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COUNTRY PROFILES


PROFILE

Country Profile

Area: 25,333 sq km (9,928 sq miles)
Population: 2,052,722 – Republic of Macedonia State Statistical Office (31 December 2009)
Capital city: Skopje (480,000 (2009) CIA Factbook)
People: (2002 Census) Macedonian 64%, Albanian 25%, Turkish 4%, Roma 3%, Serbian 2%, Bosniak 0.5%, Vlach 0.5%, Others 1%
Languages: Macedonian, Albanian, Turkish, Serbian, Vlach, and Roma
Religion: Orthodox 67%, Muslim 30%
Currency: Macedonian Denar
Major political parties: Internal Macedonian Revolutionary Organisation – Democratic Party for Macedonian Unity (VMRO-DPMNE), Social Democratic Union of Macedonia (SDSM), Democratic Party for Integration (DUI), Democratic Party of Albanians (DPA), Democratic Renaissance Party (NDR)
Other Parliamentary parties: Democratic Union (DS), Democratic Party of Serbs in Macedonia (DPS), Democratic Party of Turks in Macedonia, (DPT); Union of Romas in Macedonia, Party for Democratic Action in Macedonia, Democratic Renewal of Macedonia (DOM), New Alternative (NA), New Democracy (DR) - (Demokracija e Re), New Social Democratic Party (NSDP), Liberal Party (LP), Liberal Democratic Party (LDP), Socialist Party of Macedonia (SP), Party for European Future (PEI)
President: Gjorge Ivanov
Prime Minister: Nikola Gruevski
Foreign Minister: Nikola Poposki

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ECONOMY

Basic Economic Facts

Basic Economic Facts (according to the CIA World Factbook and International Monetary Fund)

GDP: €GDP per capita at Euro Purchasing Power Parity - PPP €8,400 (2010 estimate).
Annual growth: GDP real growth 0.7% (2010 est.); 3% and 3.7% (IMF forecast for 2011 and 2012)
Inflation: 1.6% (2010 est.) 5.2% and 2% (IMF Forecast 2011 and 2012)
After gaining independence in 1991, Macedonia faced a number of obstacles to economic growth. These included: the 1992-2000 UN economic sanctions on the then Federal Republic of Yugoslavia (FRY) and then later, Serbia; a 1993-96 unilateral Greek trade embargo; the 1999 Kosovo refugee crisis; and the 2001 internal crisis. From 2006-2008, Macedonia witnessed new sources of investment resulting from privatisations within the energy sector and green-field investments in Macedonia’s free economic zones. GDP growth during this period was 4.0% (2006), 5.9% (2007) and 4.8% (2008).

The global economic crisis impacted upon previous positive levels of economic growth. However Macedonia weathered the crisis well with a decline only to 0.9% in real GDP growth in 2009, rising to 0.7% in 2010. Levels of unemployment remain over 30%.

Macedonia was the first country to sign a two-year arrangement under the Precautionary Credit Line (PCL) in the amount equivalent to SDR 413.4 million (about €475.6 million, 600 percent of quota). The PCL was designed for countries with sound economic fundamentals and policies that do not have actual financing needs but face risks that could give rise to such needs e.g. excessive market volatility. In March 2011 the Macedonian Government informed the IMF it would draw €220 million from the amount available under the PCL arrangement The Government stated that the decision reflected the changed circumstances brought about by early parliamentary elections (held on 5 June 2011), including a delay to the propose issue of Eurobonds.

In the 2011 World Bank ‘Doing Business’ Guide, Macedonia was ranked 38 out of 183 countries, well ahead of its neighbouring states – Bulgaria (51), Montenegro (66), Albania (82), Serbia (89), Croatia (84), Greece (109) and Kosovo (119).
Both the IMF and Government forecasts suggest that growth in 2011 and 2012 could be somewhere in the region of between 3-3.7%.

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HISTORY

Recent History

Independence

On 8 September 1991, Macedonians overwhelmingly voted in favour of independence from Yugoslavia. This led to the adoption on 20 November 1991 of a new Constitution, which proclaimed the 'Republic of Macedonia' as a sovereign and independent state. In March 1992 the peaceful withdrawal of the Yugoslav army from its territory was successfully negotiated. Macedonia was the only country to accede from the Yugoslav federation peacefully.

Conflict in 2001

Stability in Macedonia was seriously affected by the Kosovo crisis in 1999, during which the country received around 300,000 refugees. Albanians form the principal minority, comprising 25% of the population according to the 2002 census.. They live mainly, but not exclusively in the west of the country, neighbouring Albania and Kosovo. Violence between ethnic Albanian insurgents and the security forces broke out in February 2001, starting with a number of isolated incidents between the ‘National Liberation Army’ (NLA) and the Macedonian police in the area of Tanusevci, near the Kosovo border. Macedonian forces were able to establish tentative control of the area towards the end of March 2001. After a lull, violence resumed in late April with an attack that left eight members of the Government forces dead; in early May the NLA seized villages near the northern town of Kumanovo.

Following the signing of the Stabilisation and Association Agreement (SAA) with the EU on 9 April 2001 (see below), a parliamentary 'Europe Committee' was established as a means of enhancing political and particularly inter-ethnic dialogue. As the situation deteriorated political dialogue made little progress. The humanitarian situation worsened, particularly in the NLA-held villages. Tens of thousands of ethnic Albanians managed to flee the fighting to southern Kosovo and Serbia, whilst ethnic Macedonians tended to flee to other parts of the country. According to UNHCR monitoring, most refugees and internally displaced persons were accommodated by local families.

The Ohrid Framework Agreement

Fighting was interrupted in June 2001 when NATO negotiated a cease-fire between the two sides. The cease-fire more or less held whilst peace talks continued between the ethnic Albanian and Macedonian political leaders and the late President Trajkovski. These talks, facilitated by the European Union, NATO, the US and the Organisation for Security and Co-operation in Europe (OSCE), produced a settlement based around a Framework Agreement. In broad terms, the Agreement called for an end to the conflict by disarming the NLA, offering them an amnesty, and initiating a reform process to address ethnic Albanian aspirations. It was formally signed in Ohrid on 13 August 2001 following which NATO deployed a Task Force 'Essential Harvest', comprising over 3,000 troops, to collect weapons volunteered by the NLA. During September and early October 2011, the level of violence in the country greatly reduced whilst the political process concentrated efforts on implementing the Ohrid Framework Agreement.

The Macedonian Parliament formally ratified the constitutional changes agreed at Ohrid on 16 November 2001. President Trajkovski promulgated an amnesty for former NLA fighters and an enhanced mission of international monitors was deployed to facilitate both the return of displaced people to their homes and of the Macedonian police to the areas of conflict. Successive NATO task forces provided necessary security until 31 March 2003 when this duty passed over to the first EU military mission, Operation Concordia, which terminated on 15 December 2003.

On 8 March 2002, the Macedonian Parliament passed an Amnesty Law, providing amnesty to those involved in the conflict. In the summer of 2004, a package of laws on decentralisation was passed. A referendum to revert to the 1996 law was held on 7 November 2004. The referendum failed due to low voter turnout (26% turnout against a required 50% plus one quorum). On 15 July 2005, the Macedonian Parliament passed legislation covering the display of national flags and symbols. This completed the legislative agenda of the Ohrid Framework Agreement, which is celebrating its 10th anniversary in 2011.

Longer Historical Perspective

BBC News Country Timeline: Macedonia (http://news.bbc.co.uk/2/hi/europe/country_profiles/1410364.stm)

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INTERNATIONAL RELATIONS

Macedonia's Relations with Neighbours

Greece and the Name issue

The Republic of Macedonia gained its independence from the former Yugoslavia in 1991. Wider international recognition was held up by Greek claims that the country's constitutional name implied territorial ambitions on the northern Greek region of Macedonia. In September 1995, following three years of difficult relations including a unilaterally imposed trade embargo, Greece and Macedonia signed an Interim Accord facilitating the normalisation of relations and Greece recognised Macedonia under the designation 'former Yugoslav Republic of Macedonia' (fYROM). However the name issue continuously hinders the bilateral relations between Greece and Macedonia, and impedes NATO and EU membership.

The UK uses ‘Republic of Macedonia’ in bilateral relations but in international forums, e.g. EU and UN, it uses the temporary designation ‘former Yugoslav Republic of Macedonia’. Some countries however have recognised Macedonia under its constitutional name, including the US in 2004.

Negotiations led by UN Special Envoy Matthew Nimetz continue to try to find a mutually acceptable solution.

Greece remains a significant investor in Macedonia.

Kosovo

On 9 October 2008, both Macedonia and Montenegro jointly announced their decisions to recognise the independence of Kosovo. At the same time both countries stressed their desire to continue to build close relations with Serbia. On 18 October 2009, Macedonia and Kosovo completed demarcation of their mutual border, in accordance with Ahtisaari's Comprehensive Settlement Proposal, and established formal diplomatic relations. Macedonia accepts Kosovo-issued passports as legitimate travel documents.

Serbia

Macedonia also enjoys good relations with Serbia although there are some outstanding issues, primarily over the refusal of the Serbian Orthodox Church to recognise the Macedonian Orthodox Church as an independent Church, and in relation to the Serb minority living in Macedonia. Recognition of Kosovo's independence also created difficulties between the two countries that have to a certain extent now been overcome.

Albania/Bulgaria

Macedonia also borders Albania and Bulgaria. Relations with both are good, although there remain some issues with Bulgaria over Macedonia’s identity: while Bulgaria recognises the territory of the Republic of Macedonia it does not recognise the nationality “Macedonian”. Relations with Albania are good.

Macedonia's Relations with the International Community

EU

Macedonia signed a Stabilisation and Association Agreement (SAA) on 9 April 2001. The SAA entered into force in 2004. Trade issues were defined within the Interim Agreement on Trade and Trade-related issues between Macedonia and European Communities which entered into force on 1 June 2001. According to the Interim Agreement, Macedonia and EU were required to establish a free trade area within ten years. As of January 2011 trade between Macedonia and EU is nearly 100% liberalised.

A formal application for EU membership was subsequently submitted, in March 2004. Following the European Commission’s recommendation, the European Council (http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/ec/87642.pdf) decided on 16 December 2005 to grant candidate status to the country, under the UK Presidency. The 2008 Accession Partnership defined eight areas as Macedonian key priorities within the EU reform agenda including the full implementation of SAA obligations, public administration reform, police reform, judicial reform, fight against corruption, reducing unemployment and enhancing the business environment.

In the 2009 Progress Report issued on 14 October the Commission concluded that Macedonia had substantially addressed the indicators (benchmarks) under the key priorities, and recommended opening accession negotiations. The positive recommendation was reiterated in the 2010 Progress Report. The EU Council is yet to set the date for opening the negotiations.

On 30 November 2009 the Council approved a proposal granting visa free travel to the citizens of Macedonia, Montenegro and Serbia. This does not include the UK, which has its own separate visa regime. It enables the citizens of these three countries to travel without visas to the Schengen countries with biometric passports from 19 December 2009.

NATO

Macedonia is seeking NATO membership and is part of the Membership Action Plan. NATO Allies at the Bucharest Summit in April 2008 agreed an invitation to join would be offered as soon as a mutually acceptable solution was reached with Greece on the name issue. Macedonia has already provided support to NATO’s operations in Kosovo, EUFOR in Bosnia and has gradually increased its contribution to the International Security Assistance Force in Afghanistan (currently 163 troops).

Macedonia's Relations with the UK

UK Development Assistance

Diplomatic Influence & Value Fund - Reuniting Europe

The British Embassy in Skopje works with international and local partners to implement projects that enable delivery of HMG objectives and strategic priorities. The Embassy engages in project activity, using resources from the Diplomatic Influence and Value Fund - Reuniting Europe that provides support to partner countries with the reforms necessary for EU accession or a closer partnership with the EU.

The ‘Reuniting Europe’ programme is designed to deliver the British Government’s vision of building an effective and globally competitive EU in a secure neighbourhood. It does this by supporting EU enlargement and by helping European partner countries to implement the reforms necessary for EU accession. It focuses, in particular, on stable institutions which embed democracy, the rule of law, human rights and the respect for and protection of minorities.

Programme objectives

-- support political reforms and undertake political advocacy

-- to increase political transparency and good governance

-- to build capacity in public administration

-- to strengthen reforms in the justice sector and promote Human Rights

The Bilateral Programme Budget (BPB) is a devolved fund available for smaller scale projects in institution building, good governance, accountable democracy, minority rights, the implementation of SAA requirements and European Partnerships

Embassy project work is focused in the following areas:
Objective 1: To increase political transparency and good governance
The EU’s agreements and action plans with neighbouring countries place a strong emphasis on progress in this area. It is fundamental to political and economic development, to combat corruption, build investor confidence and pave the way for faster EU integration.

Objective 2: To build capacity in public administration
Co-ordination of the legislative, administrative, operational and policy work demanded by the EU integration process is a formidable challenge. Governments need to review the scale and organisation of their human and financial resources and put in place strong systems for strategic direction and communication at central, regional and local level. The UK is recognised as one of the most efficient EU "operators" and its expertise is in strong demand.

Objective 3: To strengthen reforms in the security and justice sector and promote human rights.

This is one of the most challenging aspects of the EU harmonisation process. There is already substantial investment in this area by the EU and others, but monitoring suggests that more progress is needed. Even where legislation and institutions exist, effective implementation can be hampered by poor communication and lack of trust. Joined-up working can have a transforming effect in safeguarding human rights, reducing corruption, increasing efficiency and winning public and investor confidence. Aspects of human rights and minority rights can be particularly challenging.

Successful social inclusion is crucial in many of countries we work in if they are to achieve political and economic stability and may be fundamental to the process of integration with the EU.

Cultural Relations with the UK

Bilateral relations between Macedonia and UK are excellent. Macedonia and Britain signed a Cultural Agreement in 2000. The British Council have offices in Macedonia and during 2011 are celebrating the15th anniversary of their establishment in Macedonia.

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GEOGRAPHY

Macedonia is bordered by Serbia and Kosovo to the north, Bulgaria to the east, Greece to the south and Albania to the west. It is a land-locked mountain territory with deep valleys and basins, and has three large natural lakes. The river Vardar bisects the country.

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TRADE AND INVESTMENT

Trade and Investment with the UK

Major UK companies represented in Macedonia are Johnson Matthey (started with full operational capacity in April 2010 at the free economic zone), Imperial Tobacco, QBE, Mittel Steel, Binani Group and Crown Agents. UK companies’ interests are represented by the British Business Group, which has frequent contacts with the Macedonian Government and the business community.

Trade between the UK and Macedonia has often seen a trade surplus in favour of Macedonia, mostly due to the so-called ‘lohn’ production (e.g. importing textiles and accessories, and exporting ready-made clothes). Figures vary between $40 - $70 million.

MEDIA

Most Macedonian media is privately owned. Eight commercial broadcasters have concessions for national coverage: five of them are TV and three are radio stations. There are many TV and radio stations that broadcast locally and some that broadcast via satellite. There are ten daily newspapers and many weekly magazines, a couple of news agencies and many Macedonian language news portals.

According to the 2010 International Research & Exchanges Board (IREX) report on freedom of media in Europe and Eurasia, Macedonia came seventh out of 21 counties reviewed within Europe and Euroasia. Editorial policy and journalists can be influenced by the political and the business elite. Reporting is mostly parochial, focusing largely on domestic news. The European Union Annual Progress report for 2010 noted that further efforts were required in the area of freedom of expression in the media.

TRAVEL SUMMARY

The vast majority of visits to Macedonia are trouble free. However, British nationals living in Macedonia or intending to travel to the northern and western border regions of Macedonia (with Albania and Kosovo) should exercise caution. Please see separate Travel Advice (http://www.fco.gov.uk/content/en/travel-advice/europe/macedonia/fco_trv_ca_macedonia) on the FCO website for more information.

RECENT VISITS

Inward

On 23 November 2010, the Macedonian Prime Minister, Nikola Gruevski visited the UK, accompanied by then-Foreign Minister Antonio Milososki. They met the Prime Minister David Cameron, and Foreign Secretary William Hague.

Deputy Prime Minister for European Integration, Dr. Teuta Arifi, visited the UK on 19 January, meeting with the FCO Minister for Europe, Mr David Lidington and other FCO officials.

The Minister for Education, Pance Kralev, and Minister for Public Administration and IT, Mr Ivo Ivanovski, have visited the UK during January 2012 on education and public administration/open government matters.

Outward

General Sir Peter Wall, Chief of the General Staff, visited Macedonia from 1-2 March 2011. He met President of the Republic of Macedonia, Mr Gjorge Ivanov, Minister of Defence Mr Zoran Konjanovski and Chief of the Macedonian General Staff General Miroslav Stojanovski

Minister for Europe, David Lidington, visited Macedonia on 23 – 24 June 2010. He met Prime Minister Nicola Gruevski; DPM for European Affairs Vasko Naumovski; Leader of DUI Ali Ahmeti, DPM for Implementation of the Ohrid Framework Agreement Abdulakim Ademi; and senior member of opposition SDSM Radmilla Shekerinska.

HRH Prince Michael of Kent led a British business delegation visit to Macedonia from 28 January until 1 February 2012, meeting President Gjorge Ivanov, Prime Minister Gruevski and a wide range of political and business leaders as well as meeting the resident British community, including business representatives.

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POLITICS

Macedonia is a parliamentary democracy. Parliamentary elections are usually held every four years, when the Prime Minister is elected. The President of Macedonia is elected for a five-year term.

Macedonia held its first multi-party elections in October 1990 when it was still part of Yugoslavia. The nationalist Macedonian Internal Revolutionary Movement (VMRO) won the most seats, but a bloc including Kiro Gligorov's Social Democratic Alliance (SDSM), the Liberal Party and the Albanian Party for Democratic Prosperity (PDP) held a majority. Gligorov became President of the new Republic and was re-elected as President for a five-year term in 1994.

At Macedonia's third parliamentary elections in October / November 1998, the opposition VMRO/Democratic Alternative alliance won with an overall majority of 62 out of 120 seats. Ljubco Georgievski, leader of VMRO, became the Prime Minister. Boris Trajkovski, who had previously served as Deputy Foreign Minister was inaugurated as President on 15 December 1999. Municipal elections held in September/October 2000 were marred by irregularities and a number of violent incidents.

At the height of the crisis in May 2001 a broad coalition government, including the former opposition SDSM and PDP was formed. The SDSM withdrew on 20 November once parliamentary ratification of the Framework Agreement was complete. Georgievski then reconstituted his government including other smaller parties.

The third Parliamentary Elections were held on 15 September 2002 and were considered to be largely fair, free and peaceful. The new government composition was a coalition of two ethnic Macedonian parties (the Social Democratic Union of Macedonia (SDSM) and the Liberal Democratic Party (LDP)), and the main ethnic Albanian party (the Democratic Union for Integration (DUI)), a successor party to the National Liberation Army. The official turnout on the Election Day was 73.15%.

Presidential elections were brought forward to April 2004 due to the death of President Trajkovski in a plane crash on 26 February 2004. The incumbent Prime Minister Branko Crvenkovski was voted in as President, and former Interior Minister Hari Kostov replaced Crvenkovski as Prime Minister. Kostov resigned on 15 November 2004 and was replaced by Vlado Buckovski on 17 December 2004.

The fourth Parliamentary elections were held on 5 July 2006. The OSCE declared that the elections had generally met international standards despite isolated incidents during the election campaign and isolated irregularities on polling day itself. The official turnout on the Election Day itself was 56%. After a revote in some polling stations on 19 July 2006, the State Election Commission announced that the VMRO-DPMNE led coalition held 45 parliamentary seats (44 before the revote).

Recent Political Developments

The seventh parliamentary elections were held on 5 June 2011. This early election was called following a parliamentary boycott by the main opposition party, SDSM.

International monitoring missions from the OSCE Office for Democratic Institutions and Human Rights (OSCE/ODIHR), the OSCE Parliamentary Assembly, and the Parliamentary Assembly of the Council of Europe (PACE) assessed the elections a competitive, transparent, and properly implemented throughout the country. Though they also highlighted remaining problems such as the insufficiently clear distinction between state and party activities.

The VMRO-DPMNE-led coalition won 53 seats, SDSM won 42 seats, DUI won 15 seats, DPA won eight seats, and the NDR won two seats. For the first time, the Macedonian Diaspora cast votes for their own representatives, and elected three MPs from the three regions of Europe & Africa, North & South America, and Asia & Australia.

VMRO DPMNE also won the three MP seats form these new Diaspora districts. The Macedonian parliament now has a total of 123 MPs.

Under current rules Presidential elections are held in a five-year cycle. The fifth presidential elections were held in 22 March 2009 with a second round in 5 April 2009.

According to the electoral law, the president is elected if he wins the votes of the majority of the registered voters in the first round; or, a simple majority of the votes in the second round, in which the turnout must be over 40% of the registered voters.

The 2009 Presidential elections were held on the same day as local elections. There were seven presidential candidates, six appointed by political parties and one independent. VMRO-DPMNE, appointed Gjorge Ivanov as the party's presidential candidate; the biggest opposition party, the Social Democratic Union of Macedonia, appointed the former Minister of Internal Affairs and former Minister of Foreign Affairs Ljubomir Frčkoski; the Liberal Democratic Party appointed Nano Ružin; New Democracy put forward Imer Selmani; Democratic Union for Integration appointed Agron Buxhaku; Democratic Party of Albanians put forward Mirushe Hoxha; and the independent candidate was Ljube Boškoski.

Based on the results from the first round of voting, Gjorge Ivanov, and Ljubomir Frčkoski qualified for the second round.

In the second round on April 5, Gjorge Ivanov from VMRO DPMNE was elected president with 453,616 votes (63%), with Frčkoski securing 264,828 votes (37%). Since these elections, former President Branko Crvenkovski, has returned to lead the opposition SDSM party.

Under the current electoral code there are two rounds of voting in municipal elections. Only municipalities where there is no outright winner in the first round of voting for mayor go through to a second round. Voting also takes place for members of the municipal councils, whose number is determined according to the population size of each municipality. 365 mayoral candidates stood in the 2009 municipal elections for 85 seats. 13,709 candidates stood for municipal councillor positions, of which 1391 were elected. In the overall results, VMRO DPMNE won 55 mayoral seats including the capital city of Skopje, SDSM won nine, DUI won 14, and DPA won one in Tetovo.

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Last Updated: February 2012

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