data that Balkan Insight obtained from the border police at the three check-points shows about five times more people crossed the border in December 2006 than in January 2007.

About 73,000 Macedonians passed through the Deve Bair checkpoint, for example, in December, while in January the figure was only about 13,000.

While businessmen on both sides of the border believe the hiccup is likely to be temporary, Bulgaria's tourist industry, in which Macedonians are important clients, is suffering severe stress.

In 2006, almost 550,000 Macedonians entered Bulgaria as tourists, according to the Bulgarian Tourism State Agency. But many Macedonians have now canceled bookings at the Bansko ski resort, where they were regular visitors. Others have cut off their weekend shopping trips to the border towns of Kyustendil, Blagoevgrad and Sandanski.

Donco Nacev, of the ARBO tourist agency in Skopje, says this sector of the industry is facing a slump. "Customers [for trips to Bulgaria] have dropped by 90 per cent," he said, even after a drop in prices.

Maria Govedareva, a hotel manager in Bansko, said only half her usual guests from Macedonia had arrived in January. "Those who did come said they had troubles getting visas," she added.

In Kyustendil and Blagoevgrad, the situation seems even worse. "Our Macedonian and Serbian customers have simply vanished," said Angelina Hristova, manager of a restaurant and hotel in Kyustendil. "I miss them."

Hristova said many people used to come to the town for weekend shopping and would drop by to chat even if they were not staying at her hotel. Since the beginning of 2007, they had disappeared.

Bulgarian and Macedonian companies are less stressed. They see the current problems as an unpleasant but temporary obstacle, pending the hoped-for introduction of new multi-entry, one-year visas for business travelers.

Trade between the two countries remains brisk having almost doubled over the last 10 years, reaching 319 million US dollars in 2005 and 380 million dollars last year.

In the meantime, Macedonian businessmen like Skopje-based Sasho Avelovski struggle with the new bureaucratic procedures just like the rest of the population.

To obtain a Bulgarian visa, Avelovski has to submit his contract with his Bulgarian partner, an invitation asserting that he works with the country on regular basis and proof of travel insurance.

Avelovski said he applied for his first visa on January 15 and was asked to supply his documents on February 15. He was lucky he had only to wait for one month.

To lessen the burden of the visa regime on the Bulgarian embassy in Skopje, the Bulgarians opened a new consulate in Macedonia in Bitola last December.

It is now clear that this measure alone was not enough and that the two Bulgarian missions lack the staff to cope with the thousands of Macedonians seeking entry permits.

Miho Mihov, Bulgaria's ambassador to Macedonia, said the two consulates were acting scrupulously in processing visas and with "an absolute order and responsibility towards the European Union".

But he admitted that the two offices issued only a combined total of 340 visas per day, well short of what is needed, given that about 2,000 Macedonians entered Bulgaria daily in 2006.

Nacev blames poor organisation in the consulates. "It looks as if the visas took Bulgaria's understaffed embassies by surprise," he said. "They could have been prepared better, so the [number of] tourists would not have dropped so much."

Nacev said at least for travel agencies, the situation was improving. "We have priority and can get the visas in one or two days," he claimed.

If this discrepancy continues, travel agents stand to do good business in future, handling the needs of all those who cant afford to wait months for visas.

Vasil Gaytanov, a Bulgarian tourist agent, agreed that the Bulgarian authorities had been wrong-footed.

"The situation is another version of what the Bulgarian authorities experience each winter, when the snow takes them by surprise," he said. "The [problems over the] introduction of visas were as foreseeable as heavy snow in January. In the same way it has - absurdly - left the state looking flabbergasted."

Macedonia makes its first appearance at EMITT 2007

Macedonia will take part in the 11th Eastern Mediterranean International Tourism and Travel Fair (EMITT) in Istanbul, upon an invitation of the Turkish Tourism and Culture Minister Atilla Koc.

Macedonian Economy Minister Vera Rafajlovska will attend today's opening of EMITT 2007. The Bitola-based Epinal hotel and the Mavrovo Hotel Ski Center will represent Macedonia's travel offer.

Participants from more than 50 countries are expected to attend the EMITT fair, including 15 travel agencies from Macedonia. The participation of Macedonian travel agencies was organized by the Association of Travel Agencies of Macedonia (ATAM) and the Hotel Association of Macedonia (HOTAM).

On the sidelines of the fair, Minister Rafajlovska will hold a bilateral meeting with Turkey's Minister of Culture and Tourism Atila Koc, Macedonian Economy Ministry said.

Government's non-transparent campaign - "bleakest" in January

The non-transparency over expenses of government's campaign is the "bleakest", whilst the successful thwart of bribery and fraud in property restitution process is the most positive event in January in terms of corruption and the anti-corruption.

These two events got majority votes in the monthly opinion poll Corruption Barometer, conducted by NGO Zero Corruption and the independent news agency Makfax. The respondents include 17 chief editors of national electronic and print media in Macedonia.

"Government's campaign entitled Invest in Macedonia, deemed by most journalists and experts as good and indispensable, turned "bleak" after the Prime Minister said the campaign "will cost less that 1% of first investment". Given the general estimates amounting several million euros, the government acts non-transparently as it decided not to disclose the expenses of the campaign. Such decision was most probably prompted by political or pragmatic reasons."

This explanation was hailed by eight chief editors who took part in the survey.

Second on the list of "bleak" events, with 6 votes 'yes' is the scandal unfolding in the Macedonian Football Federation. The embezzlement reported in Macedonian Posts and lately confirmed by state auditor was ranked 3rd, and the conduct of the former government in connection with the sellout of Suvenir factory was ranked 4th of shortlisted events.

The successful thwart of attempted bribery and fraud during property restitution in Strumica process is deemed as the most positive event in the fight against corruption. The event was highlighted by 9 chief editors.

Namely, the police slapped corruption and fraud charges against a member of City Council and Commission in charge of property restitution procedure. He is said to have earned at least 120.000 euros. The Interior Ministry tracked out the case and legal proceedings are underway.

Second on the list of "light" events are the activities of the National Anti-Corruption Commission, which ended the first four-year mandate in January. Third on the list of positive events is the Interior Ministry's pro-active fight against corruption, as the ministry pursues the anti-corruption programme.

Corruption Barometer poll is conducted each month since December 2004. The respondents include chief editors of national media in Macedonia.

The January poll included chief editors of A1, Alsat-M, Kanal 5, Sitel and Telma; radio Kanal 77, newspapers Dnevnik, Vest, Utrinski Vesnik, Vrene, Vecer, Fakti and Biznis, weekly newspapers Fokus, Kapital and Aktuel, and Lobi online edition.

Launch of bidding for construction of 60 small hydro-power plants

Macedonian government announced a public tender for water concessions for 60 small hydro-power plants for electricity generation with installed capacity of up to 5 MW.

The public tender, announced today by the Ministry of Economy, specifies that water concession would be provided for electricity generation according to the DBOT model (Design, Build, Operate and Transfer), at the confluences of Vardar River, Strumica River and Crn Drim River.

The domestic and foreign companies and individuals that will pick up tender documents and meet the requirements will be considered eligible bidders.

The tender documents will provide, among other data, site specific information about the exact location, hydrological conditions, and possibilities to feed the produced electricity into the public distribution grid, as well as site access and land ownership. Sites will be tendered separately.

The deadline for pick-up of tender documents will expire on 16 March 2007. Bids are to be submitted not later than 14 June 2007.

The unsealing of bids will take place on 15 June 2007. The water concession will be granted for a period of 20 years, in accordance the law on waters.

The bidders could submit offers for one or more locations for small hydro-power plants, but no more than one offer per location.

A several public tenders will be launched soon given the government's announcement on planned construction of 400 other small hydro-power plants.

Police lays charges against two persons for malversations in property restitution

Strumica Police has laid criminal charges against R.T, 53, employed in Cadastre Office and M.P., 39, Deputy Public Attorney for Strumica area, suspected of having committed malversations in proceeding of a property restitution case.

The two are charged with power abuse, Macedonian Interior Ministry announced.

Back in 2003, M.P. issued a certificate upon submitted application for restitution of property, in which he was also listed as an interested party. The certificate contained false data on the size of the property and its identification numbers, on the basis of which the Restitution Commission approved allotment.

The secondary suspect M.P., failed to revoke the certificate although she was aware that the property in question could not be subject to restitution procedure.

Jankulovska says Macedonia is active in fighting terror

Macedonia takes active approach in fighting and prevention against terrorism, Macedonian Interior Minister, Gordana Jankulovska, said today in Berlin.

"Given the global dimension of the terrorist activities and the need of joint action and prevention, Macedonia cooperates with all EU members; as well as on a bilateral level with the countries in the region; and with the international organization, in accordance with the UN Charter, international law, and the relevant international conventions and protocols", Jankulovska said today in her address before the attendants of the 10th European Police Congress.

The two-day Congress that brought together about 1.600 experts and some 20 interior and justice ministers is dedicated to the "European Security Strategy - Concepts and Technologies in the Battle against Terrorism".

Minister Jankulovska underlined that "the need of harmonization of the interest and outlining a joint strategy of the SEE countries on prevention and stamping out the threats of the international terrorism, resulted in establishing of cooperation on a multilateral level."

Macedonia seeks to woo investors to "business paradise"

In a bid to increase the amount of international business in Macedonia, the government of Prime Minister Nikola Gruevski has launched a promotional campaign aimed at foreign investors. "Invest in Macedonia, a new business paradise in Europe" is the slogan.

Through paid commercials in 50 leading papers and magazines in 35 countries, including 21 EU members, the government hopes to make international investors aware of the business advantages in Macedonia. These include low tax rates, a one-stop shop system for business registration, access to a burgeoning consumer market, 3.1% inflation, and the promise of EU accession.

Gruevski cautions against unrealistic expectations. "We don't believe that after the promotion, investors will just pour into Macedonia," he said. "Our initial goal is to encourage investors to think about investing in Macedonia."

The government also has announced a tender for 20 consultants who will be tasked with placing information abroad concerning business in Macedonia, the prime minister noted. He said the Foreign Investment Agency, whose budget has been increased five times over the past year, would readily provide information for investors through a special phone line.

"I am convinced that this investment the government is making now to advertise Macedonia will only be 1% of the first investment that will come to Macedonia," Gruevski said.

Implementing cadastral reform and overhauling the country's judiciary will also help woo investors and draw more foreign capital to the country, he added.

The promotional efforts are already having an impact, according to the Foreign Investment Agency. "So far, the Agency has received up to 70 e-mails, mostly from US companies that are asking for more detailed investment information," agency head Viktor Mizo said, expressing optimism that the trend will continue.

Free Economic Zones in Macedonia

Answer: There is an important distinction which the media is not aware of between FREE ZONES and FREE ZONE SITES.

To quote from the law:

"A free zone site represents a detached, enclosed and marked area of the territory of the Republic of Macedonia on which commercial activities are conducted under conditions prescribed by this and other laws and on which custom and other tax incentives determined by this law shall be applicable."

"A Free Zone shall be established as trade associations conducting economic, technical, administrative, expert and other activities supporting the operations in the free zone sites."

Question: Do other countries have free zones?

Answer: Dozens of other countries have free trade zones, free industrial zones, free industrial or technology parks, customs free zones, free transhipment zones and many other types of free economic zones. Our law allows for all these types of activities to exist. It is very broad and flexible and one of the best and most complete laws I have seen. As opposed to popular opinion, free zones exist even in rich countries such as the United Kingdom or the USA (although they are not called "free zones" there). It is true, though, that to poor and middle income countries, such as Macedonia, a free zone can be an important tool for economic development.

Question: Why do you use such cautious language, "can be"?

Answer: Because it is never enough to have a law. What matters is how it is implemented. There are free zones in countries as diverse as the Philippines, Tunisia, Costa Rica and Taiwan. In some places they are the engine of the economic locomotive, in other they are a drag on the local economy.

Question: So, the critics are right, free zones can be a bad thing?

Answer: The critics are wrong. Anything that has the potential of generating investments, encouraging entrepreneurship, creating new working places, enhancing exports and improving the balance of payments – should be implemented without delay. Free zones are potentially powerful economic engines of exports and growth and employment. Would it have been wise of us to ignore their potential?

Question: Can't free zones be used as tax havens, for smuggling or other criminal activities?

Answer: If the free zones are run by criminals AND (this is a cumulative condition) the authorities are inefficient or corrupt – of course it can. But our law is very strict on WHO will own and run the free zones. It is also very explicit about the precise functions and procedures to be performed by the authorities intended to ensure that the free zones are not abused. Free zones will be established only where and when they can increase employment, bring new technology and know how to the country and increase exports. An average of 65% of the goods and services produced in the zones MUST be exported or the developer might lose its licence. Additionally the law says that the businesses operating in the zone must use local manpower and prefer domestic suppliers where economically feasible.

Question: What is the Free Zones Directorate?

Answer: This is my favourite part of the law, the one I am most proud of. We introduced, for the first time in Macedonia, not only in theory, but in practice, the concept of "One Stop Shop". All the business entities in the free zone will have one address to go to. They will no longer have to run for weeks between ministries, authorities, agencies and state organs. They will get everything they need from one central authority, from one address. All the relevant ministries and state organs will be represented there, with full authority to render all the services required by the free zones users. This is unprecedented. The ministers are worthy of the highest praise for being willing to participate in such an innovative approach. The law says:

"The Free Zone Directorate shall be responsible for… granting approvals of requests of developers for the establishment of free zones; provision of supervision and management of free zone sites through its branches; coordination of the activities of state organs and authorities and public enterprises within the free zone sites; planning and developing free zone sites and making sites available to developers; public relations, advertising and promotion of free zone sites; attracting developers and users to the free zone sites; registration of businesses and structures within the free zone sites; coordination of issuance of licenses, permits and approvals where and as needed, of product quality control and the issuance of certificates of origin by the members of the Directorate; Inspection of installations and working conditions within the free zone sites; convening a labour relations committee in which all labour disputes between employees and employers in the free zone sites are to be settled; the coordination of the issuance of export and import licenses; coordination of the prevention of smuggling; coordination of the safety and security of people and property in the free zones sites; Provision and maintenance of all public goods and utilities … conducting other activities associated with the functioning of free zone sites and especially the implementation of the 'one stop shop' concept of management of the free zone sites; raising the required start-up capital."

Question: So, from now on, any trade association can open a free zone?

Answer: Absolutely not. The developer must satisfy very strict and rigorous criteria to qualify. The law demands that it "…provide written proof of their financial ability matching their financial obligations under this Law either in the form of a performance bond or a bank document substantiating the availability of unencumbered funds in their account or audited financial statements" and "demonstrate previous experience and track record in trading or in the operating of free zone sites".

The developers, in their application, must provide an environmental impact assessment, a marketing plan and a business plan or a feasibility study.

And the developer loses his approval if it enters bankruptcy procedures, if it is proven that he provided false material information in his request, If he failed to build and operate the free zone site in accordance with the stipulations of this Law or failed to submit one annual report.

Additionally, the developer pays 0.3% of the total turnover of the business entities in his zones.

I think these are relatively reasonable terms.

It will also not be that easy for the developer to do in the zone something other than what he undertook to do. Almost every substantial change requires a new approval. The law states: "Each change of a free zone shall be subject to the procedure for the establishment of a free zone…" "Change" in this law shall mean: enlargement of the approved free zone site area; change in location of the free zone site; new activities are to be conducted in the approved free zone; each change in the composition of the developers (addition of new developer, change of corporate structure, take over, merger, acquisition, etc.) of the free zone; change of the period for existence of the free zone.

Question: Still, inside the zone – the developer is king. Actually, it is a kind of ex-territorial area, like an embassy?

Answer: I want to say it once and for all (because I heard this argument before):

A free zone is NOT an ex-territorial area. It is an integral and inseparable part of Macedonia. All the domestic laws of Macedonia apply there. It simply has different rates of customs and taxes. The over-riding status of the Macedonian domestic law is stated numerous times throughout the law. One example:

Article 20 says: "Free zone developers shall enact rules or pose conditions (hereunder referred to as 'developer rules') under which their free zone site will be operated and activities conducted, regulate internal order and prescribe separate measures for protection of the working and living conditions and the environment. BUT…

The developer rules shall not contradict all the applicable laws of the Republic of Macedonia, including their by-laws and regulations and all the international obligations of the Republic of Macedonia... AND The developer rules shall be announced in the Official Gazette of the Republic of Macedonia after the approval given by the Free zone Directorate."

Question: Aren't we offering too much by way of tax incentives? Aren't the revenues lost by the state worth more than the free zone will ever generate?

Answer: It is a very narrow point of view. Tax revenues are not the only thing we should consider. What about unemployment, technology transfers, export enhancement? These are invaluable in that they can revive the economy.

Compared to other free zones in other countries, we are offering mid-way concessions. We are by no means too generous. Additionally, to qualify to receive the tax incentives, the user must satisfy certain annual export quotas. It must prove that it generated NEW activities, not merely transferred activities from "mainland" Macedonia to the free zone "island". It must show that it is not involved in criminal activities or bankruptcy procedures and so on. Only then is it eligible to enjoy the tax incentives.

Question: Which are?

Answer: The law says it best:

"Free zone users meeting the terms as in article 21 of this law shall be exempted from:

1. Sales tax on products within the free zone site except for those products sold for final consumption within the free zone;
2. Sales tax and VAT on goods imported into the free zone site for production purposes and for performing other approved activities in the free zone;
3. Sales tax on services provided in the free zone immediately linked with export of goods and services;
4. Profit tax for a period of ten (10) years from the day of commencement of activities in the free zone;
5. Property tax for a period of ten (10) years from the day of commencement of activities in the free zone;
6. All taxes otherwise applicable to any transfer of property or rights thereof between developers and users within the free zone.

Free zone users reinvesting in the capital assets of the free zone site shall be entitled to a reduced profit tax base for the amounts invested after the expiration of the 10-year period.

Free zone users shall be exempted from paying participations (contributions), taxes and other duties pertaining to use of land for construction, connection to the water supply, sewerage, heating, gas and power supply networks.

Free zone land may be leased to foreign investors for a period of fifty (50) years, with a possibility to extend the term to another twenty-five (25) years, pursuant to the law.

The developers of the free zone shall have the full right to sublet or rent parts of the free zones or structures thereon or rights thereof to the users."

Question: Are the economic activities within the free zone restricted?

Answer: Every type of economic activity is allowed EXCEPT the activities explicitly forbidden by the law. These include: the trading of decayed, rotten, expired or infected goods or waste material detrimental to the environment or not fit for human or animal consumption; radioactive materials except those which are needed for industrial, medical and scientific research purposes under a valid license from the competent authorities; drugs, chemicals and biological materials and chemical and biochemical derivatives with the exception of those used in industrial, manufacturing, medicinal and pharmaceutical preparations, according to certificates issued by the Ministry of Health; arms, munitions, weapons and military explosives; goods or services which originate from countries or firms subject to boycotts, embargoes or blockades imposed by the competent national and international organs and authorities; goods or services that violate public morals, public defence, public safety and the security of the state; goods or services that violate the domestic laws and international treaties pertaining to intellectual and commercial property; practices, services and activities in contravention or violation of treaties, laws, regulations and directives regarding the protection of the environment in Macedonia.

Free zone users may apply standards, technical and quality norms of the destination country when manufacturing goods in the free zone intended for export.

Free zone users may set prices for their goods and services and will not be subject to laws and regulations pertaining to prices in the Republic of Macedonia.

Question: Will workers' rights be protected in such an environment?

Answer: Workers' rights are protected only by a good economy. In Macedonia, we have a lot of theoretical workers' rights. But the right to work is violated by mass unemployment and by gigantic wage and pension arrears. All the employers in the free zone shall sign a collective agreement with their employees. The collective agreement will oblige the employers and the employees to settle labour dispute through arbitration or mediation. The Directorate shall set up a labour relations committee to provide the employers and the employees with an arbitration and mediation mechanism.

Sam Vaknin ( ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

According to Press in Skopje Bulgarian Generals would set Macedonia further away from NATO

Skopje. Under the title ‘Bulgarian General to lead Macedonia to NATO’ the Macedonian daily Untrinski Vesnik, which is close to the oppositional party SDSM publishes information for the forthcoming replacement (at the end of the year) of the British Head of the NATO Mission in Macedonia Gen. John Durance with a Bulgarian General. The daily does not mention the name of the replacement, but notes that this would set the country further away from the desired joining to the Alliance in 2008.
Utrinski Vesnik comments that given the experience Macedonia has with another Bulgarian general – the current Bulgarian Ambassador to Skopje Miho Mihov, it would not be a surprise if the new NATO mission sets the country away instead of getting it closer to the Alliance membership in the key years till the enlargement in 2008.

Wednesday, February 14, 2007

Macedonia has no plan as to how to use EUR 210 million from EU

Skopje. Macedonia doesn’t have a plan yet as to how to use EUR 210 million from the new EU Instrument of Pre-Accession Assistance (IPA), which will be allotted within three years, the Macedonian newspaper Dnevnik reports. So far only one project has been chosen as part of the police reforms. The total of EUR 8 million will be used for it. Besides, EUR 30 million will be used for the construction of road infrastructure from Corridor 10 /north-south/.
There are no other projects. Neither has the government chosen priority projects, which will be financed by the EU.
The EU will finance projects in five sectors: institutional consolidation, transborder cooperation, transport and environment, human resources development and agriculture. Municipalities, state institutions, private companies and farmers stand equal chances of getting funding.

Construction of Johnson Controls' factory begins

The construction of Johnson Controls' factory will begin Monday at the free economic zone Bunardzik near Skopje.

Mavrovo Engineering construction contractor is to build the plant within next seven months. Johnson Controls Inc, a global market leader in automotive systems, will produce automotive interior electronics.

Meanwhile, Macedonian government undertook to provide the necessary infrastructure in Bunardzik. The electric power, water and gas installations are scheduled for completion by October at Bunardzik zone.

The Johnson Controls' investment in Macedonia is put at $20 million. The company said the first phase of investment will provide 150 jobs and 500 new jobs in the next five years.

Bomb blast in Skopje, no casualties

An explosive device went off on 192 St. in Skopje at 23.30 hrs. on Monday, leaving no injured.

According to the Interior Ministry's announcement, hand-grenade was most likely in question. The explosion damaged shop windows of the firms Dura Kom, owned by S.D., 40, and Bani Market, owned by L.Z., 40, as well as of the agricultural pharmacy Zhetva, owned by Z.S., 23.

"A police forensics unit conducted inspection at the site and took samples of the explosive device for further proceedings", Ministry's announcement says.

Macedonia seeks closure of Kosovo drama

Macedonia’s National Security Council, made up of the country’s top officials, met to discuss the UN envoy’s proposal for Kosovo’s final status after he presented it to Belgrade and Pristina on February 2, Balkan Insight has learnt.

The meeting is seen as a clear sign that Skopje remains deeply concerned about the outcome of the Kosovo drama.

The government is relying on the international community to keep matters under control and prevent fresh destabilisation of the region, but analysts are still concerned about potential dangers for the ethnically divided republic.

One is that internal political instability will increase, after Albanian opposition parties appeared to time a walk-out from parliament with the announcement of Kosovo’s final status. Another worry is that extremist groups from Kosovo may set up bases in the border areas of Macedonia. A third area of concern is a potential division of territory between Serbs and Albanians in northern Kosovo; this may encourage Albanians in western Macedonia to try to detach territory in a similar way.

For all these reasons Skopje wants to see the final status issue in Kosovo off the agenda as soon as possible. Indeed, many expect Macedonia to be among the first countries to recognize Kosovo as an independent state.

When it comes to Kosovo, Macedonian public opinion is divided along ethnic lines. Ethnic Albanians, who make up a quarter of the country’s two million inhabitants, have strong family and cultural ties to Kosovo and strongly support independence. Most ethnic Macedonians, on the other hand, see Kosovo as a potential danger.

Ethnic Macedonians have been wary of Kosovo since the Kosovo conflict of 1999, when some 300 000 refugees fled to Macedonia, placing a burden on already fragile ethnic relations in the country.

Two years later, Macedonia was plunged into an ethnic conflict launched by fighters of the National Liberation Army, demanding greater rights for Albanians in Macedonia.

The six-month conflict ended with a peace deal that provided greater rights for the Albanians, while the guerrillas turned into politicians and formed the Democratic Union for Integration (DUI).

The party joined the centre-left government from 2002 to 2006, when Macedonia made its policy shift in favour of Kosovo’s independence, but withdrew to the opposition after elections returned the centre-right to power.

On the eve of the Kosovo status resolution, the behavior of the DUI is one of the main reasons for Skopje’s anxiety.

The party stormed out of parliament this week along with its minor partner, the Party for Democratic Prosperity, complaining that the government was bypassing the Ohrid deal provisions.

Experts say the walkout has deprived Macedonia of a broad political consensus on Kosovo, increasing the risk of trouble.

“Macedonia is in a fragile situation; there is no political unity and stability and we have two parties that have decided to act outside the institutions,” law professor Vlado Popovski told Balkan Insight. “Macedonia would have been much more resilient towards potential risks if there had been political unity,” he said.

Biljana Vankovska, professor at the Institute for Defence Studies in Skopje, agreed. “If the best way to prepare for Kosovo’s final status was internal stability and a broad political consensus, we are again unprepared,” she said. “The DUI walkout is another negative factor.”

Popovski said the DUI move was timed to coincide with developments in Kosovo, with the DUI “using tensions over Kosovo to put pressure on the authorities to accept their political demands”.

Apart from these internal developments, events in Kosovo pose other threats to Macedonia’s stability. Some analysts fear Macedonian border villages, populated by Albanians, could become a safe haven for extremists groups from Kosovo.

Blagoja Markovski, a former army official and head of the Balkan Forum for Security NGO, said extremists unhappy with Ahtisaari’s proposal could try to destabilise Macedonia.

“Judging from the experience of 2001, when armed groups freely crossed the porous border with Kosovo, extremist groups from Kosovo could set bases in border areas of Macedonia populated by Albanians,” Markovski told Balkan Insight.

This concern was also discussed at the last session of the Security Council. One official told Balkan Insight that remnants of extremist criminal groups have no political backing and do not currently pose a threat but added: “It doesn’t mean they would not be a threat in a different political context”.

President Branko Crvenkovski recently said the presence of extremist and criminal groups in Kosovo, as well as large quantities of weapons, needed continued monitoring.

“The capacity of Kosovo’s institutions is weak; we must not underestimate the risks and our institutions will remain vigilant and will closely monitor developments,” he said.

Another potential worry is the outcome of events in the north of Kosovo, where some local Serbs have said they will secede in the event of Kosovo gaining independence.

“If parts of Kosovo (start to) function independently from the state with parallel structures, Albanians may go for the same model in (western) Macedonia,” one official said.

Vlado Popovski, one of the architects of the Ohrid peace deal, agreed, saying the division of northern Kosovo could have negative repercussions. “It could result in an attempt to create a similar situation in western Macedonia,” he said, adding that he was confident that the international community would not allow a division because of the “domino effect”.

In the meantime, Macedonian politicians believe Kosovo will not reignite the region on account of the numerous safeguards they expect to be incorporated into any final settlement see link to document.

These start with a ban on any potential merger of Kosovo and Albania, which they believe effectively rules out the creation of a Greater Albania that would seek to absorb all the mainly Albanian territories of the region, from Kosovo to western Macedonia and the fringes of Serbia and Montenegro.

Some officials also expect that the UN envoy’s proposal to address the live issue of the border between Kosovo and Macedonia.

Pristina has refused to recognise the line, saying it was agreed between Skopje and Belgrade to suit Macedonia and at Kosovo’s expense.

Macedonia now wants to see final “closure” of the Kosovo issue, according to Dane Taleski of the Institute for Democracy. Prolonging the final status question was the greatest threat to the stability of Macedonia and indeed the region.

“We need to wrap up the Kosovo drama once and for all, for the longer it stays open, the more someone will want to use it for different purposes,” Taleski said.

“Limited or full independence of Kosovo should not be taboo or a security threat to us,” Vankovska agreed. “It is much worse to keep final status undefined, as this will increase anxiety among all actors.”

Liberal Democratic Party in Macedonia elects its new leader

Skopje. Jovan Manasievski, Macedonian Defense Minister in the government of Vlado Buckovski, is the new chair of the Liberal Democratic Party, the correspondent of Focus Agency in Skopje reports.
The decision was made at the party’s congress in Skopje on Sunday. The other candidate was Stevce Jakimovski, former Minister of Labor and Social Policy.

Representatives of Commerce Chamber to meet with judicial authorities

The first meeting between the representatives of the Macedonian Commerce Chamber (MCC) and the judicial authorities is due to take place in Skopje today.

The meeting has been staged within the efforts for developing and putting into practice of the principles of public and private partnership, MCC announced.

"This meeting is aimed at familiarizing the judicial authorities with the views of our members on the current situation and problems they are facing in communication with them", the announcement says.

MCC also expects to be briefed about the progress of the ongoing reforms in judicial sector and its reflection on doing business in the country.

"In this way, we would like to express our support to the ongoing reforms and give our contribution towards creating a better business environment, which stands as one of the primary commitments of our governments on the road to EU and NATO", the announcement says.

Representatives of the Justice Ministry, Republic Judicial Council, Supreme Court, Constitutional Court, Appellate Courts, several district courts, judges and commerce lawyers' guilds, will attend the meeting.

2 teens die in two-car collision on Prilep-Bitola road

Two teenagers died and six other were injured in late Monday's collision involving two cars on Prilep-Bitola road.

Makfax correspondent says the 14-year-old Xhengis Musovski and 15-year-old Jakup Rexhepi, both from Bitola, died in collision involving Lada and Polonez taxi.

The accident occurred when the Lada vehicle run out of gasoline and the teens got out and started to push the vehicle to nearest gas station. The Polonez came up on the road and collided with the Lada. Both cars slipped off the road.

Two teens died instantly, while the other six were rushed to Bitola's hospital and are in stable condition.

Sunday, February 11, 2007

Don't Hurry to Invest in Macedonia

In the near past, Macedonia seemed to have been bent on breaking its own record of surrealism. While politicians in other countries in transition from communism and socialism strive to be noticed for not stealing, their Macedonian counterparts, without a single exception, aim to steal without being noticed.

The previous VMRO-DPMNE government (1999-2002), in which Gruevski served as Minister of Finance, plundered the country shamelessly. The local papers accused then outgoing prime minister, Ljubco Georgievski - a virtual pauper when he attained power - of owning land and a residential building in the capital's most expensive neighborhood. The erstwhile Minister of Defense, Ljuben Paunovski, was recently sentenced to 42 months in prison for his pecuniary shenanigans during his tenure. Another leading figure, the former Minister of interior, Ljube Boskovski, is in the dock in the Hague on war crime charges.

Inevitably, VMRO-DPMNE lost power to the SDSM in the heated elections of 2002 and then fractured as its new leader, Gruevski, purged the old guard and installed his own cohorts everywhere.

Then prime minister designate, Branko Crvnkovski (the country's current President whose legitimacy is contested by the Gruevski government), vowed to learn from his party's (SDSM) past mistakes when they venally ruled the land until 1998. In a sudden and politically-motivated resurrection, the high court began scrutinizing the "Okta" deal: the opaque sale of the country's loss-making refinery to the Greeks in 1999. Heads will roll, promised both the election victors (the SDSM) and their Western sponsors. Nothing happened.

The country's current Governor of the Central bank and then minister of finance, Petar Goshev, a former socialist high-level functionary known for his integrity, announced that his top priority would be to eradicate corruption by instituting structural and legal reforms. His newfound socialist partners - he headed a center-right outfit - found this bizarre ardor unpalatable and promptly kicked him out of office.

Four years later, with Georgievski relegated to the political wasteland, Crvnkovski ensconced in the presidential suite, and his successor, Buckovski a resounding failure, Gruevski's ascent in 2006 was all but secure. It was the SDSM's turn to crumble acrimoniously amid a virulent contest for its leadership. It has never recovered and Macedonia has had no viable opposition ever since.

Macedonia's post-electoral euphoria faded, in July 2006, into arduous coalition-building negotiations replete with arm-twisting by the worried representatives of the "international community".

The country's new VMRO-DPMNE Prime Minister, Nikola Gruevski (36), excluded from his government the party that won the majority of Albanian votes because of its roots in the much-hated Albanian NLA, National Liberation Army, the instigator of the 2001 near-civil-war. Albanian factions clashed in a chilling reminder of the country's inter-ethnic fragility.

To add to Macedonia's precarious standing, its greenhorn Minister of Foreign Affairs, Antonio Milososki, engaged in intermittent - and utterly avoidable - spats with its neighbor and biggest foreign investor, Greece, virtually guarantee delayed accession to both NATO and the European Union, the much ballyhooed strategic goals of the current administration. Milososki adopted a similarly belligerent and ill-informed stance against Bulgaria, another flanking polity and the newest member of the coveted European club.

Where the government claims great strides is in its uncompromising stance against all forms of malfeasance and delinquency in both the public and the private sectors. From the army to various municipalities, scandals erupt daily in an atmosphere often bordering on a frenzied, media saturated, witch-hunt.

Gruevski is alleged to have rejected a bribe of 3 million euros (c. 4 million USD) offered to him by a Serb firm. His government embarked on highly publicized campaigns against illegal construction (the "urban mafia") and other festering nests of corruption.

Alas, Gruevski himself appointed members of his family and innumerable political hacks to senior government positions in a series of blatant acts of nepotism and cronyism decried by the European Union and other watchdogs. Consequently, with one exception (Zoran Stavreski, the talented vice-premier), the government in all echelons is largely made up of utterly inexperienced operators. Plus ca change.

Politics, venality, and terrorism are the sole venues of social mobility in this tiny, landlocked, country of 2 million impoverished people. Immediately following their insurgency, the former terrorists of the Albanian National Liberation - courtesy of Western pressure and the Albanian voters - occupied crucial ministries with lucrative opportunities of patronage of which they are rumored to have availed themselves abundantly.

Comic relief is often provided by bumbling NGOs, such as the International Crisis Group. In 2001, its representative in Macedonia, Edward Joseph, went to Prilep to conduct an impromptu investigation of the thriving cigarette smuggling trade. Posing to the cameras he declared that only the local leaf-rolling plant was not involved in this pernicious line of work.

Macedonia is a hub of expats and consultants in the Balkans. Ante Markovic, an Austria-based former Yugoslav prime minister, who served as an oft-criticized economic advisor to the government until he was dumped, sued Macedonia for $1 million. In 2001-3, the youthful former minister of finance, Nikola Gruevski, was asked by USAID, on behalf of the Serbian-Montenegrin government, to serve as its consultant on matters of reform of the financial system. The author of this article acted as Economic Advisor to Georgievski's government and, later, to Gruevski himself.

But to no avail. The country is a shambles. In the wake of a civil war, the official unemployment rate is 31-35 percent. Close to 70,000 people work in the bloated central and local administrations. The trade deficit is an unparalleled 17 percent of GDP. In 2001, the budget deficit climbed to 5 percent, though it was since halved.

"The Heritage Foundation" has consistently ranked Macedonia 95-97 out of 155 countries in terms of economic freedom. The country is "mostly unfree" it correctly concludes in its reports, though it cites sometimes erroneous data. A moderate level of trade protectionism, low tax rates, moderate inflation, a moderate burden of the government, moderate barriers to capital flows and foreign investment, and moderate interference in the economy are offset by a dysfunctional banking system, intervention in wages and prices, low level of protection of property, a high level of regulation, and a very high level of activity of the black market.

Owing to the IMF's misguided emphasis on exchange rate stability, the currency is inanely overvalued. The manufacturing sector has all but evaporated. Industrial production declined by a vertiginous 20 percent in August 2002 compared to the average the year before - or by 11 percent year on year. The trend has not been reversed since.

Macedonian steel is exempt from the latest bout of American protectionism, but not so its textile industry. Europe is fending off the country's agricultural products. People make their meager and desultory living catering to the needs of an ever-expanding international presence or dabbling in illicit activities. Piracy of intellectual property, for instance, is thought to yield c. 1 percent of GDP.

Close to half the population is under the poverty line. The number of welfare cases increased by 70 percent between 1994 and 2002. Generous and incessant multilateral and bilateral credits sustain the faltering economy (and line politicians' ever-deepening pockets). The country is alternately buffeted by floods and droughts. There has been only one day of rain in all of January 2007.

In a much-touted donor conference after the 2001 skirmishes, the pledges amounted to a whopping 15 percent of GDP. Then governor of the central bank, Ljube Trpski (currently detained for his role in a murky affair involving the country's foreign exchange reserves), cheerfully predicted that these handouts will cover the gaping hole in the balance of payments.

Macedonia also received 7.5 percent of the gold reserves of the former federated Yugoslavia of which it was a component. At between $700 million and one billion USD net, foreign exchange reserves are at an all-time high. Macedonia has recently decided to prepay its $104 million debt to the Paris Club creditors.

Both the IMF and the World Bank, who did their best to obstruct the previous VMRO-DPMNE government in its last few months in power, promised a speedy return to business as usual. An hitherto elusive standby arrangement is likely to be concluded by the end of the year. World Bank funds, frozen in material breach of its written contracts with the state, will flow again. The EU promised development funds if the new government acts in a "European spirit" - i.e., obeys the diktats of Brussels.

The incoming administration is likely to enjoy a period of grace with both the trade unions and international creditors. Strikes and demonstrations by dispossessed miners and underpaid railways workers have waned. But Macedonia joined the WTO in 2002 and will thus be forced to open even more to devastating competition. Labor unrest is likely to re-erupt soon.

Foreign investment in the country mysteriously wanes and waxes - some of it laundered money reinvested in legitimate businesses. The government is doing a great job of building up the image of Macedonia as an FDI (Foreign Direct Investment) destination. But public relations and perceptions management must be followed by palpable actions and the new government is woefully short on concrete steps. It talks the talk but hitherto does not walk the walk.

The government's attempts to attract foreign investors by introducing lower taxes may backfire: studies clearly evince that multinationals worry less about taxation and more about functioning institutions, a commodity that Macedonia is irreparably short of. Moreover, vanishingly lower taxes signal desperation and Macedonia indeed sounds more desperate than confident. No one wants to buy the country's leading bank, long on offer. Only one contender (Mobilkom Austria) entered a bid for Macedonia's third operator cellular network licence.

On a few occasions, domestic firms, using international fronts, have bid for local factories, such as the textile plant "Astibo". The national payment card project has been guzzled by two banks incestuously close to the outgoing ruling party, VMRO-DPMNE.

But there are real investments, too. The capital's central heating utility was purchased by a unidentified French energy outfit, announced the general manager. The utility's shares were listed in the Athens stock exchange. The Macedonian construction firm "Granit" will build a $59 million highway in Ukraine, with which Macedonia enjoyed an unusually cordial relationship, to American chagrin. Johnson Controls and others are eying a string of free trade zones and infrastructure projects (dams, roads, railways, oil pipeline). A much hyped Vardar Silicone Valley is in the works.

The contentious census in the first two weeks of November 2002, a part of the "Ohrid Framework Agreement" which ended the internecine fighting the year before, was conducted fairly. The count showed that Albanians make c. one quarter of the population rather than one third, as most Albanians spuriously insisted.

But, with Kosovo's independence looming across the border, the restive Albanians are likely to coerce the enfeebled Macedonia into translating this numerical reality into political and economic clout. The Macedonians are likely to resist. The West will intervene. Macedonia is facing a hot spring and a sizzling summer.