Democracy and Governance in Macedonia
The Development Challenge:
Macedonia continues the transition to a free market-based, multiethnic democracy, with good governance and social equity. While political will exists, the process has proven difficult and prolonged. As with other former socialist states, the political and economic institutional structures supporting democracy and economic freedom require time to foster and flourish. Weak governmental institutions, ethnic division, high unemployment, and regional instability slow the process. Nonetheless, progress is being made. A political modus vivendi, the Framework Agreement (FWA), halted open ethnic conflict in 2001. Adherence to the framework provides the basis for a stable, multi-ethnic society. In the aftermath of the tragic death of President Boris Trajkovski in an airplane crash, constitutional process was followed and a successor elected in what international observers declared free and fair elections. Inefficiency and corruption remain serious problems in all three branches of government. The checks and balances on all branches of government need to be reinforced. The decentralization plan to devolve power to local government is central to many other reforms and had been stalled by a referendum but is now back on track. The governance process and regulatory framework are being strengthened - incrementally but continuously. Over the longer term, the Macedonian economic outlook is positive; however, it remains the poorest of the former Yugoslav republics. The unemployment rate is over 30%; the gross domestic product has risen at an average rate of only 1% since independence; and the volume of foreign direct investment averaged $451 per capita, one of the lowest in Southeast Europe.
A Europe whole, free, and at peace is the overriding U.S. strategic interest in the Balkan region, including Macedonia. Throughout the region, the United States supports continued peace and stability, ethnic reconciliation, neighborly relations among states, development of market-based economies, and integration into Euro-Atlantic institutions. The relatively well-educated population, strategic location as a Balkan crossroads, rich farmland, and mineral resources also make Macedonia a potential force for economic growth and stability in the Southern Balkan region. Moreover, Macedonia is working hard to overcome a legacy as the transit route for smugglers, traffickers, and money-launderers. Macedonia supports Operation Enduring Freedom and has troops serving in Iraq and Afghanistan.
(Excerpted from the 2006 Congressional Budget Justification for Macedonia)
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