Over the past several years Macedonia has instituted a number of economic reforms that have substantially improved the country’s standing in global rankings such as the World Bank Doing Business reports. Unfortunately the changes are not having the desired positive impact on key economic indicators such as growth, jobs and income. Even before the Eurozone financial crisis, GDP growth in Macedonia was only about half that of its other Balkans neighbors. Economic growth slowed to zero in 2012 as demand for exports decreased. Domestic consumption remains weak as incomes stagnate and the unemployment rate remains at over 30 percent, and approaches 55 percent for youth. Entrepreneurship and workforce skills are inadequate, further inhibiting growth. Macedonia has managed to attract a few foreign investments, however the overall investment level is low and the financial sector has reduced its lending to the private sector.
Microenterprise and Private Sector
In Macedonia, USAID focuses on improving the competitiveness of small and medium-sized enterprises in strategic sectors that have the potential for growth and job creation. Activities in this area include:
Strengthening private sector capacity to drive regional economic development and job creation within selected regions of Macedonia. We engage business leaders, local government and other institutions to identify market opportunities, financing and technology to meet the needs of micro, small and medium enterprises as a means of supporting economic growth at the local level.
Providing tailored solutions to up to 180 small enterprises that best address their specific needs and enhance their probability of success.
Fostering microenterprise access to the public procurement system in 20 municipalities in Eastern Macedonia and the Vardar region.
Accelerating economic growth in southwestern Macedonia by providing training, technical assistance, and small-scale finance to start-up and existing small enterprises. USAID is supporting a business start-up center and its business incubator.
Increasing the participation of persons with disabilities in society by increasing their employability skills through internships and trainings, and by supporting them to start their own businesses. USAID will also raise public awareness of the needs, rights, and potentials of persons with disabilities.
Agricultural Markets & Trade
USAID increases economic growth in Macedonia through expanded production and sales of value-added agricultural products in the fresh and processed fruits and vegetables value chains. The program prepares Macedonian producers and processors to compete regionally and globally by educating producers about new markets, facilitating market linkages and value-added exports, and improving management and operational practices.
Development Credit and Access to Finance
Three Development Credit Authority (DCA) facilities provide access to working and investment capital to companies that want to expand their operations or market opportunities. These are loan portfolio guarantee programs through which USAID provides a 50 percent guarantee of the loan amount, thus sharing the risk with partner banks. One of these loan guarantee facilities supports microenterprises, another focuses on small and medium enterprises, and the third supports energy efficiency improvements in municipalities and private businesses.
The Innovation Financing Vehicle is a specialized fund aimed at directly servicing innovation-driven business development in Macedonia. It provides access to finance for innovators and start-ups that have difficulty accessing traditional forms of finance because they lack bankable collateral and a financial history. By providing such financing, the fund fosters innovation and the development of support services that help entrepreneurs bring ideas to market in a commercially viable way.
USAID also focuses on improving the business policy and investment climate by strengthening the capacity of key economic ministries and agencies within the Government of Macedonia (GOM) to develop and implement economic development policies and programs through the following activities:
Improving the GOM’s capacity to increase domestic investment and attract more foreign investment under the framework of the GOM’s Industrial Policy. USAID also provides support to develop a comprehensive and effective export promotion strategy, and to develop and institutionalize stronger mechanisms for public-private dialogue on economic policy.
Training internal auditors in the public sector to develop the internal audit profession in Macedonia, improve public financial management, and increase accountability, transparency and efficiency in the public sector. The U.S. and Slovenian Governments have partnered to implement this activity in Macedonia.
- Substantially expanded microenterprise and local economic development support in regions outside the capital city
- Created three lending institutions: FULM, Moznosti, and the Crimson Capital SME Fund
- Established the Center for Entrepreneurship and Executive Development (CEED)
- Introduced a number of e-government solutions that improved the Government of Macedonia’s provision of services to the private sector, such as e-procurement and a single window for import/export licensing
- Assisted in creating the Public Procurement Training Center
- Established the MyCareer Internship and Job Placement program
- Increased exports of agricultural products such as bottled wine
- Supported the growth and skills development of the digital media/special effects industry
Last updated: January 23, 2014