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Macedonia in the Bulgarian and International Press
News Bulletin No3, March  2000

Is the Republic of Macedonia Heading on the Way to Reform | The Attack by the Opposition

Domestic political life in the Republic of Macedonia was rife in problems. But two of the issues – the negotiations with the International Monetary Fund and the World Bank (IMF and the WB) and the commenced offensive of the opposition against the government of Ljubcho Georgievsky – aggravated it even more. The remaining issues are more or less permanent.

Is the Republic of Macedonia Heading on the Way to Reforms?
For the Republic of Macedonia as well as for the other countries in transition, the reform of the existing system is impossible without the support of international financial institutions and mainly of the International Monetary Fund and the World Bank. Active negotiations and particularization have been running between representatives of the country and of these institutions during the whole of the second half of last year, however they brought no success. Such issues like the disagreement on the macroeconomic framework for development of the country proposed by these institutions, the budget deficit, the sale or liquidation of losing enterprises and the specific reforms of particular fields of government represent the stumble stone. It has only been agreed that negotiations are to continue and that the actions of the government in regard with the implementation of the already particularized items shall be subject of control.

In January this year representatives of the IMF and the WB arrived in Skopje and established that the agreed terms for the implementation of the reforms have not been executed. And so the agreement desired by the government was not concluded, which placed the government of Ljubcho Georgievsky in a too hard situation. There are many reasons for this among which the situation inside the country which has been established as a result of the presidential elections that continued too long and the changes in the government of the ruling coalition.

In March following the resolution of the problems around the new cabinet of Ljubcho Georgievsky the government intensified the negotiations with the IMF and the WB. They were conducted between 15. and 20 March in Washington. According to the statement of the financial Minister Nikola Gruevsky who was leading the negotiations team, they have started from a "zero point", as the Dnevnik n.p. (The Journal) noticed on 14 March and they are to be especially difficult since "the IMF and the WB do not believe us". The emphases of the negotiations at this stage seem to be the economic condition of the country, the reforms, the introduction of the Value-Added-Tax (VAT) and the privatization.

According to the Skopje press of 16. and 17 March Mr. Gruevsky explained the delay of the reforms with the events in Kosovo and demanded financial assistance for their conduct. The response of the institutions was that such aid would be provided after the problem with the losing enterprises has been resolved, after the value-added-tax has been introduced beginning on 1.April as a part of the Tax reform in the country, after the reforms of the social security system, the state’s administration and so on have been resolved. The time for the resolution of these problems is too short. The IMF intends to resume the negotiations for the three-year agreement in May, and the World Bank intends to do so in July. This is a significant change of their intentions since they use to announce them at the end of the year only. Beyond this the IMF and WB pose a categorical condition for the commencement of the negotiations for the three-year agreement which condition is the prompt sale of the Macedonian telecommunications Company, as the Utrinsky Vestnik n.p. (The Morning Paper) of 21 March announced. For some time before the meeting in Washington during the exhibition of Macedonian goods in Paris the Prime Minister Ljubcho Georgievsky also declared the intention of the government to sell the telecommunications by the end of the year.

Macedonian telecommunications have been announced for sale a long time ago, but the process was interrupted during the last parliamentary elections so that it were not utilized for the election that time the government of SDSM (the Social Democratic Union of Macedonia) was ruling. In the beginning of the privatization process the American International Financial Corporation (IFC), that is a member of the World Bank, and the Dutch IAT "Barnig" invested some $ 25 million USD in the pre-privatization activity, which amount has now to be returned by the telecommunications. The term expires in July. Because of that activity around the sale has intensified.

Macedonian Telecommunications are an appetizing piece and that is why the press is calling it the "golden hen". Its net profit for the last year amounted to 100 million Deutche Marks (DM). The task is to sell it by the end of the year and to look for a potential investor. The Greek National Company OTE, which is the dominating proprietor of the Romanian telecommunications and which is conducting negotiations for the purchase of telecommunications in Bulgaria, has so far been referred to as such an investor.

The situation in the country is not especially suitable for meeting the requirements of the international institutions. But it would hardly improve. As the Utrinsky Vestnik n.p. announced on 7 March the total amount of the foreign debt of the Republic of Macedonia added up to 1 billion and $ 438 million USD. This year the Republic of Macedonia had to pay the amount of $ 217 million USD in the form of interest on the debt. The total amount of the debt which is 1,2 billion represents the debt of the state whereas the debt of private companies that have guaranteed for it amounts to $ 207 million USD. In fact the Macedonian National Bank reported that the currency reserves of the country were at the moment the largest after the establishment of independent Macedonia and namely $ 458 million USD. This was published in the Makedonia Denes n.p. (Macedonia Today) on 24 March. According to the Vecher n.p. (The Evening Paper) of 8 March and the Utrinsky Vestnik n.p. of 21 March, however, the trade deficit of the country had for the last year only amounted to $ 603 million USD. The social status of the country’s population has also changed drastically. There are about 350 – 400 thousand unemployed in the country. According to the Utrinsky Vestnik n.p. of 10 March, 70% of the salaries are under the average level. So are 2/3 of the pensions, 72 000 families depend on social aid and 45% of the incomes go for food. The expected reforms of the administration, the army, the sale of the losing enterprises that have so far remained and so on will undoubtedly strengthen this picture. Social discontent of all this is already a fact.

Of course there are some facts that encourage the government. The American Corporation for Private Foreign Investment (OPIC) promised to invest some $ 160 million USD this year in small and medium-sized enterprises. It organized a conference on this topic, which was held in Skopje in the summer. But there have constantly been such promises during the whole of last year and especially during the events in Kosovo, but of no result. As the Nova Makedonia n.p. (New Macedonia n.p.) of 1 March and of 4/5 March and of 17 March announced, the two credits from Taiwan to the amount of 20 and $ 21 million USD that are already in use, have been more real for the direct crediting of production in some fields and for the commenced construction, again on the initiative of Taiwan, of a free customs zone in the area of "Bunardjik" as well as the negotiations held at present between Taiwan and the Republic of Macedonia for a new credit line of $ 20 million USD. Real is also the opportunity to use Kosovo, at least for now, as a market for Macedonian goods, which would play a significant role for the development of production in the country. The aid by the IMF and the WB could be anticipated after the implementation of the reforms that have expressly been noted. And the latter are particularly painful. Like the one in the field of administration or the reform of social security.

As the Dnevnik n.p. of 24 March announced about 90 000 people are now employed at the administration. Only 45 thousand have to remain in it by 2002. The number of administration employees has to be reduced by 6500 people by the end of this year only. These are men at the age of more than 63 years and women at the age of more than 58.5, with at least 20 years of length of service. This is called an administrative pension. Besides, all men with 30 years of length of service and all women with 34 years length of service shall retire with no regard of the age. That is what the administration bill states. The above figures include also the retirement of 3600 teachers by the end of March, which none knows why are deemed to be state’s employees. Adding also the reduction of the army by half and the retirement and the release of half of the officers’ staff, also in this year, it becomes clear that the number of the country’s unemployed will increase substantially. And this incites and reinforces the social discontent among the population.

Social discontent has also been strengthened by the pension reform. On 22 March the Parliament approved of the amendments of the Pensions’ Act, which amendments were proposed by the government. Men at the age of 64 and women at the age of 62 having a minimum of 15 years length of service are entitled to a pension. The pension basis amounts to 72% of the salary. This was announced by the Dnevnik n.p. on 23 March, as the n.p. added that the amendments of the law have met the protest of the opposition members of parliament. According to the project for the reform of the healthcare system some 700 physicians and 800 people middle medical personnel will become superfluous. At present in the Republic of Macedonia there is 1 physician for 890 people, but following the implementation of the reform this one physician will be responsible for the health of 1700 people.

As part of the tax reform beginning on 1 April this year the value-added-tax shall be introduced in the Republic of Macedonia. The rate was established at 20 percent due to the demands of the IMF whereas the government insisted on 19 percent and whereas the VAT shall be imposed on the excise goods as well (e.g. the petroleum).

It is clear that the said reforms are difficult and not popular and therefore they would be successful only in case of unanimousity in the ruling coalition and provided the support of the vast public. The former however is lacking. Unanimousity in the ruling coalition is limited within VMRO-DPMNE (IMRO-DPMNU) and its representatives in the government who support the reform under the auspices of the IMF and the WB. The president B. Traikovsky also counts in the group of the supporters. As far as V. Tupurkovsky and the Democratic Alternative are concerned, they though claiming for the reform, view the same within the framework of the Agency for Revival and Development (ARD) and within the cooperation with Taiwan. Mr. Tupurkovsky stated before the Dnevnik n. of 7 March that he and his party intended to leave the ruling coalition due to the poor results of the government. In his speech that was quoted by the Nova Makedonia n.p. of 21 March Tupurkovsky again declared that there were historic responsibility for the reforms and that their fundamentals were in building the free customs zone of "Bunardjik" and in the support of Taiwan for other Macedonian projects. At the third conference of the DA (Democratic Alternative) Tupurkovsky confirmed the accent in the programme of ARD, which are the deals with Taiwan as a basic task of the party (Utrinsky Vestnik of 22 March). As far as the Democratic Party of the Albanians of Arben Xhaferi is concerned, its principal concerns follow a different direction though it supports VMRO-DPMNE. There is no support by the vast public. But the greatest part of it is preparing to overthrow the government.Back to top

The Attack by the Opposition
Though the attack of the opposition against the governments (against both of them) of Ljubcho Georgievsky has not stopped ever since the presidential elections in February and in March it has been particularly intensive. The principal aim is to provoke pre-term parliamentary elections that are designated to overthrow the government of Ljubcho Georgievsky. As the Utrinsky Vestnik n.p. of 24 March wrote, three months ago the leader of the SDSM of Macedonia Br. Zarvenkovsky had called for pre-term parliamentary elections. This demand is now supported by other political parties as well. One of the leaders of the newly established Liberal Party, the outstanding businessman Risto Gushterov, also declared his support for it. The demand for pre-term elections was raised at the regular Third Congress of the Socialist Party too. At a meeting of the Parliament of 2 March the prominent activist of the Liberal Democratic Party Petar Goshev also adhered to this demand (Utrinsky Vestnik, 3 March). The Liberal Party particularized its proposal for pre-term parliamentary elections as it insisted on them being conducted in the autumn, together with the local elections. The proposal in principal is also supported by the smaller parties in the country that gravitate to the SDSM. At least so far it is clear that even if no united front of the opposition is formed against the government of Ljubcho Georgievsky, there is a common demand which could motivate such a step. SDSM places great efforts in this.

The Vecher n.p. of 14 March published an article, which stated that the SDSM intended to activate its struggle against the government and that it promised the country the so-called "hot spring". Such means like tribunes, meetings, "a march for overthrowing the authority" will be enacted. These means have to lead to a political crisis which were to bring the party back to power. For the purpose of giving rise to a political crisis the SDSM and the other opposition parties have aimed at discrediting the two ruling parties – VMRO-DPMNE and the Democratic Party of the Albanians, through its leader Arben Xhaferi, without attacking the Democratic Alternative which is alone looking for a way out for the coalition. An attempt to discredit VMRO-DPMNE was undertaken by launching the statement that the party was sustained by Greek money and this is part of the active anti-Greek campaign carried out in the Republic of Macedonia recently. It is obvious that it represents the resistance of local business circles against the vigorous invasion of Greek capital into the country and against the few important deals that were concluded between the Greek capital and the government, which deals are not especially successful if we have to be honest. VMRO-DPMNE has been accused of purchasing real estate property (With whose money, is the question?) in view of its existence after the withdrawal from the power. The real estate property in question is the Publishing House "Gotse Delchev" in Skopje, which has recently been purchased by the party This is in full conformation with the provisions of the Party Law, however under today’s political circumstances it does not sound particularly well. The campaign for discreditation of A. Xhaferi has been concentrated on his mediation in the relations between the Bulgarian Prime Minister Iv. Kostov and the Albanian leader H. Tachi. This mediation has been viewed by the opposition as an act aimed at the apportion of the Republic of Macedonia between Bulgaria and Albania.

Part of the Macedonian press valued the opportunities of the SDSM to overthrow the ruling coalition very optimistically. The Nova Makedonia n.p. of 4/5 March, though deemed to be the official edition of the ruling, published an author’s commentary that outlines these opportunities as follows: The first step towards this achievement is considered to be the fact that Br. Zarvenkovsky had managed to keep the main body of SDSM and to form a government-in-shadow, which would closely follow the actions of the ruling. The second step has been the activity of the SDSM destined at the organization of the obstruction of parliamentary work as it is stated at the same time that the Parliament were not working properly. And the third and the most important step at this moment is the fact that SDSM managed to engage the Union of Trade Unions (UTU) in Macedonia lead by Jivko Tolevsky in its struggle against the present government.

The Union of Trade Unions in Macedonia that has for years been lead by Jivko Tolevsky is in close relations with the SDSM. During the government of the latter the Union had not only hindered it but it also helped it to break the strike of the railroad workers. SDSM is now activating it and is directing it against the present government of Ljubcho Georgievsky. On 29 February The UTU organized a meeting in Skopje which was joined by thousands of people and which meeting was organized to protest against the economic policy of the government that had brought to high unemployment, as well as against the requirements of the IMF and the WB for closing the losing enterprises, what were to increase unemployment. About 15 000 people participated in the meeting according to the n.p. Vecher of 1 March and Monitor and Sega (Now) of 2 March. Tolevsky called for the government to begin a dialogue with trade unions and not to accept the "blackmail by the World Bank and the International Monetary Fund". One meant under "blackmail" the demands for reforms of the social security and the healthcare system, as well as of the administration and taxation etc.

Strikes in the Republic of Macedonia have during the last few months become a daily event, mostly because of the unpaid salaries and the treat of closing enterprises. However there was something else in the foreground of the protest that was organized by the UTU in Skopje and namely the struggle of the opposition to obstruct the reforms commenced by the government and to discredit it before the international financial institutions. The probable signature of the three-year agreement between them and the government would strengthen the positions of the latter and would ruin the attempts for its pre-term overthrow from power, what is the objective of the opposition. One of the commentators was right when stating for the Dnevnik n.p. that the protest meeting of the UTU was in fact an opposition activity.

UTU is an organization of numerous members and the fact that the Social Democratic opposition has mobilized them in its struggle against the government is of great importance, especially for the course of the commencing reforms. As the Dnevnik n.p. of 3 March and Vecher of 9 March and Dnevnik of 24 March announce, the UTU has categorically declared itself against the social security reform, against the reform of the healthcare system and against the rest of reforms, and it has threatened the government with unceasing protests and even with a general Strike. According to the statements of its leaders the protests would flood the whole country. In Parliament the deputies of the SDSM united themselves against the bill for amendments of the pension law and members of Parliament from the Liberal Democratic Party and from the Party of Democratic Prosperity. In fact the bill was supported in Parliament by the VMRO-DPMNE and the DPA.

In its struggle against the government the SDSM is looking for allies among the other opposition parties. The occasion are the forthcoming local elections. It is obvious however that the matter here is a long-term one. Makedonia Denes of 10 March and Utrinski Vestnik of 6 March informed about talks about a probable coalition between the SDSM and the Liberal Democratic Party of Risto Penov, who is the mayor Skopje. The liberal democrats also raise the formula of such a coalition – two plus one, which means that the coalition is to include two Macedonian and one Albanian parties. Actually the formula is unalterable and it has been implied by each and every of the former governments of the Republic of Macedonia.

In February and in March some new political formations attempted to enter the political life in the Republic of Macedonia. These were the just established Democratic Union of the former Minister of Internal Affairs Pavle Trayanov, a new political formation of the Albanians, which is still under construction, if one could trust publications in the Macedonian press, and the former fraction in VMRO-DPMNE around B. Zmeykovsky and B. Stoymenov which is becoming an independent political force. Some of them like the Democratic Union, the newly revived Liberal Party and even DA (Democratic Alternative) of V. Tupurkovsky proclaimed as their objective the "Third Road" or the "Third Option", which means the rejection of the leading role of the state in the development of the country and the establishment of the so-called civil society as the leading force during the changes. This is a pretty vague idea in regard to its content, which has been propagated in the past years. In this specific case it was noted that the proclaimers of this idea were in opposition to the ruling VMRO-DPMNE but they were standing aside from the SDSM. And still they are opposition and are engaged or intend to engage in the struggle against the government. And this in reality increases the number of its enemies.

According to information in the media Ljubcho Georgievsky’s government was in the state of media isolation. There is no newspaper and no TV-channel to stand firmly behind it though media are state-owned. At the same time the opposition enjoys a media comfort, newspapers and television are open for their initiatives. It is therefore no wonder and especially after the presidential elections that its rating among the population is constantly rising.

In its edition of 21 March Utrinski Vestnik published an inquiry of the Center for Research and Analysis at the newspaper, the results of which inquiry were astonishing. The inquiry had been conducted with 1040 citizens and according to it if parliamentary elections had then been conducted 29.9 percent of the voters would have voted for the SDSM against 12.4 percent for VMRO-DPMNE. Nevertheless how careful we relate to such inquiries, because of the aim of their conductors to first of all manipulate the society, the difference is too large for not to think about it. Further 11.4 percent of the inquired intended to vote for the DPA, 3.2 percent for the other Albanian Party, 1.9 percent for the Liberal Democratic Party, 1.5 percent for the DA, about 1 percent for the Liberal Party etc. All parties from the ruling coalition are losing the trust of their voters, DPA the least and Democratic Alternative the most. VMRO-DPMNE compared to another inquiry conducted in December has lost 8.5 percent of its potential voters. If no events of favourable nature for the ruling coalition occur and the aid they are seeking from international financial institutions is not delayed, the opposition will proceed its victorious march. Back to top