Macedonia Government Pledges Faster Growth
By Sinisa Jakov Marusic
In the government platform submitted to parliament last week Prime Minister Gruevski promised speedier economic growth, a doubling in the level of foreign investment by 2015 and curbing the 31 per cent unemployment rate by almost 7 per cent.
The government expects more intense economic growth, reaching 4 or 5 per cent in 2012 and 1013. If all goes well the government hopes that growth in 2014 and 2015 will reach 7 per cent.
The government counts on low inflation in the next four years not exceeding 3 per cent and an annual budget deficit of 2 to 3 per cent of GDP.
The government estimates that the country will finish this year with some 350 million euros in foreign investment. By 2015 they hope the country will have some 700 million euros annually.
“If there is no fresh global economic turmoil or recession, we expect cumulative income from FDI in the next four year to reach over 2 billion euros,” the government platform says.
The government pledges to continue advertising the country’s potential in the international media as a way of attracting investors and says it will further reduce red tape for businesses. In the past few years the country ranked among the world’s top reformers according to the World Bank as a place to start a business.
Gruevski’s government hopes that the improved economy will stimulate employment and thus significantly reduce one of the most striking problems, the high unemployment rate.
In this regard, the government plans to continue cutting taxes to stimulate employment.
Wages for public servants and pensions are set to go up by 21 and 24 per cent respectively in the next four years. The government plans to achieve this though gradual rises each year.
Currently the country ranks at the bottom of the region in wages with average salaries of slightly over 300 euros a month. The government promises to raise the average salary in the state administration to 420 euros by the end of its term, significantly increasing the average salary level in the country.
Gruevski pledges to build more roads, modernize transport hubs and improve energy producing capacities. As one of his measures, he proposes partial privatization of country’s electricity supply company, ELEM and placing key highways under concession in exchange for their completion.
Gruevski has been in power since 2006 and since then has won two more general elections, in 2008 and on June 5.
He started his career as Prime Minister viewed as an economically savvy technocrat and lived up to his reputation in the first two years of his term. Economic performance peaked in 2008. That year the country registered record growth of 5 per cent and attracted nearly half billion euros in FDI.
The economic statistics started to dip in 2009, largely due to the effects of the global economic downturn, which cut exports of Macedonia’s flagship metal, construction and textile industries. Last year the country witnessed only minimal 1 per cent economic growth.
The economy has been additionally burdened by the political gridlock over the unresolved “name” dispute with neighbouring Greece, which is blocking Macedonia’s Euro-Atlantic membership bids in connection with this.
Many economic experts say the continuing political uncertainty is causing investors to hesitate before putting money in the country.
