USAID: Macedonia Country Profile

 

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Geography/Population/Economy Size: 9,779 sq. miles (25,333 sq. km) -- slightly larger than Vermont Languages: Macedonian (Albanian, Turkish, Roma and Serbian are also official languages where over 20% of the population belongs to ethnic communities) Population: 1.95 million (1998) - 67% Macedonian, 23% Albanian, 4% Turkish, Roma 2%, 2% Serbs Population Growth Rate: 0.43% (2001 est.) Life Expectancy: males - 71.79 years, females - 76.43 years (2001 est.) Infant Mortality: 9.08 deaths per 1,000 live births (2000 est.), 12.95 (2001 est.) Per Capita GDP: $1,848 (1999), $1,788 (2002), $1,740 (2001 est.) Gross Domestic Product (GDP): $3.730 billion (2002), $3,477 (2001 est.) Real Annual GDP Growth: 4.6% (2001), 3% (2002 est.) Annual Inflation: 5.3% (2001), 4.6% (2001), 3% (2002 est.) Private Sector share of GDP: 60% (1998) Foreign Direct Investment Per Capita: $83 (1998), $16 (1999), $76 (2000), $217 (2001) Government Capital: Skopje President: Boris Trajkovski Prime Minister: Ljubco Georgievski Ambassador to the U.S.: Nikola Dimitrov Support for East European Democracy (SEED) Assistance to the Former Yugoslav Republic of Macedonia (FYROM) Macedonia has made considerable progress with economic and democratic reforms since it first gained independence from Yugoslavia in 1991. With nearly $273 million in SEED assistance since 1991, Macedonia has established a credible framework of laws and policies at the national level. SEED assistance for FY 2002 is $49.5 million. Results include the stabilization of the economy, a sounder financial system, a growing private sector, and the establishment of democratic institutions, both governmental and civil society. New private sector investment is being encouraged, as is restructuring. Greater citizen participation in political decision- making and helping local government become more responsive to its citizens will strengthen Macedonia's democracy. Following a serious economic downturn from 1991 to 1996, Macedonia's economy stabilized and was experiencing accelerated real growth, from 1.2% in 1996 to 4.3% in 2000, with a drop in inflation from over 600% in 1992-94 to only 0.6 percent in 1997-99. This growth came to a halt with the Kosovo crisis and was further impacted by the 2001 conflict within Macedonia which resulted in a negative growth rate of -4.6% in 2001. With the reduction of tensions and the implementation of the Framework Agreement, growth of 3% is expected in 2002. While reforms, including the privatization of more than 2,700 enterprises, are helping to create an environment conducive to economic growth, many firms continue to be hindered by a lack of business experience and foreign investment. USAID is providing critical assistance to enterprises through a business resource center, trade and investment facilitation and other advisory programs. By creating a visible core of efficient enterprises, USAID is helping to create a catalyst for economy-wide reform. Technical assistance is being provided to the National Bank and commercial banks in banking supervision, and to farmer associations for efforts such as the development of a Seal of Quality for the Meat and Dairy Association. Complementary credit and equity mechanisms are being supported for small and medium sized enterprises. In 2002, a competitiveness initiative is being developed to identify and remove constraints in key sectors of the economy. USAID legal advisors are helping to reform critical taxation, banking, bankruptcy, monopoly regulations and assisting with accession to the World Trade Organization (WTO). As democratic institutions are established in Macedonia, citizens and officials are learning to function in the new system. The understandable focus on national survival in the years following independence led to the dominance of central government institutions in the political process. To strengthen the Macedonian democracy, USAID is helping municipal governments find better ways to serve the public and is working with the central government on legal changes to encourage decentralization to municipalities. Advisors have provided direct services to local officials in areas such as resource and infrastructure management, and constituency interaction and support. In addition, SEED assistance is strengthening civil society by helping to fortify the mechanisms by which citizens influence public policy, identify and defend their interests, and monitor the actions of the state. USAID assistance is helping to create a network of advocacy and watchdog organizations, bolster the professionalism of the media, and provide Macedonians with the knowledge and skills they need to be citizens in a democratic society. Since an inefficient judiciary and a lack of rule of law are key impediments to the economic and democratic development of the country, USAID will focus on reforming the legal system, increasing the independence of the judiciary and improving court operations. Assistance is also being provided to increase confidence in the political process, particularly the upcoming elections, and in institutions such as the Parliament and political parties. The influx of over 320,000 Kosovar refugees in 1999 was a serious political, economic, and institutional strain on Macedonia. Unemployment, already high at an estimated 32 percent, increased with the loss of the Serbian market and of trade transit corridors through Serbia. Despite USAID assistance ($28 million to reinforce Macedonia's social safety net and $14 million to support those communities most affected by the influx of refugees), these strains contributed to tension which erupted in the 2001 conflict within Macedonia between ethnic Albanian and ethnic Macedonian citizens. In 2001, USAID made use of increased SEED assistance by expanding its activities to directly address the causes of the conflict, to establish sustainable mechanisms for managing conflict, and to support the implementation of the Framework Agreement. In support of this response, the Mission added a new Social Transition objective under which activities are currently being developed to address the quality of education and workforce development. These new initiatives will aim to reduce the unemployment and poverty in the country and will supplement ongoing activities such as the labor redeployment program, the Community Self Help Initiative, and the support of a private accredited university, the South East Europe University (SEEU). USAID has contributed $17 million or approximately half of the total pledge of $32.95 for the SEEU to the Organization for Security and Cooperation in Europe (OSCE) led effort. USAID will also provide $.5 million in technical assistance and equipment to assist with the implementation of the census. Mission objectives are being complimented by the Community Building Initiative (CBI) being implemented by USAID's Office of Transition Initiatives. The CBI brings together diverse groups of Macedonian citizens to work cooperatively on projects, which the communities have identified and prioritized. Since October 2001, the CBI has approved almost 200 grants to non-governmental organizations’ projects for a total of $3,477,723. USAID/Macedonia, Mission Director: Dick Goldman, tel: +389 (2) 380-446, fax: +389 (2) 380-449 USAID/Washington, Macedonia Desk Officer: Stacia George, tel: (202) 712-5954, fax: (202) 216-3181

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