South East Europe Review For Labour and Social Affairs

SPECIAL ISSUE OF THE SOUTH-EAST EUROPE REVIEW FOR LABOUR AND SOCIAL AFFAIRS
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Editorial Board: Dr. Jens Becker, Johann-Wolfgang-Goethe University,
Frankfurt/Main; Dr. Bla Galgczi, Institute for Social Studies, Budapest;
Reiner Hoffmann, Director of the European Trade Union Institute, Brussels; Dr.
Dobrin Kanev, New Bulgarian University, Sofia; Dr. Darko Marinkovi,
Megatrend, University of applied sciences, Belgrade; Dr. Igor Munteanu,
Viitorul Foundation, Chiinau; Dr. Kemal ke, Abant Izzet Baysal University,
Ankara; Dr. Ekaterina Ribarova, Confederation of Independent Trade Unions of
Bulgaria, Sofia; Prof. Bruno S. Sergi, University of Messina & CERC-University
of Melbourne; Ljiljana Vidui, PhD Associate Professor at the University of
Split, Croatia; Prof. Dr. Edward Zammit, University of Malta, Msida
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of the South-East Europe Review
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Editor
Associate Editor
Peter Scherrer
Calvin Allen
European Trade Union Institute
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Production: Nomos Verlag
ISBN 3-7890-7954-5
Contents
Page
Editorial
Lidija Hristova
Introduction
Mirjana Maleska
The political and security crisis in Macedonia
Blagoja Nanevski
The macroeconomic policy of the Republic of

Macedonia achievements and problems
15
Violeta aeva
Criminal activity during the period of transition

in Macedonia
27
Ljubica oneva
Social policy and transitional changes in the

Republic of Macedonia
39
Vesna Sopar
The media system in the Republic of Macedonia:

between theory and practice
47
Ali Pajaziti
Young people and religion
67
Vesna Dimitrievska Qualitative analysis of poor households in the

81
Maria Donevska
Childrens social rights and their implementation in

the Republic of Macedonia
89
Jorde Jakimovski
Rural development in Macedonia
99
Biljana Aevska
Entrepreneurship under difficult circumstances:

factors hindering SME growth in the Republic
of Macedonia
About the Authors
109
123
This publication is printed

with the support of the
Friedrich-Ebert-Stiftung
Editorial
It is just one year ago that the Republic of Macedonia was on the edge of catastrophe.
Another bloody war, another killing of the neighbours, almost became a reality. For
many ordinary TV news consumers in Europe and around the world, it was one more of
these brutal civil clashes between paramilitary groups and more or less well-equipped
armies somewhere in a hilly landscape; just one more armed conflict in the evidently
barbarous, savage region of the Balkans. Up to last year, Macedonia was one of the few
lucky states or provinces in south-east Europe which had achieved independence without having to undergo a bitter war on its territory. Even so, it has endured various economic and political embargoes, it has suffered and still is suffering an economic and
social crisis, and its entire development in every respect has been heavily influenced by
the wars around its borders.
The Ohrid Agreement, signed by representatives of the major Slav and Albanian
Macedonian parties in the summer of last year, is the basis for a new period of understanding and political co-operation between the two ethnic groups in todays Macedonia. It is
clear that development towards a society where minority rights are an existing reality is a
long-term project. However, substantial progress has been made with the establishment of
the South-East Europe University in Tetovo. Here, lessons are taught both in the Albanian
language and in Macedonian. Albanian and Slav Macedonians study together at one university. It is only a beginning, of course, but it is a sign of positive development. The fights
between the so-called UK II and the Macedonian army and, even more so, the violent
clashes between neighbours in small villages last year created an atmosphere of distrust
and hostility. That has to be overcome and that takes time. The path to peace has been set
out but both parties have to strive for it. The hard-liners and those who defend fundamentalist positions should be given no opportunities to spread their hatred. A basic and
constitutional element of democracy is the ability to accept and to make compromises and
that is the essential measure by which parties representing both Albanian and Slav Macedonians must be measured.
The collection of articles in this special edition presents an overview of the manifold
aspects of society in the Republic of Macedonia. All of them, of course, represent the
personal views of the authors concerned. For many reasons, one can find room to disagree with some of the opinions expressed: in particular, appropriate and reliable statistics are always difficult to find and, in some instances, they vary considerably. The most
prominent instance of this is the figure for the percentage of the different ethnic groups
in society; an Albanian author would probably quote an alternative percentage than 22%
of the population. Unfortunately, the problem of obtaining reliable and authoritative
data is a common one that exists throughout the whole region. At the same time, our intention was, naturally, also to include in this special issue articles written by Albanian
researchers, journalists and trade unionists, etc although, for a combination of reasons,
we have been unsuccessful in realising this intention. Nevertheless, the SEER remains
dedicated to presenting, as far as possible, a wide scope of opinions and views from different angles and we can see that another special issue will be needed which deals with
the recent history and the future of this young country from the perspective of the views
of Albanian authors from the Republic of Macedonia.
S. 5 6
Editorial
To put together a special issue like this one, the work of a number of people has been
necessary. In particular, we would like to thank Lidija Hristova for her support. She has
sought to maintain contact with the authors and to make sure that the contributions
arrived on time. And also we owe a very special thanks to Arnold Wehmhrner, the
regional representative of the FriedrichEbertFoundation, without whose support the
production of this special issue would not have been possible.
Of course, as always, your criticisms, comments and suggestions are more than
welcome and we look forward to hearing them.
Peter Scherrer
Calvin Allen
March 2002
Lidija Hristova
Introduction
The Republic of Macedonia is a south-east European state situated in the central part of
the Balkans, bordering the Federal Republic of Yugoslavia to the north, the Republic of
Bulgaria to the east, the Republic of Greece to the south and the Republic of Albania to
the west. It is a small country, with a total land area of 25 713 km 2 divided into 123 municipalities. The population of 2 041 464 inhabitants belongs to different ethnic groups:
Macedonian, 66.6%; Albanian, 22.7%; Turkish, 4%; Roma, 2.2%; Serb, 2.1%; and others, 2.4%. The country's citizens practise different religions: Macedonian Orthodox
(67%); Muslim (30%); and others (3%).
Until 1991, Macedonia was an integral part of the Federal Republic of Yugoslavia,
being one of the six republics allied within the federation. During the process of the
dissolution of Yugoslavia, the Republic of Macedonia became an independent state. It
is worth emphasising that Macedonia, unlike the rest of the newly-established states
in the region, managed to gain its independence peacefully.
The first multi-party Assembly was constituted in November 1990, after general
and direct elections carried out by secret ballot. Based on the results of a referendum
held on 8 September 1991, the Assembly adopted a Declaration which confirmed the
referendum results and established the basic principles of the international capacity of
the state. This process of gaining independence and the establishment of a political
parliamentary democracy was completed with the adoption of the new Constitution of
the Republic of Macedonia on 17 November 1991. On 8 April 1993, the Republic of
Macedonia was admitted into the United Nations and, two years later, in 1995, Macedonia became a member of the Council of Europe.
In its Constitution, the Republic of Macedonia is defined as a sovereign, independent, democratic and social state in which sovereignty both originates from the citizens
and belongs to them. As fundamental values of the state order, the Constitution laid
down the rule of law, the division of state power, political pluralism and free general
and democratic elections, the free expression of ethnic affiliation, legal protection of
ownership, the freedom of the market and entrepreneurship, and respect for generallyaccepted provisions of international law.
Undoubtedly, the adoption of a modern and democratic Constitution was only the
start of the further building-up of a system of liberal democracy. As with the rest of the
countries in transition, Macedonia travelled along a problematic path on which many
laws and other legal acts had to be adopted and many new institutions established as essential prerequisites in the introduction of substantial reforms in the economic, political, health, pensions, social system, etc. These reforms were neither easy nor simple.
The social price of economic transition was far too expensive and made manifest
through: a significant stratification of the population; the severe impoverishment of a
wide strata of the population; and an unemployment rate that has been the highest (over
30%) during the past 8-10 years of the whole of Europe. Strikes and other forms of social unrest became quite frequent although, fortuitously, social dissatisfaction did not
S. 7 8
Lidija Hristova
spread wider in such a way as could have destabilised the system. Credit for that,
among others, has been paid to the widespread grey economy.
The external shocks at the beginning of the 1990s had a severe impact on the Macedonian economy and stained heavily the Macedonian path toward transition: wars in the
former Yugoslav republics; the embargo that Greece imposed on Macedonia because of
its name; the embargoes imposed on Yugoslavia by the international community; the
bombing of Kosovo and Serbia by NATO; and the huge wave of around 350 000 refugees
who fled to Macedonia. Essentially, all these events had an extremely negative impact on
the economy and more widely indeed, on the entire social and political milieu in the
country. Simply, they slowed down the process of the democratisation of the country in
all its spheres, thus influencing in a specific way the stability of the system.
The second feature of the Macedonian path toward the transition derives from its
multi-ethnic society, in which the Albanian minority amounts to more than 22% of the
entire population. Pluralism on the political scene in Macedonia since the beginning
of the 1990s has been strongly marked by the ethnic divisions in society. All ethnic
groups in Macedonia have formed their own political parties. As regards the relevant
Albanian parties, their interests have almost entirely focused on the accomplishment
of rights for Albanians. In the conditions of an entrenched political polarisation between the existing ethnic divisions in society, ethnic tension has, more or less, been
present throughout the entire transition period, sometimes threatening the political
stability of the state. Fortunately, the political elites have managed to retain their
senses so that the Albanian parties have participated in all the previous Macedonian
governments, by which process they have been politically integrated into all the levels
of administration. As a result, the international community did hold up Macedonia as
a positive example of ethnic tolerance and co-existence, and it was strongly encouraged to continue on that path.
This situation was unexpectedly and suddenly interrupted in spring 2001, when
conflict began between the Macedonian security forces and Albanian armed groups
from Kosovo, joined later by part of the local Albanian population. Macedonia entered the deepest crisis since its existence, being on the verge of civil war. Through the
intermediation of the international community, the crisis was surmounted (the country
introduced amendments to the Constitution by which the rights of the Albanian minority were increased), but the consequences of the crisis are more than evident:
armed incidents; internally displaced people; feelings of distrust and insecurity; unrecoverable economic and political damage.
Nevertheless, there is still some belief that the newly-established balance between
ethnic Macedonians and ethnic Albanians will not be short-lived and that Macedonia
will continue along its path of integration into European structures.
Mirjana Maleska

Introduction
In 1989, when the Berlin Wall fell, and the iron curtain was finally removed from
the political scene in Europe, Yugoslavia (SFRY) seemed more ready for integration
into the new post-cold war Europe than the other eastern European countries. The
communist system itself had been revised, i.e. the economy was highly decentralised, the land was mostly privately-owned and certain forms of market-based economy had been begun. The political system had also been decentralised. The federation
was a loose community, comprised of two houses in a parliament, one consisting of
citizens representatives and the other of those from the republics, with decisions being made by consensus between the six republics and the two provinces, Kosovo and
Vojvodina. Geographically speaking, Yugoslavia belonged to Europe, both spiritually
and culturally. Despite ideological differences, those ties were strong both historically
and in the last fifty years.
When, in 1989, the dramatic changes in Europe took place, Yugoslavia was a moderately-developed industrial country with natural potential, educated intellectuals and
economic problems that could be overcome with European assistance. The most serious obstacle facing Yugoslavia was that it had large debts to other countries in 1990,
amounting to about $17bn coupled with an inflation rate of around 600% and an unemployment rate of about 25%. This debt was one of the highest of all the Socialist
states because the Yugoslav economy had begun to make the move towards being a
market-based economy and contained no concealed mass unemployment.
Knowing that nationalistic centripetal forces could bring about disintegration in
the country and, quite possibly, civil war, the representatives of the European Community promised the last Yugoslav Prime Minister, Ante Markovi, material help, the
admission of Yugoslavia into the European Community and a number of other benefits if Yugoslavia transformed into a loose confederation. However, the development
of events proved that there is something self-destructive in human beings and that the
power of history, and religion, is stronger over human hearts than it is over the mind.
The Yugoslav federation began disintegrating violently.
In the beginning, the European Community did not succeed in assuming the role
of impartial mediator between the sides in conflict: the Serbs and the Croats. Inside
the European Community, there appeared to be a conflict of interests going on while
Yugoslavias crises escalated. The Conference of Yugoslavia, formed in September
1991 by the EC, failed because of disunity between the European countries which, at
that moment, were running their own policies independently of previous contacts
within the Community. This played its own role in igniting nationalism and violence
in those who were stronger and better armed the Serbs.
Coming more up to date, from March to June 1999, 12 000 NATO soldiers were
stationed on the Macedonian-Yugoslav border. Military planes, some of which were
amongst the newest types of aircraft and which had never been used in combat, were
S. 9 14
Mirjana Maleska
bombing Serbian military infrastructure. What was that force called nationalism and
what had been happening in the Balkans during the last ten years that necessitated the
engagement of NATO? It was certainly clear that Yugoslavia was disintegrating under
the forces of nationalism created by the nations that composed the Yugoslav federation, mainly under the pressure of Serbian and Croatian nationalism.
The force of nationalism and the creation of the nation-state
The consolidation of nation states began near the end of the nineteenth century and at
the beginning of the twentieth, after the fall of the Ottoman and the Austro-Hungarian
Empires. This process continued to the end of the last century, after the collapse of
federal power in Yugoslavia in 1991.
These processes were happening simultaneously on the wider European scale and
were followed by political instability and war. European states themselves were divided
and confronted, such that relations between the Balkan states reflected the established
balance of power after World War II. In 1989, this balance broke apart. The power of the
Soviet Union and its traditional influence as a stabilising factor in the Balkans decreased and the Balkan nations began the process of consolidating their nation states.
Old territorial hostilities and buried conflicts began to surface. The Serbian nation was
hurt by the disintegration of Yugoslavia more so than any of the others because a large
number of Serbs lived in Croatia and Bosnia.
All of the above was happening when European integration was intensifying, making the ethnic conflicts of the Balkan nations seem even more absurd. Those Yugoslav
nations, such as Croatia or Macedonia, which were weaker and needed outside assistance to create their own nation state showed a greater degree of co-operation with the
EU and NATO. Their governments made some compromises: Croats abandoned their
ideas of creating a Greater Croatia and agreed to a Croat-Muslim federation in Bosnia;
Macedonians agreed to offer protection and the development of national rights to the
Albanian minority in Macedonia. The Serbian government, however, was less prepared
to make compromises and provoked international anger. The escalation of violence in
Kosovo was simply not acceptable for the stabilisation and the future of Europe.
The Macedonian situation
At the beginning of the last century, the territory of Macedonia presented itself as the
apple of discord between the Balkan states, i.e. Bulgaria, Greece and Serbia. The
division of Macedonia after the Second Balkan War, mainly between Greece and
Serbia, left Bulgaria dissatisfied. It twice entered into war, during both the First and
the Second World Wars, in the attempt to relocate Macedonia within its borders. Its
claims were based upon a belief that the main ethnic group in Macedonia were Macedonian Bulgarians. Bulgaria was defeated and the situation remained unchanged up
to 1991.
When Yugoslavia disintegrated in 1991, the balance between the Balkan nations,
as well as that between western and Russian influence in the region, was disturbed.
Each Yugoslav nation sought to gain advantage from this situation. Those nations that
had no significant minorities, i.e. Slovenia, gained independence after a very short
10
war. Those that were intermingled, like Serbs, Croats and Bosnians, did not manage to
split apart peacefully. Serbian and Croatian nationalism, whose ideal was the creation
of nation states in which political borders would follow ethnic lines, was strong and
pulled toward war. Serbs, whose nation was the most disperse, engaged the military
power of the former state in the pursuance of its national ideal. All sides in the Bosnian war committed atrocities but the Serbs committed the most.
In 1990, Macedonia proclaimed independence in an extremely difficult domestic
and international environment. The neighbouring countries were hostile and Macedonia had to cope with a sizeable Albanian minority. But, in the last ten years, the interests of these two groups have greatly overlapped. Albania as a state was too feeble to
support the separatist tendencies of the Albanian minority in Macedonia and its strategy was therefore to gain instead the status of a constituent nation. Thus, the leaders
of the Albanian minority in Macedonia were co-operative, as were the Macedonians,
whose interests in this stemmed primarily from the need to ensure the survival of the
state. That both groups were, at that point, led by moderate people saved Macedonia
from chaos. Macedonian nationalism was feeble at the time, since the Macedonian
nation was of recent origin while, historically, Macedonian separatism and irredentism
from Yugoslavia, backed by some circles in Bulgaria and the Macedonian emigrant
population there, had been defeated between the two World Wars and then again immediately after World War II.
Crisis in Kosovo
This balance existed until the Kosovo crisis and the danger of full-scale war in 1998.
This war directly, and without any doubt, undermined the balance between the Macedonian majority and the Albanian minority.
Both groups were scared and had their own different political aims and hopes.
Several months prior to the elections in Macedonia in April 1998, following the disintegration of the state structure in Albania and the smuggling of weapons across the
high mountain of Shara over which runs the border between Albania and Kosovo, the
hostile co-existence between Albanians and the Serbian government turned into
armed conflict. The gyre of violence that had been set spinning struck all the citizens
in Kosovo, but mostly the Albanians. At that time, there were estimated to be 30 000
automatic weapons in the hands of a force of several thousand fighters, as well as antitank weapons and light mortars (according to the New York Times of March 29, 1999).
The massacres in Drenica and Raak, the bombing of Albanian villages and the
great number of refugees from Kosovo in 1998/1999 resulting from the excessive use of
force by the Miloevi regime, radicalised public opinion amongst ethnic Albanians in
Macedonia. They started to gather in public meetings in which only Albanian flags
could be seen, the Albanian national anthem was sung and fiery speeches were made in
support of the independence of Kosovo. Several times during the previous ten years, the
leadership of the Albanian minority in Macedonia had provided proof of its double
standards concerning loyalty, often going directly to Tiran to consult with officials of
the Albanian Government. The Macedonian state was not in a position to oppose this
behaviour and it was not able to effect any substantial change. The result was frustration
11
Mirjana Maleska
and hurt feelings amongst ethnic Macedonians. The Macedonian public was greatly
disturbed and, when FRY sent warning signals about interference in its internal affairs,
anti-Albanian feelings erupted throughout the Macedonian language media, demonising Albanians and, especially, their more radical leaders.
The difficult economic situation in Macedonia further aggravated the problems.
Owing to these deteriorating conditions, Macedonian and Albanian radicals and
nationalists won the 1998 general election, creating a coalition of convenience. The
aim of the Macedonian nationalists in the government (VMRO-DPMNU) was to keep
Macedonia as a nation state of Macedonians. Their desire for closer ties with Bulgaria
was wrongly understood by the political leaders of the Albanian community in Macedonia as a signal toward the partition of Macedonia. That hypothetical partition perfectly overlapped with the interests of some Albanian radicals for closer ties or, even,
unification with Kosovo or Albania. Thus was the scene being set up.
Sliding into the abyss
The ethnic Albanian community had been dissatisfied with its status for ten years.
The Albanian political parties had their own programmes and made their demands
within the Assembly. They did not vote for the Macedonian Constitution, arguing that
their dissatisfaction stemmed from perceptions of being outvoted and being treated as
second class citizens, while the ethnic Macedonian approach was to deny the poor
state of inter-ethnic relations and to point out that the Albanians ought to be satisfied.
Meanwhile, the attitude of SDAM, the ruling party between 1993 and 1998, towards
its coalition partner in the government, the DPA (the ethnic Albanian party), heavily undermined its reputation amongst Albanian voters. As for VMRO-DPMNU, the party
that won the 1998 elections, it sowed nationalism but, in return, was kicked by Albanian
nationalism. The leaders of this party either could not or would not fulfil what they had
promised in return for the votes of DPA supporters during the presidential and the local
elections. Consequently, immediately after the local elections there was a protest in
Tetovo, organized by the DPA. This sent a clear message that Albanians in Macedonia
should gain the status of a constituent nation, that the Albanian language should be the
second official language and that there should be a state university teaching in Albanian.
The leaders of the DPA made it clear to Prime Minister Georgievski and his party that
the stability of Macedonia was in their hands and that they should be aware of it.
During the period of the struggle of Serbian military forces to secure the borders
with Kosovo, and while Albania could not and would not support secessionism in
Macedonia, at least not openly, the balance of forces in the region lay in favour of stability in Macedonia. After NATOs intervention in Kosovo, however, the situation dramatically changed it gave wings to Albanian extremism and expansionism, and also
led to the border between Kosovo and Macedonia ceasing to be a problem. The international community, which entered as a friend in the Kosovo crisis, was not very
quick to seal the border because it did not want to spark dissatisfaction amongst the
Albanians in Kosovo.
12
It was quite clear that Albanian extremism would spread from Kosovo into Macedonia, but the politicians inside the country had no unanimous view on how the crisis
should be overcome. This is precisely why ethnic conflicts are so complex and have
no easy answers. An extremist group coming from abroad gains support amongst the
local population of the same ethnic group, facilitated because of their discontent with
their own situation; the serious danger to territorial integrity, as well as the fate of the
first victims, causes extreme reactions on the other side and the homogenisation of the
majority ethnic group; this, in turn, strengthens the disloyalty of the minority group;
where disproportionate force is used for victory, it may radicalise the situation in the
country and cause negative reactions abroad; where there is no military victory, then it
is a kind of defeat and there have to be negotiations.
It cannot be asserted with certainty that, had we taken into consideration the requests of Albanians in Macedonia for the previous ten years, we would not have been
on the verge of civil war. But, certainly, there would have been a greater chance to
avoid bloodshed and our national dignity would not have been so badly hurt.
Macedonia certainly did lay on the verge of civil war and the crisis has not yet
been overcome. Following the ethnic homogenisation of the majority group at the beginning of the crisis, when the authorities and the intellectual elite joined together
with the intention of defeating, militarily, the armed extremists, citizens witnessed the
break-up of the governing coalition. The Albanian parties in the government and in
the Assembly had different views of the reasons for the crisis and the best way of resolving it, and thus the country started sliding into the abyss. All known means of
pressure were used by the international community to abandon the military option:
from guarantees of territorial integrity to persuasion, explanation, promises of financial help and, probably, threats. By succeeding in bringing together the four largest
parties, and by promoting the political option, the international community was, however, able to provide moderates with the opportunity of overcoming the crisis.
The international community (i.e. the EU, US, NATO and the UN) had clearly
learned something from the wars that had been raging in the Balkans for the previous
ten years and, thankfully, this time it reacted quickly. It deduced that the conflict
should be prevented before it turned into civil war, that there should be a mission with
a specific and limited mandate (this being the easiest way to obtain the support of the
governments and the people of NATO member states) for example, the Harvest
mission and that the two sides should be coerced to respect the agreement.
Towards an outcome
After several months of fighting between central government troops and armed Albanian groups (the ONA, or the National Liberation Army), four leaders of two
Macedonian and two Albanian parties, as a result of mediation by, and massive
pressure from, representatives of the international community, signed in Ohrid a
peace agreement which radically changes the character of the Macedonian state and
which enforces a guarantee of the collective rights of Albanian and other minorities
in Macedonia.
13
Mirjana Maleska
Perhaps no-one is content with this agreement, especially the majority that had to
make the greatest concessions, but it does gives a chance for peace and for the future
of Macedonia albeit practically as a state of two nations. Whether this is going to be
the future depends on all parties acting in a moderate fashion, because the model of
consensual or majority democracy does not solve problems by itself. It is well known
that, in societies that are divided on religious, linguistic, cultural and/or racial lines,
there is a need for some kind of consensus (on certain issues), bearing in mind the
need for responsible behaviour, on the part of the political representatives of the two
ethnic groups (ethnic Macedonians and ethnic Albanians) as well as on that of society
as a whole.
Macedonia, as a country, will certainly change. In the beginning, there will probably
be great division (based on cultural and territorial autonomy) between the two ethnic
communities, but the newly-established delicate balance between ethnic Macedonians
and ethnic Albanians will help to avoid in the future a new political and security crisis
or, even, civil war.
14
Blagoja Nanevski
The macroeconomic policy of the Republic of

Macedonia achievements and problems
1. Introduction
In the last ten years, the transition processes of the economy of the Republic of Macedonia have been realised with varying degrees of intensity and success. Within the
framework of approaching the European Union, numerous systematic changes in
Macedonian society and its economy have been taking place. Changes have been introduced in the area of monetary taxation and customs systems, the financial sector
and the foreign exchange system, amongst others. Together with these reforms,
changes have been carried out in the public sector, especially in welfare, the health
system, the education system, public administration, the legal system, etc. The aim of
all these reforms is to adapt the countrys economic and political system to European
(and worldwide) standards. The implementation of the reforms has, to a large extent,
influenced the concepts and the degree of fulfilment of the aims of macroeconomic
policy.
The aim of the macroeconomic policy of the Republic of Macedonia is to reduce the
differences in the degree of its development compared to that of developed countries.
Even though positive real GDP growth rates were achieved between 1996 and 2000,
such a dynamic has not satisfactorily resolved the problems, such as unemployment, the
low standard of living, poverty and the growing foreign trade deficit. Analysis shows
that current strategies for economic development and macroeconomic policy have not
resolved, nor even decreased, the numerous problems with which the economy of the
Republic of Macedonia is faced.
The Macedonian economy is characterised by an obsolete technology and a high
degree of degradation of its fixed assets. The structure of the economy is geared towards
the former Yugoslavia and, not only has it not improved during the transition period, it
has actually worsened. With such an amount and structure of fixed assets, the economy
significantly lags behind developed countries and the gap in the level of development
compared to such countries is widening, now reaching several decades. For the Republic of Macedonia, with its small and under-developed economy, improving the relationships and the degree of co-operation with other countries is a very important prerequisite in dynamising its development processes. Improvements in co-operation with other
countries, and in export performance, are also prerequisites for the full mobilisation and
utilisation of the available production factors, on the one hand, and the accelerated
transformation of the country into a modern market economy, on the other.
But, even at the relatively slow pace and with great losses, the economy of the Republic of Macedonia is, gradually, approaching the standards of developed countries,
especially those of the European Union (at the end of 2000, around 95% of enterprises, employing 225 790 people, had been privatised). At the same time, with the
transition towards a market economy, interconnections with international markets
S. 15 26
15
Blagoja Nanevski
have been achieved. Such an interrelationship, even with insufficient dynamics and
being insufficiently co-ordinated, has contributed to a transition towards more intensive kinds of economic activities, as well as encouraging the application of new management methods and forms of work organisation.
2. The achievements and problems of economic development
The regional surroundings of the country have had, and are still having, an adverse influence on economic development and the fulfilment of macroeconomic policy goals.
The wars and political tensions in the region have not only adversely influenced the
dynamics of economic development but have also postponed reforms and the restructuring of the economy, contributing to the high internal and external risks facing the
country. Especially significant have been the consequences of the crisis and military
activities in the north-west border region of the country during 2001.
Since 1996, macroeconomic stability has been one of the basic characteristics of
the economy of the Republic of Macedonia (see Table 1). After 1996, inflation was
minor and, in some years in this period, it fell within the Maastricht criteria (in 1996,
it amounted to 0.2%; in 1997, 4.5%; in 1998, it transformed into a deflation of 1.0%;
in 1999, it was 2.3%; and in 2000, 6.1%). The budget deficit was also lower than 3%
of GDP the percentage allowed for those countries who, at the time, were members
of the Eurozone (the percentage of the budget deficit in the Republic of Macedonia
amounted in 1996 to 0.5%; in 1997, 0.4%; in 1998, 1.8%; in 1999, 0.1%; while, in
2000 there was a budget surplus of 3.5%). We have a similar situation with public
debt, which is lower than 60%. In the area of currency exchange rates, the criteria of
stability has been achieved, bearing in mind that the last devaluation of the denar was
carried out in July 1997.
Since 1996, the Republic of Macedonia has achieved positive GDP growth rates.
The recession phase had been overcome and expectations for accelerated GDP growth
were starting to be fulfilled in 2000 (in 1996, real GDP increased by 0.8%; in 1997, it
rose by 1.5%; in 1998, by 2.9%; in 1999, by 2.7%; and in 2000, by 5.1%). In 2000,
GDP amounted to $3.8bn, while GDP per capita was $1 885.1
The relatively high growth rate of GDP in 2000, the highest in the transition period,
shows that the reforms and the restructuring were starting to deliver results. The main
generators of economic growth in 2000 were increased consumption and investment.
Consumption grew as a result of export demand, but also because of growth in domestic
demand prior to the introduction of value added tax in April 2000. Investment grew by
52.0% compared to the previous year, bringing at the same time a significantly increased inflow of foreign capital.
From the point of view of supply, the greatest contribution to GDP growth in 2000
was trade (added value actually increased by 32.7%) and industry (which contributed
21.1% to GDP). The relatively high growth of industrial output was a result of the good
supply of raw materials, improved access to foreign markets, the increased export of
1
16
Based on some estimates, if the grey and shadow economies were included, GDP per
capita would be significantly larger and would amount to between $3 500 and $5 000.
The macroeconomic policy of the Republic of Macedonia achievements and problems
some traditional products and the stimulus obtained from increases in the quantity of
production, the better utilisation of production capacities, increased work productivity
and lower expenses per unit of output. In addition, it was influenced by the structural reforms in both the real and the fiscal sphere.2 However, in most real economy enterprises
in industry, the situation concerning the modernisation of equipment has been changed
and improved very little. Patched-up tools, obsolete product lines, high production expenditures, large losses and illiquidity, etc. are all still present.
Personal consumption in the Republic of Macedonia is comparatively low. Such a
situation has persisted during the whole of the transition period. By the co-ordinated
action of monetary and fiscal policy, exercising at the same time strong control of
wage growth, equilibrium between global supply and demand can be maintained: it is
one of the basic presumptions for the suppression of price inflation. However, strong
control of the quantity of demand and of consumption has also contributed to the low
standard of living of the population and to its poverty (in 2000, about 75 000 people
were dependent on social transfers).3 It could be argued that an emphasis in macroeconomic policy on the maintenance of stability has had an adverse influence on the
intensification of economic activity and on the acceleration of economic growth.
In the area of personal consumption, restrictions are applied on the quantity and
the level of consumption of the population through controls on salary growth. Such
controls are applied directly to the salaries of those who are paid via the government
budget, and to those in enterprises whose privatisation is incomplete. Even though the
current legal framework permits the adjustment of wages in accordance with the cost
of living, this instrument has seldom been utilised so far. The low level of price increases in recent years (in 1998, deflation was encountered) and the relatively low rate
of increase in GDP do not permit large wage increases. It should be noted that there is
a high degree of interventionism in the area of wages in the Republic of Macedonia,
bearing in mind that more than two-thirds of wages are paid under administrative limitations (in June 2000, the average net salary amounted to 10 193 denars, which is
equal to $166).
It should be noted here that the influence of trade unions in the Republic of Macedonia is marginal. A new law on the functioning of unions has not yet been enacted
something that is adversely influencing the protection of the interests of employees.
Examples of the callous exploitation of employees by employers are numerous, mostly
in newly-formed enterprises. These include low salaries, work in difficult conditions,
blackmail, non-payment of work at weekends or at night, etc. Such a phenomenon,
typical for the period of one hundred or more years ago, could very often be eliminated
or, at least, decreased if the functioning of trade unions was founded on modern lines.
2
3
National Bank of the Republic of Macedonia (2001): Yearly Report 2000, kopje, pp. 24-26.
Blagica Novkovska (2001): Quantitative Analysis of Poverty in the Republic of Macedonia, in: Poverty Trends and the Possibilities of Overcoming it, Friedrich-Ebert-Stiftung
and Institut za socioloski i politicko-pravni istrazuvanja (Institute for Sociological, Political
and Juridical Research), kopje, p. 22.
17
Blagoja Nanevski
The highest salaries are in financial and technical services, which are 70% higher
than the average salary; the lowest salaries are in civil engineering, amounting to just
35% of the average. The situation in this area is worsened by irregularities in pay
dates, which is both remarkable in itself and which has multi-dimensional repercussions for peoples lives and for their standard of living. The percentage of employees
that do not get their salaries, or who do not get them paid on time, is very high (for
example, in 2000 only about 77% of all employees got their salaries on time; the rest
either did not get their salaries at all, or else got them only with some delay).
The reduction of real GDP to around 60% of its 1991 level has produced a corresponding reduction in public revenues. The evasion of tax and customs duties has also
contributed towards the reduction, as has the non-payment of other state revenues, a
factor present not only in the grey economy but also in the regular one. The decreased
public revenues has led to a reduction in the financing of all public expenditure; however, a balanced budget has been achieved by the inclusion of foreign capital (about
95% of public revenues are from domestic sources), revenues of the Central Bank
and, partly, the postponement of the fulfilment of accepted obligations.
Transfers in respect of the pension fund, the unemployed and the poor amounted to
25% of total budget expenditure. Public expenditure is, additionally, marked by the responsibilities which have arisen under the processes of transition such as government
obligations towards those with savings in hard currency, transfers intended for the rehabilitation of banks, the payment of foreign loans formerly raised by commercial banks,
compensation for displaced workers, transfers to the socially vulnerable, etc. A significant part of this expenditure will characterise the budget for a long period of time and
will limit the possibilities for an increase in investment, development and employment.
Unemployment in the Republic of Macedonia is high and has particularly increased during the transition period. In June 2000, the number of registered unemployed people, based on official sources, amounted to 261 700, and the rate of unemployment, according to the Labour Force Survey, is 32.2%. Unemployment is one of
the most difficult problems facing the country, with noticeable social consequences.
Almost 70% of the unemployed are younger than 40, of which three out of five are
younger than 19.
Employment possibilities are limited, bearing in mind the unfavourable ratio between workforce supply and demand, and the very rudimentary workforce demands.
Unemployment is structural, meaning that its consequences will carry long-term influence. The slow restructuring of enterprises and the low level of investment do not
contribute to the generation of new workplaces.
The external debt of the Republic of Macedonia at the end of 2000 amounted to
$1.43bn, which means that the country is trading at a medium level of indebtedness.
The trade balance and the current account balance have registered deficits since 1994.
The growing deficit is a consequence of the more dynamic increase in imports compared to exports. Within the import structure, reproduction products and public spending prevail; the share of the means of production is relatively low (in 2000, about
12.5%). In 2000, foreign direct investment amounted to $170m, the largest since the
countrys independence.
18
As a consequence of the low competitiveness and the slow restructuring of the

economy, numerous markets have been lost. Entrance into new markets is slow and
will depend on improvements in the technological base as well as on the competitiveness of the national economy. Low competitiveness is also a consequence of inadequate management. Increases in exports cannot be accomplished without the development of technology and improvements in the quality of goods offered to foreign
markets. In that sense, the numerous arguments that exports can be increased by a
change in the exchange rate value of the denar are not valid, although the currency devaluation carried out in 1997 did make a small contribution to an increase in exports,
as well as having a minor influence on the decrease in imports.
Interest rates are comparatively high (in 2000, the active interest rate amounted to
18.9%, while the passive rate was 11.2%). The high interest rate margin (7.7%) is a
synthetic indicator of the operation and efficiency of the banking system. Several factors, on the supply side as well as on the demand side, influence the level of the rates
and the margins. The level of interest rates is determined by the low amount of domestic savings, the high demand for loans by economic enterprises, insufficient financial
discipline, the high operating costs of the banks, difficulties in collecting claims, a
slow realisation of mortgage rights, insufficient bank competitiveness, etc.
3. The consequences of the military activities in 2001 on the economy of
In 2000, the economic sector of the Republic of Macedonia achieved comparatively
favourable results, such that the country was considered to be one of the more successful transition countries. Such an achievement provided solid ground for the anticipated
acceleration of economic growth in 2001; in macroeconomic policy, a real growth in
GDP of 6.0%, an average inflation rate of 2.2%, investment growth of 22%, a rise in
employment of 1.5% and salary growth of 2.3% were predicted.4
However, the crisis on the north-east border and the military activities induced,
and are still inducing, significant damage to the economy which will have adverse
effects on the structural reforms which have already been commenced. Numerous development projects have been cancelled or postponed, a significant amount of money
was spent on buying arms or on military assignments and huge material damages have
been sustained in the areas in which military clashes took place. The consequences of
the damages arising from the events of 2001 will have long-run adverse effects on the
economy of the Republic of Macedonia.
Even though the real amount of damage cannot yet be determined precisely, it is obvious that the crisis will, to a great extent, nullify the achievements of the last few years.
Besides the obvious consequences of the destruction itself, in many enterprises production was reduced or stopped, export contracts were cancelled, damage was encountered
in the transport sector, as well as in tourism and civil engineering (production has been
4
Macroeconomic Policy of the Republic of Macedonia for 2001, Official Gazette of the
Republic of Macedonia, No. 112/2000.
19
Blagoja Nanevski
lowered in probably 24 out of 32 industrial sectors),5 confidence in the banking and the
financial system of the country has been reduced, etc.
As a result of the interventions of the Central Bank on the foreign exchange market
and the repayment of obligations due under foreign loans, the currency reserves of the
country have been reduced by $150m. The military activities and the crisis did have an
influence on both budget revenue and expenditure. Unlike in 2000, when a budget surplus was realised, one can expect that, in 2001, there will have been a deficit of around
$330m, or around 8% of GDP. This deficit would have been caused both by reduced
budget revenues on the one hand and by increased expenditures on the other.
Around 17% of total budget expenditure has been devoted to the defence needs of
the country (a figure that is usually 2.5%); while about $190m was spent on the purchase of arms. The amount of these expenses will be increased by the new purchases
that are expected to have been made up to the end of 2001. The liquidity of the economy was lowered and the amount of outstanding claims between enterprises was increased, leading to lower tax revenues. The so-called war tax (0.5%), imposed on all
financial transactions between enterprises, contributed to the further reduction of their
ability to finance investment projects. It is estimated that, through the introduction of
this tax, the budget deficit will, however, be reduced to 6% of GDP.
All this will lead to a situation in which real GDP at the end of 2001 will be facing
a negative growth rate of around -4%, inflation reaching about 6% and the amount of
exports and imports being significantly reduced. During war, the risk of a country to
investors is increased and, as a consequence, investment activities are reduced. In the
Republic of Macedonia, numerous modernisation and restructuring projects have
been stopped. Especially adverse have been the consequences for the import of
foreign direct investment and the development of co-operative relationships with
foreign partners.
It is difficult to estimate the amount of total direct and indirect damages; damages
in the enterprise sector alone are estimated at around $700m.6 But these sums are not
final and one can expect them to increase. Besides this, the economic state of the Republic of Macedonia is beginning to threaten the fulfilment of numerous obligations
undertaken in pursuance of the Stability and Association Pact concluded with the
European Union. The same is true about co-operation with the International Monetary
Fund and the World Bank concerning funds guaranteed under already-concluded
arrangements.
4. Opportunities and limitations concerning more dynamic development
The Republic of Macedonia is an under-developed country, with limited natural resources, a very high unemployment rate and a low standard of living of the population.
To overcome the numerous limitations that the country has, it is necessary to accom5
20
Kamcevski, J (2001): The Effects of the Crisis on the Macedonia Economy, Stopanska
Banka, 10/2001, p. 16-17.
According to a report on the economic implications of the crisis. See Ministry of Finance of
the Republic of Macedonia (2001): Republic of Macedonia Bulletin No. 7-8, pp. 155-159.
plish comparatively high GDP growth rates as a basis for narrowing the gap between
the country and the developed world and for resolving the numerous social problems
(unemployment, poverty and the low standard of living). To achieve the necessary
high growth rates and the high employment rate, it is primarily necessary to continue
the reform processes that have already been started and also to commence new ones in
several areas of the economy.
In that sense, it is clearly important to review existing procedures and to adjust the
numerous solutions to European Union standards. Consequently, it is necessary to accelerate the post-privatisation restructuring of enterprises and their financial consolidation so that their operating efficiency can be improved. A special field of activities lies
in finishing the privatisation process and in quickening the sale of state capital. In this
manner, the private sector will be strengthened but, furthermore, this is a prerequisite
for higher efficiency and the competitiveness of the whole economy.
In the time to come, macroeconomic policy will follow already-established directions in maintaining the high degree of price stability, balance in the local currency
exchange rate, a more dynamic increase in production and in GDP, the increase in exports, etc. In this direction, co-ordinated measures have been planned for monetary,
fiscal and revenue policy. One of the basic goals of macroeconomic policy in the future is to preserve existing macroeconomic stability, and changes in this area should
thus not be permitted. Experience shows that the inconsistency of some transition
countries in this respect has had a negative effect on their economic development and
the restructuring dynamics of their economies. Consequently, the annual inflation
rates should not be allowed to rise higher than 5%. The strategy of maintaining low
and predictable inflation rates is an inevitable prerequisite of an increase in confidence
in the monetary system, of increased savings and investments, of the attraction of foreign capital and of the decrease in interest rates.
Monetary policy should be gradually oriented towards the growth of the economy,
with a basic goal of the defence of the stability of the denar. It will be possible to
achieve this when the conditions for a more extensive implementation of market instruments in monetary regulation have been accomplished. Fiscal policy should continue to support monetary policy by maintaining equilibrium between revenues and
expenditures and a low budget deficit compared to GDP. In the same direction should
run those activities aimed at restraining the share of public debt as a proportion of
GDP. Similarly to fiscal policy, revenue policy should act in conjunction with monetary policy so that control over aggregate demand can be preserved.
The system of public finance needs to be adjusted to the corresponding system in
developed countries, and customs duties decreased by the dynamics defined in the negotiation processes with the European Union. Besides that, improvements in managing public finances will contribute towards increased domestic savings. The reduction
in total budget expenditure and its share of GDP will contribute to unburdening the
economy and to enhanced investment ability. Improvements in tax collection will contribute to better comprehension and control over taxpayers so that, according to some
estimates, budget revenues could be 10-30% higher.
21
Blagoja Nanevski
In the future, revenue policy will not have to deal with extensive changes but it
will serve to support macroeconomic stability and low inflation rates. Besides this,
wage policy will be used to support increased enterprise investment activity, improvements in competitiveness and increased employment. For these aims to be reached,
wage increases and personal spending will have to be adjusted in the future to increases in productivity at work.
The accomplishment of the aim of macroeconomic policy high growth rates
will depend on the amount and the success rate of investment. Official government
documents predict that investment financing can be sourced domestically. This intention is over-optimistic, bearing in mind the low performance of enterprises, problems
related to amortisation7 and the low efficiency of, and peoples distrust in, the banking
system. In those circumstances, sources of financing should be sought abroad, mainly
in a non-credit form. Another significant source of investment can be the savings of
the population kept outside the banking system.
Investment should be steered towards the renewal of existing production capacities (modernisation, reduction in energy consumption, respect for environmental
standards etc.), the optimisation of technological processes and the introduction of
higher phases of production, as well as the improvement of the technological level of
the production process.8 The low amount of investment funds available demands that
these be utilised in the financing of capacities that require only a low amount of capital. However, this can be quickly and effectively activated. To secure a quick investment return, it will be necessary to create the conditions for the strict respect of the
regulations and procedures through which its rational and efficient utilisation can be
guaranteed.
Foreign direct investment (FDI) is a suitable instrument with which to import
fresh knowledge into the country, seeing that the financial capacity for the traditional
import of technology is now so low. Bearing in mind the high indebtedness and insufficient exports of the Macedonian economy, FDI is considered as a particularly
suitable source of the non-credit import of new technology. Government documents
state that FDI is an instrument for the import of foreign technology which can be realised within the framework of macroeconomic policy and structural adjustments. Its
lack can induce negative consequences as regards the structure and the development
of the country.
Given the significance of FDI, macroeconomic policy is making the effort to promote the economy abroad and, at the same time, to remove the systemic and administrative obstacles (i.e. those which encompass the economic and legal system, via the
acceptance of new laws, making improvements in the application of the law and in the
efficiency of legal procedures and tribunal authorities, simplifying the procedures
involved in registering FDI contracts concluded within the country, developing the
7
8
22
This is mainly a book-keeping figure but a very small amount of such money is actually
utilised for investment in the fixed assets concerned.
Boris Blazevski (2001): Aspects of the restructuring of production in the economy of the
Republic of Macedonia, kopje, p. 312-319.
capital market, etc.) The enlargement of the domestic market, via free trade agreements with neighbouring countries and with other countries in the region with whom
such agreements have not yet been concluded, are measures in the same direction. Of
course, the economic and political stability of the country, as well as improvements in
its external environment, are of crucial importance in attracting FDI.
One of the basic aims of macroeconomic policy in the Republic of Macedonia is
increased exports. The comparatively small area and the market of the country, the
lack of rich natural resources, the high trade deficit, unemployment, etc. impose the
need to develop an open market economy, in which exports have the utmost importance. Without an increase in exports, the economy will not be able to resolve its numerous accumulated problems. Setting export goals as a target of high priority in
macroeconomic policy is a way of elaborating a decisive policy in increasing competitive ability, raiding foreign markets and building an offensive export policy.
The important issue which has a close relationship with achievements in macroeconomic policy, investment and social transfers is the grey economy. From the point
of view of its macroeconomic consequences, there has been no systematic research on
this issue in the Republic of Macedonia. There is, however, no doubt that the grey
economy (with a share in GDP of something like 40-50%) is contributing to a relaxation of the problems of unemployment and poverty because it provides the means to
an existence for a significant number of people. The grey economy also enables the
generation of revenues, which is of importance at the national level.
The study and the understanding of the phenomenon of the grey economy in the
Republic of Macedonia is necessary for its control, as well as for defining public revenues and expenditure policy. Namely, significant amounts of revenues are generated
in the grey economy that are not registered and on which taxes are not paid. In this
way, the budget is damaged twice because, on the one hand, the inflow of budget revenues is reduced while, on the other, there is an outflow of budget funds into projects
that, for good reasons, would not otherwise be financed from public sources.
The institutional infrastructure of the Republic of Macedonia is under-developed
and acts as an obstacle to achieving macroeconomic policy goals, as well as of those
of the reform and restructuring of the economy. However, approximation to the legislation and standards of the European Union is imposing an accelerated development
of the institutional infrastructure, even though numerous international laws, rules and
standards have not yet been translated and are not available in the Republic of
Moldova. The same story, but on an even greater scale, is true for their implementation in practice. One of the obligations of the government is to improve its apparatus
in accordance with modern methods of the management of public administration.
This is a prerequisite for the achievement of macroeconomic policy and the tasks
which are immediately connected with its fulfilment.
Conclusions
In the years that follow, one cannot expect more intensive changes in the macroeconomic policy of the Republic of Macedonia; its basics will remain unaltered. To preserve macroeconomic stability, it is necessary that monetary policy be supported by
23
Blagoja Nanevski
the corresponding macroeconomic and structural policy. Fiscal policy should continue to support macroeconomic policy by maintaining equilibrium between revenues
and expenditures, and the budget deficit as a low percentage of GDP. The public debt
should be preserved at its current level. Revenue policy, as with fiscal policy, should
act in accord with the other components of economic policy, and the main aim should
be to preserve the control of aggregate demand.
It will be possible to preserve long-term stability in the exchange rate of the national currency by increasing exports and decreasing the deficit in foreign trade. An
increase in exports will depend on the fulfilment of structural reforms within enterprises. Monetary policy does have a small influence on the shape of the microeconomy and on the functioning of economic subjects, but a more extensive and less adequate involvement of monetary policy in this area could cause an imbalance and lead
to inflation. The quantity of GDP growth and of increases in employment will depend
on the intensity and success of the reforms. The experience of the Republic of Macedonia and other countries show that the consequences of a reform process that is not
carried out on time are more severe, and may manifest themselves in a low standard of
living of the population as well as in poverty.
24
%
%
% GDP
Denar/$
Denar/$
$bn
$bn
$bn
$bn
%
$bn
$bn
%
Inflation (average)
Inflation (end of period)
Budget balance
(Central budget and funds)
Exchange rate (average)
Exchange rate (end of period)
Exports (F.O.B.)
Imports (F.O.B.)
Trade balance
Current account balance

(with grants)
As % of GDP
Foreign exchange reserves
Import coverage (reserves/imports)
External debt
As % of GDP
10
11
12
13
14
15
n.a
n.a
1.4
0.12
0.6
0.02
0.05
1.01
1.06
44.6
23.6
-13.4
229.6
349.8
-9.1
n.a
n.a
1.6
0.16
-4.7
-0.16
-0.19
1.27
1.08
40.6
43.2
-2.9
55.4
121.8
-1.8
1994
32.3
1.44
2.3
0.27
-5.0
-0.22
-0.22
1.42
1.20
38.0
38.0
-1.2
9.2
15.9
-1.2
1995
26.6
1.17
2.2
0.27
-6.5
-0.28
-0.31
1.46
1.15
41.4
40.0
-0.5
0.2
3.0
0.8
1996
30.5
1.13
2.1
0.28
-7.4
-0.27
-0.39
1.59
1.20
55.4
49.8
-0.4
4.5
4.4
1.5
1997
41.5
1.40
2.3
0.34
-8.7
-0.31
-0.6
1.91
1.31
51.8
54.5
-1.8
-1.0
1.2
2.9
1998
43.4
1.44
3.1
0.46
-3.0*
-0.11
-0.59
1.78
1.19
60.3
56.9
-0.1
2.3
-1.1
2.7
1999
45.7*
1.43*
3.5*
0.71
-3.4*
-0.13***
-0.76*
2.08*
1.32*
65.3
65.9
3.5
6.1**
5.8**
5.1*
2000
*Preliminary data.
**In 2000, inflation is calculated with reference to cost of living measures.
***As of 30 November 2000.
Source: Ministry of Finance of the Republic of Macedonia (2000): Bulletin 6/2000, p. 5 (data sources: State Statistical Office, Ministry of Finance of the Republic
of Macedonia, and the National Bank of the Republic of Macedonia).
Months
Real GDP
1993
Table 1 Basic macroeconomic indicators (annual data for the Republic of Macedonia)
25
Blagoja Nanevski
26
Violeta aeva
Criminal activity during the period of transition in

Macedonia
1. Introduction
Criminal activity, being part of social reality, regardless of its negative social characteristics, is a result of many complex relationships and common actions between the
phenomenon itself and the processes which are taking place in society more widely at
a certain point in time. The differences in both the achievement and the intensity of
the impact of these processes, occurrences or situations also explain the different
manifestations of criminal behaviour according to its quantitative and qualitative
characteristics, either in one and the same environment at different times or in different environments at the same time. The increase in criminal activity in the countries in
transition, which is their common characteristic, locates an inter-relationship between
criminality and some identical or similar social processes and phenomena occurring
in all these countries during the past ten years.
A common feature for this group of countries is the process of transition towards
civil society. The three key issues in the process of the transition are the development of
a market economy, political pluralism and the promotion of a legal state, especially in
the sphere of human rights. It is a process in which major changes have happened at the
macro-social level which, besides the positive and desirable occurrences, has produced
a series of difficult and negative consequences for the citizens of those countries. The
majority have faced unemployment, which has taken on concerningly huge dimensions,
and their own increasing impoverishment, and there have been disturbances in the system of values. Controversial standards and models of behaviour, i.e. the consequences
of these developments at the micro level, have all led to situations, especially amongst
the young, in which individuals feel that they have no future, and has created perceptions of frustration and of being lost i.e. situations that increase the motivation for law
breaking. This has, in fact, been confirmed in practice. An increase in criminal activity
and in other social pathological events has been registered in all the countries in transition, albeit with different intensities depending on their own heritage as well as on other
phenomena and factors unique to each country such as war, blockades, embargoes, etc.
2. The transition and the criminal in Macedonia
2.1 Transition in Macedonia
The macro-social changes that have happened during the last decade in Macedonia
are comprehensive in their scope because they have spread across all social spheres.
The changes have also been, essentially, radical since they have produced states that
had new qualities, structures and processes. The Republic of Macedonia is no exception in this. Society has been paying for the transition process with a series of negative
consequences which have reached a dramatic extent in certain spheres and which
have had an impact on criminal behaviour, especially in some of its manifestations.
S. 27 38
27
Violeta
aeva
Here, we refer in the first place to the consequences which have accompanied the
structural changes in the economy and which have caused a permanent increase in unemployment. This has itself gained enormous dimensions: in 1991, the number of unemployed was 166 873 while, in 2000, the State Statistical Office registered 361 322 unemployed people, a figure almost equal to the number of employed individuals. According to
some recent official data, the unemployment rate is around 40%, which places Macedonia
amongst those countries which have the highest rates of unemployment. The situation
with regard to unemployment is even more dramatic if we take into consideration that the
majority of individuals who are looking for a job are less than 30 years of age.
Moreover, the trend of the majority of the population becoming poorer and poorer is
equally dramatic. According to recent official data, about 77 000 households benefit from
social assistance amounting to up to Euro 65 for a family which has five or more members. It is clear that this sum is not sufficient to satisfy the basic needs of households.
Furthermore, those who are in work are dissatisfied with the level of their earnings
and they feel uncertain as to whether they will be able to keep their jobs. These situations undoubtedly have had considerable impact on the scope, dynamics and structure
of criminal activity in the state during the past decade.
2.2 Registered criminals scope, dynamics, structure
Based on media reports, and without the benefit of any in-depth analysis, it can be
concluded that the years of transition have been marked by an increase in criminal activity in the Republic of Macedonia. In this context, we are analysing its development
on the basis of official data relating to registered criminal acts. This is necessary
since, unlike data on sentenced crimes, they provide a more realistic picture of the
scope, dynamics and structure of criminal behaviour.
A basic conclusion is that, during the past decade (1991-1999), the level of criminal activity has risen. Up to 1993, the data indicate that criminal behaviour in the
country increased sharply, and afterwards, although its scope stabilised, this was at a
much higher level than previously. In comparison, one can notice oscillations in the
previous decade (1981-1990) on a year-to-year basis, but at lower levels.
Table 1 Registered criminal acts, 1981-1999
Year
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
28
Registered Acts
13 374
14 475
16 412
16 579
16 518
16 405
17 294
17 715
14 838
14 624
Year
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Registered Acts
13 429
17 149
22 816
20 283
19 269
19 452
19 277
20 582
19 383
n/a
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Chart 1 Registered criminal acts during the period 1981-1999
A more detailed analysis of data on the structure of criminal activity, according to the
main types of criminal act, indicates that an increase has not been registered across all
types of criminal behaviour but that crimes have been concentrated mainly in the area
of property. Moreover, the data indicate that the increase in the rate of property crime
is higher than the rate of increase in total criminal acts.
Table 2 Registered and sentenced property crimes during 1991-1999
1991
1998
1999
Total
crimes
13429 17149 22816 20283 19269 19452 19277 20582
19383
Property
crimes
3335
6821
10924
9613
9482
% of
total
24.8
39.8
47.9
47.4
48.1
1992
1993
1994
1995
1996
1997
10481 10584 11513

53.9
54.9
55.9
10378
53.5
29
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Chart 2 Registered and sentenced crimes against property

during 1991-1999
An analysis of the structure of criminal behaviour according to the level of criminal

acts indicates sharper increases amongst several particular types of act physical injury, significant thefts, burglaries, stealing motor vehicles and murder (burglaries
having increased considerably after 1994). These are all major criminal acts, with elements of violence (except the theft of motor vehicles).
Table 3 Registered criminal acts during 1991-1999
Criminal act
1991 1992 1993 1994 1995 1996 1997
1998
1999
Murder
54
42
50
62
65
58
75
99
80
Physical injury
251
227
197
223
266
213
282
309
314
Serious theft
2205 4932 8461 6953 6243 5819 6653
7001
6216
Burglary
19
36
35
48
49
70
165
240
155
Vehicle theft
221
403
652
271
334
510
420
484
486
30
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Chart 3 Registered criminal acts during 1991-1999
Hence, the official data provide three general conclusions about the level of registered
crime in Macedonia during the past decade:
increase in the overall level of crime
increase in property crime
increase in violent criminal acts.
2.3 The relationship between registered and sentenced crime
We have already emphasised that the more accurate picture about the scope of criminal behaviour in Macedonia can be obtained from the data on registered crimes,
which give more extensive and more precise information both on the act itself and on
the perpetrators, since these are stipulated in the legal proceedings. Usually, there is a
relatively stable relationship between registered and sentenced crime and so any diversion on one or the other side can be a reliable indicator of certain changes in the
operation of the courts or in their efficiency which warrants a deeper analysis.
Unlike registered crime, which we have concluded has increased during the past decade, the data on sentenced crimes provide quite a different picture. Namely, according to
these figures, we can conclude that, during 1981-1990, this type of criminal behaviour increased while, in the following decade (1991-1999), it decreased. During this period, the
state registered its lowest level (in 1997) of sentenced criminal acts in the past twenty
years. Hence, we can conclude that trends in registered and sentenced crimes in the past
ten years have been divergent, a situation that deserves particular analysis.
31
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Table 4 Registered and sentenced crimes during 1981-1999

Year
Registered crimes
Sentenced crimes
1981
13 374
7 403
1982
14 475
6 918
1983
16 412
7 899
1984
16 579
8 381
1985
16 518
7 955
1986
16 405
8 143
1987
17 294
9 246
1988
17 715
10 255
1989
14 838
10 878
1990
14 624
7 704
1991
13 429
7 093
1992
17 149
6 660
1993
22 816
6 538
1994
20 823
6 724
1995
19 269
7 711
1996
19 452
6 341
1997
19 277
4 732
1998
20 582
6 158
1999
19 383
6 783
32
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Chart 4 Registered and sentenced crimes during 1981-1999
A comparison between the dynamics of registered and sentenced crimes during the
past two decades can be taken as an indicator of the current existing weaknesses in the
judicial system, in particular the evident increase in the inefficiency of the courts
compared to the situation in the earlier decade.
In order to identify the reasons that have had such an impact on the decrease in the
efficiency of the judicial bodies, a deeper analysis is necessary of the different data
and the situations that have been occurring in the past ten years (a relatively long and
dynamic period). These can be very important in assessing the operation of the judicial system. With regard to the limited and superficial character of the data, we use for
this article only those that can be identified in general terms.
Firstly, there is the issue of the dissatisfaction of the courts with regard to their budgets, in particular the lack of independent judicial budgets. Secondly, for the reason that
there were significant changes in the legislation, there was, for a certain period of time,
no re-election of judges. This uncertainty had a severe impact on the operation of the
courts (in 1996, a general re-election of all judges on permanent mandates took place, in
contrast to the previous process in which mandates had been time-limited). Furthermore, there have been, amongst others:
inadequate legal solutions related to court procedures which allow a prolongation of
proceedings
constant dissatisfaction with the administration by the courts of personal finances
strikes in recent years which have prevented the normal operation of the courts
corruption and the influence of political parties in the court system.
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2.4 Unregistered criminal acts

The existence of bleak crime figures indicates that our knowledge on crime based on
official statistics provides only a partial picture in terms of the true scope of the problem, as well as its structure, consequences, the characteristics of the perpetrators, etc.
However, we know that its scope is determined by several factors (type, seriousness
of the act, consequences, trust in the competent organs, etc.), and that it can be observed to have different aspects. We turn next in this article to two forms of crime
which are present in reality and for which we lack real knowledge, either completely
or to some extent. These are the sentenced crimes in the sphere of the grey economy
and corruption in state institutions, both being forms of behaviour that are also related
to the transitional changes or, more precisely, to their negative consequences.
Grey economy
The loss of jobs and the huge financial crisis which families have faced have forced
many citizens to smuggle and to trade in different goods, mainly bought in Bulgaria
and Turkey. This has created a situation which pleases everyone: citizens because
they can buy goods at lower prices than those in retail shops; while sellers still manage to earn. As for the state, this position has become both very desirable and very
useful because it has thus reduced social tensions. However, it also means that the
state loses interest in the pursuit of crimes related to the grey economy (and, more
prosaically, that it loses significant tax-based income). This ambivalence, on the other
hand, emphasises the anaemic situation in society which has also, simultaneously,
helped to stimulate the rise in criminal behaviour in general.
Corruption in state institutions
The existence of this phenomenon is an indicator of the lack of observation of laws
and the disregard of the rules of operation of those institutions and bodies through
which citizens directly realise their rights. The need to bribe officials in order to realise any right at all has become a widely accepted mode of behaviour amongst citizens.
Knowledge derived from public opinion surveys carried out in 1997 and 1998 clearly
indicate the existence and spread of this phenomenon. According to this research
data, almost half the respondents gave money or services in order to gain access to
some right to which they were already entitled. Bribes were given most frequently in
the health service, municipalities (for licences or certificates) and education, followed
by the need to obtain rights in the pensions and disability insurance system, as well as
in the customs service.1
2.5 Organised crime
The picture of criminal behaviour in Macedonia would not be comprehensive if we
did not refer to organised crime. This form of criminal activity is one about which we
can certainly say that, in its different forms, there has been an increase in our country
1
34
V. aeva (1998): Bribes as Part of Everyday Life of Macedonian Citizens Security,

kopje, No. 3, p. 254.
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during the past several years. However, when we discuss organised crime as one of
the features of criminal behaviour in the period of the transition, we should take into
consideration several important features and, especially, the following characteristics:
the intention and mobility of organised crime
the processes of globalisation
the lack of strategy for the prevention of organised crime at both the international
and the national level (an issue to which, however, exceptional attention has been
paid recently)
the geographic position of Macedonia.
The events in the wider area, such as war, embargoes, refugee crises, the presence
of foreign soldiers in the country and in surrounding ones and, finally, the internal
problems of the country related to the process of transition which were discussed earlier, all also contribute to our analysis. It is clear that organised crime in Macedonia is
influenced by all these external and internal factors. However, a typical feature for the
period of transition is that our country, located in an area which is itself in transition,
has become a destination for particular types of organised crime.
In the following sub-sections, we will refer briefly to some forms of organised
crime that have been on the increase in the past several years.
Smuggling and trafficking in drugs
This is a form of organised crime that has been present in our country since before
even 1990 but, at that time, Macedonia was mainly a transit area. In the past ten years,
however, in view of the changes related to the external and internal environment,
Macedonia also became a drug-dealing market. The reason for this is certainly the
spreading of drug addiction, a phenomenon primarily related to the situation of young
people in the new social (transitional) milieu which, for them, represents a source of
insecurity, frustration, lack of prospects, etc.
The scope of drug addiction can be easily illustrated by two pieces of data. Currently, there are about 10 000 young people in Macedonia who take drugs (most frequently, so-called heavy drugs); in contrast, in the 1970-1974 period there were only
65 individuals registered in the state who took drugs and not all of these were defined
as users.2 Knowledge from the survey carried out at the end of 2000 across the whole
state (a sample of 1 200 respondents) indicates that as much as 60.7% of respondents
expressed fears that those closest to them might start taking drugs, although only
2.6% said that they already had friends who were drug users.3
2
3
N. Shurbanovski et al. (1978): Drugs in Macedonia, ISPiSR: kopje, p. 347.

These data derive from the research project Social Exclusion and Insecurity of the Citizens of the Republic of Macedonia, carried out by the Institute for Sociological, Political
and Juridical Research in kopje, funded by the UNDP.
35
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Smuggling and trafficking in arms

This is one of the classic forms of organised crime, one that has been on the rise during the past decade across the whole area. The increase in our country of this form of
organised crime is certainly related to the war in the region and to the break-up of
former Yugoslavia. However, it seems that Macedonia has not only been an area
through which arms have been transferred before being delivered to the parties involved in wars: the most recent events, i.e. the war-like situation of 2001 in the state,
indicate that Macedonia has not only been a transit area but that some quantity of
arms have stayed in the country or else been purposely brought into it.
Trafficking in women
The large increase in this type of crime in the past ten years in the countries in transition has also been due to the negative consequences that have accompanied the
macro-social changes, such as unemployment and the dramatic impoverishment of
the majority of citizens. However, it is also due to the opening up of these countries
towards the world and the liberalisation of travel regimes.
Until three years ago, this phenomenon was not even mentioned in Macedonia as
it appeared to have few dimensions at all. However, the war in Kosovo and, especially,
the presence of foreign soldiers first in Kosovo and then in Macedonia, in a certain
way acted to stimulate it. At the beginning, the state was a transit area in the trafficking of women but, later on, Macedonia itself became a destination for this form of
crime. However, there currently exist little or no data on the scope of this form of
crime and the involvement of women from Macedonia in this type of business.
3. Concluding remarks
The transition in Macedonia has been marked by enormous changes in three complex
systemic areas: in each of the political, economic and socio-cultural environments.
The changes that have been introduced in the legal system and the creation of new
control mechanisms have lacked the substantial capacity immediately to regulate and
control the newly-established functions and relationships in society. Therefore, there
has been an evident disruption in the balance of the system which has led to a huge
economic crisis, higher levels of poverty amongst citizens, a record rate of unemployment, the poor functioning of state institutions and an under-developed legislation
i.e. a system full of weaknesses. However, the weaknesses of the system have, inevitably, become weaknesses of the individual; frequently frustrated by the lack of clear
norms in behaviour, disoriented in terms of value structures and having weakened
moral principles and feelings of aimlessness, etc.
In such a social environment, we conclude that crime has significantly increased,
especially crimes against property and those with elements of violence. Further rises
have been recorded in unregistered crimes and those which have a mass character (the
grey economy), followed by increases in particular forms of organised crime. There
have also been increases in many other forms of crime not discussed in this article.
The article would not be complete without reference to those events which took
place in Macedonia in the last nine months of 2001, during which time the state
36
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witnessed war-like activities in which a large part of the citizenship was faced with different types of criminal behaviour murders, physical attack, kidnapping, the destruction of households, the eviction of people from their homes, etc. Even after the formal
ending of these activities (especially after the signing of the Framework Agreement), the
victimisation has, nevertheless, continued in the form of classic criminal activities, the
goals of which have been to terrify Macedonian citizens and to make them fear for the
future as a means of obtaining ethnically clean territories. There have also been frequent
robberies in war-affected regions aimed at gaining material benefits. If we observe the
development of crime in Macedonia in terms of the most recent events, then we can expect, with a large degree of certainty, that the trends of increased criminal activity, especially in property-based crimes and aggressive crimes containing elements of violence,
will undoubtedly continue in the future.
These expectations are also based on the persistence and deepening of the economic
crisis (the payments of debts for weapons and for collateral will be inevitably made and
these will have their own effect on the economy), as well as on the state having an exceptionally large amount of unregistered arms in the possession of its citizens.
37
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Social policy and transitional changes in the

Introduction
The subject of this article implies a focus on aspects deriving from the goals of social
policy, as well as from the issue itself, its legal grounds and the achievements related
to providing social security to people during the period of the transition. This approach will be applied through an analysis of the coherent and principal fundamentals
of the Republic of Moldova and its relevant social framework.
By definition, social policy plays a very important role in society through measures aimed at improving or changing the conditions for economic and cultural lifestyles, in accordance with the progressive development of social law and the economic and political capacity of the state at a certain time.1
For these reasons, contemporary theoreticians in this field emphasise social aspects in the context of their contemporary circumstances, on the grounds that social
policy contributes towards the realisation of humanity in a democratic society. The
most illustrative confirmation of this conclusion can be found in Siederman's study
Essentials of Contemporary Sociological Science, in which the values of social policy
are considered to be a solid criterion of political maturity and one of the achievements
of civilisation, and where social reforms constitute the basis for the prospective future
of every country.
Social consequences of the transition in Macedonia
Defining its own path towards the contemporary conceptualisation of change in the transition states, the Republic of Macedonia has faced serious tasks that can be considered as
revolutionary for a newly independent state. Here, we can identify the building of a parliamentary democracy, the establishment of private ownership structures with entrepreneurial input, and the creation of the required social context through an adequate system
of operation for the new society. In this view, according to the structuring of the social
sphere in terms of its provision of social security for its citizens, the Republic of Macedonia has continued or, more precisely, has redefined the former egalitarian system of
social insurance, aiming at its gradual reformation in the new conditions, beginning with
legislation. The 1991 Constitution established the values of the new constitutional order
(Article 8) as humanity, solidarity and social justice. Actually, these are also the principles on which the social state has been founded and for which the Republic of Macedonia was determined to struggle after its independence. Several fundamental constitutional
rights of citizenship, such as the right to medical care, education, social protection and
freedom for scientific, artistic and other types of creativity, derive from those values.
1
For more details about the definition of social policy, see Greffe, H (1975): La Politique
Sociale, PUF: Paris, No. 3.
S. 39 46
39
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When we observe the course and the pace of the implementation of reform in the
overall economic context of the country during the past decade, it is clear that the social consequences that have occurred have ordinarily caused serious disruptions in the
social sphere. The result of these processes is the increased isolation of citizens, since
they have continually become poorer and poorer. Moreover, citizens are sinking under
the weight of economic degradation. Values are a priori excluded, so that the whole
project is reduced to a determination only of the instruments and measures for the
changes, without any regard for the human consequences. Basically, this boils down to
an honest-dishonest game of scandal, which further amplifies the social differences.
Unemployment, viewed in the overall context of the Republic of Macedonia, is
undoubtedly one of the most severe economic and social problems. It was present
even before the time of transition but, in the past several years, it has become worse
and much more complex. The principal problem of this phenomenon during the transition has been simply the large number of unemployed people. This has become
especially acute in recent years, as is evident in the following statistics:
Table 1 Unemployment rate in Macedonia
Labour Force Survey *
Administrative Sources**
1996
31.9
38.8
1997
36.0
40.6
1998
34.5
46.6
1999
32.4
51.5
2000
32.1
53.4
* National Bureau of Statistics (most frequently used)

** National Pension Fund, National Employment Bureau
As the Labour Force Survey indicates, one-third of the labour force in Macedonia
is out of work. Besides that, it is quite clear that unemployment is permanently increasing, as a consequence of the long wait to obtain work. This indicates that the unemployment problem is complex as well as severe.
The period of waiting for employment, being a relevant indicator of labour problems, indicates that almost 80% of registered individuals have been unemployed for a
long time. An extended period without work (over one year) is registered for twothirds of all unemployed individuals, having increased by a factor of two compared to
1991, when the unemployment rate was 28.5%.
40
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Table 2 Unemployed by time interval between jobs and by gender

1998 (%)
1999 (%)
2000 (%)
Total
Women
Total
Women
Total
Women
Up to one year
1.9
15.5
17.1
15.3
16.2
14.8
1-2 years
15.9
16.7
13.8
13.0
12.7
12.5
2-4 years
23.7
22.3
13.7
13.3
11.8
10.8
Over 4 years
43.6
45.4
55.4
58.4
59.4
61.8
Source: National Bureau of Statistics
The unemployment situation in Macedonia makes labour feel worthless and not required by the system. This brings citizens to a position of being inactive and, as a result,
economically insecure with regards to their living standards. In general, the unemployed
represents a group of the population that is subject both to economic insecurity and to
different levels of risk. Unemployed individuals who are unable to provide a living for
themselves and for their families are at the highest risk level. These are the breadwinners for families who have no permanent employment, as well as single mothers and individuals who have no other income and who have been waiting for a job for a considerable time. Those who manage to re-enter employment after a while, or who are living
on family incomes, such as young people, are at a lower level of risk with regard to economic insecurity.
The high level of social differentiation of the population (into upper, middle and
lower strata) is actually caused by the wider negative economic and political processes, and not by the issue of work and its effects. A predominant element in the upper strata of the population (around 10%) is now becoming successful in the business
community. The middle class is being brought low and is a segment the size of which
is still increasing.
The results of particular sociological surveys carried out by the Institute of Sociological, Political and Juridical Research indicate that the problem of stratification is quite
severe. Accordingly, 32.7% of respondents consider that they have a satisfactory social
status while 44.7% consider their status to be unfavourable. This is evident in their assessments that the current situation of Macedonian citizens, compared to that of two years ago,
had deteriorated: this was true for 58% of the total population, in comparison to the 33.1%
whose status had not changed and the mere 7.2% who had managed to improve their situation. Consequently, the increase in unemployment and the worsening economic situation
in the country have increased feelings of insecurity amongst the majority of the population. In addition, data from the National Bureau of Statistics indicate that the cumulative
poverty index in Macedonia is constantly increasing. In the past two years it has increased
by a factor of two, such that, in 2001, it reached 23%.2
2
National Bureau of Statistics, Poverty Index.
41
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The phenomenon of extensive unemployment, along with social differentiation

and increased poverty, is being accompanied by social tensions, reductions in real
wages and a fall in living standards. Moreover, 70% of the labour force has wages
which are lower than the national average, while 20% receive their wages only with
delay. Two-thirds of pensions are below an average which itself amounts to just 68%
of the average wage. Furthermore, 36% of the population capable of working are
long-term unemployed but only 20% of this group receive unemployment benefits.
This situation makes up the downside of the transition in Macedonian society. The
unfavourable effects which are related to the process of privatisation refer to a transitional recession, as a result of reduced production and the decrease in GDP. Another
severe problem is the political instability caused by the war, or the terrorist activities,
in 2001; these removed the reform process from the focus of the news, as well as of
that of the profound necessity for it to take place.
Social policy between concept and practice in Macedonia
The Macedonian political system in transition, being in the stage of a growing democracy, has not yet achieved the attributes of a functional political system. However,
there is an awareness that the state should develop an adequate system of social protection for its citizens. The need to develop a suitable social policy in Macedonia has
existed for more than five decades and has been built both into the awareness of citizens and into their habits. At present, however, social policy raises many questions
with regard both to its content, the dominance of a particular situation of need and the
evaluation of suitable measures to tackle it, as well as the general improvement of living standards. These are issues that were under consideration even in the time when a
social state was not yet established in Macedonia. The fulfilment of this responsibility
is a very important and quite urgent task as a result of the severe political and economic crisis facing the country and the significant social problems and uncertainty
which this has caused for the majority of the population. At the same time, it is important to note that all these social problems appear as real barriers to the transition into a
market economy.
Despite the many changes which are a part of the transition, the overall goals of
the transformation, if we take into consideration its social implications, have been
contradictory. On the one hand, it is necessary to introduce a market orientation and
modern technology but, on the other, the infrastructure and labour problems remain
neglected.3 Therefore, it can be said that social policy in Macedonia resides between
two contradictory action systems. The impact of ownership transformation has been
remedied in one way but, simultaneously, there is a strong will to proceed with a new
scheme of social insurance for workers, one which is adjusted to the standards of the
market economy. At this stage of economic and social development, a planned contemporary model of social protection for the population can not yet be realised, even
though this is the basic precondition for attaining the model of a social state and a
3
42
V. Puljiz (1995): Social Policy in Postsocialist Countries, in Social Policy in Transition,

kopje, p. 11.
Ljubica oneva
humane society. In such circumstances, the individual and the family are forced to
take upon themselves the largest part of the burden. They are also forced to shoulder
some of the responsibility for their current living conditions, related both to the individual social insurance of workers and the severe unemployment.
In addition to these unfavourable circumstances, we should certainly add the remaining objective phenomena of the post-communist era, such as the lack of production, under-developed capital markets and an unstable group of employers. It is easy
to conclude that the institutional preconditions for a developed social policy are lacking, including that the social partners (a plural and under-developed trade union structure, and a backward-looking and inefficient administration) do not possess sufficient
capacity so as to allow them to meet the needs of a modern social state. A system of
mixed ownership between the public and private sector is still present, although privatisation remains the predominant orientation with the goal of central planning and the
contract-based economy becoming gradually extinct.
In addition, there exists the need expressed from within for a stronger and dominant
state, which arises from the belief that only such a state could meet the social needs of
the population. This is, of course, a paradox in the creation of a democratic system and a
real social state.
The processes of transition in Macedonia have simultaneously increased the level
of state arbitrage in the regulation of social processes, instead of this being marked by
a steady affirmation of market conditions. The state continues to intervene in the more
important problems as a consequence of the low power of consumption and as a result
of the threat of social unrest, which creates difficulties for the functioning of a market
economy. One example concerns the measures which have been implemented to
establish sustained growth in the living standards of citizens through guarantees of
minimum social security as well as a slower decrease in the standard of living. There
is also the intention to preserve a minimum level of functioning of those activities
relevant to social security which, in turn, relates to the level of operation of institutions that provide social and medical services, child protection, and so on.
Protection of the socially-threatened population
The attendant problems of privatisation and restructuring of the economy, along with
rapidly increasing unemployment, have reinforced the need for social protection. A
solution as regards the social status of citizens affected by these issues has demanded
the adoption of social programmes and has also implied legislative changes. Those individuals who had been employed, according to the current legislation, now have the
right to receive unemployment allowance for a limited period of time. Based on the
governments 1992 social programme, besides the right to receive both permanent
and one-off assistance, a new type of benefit, the minimum level of social protection, has been introduced. More precisely, this form of assistance is intended for
those who have no income, the unemployed and those individuals whose right to
employment has ceased and who have not been employed by another company. This
assistance has been available for ten years, but its basic characteristic has been a
continuing reduction in the amount of benefit due to a constant increase in the number
of beneficiaries and the states own lack of finance.
43
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In financial terms, assistance based on the minimum level of social protection

amounts to 57% of the established relative poverty line (Euro 594 per annum, or Euro
49.51 monthly) for each member, compared to the LSI-Equivalent Scale.4 This merely
supports the assumptions concerning the low level of the benefit. After the frequent
changes during the implementation of this type of assistance which have been oriented
towards its permanent reduction, the level now applied is: Euro 28.05 for a one-member
family; Euro 18.15 per member for a two-member family; Euro 15.39 per member for a
three-member family; Euro 14.85 per member for a four-member family; and Euro
13.66 per member for a five-member family. Indicators related to households who survive exclusively on social assistance (and especially those with four or more members,
whose allowance amounts to half of one Euro per member per day) show that a large
part of citizens in Macedonia find themselves in a very difficult economic situation.
For these reasons, we conclude that social assistance, the only way of helping
households without income, has largely lost its goals and its purpose. The attitudes of
49.1% of the citizens who benefit from this form of assistance reinforces such a conclusion. Namely, they report that they have to rationalise sharply even their essential
needs and that, nevertheless, they spent the entire social allowance within the first ten
days each month.
The situation becomes much clearer if we look at data from the third quarter of
2001. There are 77 000 households with a total of 350 000 members who benefit from
this form of assistance, i.e. 17.5% of the total population of the state. There has been
an evident increase in household-beneficiaries in 1999, the number totalled 67 000
compared to 60 000 one year earlier and it has tripled since 1992 when it was first
introduced. This indicates that the social environment in Macedonia is quite severe,
with an evident trend towards further deterioration.
For all these reasons and others beside, the involvement of the state in providing
for the minimum needs of citizens and their families has become a necessity. The
principal aim is to avoid or reduce social tensions and the disintegration of the population that can often end in isolation, violence and social unrest. It is also clear that a
reduction in social rights contributes towards an increase in the pathological phenomena of crime, hopelessness and a reduced sense of social justice and patriotism
amongst citizens. Furthermore, the Copenhagen Declaration of the UN obliges states
to undertake simultaneous activities in order to assist poor, vulnerable and threatened
citizens, as well as to fight against crime, illnesses, drug abuse, alienation, the decrease in educational standards and other factors that may have significant consequences for social security in its widest sense.
In contrast, if the payment of social assistance (especially where the benefit runs at
a high level) carries on for too long, it can lead to beneficiaries not being sufficiently
motivated to look for work. In circumstances of high unemployment, as is the case in
Macedonia, it is very difficult to assess for how long this form of assistance will be
implemented in the future.
4
44
National Bureau of Statistics, Luxembourg Study on IncomesEquivalent Scale.
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Conclusion
In general, we can conclude that, currently, Macedonian society is faced with several
heterogeneous structures of social policy, burdened with the historical heritage of an
under-developed economy and living under the pressure of unfavourable economic,
social and political circumstances which are the product of the reforms introduced in
the period of transition. Changes in the model of social policy are being brought in
very slowly, as is the case with the majority of the former socialist countries. We are
still unable to see a range of social policy models adjusted to the market environment,
since a unique market-based model in all spheres of the state has not yet been constituted. Consequently, changes in social policy represent a mere modification of the socialist system in the so-called transition circumstances and do not yet amount to the
creation of a new model.
The strategic goals for the improvement of the situation in Macedonia imply the
need to introduce coherent measures of social policy along with activities which support improvements in economic and social development. The goals which are set
should be realised through the creation of a solid social institutional structure that will
pay careful regard to the situation in the labour market, uncover the changes at work
and the problems with employment, and recommend suitable solutions. Parallel to
this, it is necessary to build up the criteria for the employment of labour so that the unemployed can make their living in some other way and in some other environment.
Subsequently, they would gradually be able to give up the social augmentation provided by the state. Suitable measures of subsidy for the payment of communal services and other needs of the population also need to be launched under programmes
providing social protection for the poorest, such as Roma, single mothers, the old and
those with disabilities, as well as families with many children and no income.
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46
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The media system in the Republic of Macedonia:

between theory and practice
1. General characteristics of the media scene
Gaining independence as a sovereign state and the adoption of the 1991 Constitution
of the Republic of Macedonia marked the beginning of a process of the liberalisation
and pluralisation of information in the printed and electronic media. In a period of just
a few years, hundreds of private newspapers and magazines and more than 250 private broadcasters have appeared on the media scene. This is a media and sociological
phenomenon, particularly if one has in mind Macedonias territory (25 713 km2) and
its population (1 945 932 according to the 1994 Census). In the struggle to establish a
contemporary media system, there have been attempts to put radio and television back
into state hands, to introduce a moratorium on frequencies and to allow the authorities
a direct influence on the management and editorial policy of the national media. The
formal proclamation of the principles of public interest and media commercialisation
has been used to accuse the media of being the only violators of the basic freedoms
of public information. Today, the situation is making progress on both the formal and
the legal level but, in practice, it is showing signs of regression.
a. The development of electronic media
The explosive development of the electronic media lasted until 1997, when the
Broadcasting Activity Act was passed and the Broadcasting Council formed. With
laws defining the status of the public enterprise Macedonian Radio Television and the
newly-formed public enterprise Macedonian Broadcasting, which happened at the beginning of 1998, as well as with the allocation of the first concessions for broadcasting activity (in July 1998), the public and private sectors have been normatively constituted, thus formally achieving pluralism in the broadcasting sphere. The public
sector consists of Macedonian Radio Television (three TV and five radio channels)
and 29 local radio stations. The private sector consists of 111 commercial broadcasting organisations (58 radio and 49 TV stations), as well as four national concessions
(two radio and two TV stations).
Macedonian Radio Television, as a public national service, broadcasts around 90
hours of radio and 61 hours of TV programmes daily (MTV1 and MTV3 have a 24hour programme while MTV2 has a 13-hour one). MTV1s programme (covering 96
per cent of Macedonias territory) is primarily focused on news, culture, education
and entertainment. MTV2 covers 94 per cent of the territory and, along with other
content, also broadcasts programmes in the languages of the national minorities (17
hours a week in Albanian, nine hours in Turkish and one hour each in the Romany,
Serbian and Vlach languages). MTV3 covers only 50 per cent of the territory and
broadcasts satellite programmes.1
S. 47 66
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The public broadcasting system has a similar programming orientation at the local
level; however, its legal position has not yet been defined. The status of the 29 local
radio stations has also not been consistently resolved, even with the adoption of the
Broadcasting Activity Act (Article 92), whose provisions are not in accordance with
the Law on Local Self-Government, the Law on Public Enterprises or the Law on
Territorial Division, particularly in those elements related to the right of local administrations to establish public enterprises.2 According to the Law on Macedonian Radio
Television (Article 29), existing local radio stations are to continue working as public
broadcasters at the local level and should sign a contract for taking over founding
rights with the municipalities in whose territories they broadcast. However, even this
technical solution was of no help: only five enterprises have harmonised their work
with the legal provisions within the envisaged period while, in the remaining enterprises, founding rights have been taken over by the government.
If we take into account the territory covered by the public service at the national
(state) level, there is no doubt that Macedonian Radio Television (MRTV) is the most
influential enterprise or, more precisely, that it has the possibility to have the biggest
influence on the audience. Similarly, in the private sector, four networks at the national level (TV A1, TV Sitel, Radio Kanal 77 and Radio Antena 5), which cover
around 70 per cent of the population, are the commercial broadcasting organisations
which wield the biggest influence.
b. The development of the printed media
Currently, the situation in the field of print media is that there are 11 dailies, 21 weeklies, 10 bi-weeklies and 20 monthly newspapers and magazines, 21 periodicals and 21
magazines for children. Eight dailies are published in Macedonian, two are in Albanian
and one is in Turkish. Nine dailies publish news and political content while two focus
solely on sport. All daily newspapers are published six times a week and they usually
contain various supplements on different days, generally on sports, TV listings, entertainment, advertisements, etc. The most influential print media, judging by circulation
and scope of advertising (even though there are no precise data), are in the following
rank order: Dnevnik, Utrinski Vesnik, Veer, Nova Makedonija, Makedonija Denes and
Fakti (in Albanian).
The majorities of the weeklies (17) are published in Macedonian and cover news
and politics; however, some specialise in humour and satire; student issues; film, theatre
1
48
In April 2000, Macedonia started broadcasting a 24-hour satellite programme for Europe
and Australia via the Nova Breznica satellite communication centre. The programme is
prepared by Macedonian Radio Television. For the moment, private broadcasters are not
included in satellite broadcasting.
The Law on Local Self-Government enables local administrations to establish public
broadcasting enterprises but, objectively, the newly-founded municipalities (123 municipalities were formed following the new administrative division of the country), owing to
the lack of frequencies, are unable to do so. Thus, only municipal centres established under the previous system have local radio and television stations.
The media system in the Republic of Macedonia: between theory and practice
and television; economy and the law; and puzzles and crosswords. In the records of the
Information Agency of the Government of Macedonia, there are 87 registered bi-weekly
magazines, 30 of which are published locally, and it is almost impossible to determine
whether they come out regularly or only occasionally. These are relatively dependent
both in their editorial policy and in financial terms on their founders. As far as their concept is concerned, the majority of these magazines are reviews with puzzles and crosswords, tabloids for young people, professional reviews and magazines (for example, agronomy, the economy or for emigrants) and news magazines, as well as party and
religious newspapers, of which only ten are regularly published.
The number of registered monthlies (333) is more than three times the number of
bi-weeklies, but only 20 of these are published regularly while the rest only appear
from time to time, depending on resources. The situation with periodicals is similar:
out of 200 magazines, only 21 appear on the market continuously. Concept-wise,
most of them are professional, scientific magazines or reviews for women; twelve are
in Macedonian, five in Macedonian and English, three in Albanian and one in Vlach.
A separate group is childrens magazines (21), a large number of which receive
financial aid from various foreign associations and which are used as aids in schools
and pre-school institutions.
c. Media legislation
Broadcasting activities in Macedonia are regulated by the Broadcasting Activity Act
and the Law on Telecommunications and, on certain issues (such as the issue of concession allocation), also by the Law on Concessions.3 The Broadcasting Activity Act
defines the basic conditions for broadcasting (production, transmission, broadcasting
and distribution of radio and TV programmes) based on the principles of freedom of
expression, freedom of receiving and accessing information, and freedom of establishing institutions for public information, as guaranteed by the Macedonian Constitution (Article 16) and Article 10 of the European Convention on the Protection of Human Rights and Basic Freedoms. The Law on Telecommunications regulates the
conditions and means of conducting business in the field of telecommunications:
building, maintaining and using telecommunication networks and resources; relations
between the providers and the users of these services; competition; the issue of concessions and the provision of telecommunications services through concessions; the management, use and control of the radio frequency spectrum; and the production, import,
sale, use and maintenance of radio stations. The Law on Copyright regulates the rights
of authors to their work and the rights of performers, record companies, film and stage
3
This system of regulating broadcasting through a large number of regulations has negative practical implications, especially because these provide different solutions for certain
issues. Under the Law on Concessions, the responsibility for concessions lies with the
government whilst, under the Law on Telecommunications, it lies with the Minister of
Transport and Communications on the proposal of the Telecommunications Administration. On the other hand, Article 13 Subsection 1 of the Broadcasting Activity Act regarding concessions refers to both of these laws.
49
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producers, radio and TV organisations and publishers to perform them. The work of
MRTV is regulated by the Law on Macedonian Radio Television, while the work of
local public broadcasters is looked after by the Broadcasting Activity Act and provisions in the Law on Public Enterprises and the Law on Local Self-Government.
Citizens interests in the field of broadcasting are represented by the Broadcasting
Council, constituted in 1997 when the Broadcasting Act was passed. Legislation defining the functions of European regulatory bodies differs depending on the characteristics of each country. In some countries, they have full regulatory powers passing
rules on the additional regulation of certain broadcasting issues. The scope of their
powers is one of the criteria for assessing the level of democracy of a country in the
media field. Experience from other countries shows that the legal powers of the Macedonian Broadcasting Council do not exist at the same level of status and powers indicated by the Council of Europe experts during the adoption procedure for the Broadcasting Activity Act.
The print media is not regulated by any particular law. Macedonia does not have a
law on public information (although a government bill is underway).4 Provisions of the
Law on Public Information of SFRY (1974) and the Law on the Basis of the System for
Public Information (1990), where these are not in collision with the Macedonian Constitution, remain in effect.
d. The communications market
The main source of financing for public sector broadcasters is the licence fee, which is
paid alongside the electricity bill. The amount of the fee is determined each month by
the Broadcasting Council, based on data from the Statistics Bureau on salaries in the
previous month. Pursuant to the Broadcasting Act, the fee is distributed as follows:
67.5% for MRTV, 16.5% for Macedonian Broadcasting, 5% for local broadcasters and
10% for the financing of the radio and TV programmes of private broadcasters and independent producers. Public broadcasters at the local level, apart from the 5% of the
licence fee, also receive financial resources from the budgets of local administrations, as
well as support from the state budget. Like the MRTV network, these are subject to
restrictions regarding commercials (under Article 51 of the Broadcasting Act, 7% of
broadcast time, or 4.2 minutes per programme hour).
Commercial broadcasting companies are financed from income generated in the
market. Their market position is sanctioned by legal provisions which enable them to
4 The latest draft version of the law, created by the Agency for Information (formerly the
Ministry of Information), is not publicly available. All the drafts so far have constituted an
unsuccessful attempt to regulate numerous issues in the field of public information: the
rights and duties of journalists, public media and editors-in-chief; the duties of publishers;
the establishment of news agencies; the right to reply and to correction; responsibility for
damages; status; and the rights and duties of foreign press, bureaus and journalists. The majority of the objections refer to inconsistency, imprecision and a lack of harmony with other
legal acts; the adoption of provisions from the Macedonian Constitution and Broadcasting
Activity Act; and the direct involvement of the state in the field of information.
50
broadcast commercials amounting to 20% of broadcast time, or 12 minutes per hour,

as well as one hour per day of teleshopping messages. Before obtaining their concessions in July 1998, these companies were involved either in trade or in other activities.
As for the structure and type of their income, only partial data exists: they do not
regularly submit annual financial reports while the income that is shown is out of proportion to the concession fee. In addition, in their annual financial reports, the resources obtained from commercials are not separated out from sponsorship,
entertainment allowances or other services.5
Under Article 77 of the Broadcasting Activity Act, some of the resources gained
from the licence fee are intended for the creation and broadcasting of public interest
programmes by commercial broadcasting companies and independent producers. The
decision on how to distribute these resources is made by the government at the proposal of the Council, following a public tender procedure.6 This may reflect the
general orientation for the support of independent radio and TV production within the
European experience, but the legal parameters and practice in Macedonia differ considerably. These funds7 are not used to engage the further resources of radio and TV
companies, but go directly into financing programme production.
Electronic media in the public sector are managed by management boards. The Macedonian parliament, as the founder of MRTV, appoints its management board members and
the Director General, while for local broadcasters this jurisdiction lies with the municipal
councils. The government is in charge of managing the public enterprise Macedonian
Broadcasting. In the private sector, each broadcasting company, under the Law on Commercial Societies, has its own manager and is legally registered as a DOOEL (i.e. a limited
liability company founded by one person). The Broadcasting Activity Act also contains
provisions (in Articles 10, 11, 17 and 65) which provide for pluralism, limitations on
ownership and the prevention of monopolistic concentration in the media.
According to legislation regarding the information business, there are no stateowned enterprises in the press field. State capital (33% in 1998) is present only in the
news publishing enterprise Nova Makedonija-kopje (which comprises the Nova
Makedonija and Veer dailies, the news and political weekly Puls and a number of
entertainment magazines). Almost all the media are market-positioned and some of
5 For example, based on data from the Payment Transactions Bureau (relating to 136 broadcasters 29 public enterprises and 107 commercial broadcasting companies which had
submitted their annual financial reports), the total income generated in the broadcasting
business in 1999 was 1.3 billion denars or DM 15m, while the cost of work produced was
1.2 billion denars. In this year, 17 public broadcasting enterprises and 50 commercial broadcasting companies generated profit from their work, eight public and 54 commercial companies generated losses, while four public and three commercial companies worked on the
edge of profitability.
6 Two programmes for financing radio and TV public interest projects have been realised
(in 1999 and in 2000). The first has been completed, the second only partially.
7 For example, in December 1999, around 200 million denars (DM 7m) were distributed.
On the assumption that 75% of the licence fee is collected from the population, only
around 100 million denars will be collected in Macedonia this year (Euro 1.66m).
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them, at their request and by the decision of the government, receive subsidies from
the state budget. At the same time, some media are financed by foreign associations
and donations.
The stabilisation of competition may be expected in the communications market,
primarily between the public and private sectors in the sphere of the electronic media,
especially after the allocation of concessions for cable TV and with a more significant
breakthrough by satellite channels, but also globally in the entire media market. Internet advertising is also entering the race and some commercials will slowly start to
move from the print media and from broadcasters to the internet.
e. Politics and the media
The provisions of the Law on the Basis of the System for Public Information (1990) are
a radical turnaround regarding the possibilities for establishing print media. Both ordinary citizens and legal entities have the right, under equal conditions, to establish and
publish media channels. This has opened the way for private initiative in the print
media, which has resulted in a large number of newspapers and magazines. Not a single
newspaper founded after Macedonia gained independence is state-owned; however, it
cannot be said that neither the authorities nor the major political parties have no influence this is especially noticeable during election campaigns.
Unlike the press, within the broadcasting sphere the Broadcasting Activity Act
(Article 11 (2)) limits the right of political parties and officials to become founders or
co-founders of broadcasting companies. Article 32 of the same law states that the:
Overall programme must not serve one-sidedly a particular political party or certain interests,
while Article 34 states that:

State bodies and bodies of local self-government, as well as their representatives, shall not influence radio and TV programmes or their work.
In practice, the situation is different. In a large proportion of the media there is a certain tacit inclination towards a particular political view, recognisable through the
greater presentation of this standpoint and its activities and initiatives. This is at its
most obvious during election campaigns.8
2. The broadcasting sphere between theory and practice
The efficient functioning of any media system depends on its regularity and democratic character. Fulfilment of these two criteria is directly related to the character of
8
52
If we analyse the results of monitoring by the Broadcasting Council during the 1998 parliamentary elections, the 1999 presidential elections and the 2000 local elections, the thesis that there is a more or less visible orientation in the media towards some political options can be confirmed. Pressure from the authorities can also be perceived in the public
service, MRTV and local public broadcasters (which, due to their unresolved status, are
torn between the state and the local authorities).
the system itself and the provision of appropriate conditions for its practical implementation. The first aspect presupposes the acceptance of the most efficient model/
concept for media development and is related to the specific normative and institutional framework, while the second is related to defining the procedural and technical
preconditions for the models realisation. However, the very relationship between theory and practice is the problem that media systems in the countries in transition come
across most often.
This is typical of the functioning of the media in Macedonia and exists at both the formal and the informal level. In this system, we also recognise a third entity the hub of
the penetration of the informal framework into the formal one. The formal level encompasses the functioning of all the media within the framework of the legal regulations, while
the informal level encompasses those activities and subjects that exist parallel to them, but
outside the system. The third aspect is a result of the many years of legal vacuum in the
media sphere and its appearance has, more or less, directly influenced the creation of the
formal media structure.
The establishment of a dual media system in Macedonia, typical both of developed western parliamentary democracies and post-communist eastern European
systems,9 promotes, in addition to a public broadcasting service responsible for general social interest, a certain limited amount of commercialisation which is considered
to be an essential condition both in general and for the development of the media. Of
course, this does not exclude problems in the methodology of installing the system in
practice, especially in finding the right solutions to incorporate already existing
media into the normative framework.
Formally, the system, in its essence, cherishes the principle of plurality and of a
competitive confrontation between two or, it is better to say, three subjects: the public
broadcasting service, the local public radio and TV stations, and the private media. It
meets, normatively and declaratively, the basic prerequisites for the functioning of the
media under the conditions of parliamentary democracy and the market economy.
Even so, elements of the so-called paternalistic communications model of the legitimising of political power can be recognised in the practical use of different normative
solutions. As a result, the central problem is the normative foundation of the system,
its implementation in practice and the area in which the normative appears as the
cause of the deformity which is practically destroying the fundamental concept of the
system. The latter is one of the indicators for re-examining the (non-)adaptability of
the media system to the real social context.
The next section seeks to verify, prove or deny the validity of the following hypotheses:
More information in Comparative Table on the Notion of Public Service Broadcasting

Systems of the Member States of the Council of Europe, group of specialists on public
service broadcasting, Secretariat Memorandum prepared by the Directorate of Human
Rights, Strasbourg, January 16 1995.
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Vesna Sopar
a dual broadcasting system presupposes the dominance of the public service and the
limited power of the commercial service
the new commercial media, differentiated by their structure, character and editorial
policy, create a different picture of reality from that presented by the public service,
i.e. one different from official state policy
the discrepancy between the normative and the actual in the media space, contrary
to the effort being made, creates a basis for media paternalism.
a. The reality of the broadcasting concept
What are the key moments which determine the importance of broadcasters in Macedonia in profiling the concept of a media policy? The first, and most important, lies
in choosing a model that defines the framework of mass communications in society;
the second is the legal dimension of the system, made operational through a number
of legal acts; and the third is the specific media context as a prerequisite for having a
professional media.
All the fundamental legal acts regulating these issues10 were passed by January
1998, thereby practically meeting all the formal conditions for the functioning of a modern broadcasting system. However, this model failed totally when put into practice. Immediately after the allocation of concessions to private radio and TV stations, the two
services practically swapped places. Looking at the numbers alone, the existing broadcasting communications structure is composed of a public service with 30 broadcasting
organisations on the one hand and, on the other, a commercial one which has 111. It
does not need to be emphasised whether and how much the dominance of the public service is threatened by competing private media.
This balance of power has its genesis. At the beginning, from the time when Macedonia gained independence until 1997, due to the lack of proper legal regulation, the
media system functioned according to the principles of voluntarism and pragmatism.
This legal vacuum enabled the appearance of around 250 private broadcasters,11 with
undefined status and no clear concept or appearance, and without the elementary technical and technological conditions appropriate to work, which used frequencies illegally.
This chaos in the airwaves forced the state to apply unpopular measures, including a
moratorium and the closure of a certain number of broadcasters. However, this was carried out according to some very dubious and undefined criteria. At that time, only a certain, small number of private radio and TV stations were closed (via the confiscation of
their equipment) which, of course, did not improve the chaotic state of the airwaves.
10 Accompanying laws were first passed on concessions (1993), telecommunications (1996),
commercial societies (1996), copyright (1996), as well as a law on public enterprises
(1994), and only after that appeared the fundamental Broadcasting Activity Act (1997) and
the Law on Establishing the Public Enterprise Macedonian Radio Television (1998).
11 The majority of these radio and TV stations were registered, i.e. they entered into the
records of the Ministry for Information, but did not possess any legal documents for their
work. Therefore, the state (the Ministry of Traffic and Communications) did not know the
exact number of pirate broadcasters in the country.
54
The first real changes in this artificially-created media electronic map were
brought about by the Broadcasting Activity Act, when the singular concept of a stateowned media was finally abandoned, both formally and legally, and its diversification
launched. With the institutional definition of the status of the public broadcasting service, and with the allocation of the first frequencies to private broadcasters, the subjects
the carriers of the plural media system were clearly defined and then re-defined. However, this did not solve all the problems in broadcasting. Today, pirate radio and TV
stations, whose number it is almost impossible to know due to the daily dynamics of
their appearance and disappearance, are still operating. These are the ones that influence, directly or indirectly, the character, the structure, the dynamics and the scope of
the media offering, as well as the conduct of the officially-registered media and their adherence to the law. Through them, the inconsistencies, flaws and declarative nature,
among others, of a large number of normative solutions are proved in practice.
b. Promotion of the broadcasting model in practice
If we agree that the central problem is the dysfunctionality of the system in practice, it
means that we should first locate its causes. These should be sought in both the new
and the old redefined ideas, values, methods, resources and techniques for creating
media organisational structures, which are usually directly in conflict with the real potential of the media and its implementation capacities.
On the list of democratic ideas, particular attention is drawn to those legal solutions which are (or which should be) upgrading the pluralisation process of the
media space, something for which perhaps even the developed western European
countries are seeking. This is the case with the licence fee paid by citizens to finance
the public broadcasting service, out of which 10% is set aside to finance public interest projects. This provides resources for which only private broadcasters or independent producers may apply. Equally worthy of note is the intention to finance local
public radio and TV stations from a range of sources (licence fee, advertising and
local administration budgets) which, in practice, has turned into financial collapse and
a struggle for survival. These and similar paradoxes are the result or the consequence
of, primarily, the lack of a realistic assessment of the level of economic, technological, cultural and political transformation in this sphere.
In addition, it became clear very quickly that numerous issues were not precisely
regulated by the law (the right to advertising, the right to re-broadcast foreign programmes, etc.); that certain issues were not mutually harmonised and, actually, were
being resolved in different ways by different laws (for example, institutions responsible for the allocation and withdrawal of concessions); that certain issues were unclearly and imprecisely defined (the issue of commercial broadcasting companies as
special enterprises); and that some were not legally envisaged at all (the lack of any
provisions on the protection of the right to reply). This has resulted in confusion and
has angered many broadcasters, forcing them, consciously or unconsciously, to violate certain legal provisions.
At the same time, the large number of media channels (especially the private radio
and TV stations) has been defined by the state as indicating a high degree of democSouth-East Europe Review
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ratisation and pluralisation in the media sphere. If we judge by the words of John
Keane (1992: 14) that:
The democratic quality of the media is an everlasting project without a final solution,
it would seem that Macedonia sought to complete the project straight away. It has a
total of 148 broadcasting organisations that satisfy the needs of a little less than two
million Macedonian citizens.12 Even though only around 60% of available frequencies are used, this policy of the authorities (wherein the government provides the
green light for the allocation of concessions) has proved problematic and counterproductive. Practice warns that quantity does not bring quality. There are an increasing
number of private radio and TV stations with programmes of very low quality. What
has brought this situation about? In order to satisfy all the candidates for broadcasting
concessions,13 and to alleviate as far as possible the consequences of the previous
legal vacuum, concessions were given even to broadcasters (generally in smaller
towns) which, practically, work only on the basis of minimal programming, organisational and technical standards. Knowing the limited capacities of the economy as one
of the main financiers of the private media (because such media live mostly from advertising revenues), it is obvious that the line of least resistance was taken and that it
was left to the market to make a natural selection and to throw out of the game all
those which were surplus (i.e. those which attracted lower ratings).
However, the problem is not the large number of, for example, specialised music radio stations, among which some are very good (such as the jazz station and the classical
music station). The problems remain chiefly the low standards (programming, technical
and staffing) at which the majority of them operate, especially in the smaller towns.
What kind of private TV stations are they if they broadcast only (low-budget) series and
feature films of a very poor technical quality (for which they do not make copyright
payments) and commercials? Or TV stations whose central features are shows such as
greetings and messages?14 It is true that commercial media have to adjust to the prin12 We can take as an example the number of media in some larger cities and towns in the country. The biggest concentration is in the area of kopje, with 20 private local radio stations
(10 of which operate on a time-sharing basis) and 11 private local TV stations (four of
which time-share). We should add to these figures the two national private TV stations (A1
and Sitel TV) and the two national private radio stations (Kanal 77 and Antena 5), as well as
Channels 1, 2 and 3 of Macedonian Television and Macedonian Radio. In Tetovo, there are
six private radio stations and three private TV stations; in Gostivar, two private radio stations and four private TV stations; in Prilep, five private radio stations and one private TV
station; and in Ohrid, four private radio stations and three private TV stations. Source: Republic of Macedonia Broadcasting Council Bulletin, No. 2 (1998) and No. 5 (2000).
13 It is interesting that the Broadcasting Council, as the responsible body for all the procedural activities related to the allocation of concessions, was not spared direct and indirect
pressure from the private radio and TV stations which were not awarded concessions.
They even organised protests, saying that their families would become social welfare
cases if they did not get concessions. Finally, they even tried to obtain a right to concessions through the Speaker in Parliament which method, of course, was unsuccessful.
56
ciples and laws of the market, but at what price? Is the state here not showing double
standards, first by allocating frequencies and then by withdrawing them?15
c. Broadcasting organisations
Organisations participating in the communications sphere do not have the same role
and function, and lawmakers have clearly separated them out. Their influence is different and directly dependent on their character. They proceed from different positions, but they still complement each other. They seek to build their credibility on a
structure in which independence, on the one hand, and responsibility, on the other, are
mutually interwoven. This leads to the development of pluralism regarding different
opinions, stances, values and interests. However, what is the system actually like in
practice?
i) Public broadcasting service
Conceptually, editing in the broadcasting sphere is based on the universal right of the
public good or the public interest. Lawmakers have defined this as the fulfilment
of general social interests and adaptation to the need for information, educational, cultural, scientific, sports, music, entertainment and other content of interest to the life
and work of the citizens of the Republic of Macedonia.16 In practice, it is accepted
that such public service broadcasting bases its activity on the principles of:
14
15
16
We will mention only two TV stations in the area of kopje BTR and TV Sitel which
broadcast both in the Macedonian and in the Roma language and address a target public
amongst Roma people. Precisely due to this, programmes featuring greetings and congratulations are seen by Roma themselves as a shock and as a belittling of their culture
and tradition. A monitoring of BTR programmes from 24-30 May 2000, carried out by
the Broadcasting Council, shows that, out of its entire programme, 28% was feature production, 1% documentary, 10% news, 8% entertainment programmes, 2% informative,
2% informative-entertainment, 1% religious, 6% commercials and 42% music. Within the
structure of the music programmes, as much as 41% are greetings and congratulations,
30% commercial folk music, 28% popular music and 1.2% music for children. Source:
Broadcasting Council documentation.
Four years since the start of the implementation of the Broadcasting Activity Act, and
three years since the first concessions were allocated to private radio and TV stations, the
government, following a proposal submitted by the Broadcasting Council, passed a decision to withdraw 22 concessions for radio stations and 10 for TV stations. Source: Macedonian Broadcasting Council Bulletin, 2000, No. 5, kopje, pp 39-40.
Back in 1991, MRTV, by the decision of its founder Parliament was defined as a public broadcasting enterprise across the territory of the entire country, whose main activity
was to create and broadcast radio and TV programmes, as well as to build, maintain and
develop the broadcasting network. Its status as a public service was defined only in 1998
by the Law on the Establishment of the Public Enterprise Macedonian Radio Television.
The law was drafted by the Ministry of Transport and Communications, and passed by
Parliament under a shortened procedure. If they could wait so many years, the question is
why the sudden hurry?
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Universality, diversity, editorial independence, social responsibility and justification, cultural

quality and identity, and unprofitability (McQuail, 1994: 127).
How do these principles function within the framework of Macedonian Radio Television? As far as universality is concerned, MRTV (at least, MTV1) covers almost the
entire territory of the country and attempts to send a quality signal to all citizens in the
Republic. The issue of diversity, however, from the aspect of radio and TV production, becomes a little complicated. In practice, unsuccessful attempts have been
made to produce programmes that satisfy the different interests, needs and tastes of
the public, not to speak of the social responsibility of the media towards the audience
or of issues relating to cultural quality and identity (or regard for national identity).
There has been an obvious decline in the quality of programme content, especially on
television, and its replacement with various quizzes, gameshows (Lotto, Joker), soap
operas and antediluvian feature films. This destitution and lack of inventiveness and
creativity in programme structure are, basically, a result of quality journalist staff
practically defecting to the private media and is directly connected with the circumstances of this organisations editorial policy and its financial independence.17
The companys editorial policy is conducted by the Management Board, the Board for
Financial Control, the MRTV Director-General, the Directors and Editors-in-Chief of
Macedonian Radio and Macedonian Television (who are appointed by the Director General), as well as programme councils for radio and television. That the Director General
the manager of MRTV and the Management Board are appointed by the Macedonian
Parliament implies that the state and the incumbent authorities have an influence on the
companys editorial policy.18 Both the public and the journalists who have defected have
come to recognise them as spokespersons for the incumbent (government or state) policy,
and this has destroyed the companys credibility. Those who have resisted this approach,
seeking instead to initiate communication between different social groups, have been simply excluded.19 Furthermore, there has been no room for those bearing the role of a free
and critical instrument of democratic debate, which implies a re-evaluation of political
17 This is confirmed by the results of public opinion research in 1998 in Macedonia. An increasing number of citizens do not trust MRTV. Therefore, a primary role in information dissemination has passed to the private media, especially TVA1. Source: Institute for Sociological,
Political and Juridical Research (1999): Public opinion research in Macedonia 1998,
kopje; Macedonian Broadcasting Council and Institute for Sociological, Political and Juridical Research (1999): Positions of viewers and listeners on broadcast media reporting during
the 1998 parliamentary elections (questions related to trust in the media), kopje.
18 Practice shows that the MRTV Director-General has been replaced whenever the balance
of political power has changed. The procedure is very simple: MRTV is obliged to submit
a report on its work to Parliament once a year; the report is not accepted for various reasons and, of course, a new Director-General is then appointed.
19 There are many such examples in practice. One dates from the end of 1999, immediately
after a new Director-General was appointed: the Deputy Editor of Macedonian Radio
News was dismissed for commenting critically on the government, while a journalist was
suspended for inviting a leader of the major opposition party SDSM to be a guest on
his programme.
58
stances and the social consequences of proposed policies, as well as, subsequently, of programming priorities. When it comes to debates about various current issues which are of
interest to the general public, the role of the promoters of alternative views and ideas has
been taken over by the private broadcasters (especially the national level ones, although
the local broadcasters do not lag behind) and, therefore, MRTV has practically come out
empty-handed. Attempts are being made, but they have not been successful: such shows
are clumsily managed in advance, which even ordinary citizens cannot fail to notice.
This kind of participation by the authorities in the management of the public
broadcasting service, installed via this companys leadership, clearly shows that a system of unabashed state paternalism is still functioning in practice. On the other hand,
trying to maintain its independence, at least on the surface, MRTV has voluntarily
transformed itself into a commercial service, claiming that this is in the public interest. If we add the difficulties regarding the companys resources, then clearly this actually constitutes an:
Attempt for the state to control the television, on one hand, and for an uncontrolled commercialisation on the other. (Luthar, 1992: 178)
The effects are devastating. Torn between proclaimed editorial independence and the
direct influence of politics (the authorities) and the economy (capital), Macedonian Radio
Television is falling into a trap. The dilemma of whether to be an advocate of the public or
an apparatus of the authorities is being resolved in a simple way through political instrumentalisation, which proves to a significant degree its own mono-orthodoxy.
MRTV receives financial resources for its work out of the licence fee, from marketing its services, from the sale of its own programmes and from sponsorship and donations, as well as from the resources provided by the state for special programmes (i.e.
for emigrants and other residents living in neighbouring countries, in Europe and on
other continents). The service has a legal right to broadcast commercials up to 7% per
broadcasting hour although this is, usually, not adhered to. Due precisely to this level
of advertisements, MRTV is able to hold a financial monopoly and to profit from it by
reducing prices to the minimum, which private broadcasters consider as an act of unfair
competition. By doing this, MRTV not only loses the character of a not-for-profit institution but also attacks directly the financial base of the private broadcasters.
In contrast, public local radio and TV stations are a phenomenon in their own right.
They are held hostage by the normative framework of a broadcasting model which
either is not able precisely to calculate and anticipate all the consequences of political
manipulation in the implementation of media policy, or which did not want to. As things
stand now, it seems that the issue of the status of the local operations does not go beyond
daily politics. It has simply been forgotten that these 29 broadcasting organisations have
been operating for more than 30 years, not to speak about trends across Europe in the
development of local public broadcasting. The lawmakers have, so to speak, thrown
such organisations out of the normative framework of the media system. They first gave
them temporary status, enabling the local power holders to fight over them, and then
put them at the mercy of the government. As local administrations showed no interest
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(hoping to form their own media outlets as a feature of municipal status), or else were
unable to agree on taking over founding rights (due to the political polarisation of interest between the municipal councils and the mayors), the government took things into
its own hands. As a result of all this, today we have only a few local radios and TV stations which have a resolved legal status, with the remaining under the direct and overt
influence of the authorities.20
These legal complications also influence their financing. The lawmakers made another poor choice in this regard by enabling local radio stations to have three sources of
finance (licence fee, advertising and resources from local authority budgets). The first
source is operational (though stations only receive 5% of the licence fee, which is not
enough for normal operation), but the second functions only with difficulty (due to the
level of competition between private broadcasters) and the third has completely failed.
As a result of the unresolved status of broadcasters, municipalities do not participate (or
else participate only occasionally) in their financing. For them, this is a burden which
can be avoided because of the imprecisely-defined obligations of the municipalities
themselves.
When all is added up, it is superfluous to talk about programme standards in these
radio stations. Private local radio stations are their competition but they are also destroying them. The only surprising thing is the eternal optimism of employees not
only regarding their work but also regarding the establishment of TV studios. Their
persistence and requests to the state finally to resolve their status, on which they are
united, should not be neglected.
ii) Commercial media
Our analysis of the commercial broadcasting sector is based on the following hypothesis: the alternative media can be considered as a significant, and perhaps even a crucial, factor in the stimulation of the process of institutionalisation in the broadcasting
sphere. They have been critics of the present situation as well as being the initiators of
the need for the establishment of a legal framework for the media system and, at the
same time, the bearers of its deregulation.
What basis is there for the phenomenon of the alternative commercial media?
Thanks to the specific changes in the political and economic structure of society, the
alternative media started to make a breakthrough back in the early 90s, spreading across
the whole country in a ripple effect. Their activity is basically determined by the rules of
20
60
According to the Broadcasting Act (Article 92), the City of kopje and the municipalities
are obliged to sign an agreement on the work of radio stations. If they fail to do so within
nine months of the adoption of the Law, the government can take over founding rights.
This is what actually did happen, with political party members subsequently being appointed as directors by the government. Most of these had never been in the business and
were even, occasionally, without experience of employment. This points to the conclusion
that the process of completing the legal regulation of the status of the local public broadcasting service has been deliberately delayed. Source: comments by representatives of local radio and television stations in the panel discussion The role and place of public local
broadcasting, organised by the Broadcasting Council in kopje in March 2000.
the market for ideas, but they have still succeeded in imposing a plural conception of
the information and communications process by directly participating in the installation
of institutional values and norms in broadcasting and in setting up interactive relations
in the organisational communications network. Hence, they can be regarded as a force
for reform, re-organisation and redistribution in the broadcasting field.
Fitting them into the institutional framework, lawmakers have defined their operation with respect to the following principles:
1. universality and regionalism (national broadcasters have an obligation to ensure
that at least 70% of Macedonias population can receive their signal, while local
broadcasters have an obligation to cover a specific area
2. diversity (there is an obligation to broadcast programmes on events related to the
specific area of broadcasting)
3. specialisation (developing specialist programmes music, classical or jazz radio
stations operate very successfully within the system)
4. minimum programme time (at the national level, the minimum is 18 hours of programmes per day on radio and eight hours on TV; at the local level, the figures are
ten hours on radio and three on TV)
5. editorial independence (in particular, the requirement to be independent of the organisations that participate in political life i.e. the political parties)
6. having a financial relationship with the market (including the possibility of receiving
a certain amount of funds out of the licence fees paid by citizens).
Of all these principles, financing presents the biggest headache, in particular the
issue of receiving funds from the licence fee for so-called public interest projects.
All the events regarding the allocation of the infamous 10% of the licence fee which is
available for private radio and TV stations and independent producers are timed with
such dynamics that there is almost no place for surprises. The Broadcasting Council
has defined the key areas of public interest (via a feasibility study) and has already
announced two public competitions for the allocation of funds. It is not important that
no-one knows what is meant by the term public interest, and whether this issue is
defined anywhere at all it is not. The majority of these projects have already been
implemented and aired by broadcasters.
However, the idea is collapsing, so to speak, because it lacks one important element transparency. In addition, the most important subject in the whole game the
citizens who know nothing about these projects and even less that resources are
available for their realisation, have been forgotten. Whether anyone has seen or heard
these specially financed programmes is a question that dares not raise its head. And
what is really devastating is that even those who have received some of these resources are dissatisfied with this kind of help in their work because, in competing
for these projects, they lose valuable time. This is detrimental both to their programmes and to their viewers/listeners. At the same time, it is not a mistake to say that
61
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the huge funds raised and distributed in this way are not in proportion to the quality of
the final product excluding, of course, some honourable exceptions. Knowing the
capacity of the media (especially at the local level), the question is rather one of what
sort of quality can be expected (except where the project synopses have not been written by professionals who, of course, have to be paid by the broadcasters).
In addition, it is no secret that some private broadcasters have planned to pay part of
their annual licence fee out of these funds,21 which means that a certain number of the
projects had already been realised using their own resources or those received from
other organisations. This is a very difficult situation to deal with in view of the large
number of applicants and the sheer number of projects for which they had applied, not
to speak of the arrogance of certain broadcasters who applied for more than 40 projects
(and some as many as 99) and their impudence in applying for programmes which were
a part of their regular production schedule and, even, broadcast during the competition
procedure! All these examples, unfortunately, speak volumes about the erosion of the
idea of boosting in this way the quality of private broadcast production.
The second issue to consider is that of advertising. Commercial broadcasting organisations are, as mentioned already, allowed to air commercials to a level of up to
20% per broadcast hour more than the 7% level allowed public service broadcasters
which, of course, makes the latter dissatisfied. Given that advertising is one of the
main sources of finance for the commercial broadcasters, excluding the public interest
projects (which not everyone gets anyway), the parallel broadcasting of commercials
on the public service is considered an act of unfair competition and, furthermore, a
direct cause of the closure of some commercial operations.
Besides this, the legal provisions on advertising are not precisely defined. In particular, it is unclear both to lawmakers and to broadcasters what happens if this 20% is
not used within the given time and whether it can be carried over into the next broadcast hour. The legal specifications that do exist are that commercials shall not be aired
during programmes in a way that violates the integrity of the latter (Article 54 of the
Broadcasting Activity Act), that news programmes shorter than 30 minutes must not
be interrupted by commercials (Article 55), and that feature-length movies may be
interrupted only after 45 minutes of broadcasting (Article 56). These open dilemmas
cause difficulties both for broadcasters as well as for the Broadcasting Council which
has the responsibility for the implementation of the law. This is why it happens that
the legal 20% maximum is exceeded more or less with no real possibility of punishing
those who violate it.
21
62
This should not be neglected if we acknowledge that the annual licence fee is actually
very high, especially for national-level broadcasters. For example, a TV concession at the
national level in 2000 cost DM 128 200 per year, while one for radio cost DM 65 270. At
the local level, in kopje, licences cost DM 26 450 and DM 14 700 for TV and radio respectively. Source: Macedonian Broadcasting Council Bulletin, No. 5, 2000, pp. 42-43.
iii) Pirate media

Some private media have not managed to fit into the institutional framework of the media model. But this has not prevented them from airing programmes as pirates. Using
the imprecision of the legislation and the slowness of the judicial authorities in implementing laws, they have, paradoxically but truthfully, obtained a privileged position.
Decisions handed down by inspectors to cease operations or reports to the courts, even
the pressure of being cut off,22 are trifles compared to them not paying the state a single
penny for the illegal use of frequencies. On top of this, they receive an almost equal
slice of the advertising cake, because economic decision-makers are obviously more
interested in whether someone watches or listens to a certain station than whether or not
it has a licence to operate.
Fortunately, these legislative loopholes have been corrected. In April 2000, the Macedonian parliament passed amendments to the Law on Telecommunications, enabling
Ministry of Transport and Communications inspectors to confiscate the equipment of
pirate broadcasters (until then, only judicial bodies had been able to do so) which, in actuality, and not only formally, prevents them from broadcasting. This provides the conditions for maximum efficiency in taking sanctions against illegal broadcasters, thus
putting the case ad acta.
4. Lessons and messages
Generally speaking, particularly concerning the financing, legal status, editorial policy and
programme standards of organisations operating within the broadcasting system, all the
contradictions that are surfacing are to do with the relationship between the normative and
the actual. In consequence, all the ideas of the dual model have simply failed. Normatively, the financial system is built on the basis of the mutual interweaving of two opposing principles: the distribution of the licence fee; and the right to advertising, which partly
commercialises public service broadcasters and which imposes a public character on private service ones. These institutional solutions have, in practice, quickly proven to be dysfunctional;23 they are hybrid ones for which it is hard, even impossible, to find similar
examples in theory or in practice in western or eastern European countries.
We should single out the public broadcasting service (MRTV) as the central pillar
in the media space. Its identity is constructed or deconstructed on the principle of the
appointment of the Director-General. However, the main problem is not that the director is appointed and dismissed by the Macedonian parliament, but that s/he directly
22
There have been many cases in practice so far when inspectors from the Ministry of
Transport and Communications have sealed the premises of pirate stations, only for them
to resume broadcasting after a certain time. This is described in the report by the Inspectorate in 1999, where it was indicated that 89 radio stations and 19 TV stations had been
ordered to cease working within 15 days. Where this measure was not respected, their
premises were sealed and criminal reports filed, but only against a small number of
broadcasters. Neither was this approach particularly fruitful. What is particularly worrying is that inspectors do not have the appropriate equipment to detect the work of pirate
stations and that they usually obtain their information from licensees, programme users
and the Control and Measurement Centre of the Agency for Radiocommunications.
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depends on the influence and capriciousness of parliamentarians, as well as on the

balance of power in the highest legislative house, which occurred both in 1996 and in
1998 as a result of changes in the political structures. As a result, in the ceaselessly
changing political ambience such as that found in Macedonia, it will be increasingly
difficult to recognise a vision, or a common axiom, on which public broadcasting can
build its independence and its identity.
Conceptually, it is essential to amend the Broadcasting Activity Act and to harmonise it with other laws which cover this field directly or indirectly; chiefly, to establish
a clearly-defined status and jurisdiction for the Broadcasting Council. In addition, it is
necessary to amend the law on Macedonian Radio Television, primarily with the aim
of strengthening the companys position with regard to setting out clearly-defined obligations and directing it towards public interest activities. Thereby, state influence
would be more or less successfully absorbed and objections regarding the uncontrolled commercialisation of the service annulled.
Regarding the issue of the financing of public interest projects, everything points
to it being necessary to modify the percentage set aside for these purposes in order to
prevent the public broadcasting service from falling apart under the pressure of the
commercial service. To establish balance, it should be possible to reduce the advertising percentage applying in the public service with a view to its ultimate abolition. If
lawmakers fail to do this, it may happen that practice will impose it anyway, especially following the introduction of cable transmission. This would not be anything
particularly new for the Macedonian media environment.
5. Conclusion
The Macedonian media system is lacking in both substantial and methodological respects in its application of the global social and political context. The insistence on
applying abstract and formalistic criteria at any cost places media subjects and institutions in a static, even regressive situation. This yields only partial, even counterproductive, results. Media and citizens alike are tangled in a spiders web in which the
hopes for the development of creative media expression are false ones.
To avoid these traps, a model should be created which transcends the existing situation, the strict institutionalism and the formalistic approach based on legal solutions.
An approach that is at once dynamic, complex, multi-layered, culturally determinative
and innovative. It must be preceded by a detailed analysis of what has been achieved
and the consequences of such a rigid application of legislation. In redefining the
model, lawmakers must respect both the flexibility of the media sphere and its powers
23
64
This was made manifest most dramatically during the 1998 parliamentary elections. Lawmakers, proceeding directly from the existing media law, defined through secondary
legislation the Parliament Decision on Media Election Coverage the rights and duties
of the mass media during the election campaign, leaving room for the free interpretation
of certain provisions and leading to the outbreak of disputes between public and private
broadcasting services. One of the disputed issues was that of advertising, or the paid political presentation of candidates participating in the election campaign.
of innovation which may, eventually, converge into an evolutionary process of political transformation. The media are bearers of possible qualitative changes in global
values, norms and the institutional structures of the system. However, only after the
need to redefine the media legislation has ripened can we say that institutional paths
are open for the development of a new plural democracy.
Finally, the key issue is how to redefine the dual broadcasting system in Macedonia.
This reshaping must be based on the following four considerations:
a. an analysis of the political changes in the wider social and political context
b. an all-encompassing line with regard to all subjects in the media sphere, regardless
of their formal status
c. a problem-oriented approach which highlights the conflicts and the dynamics of
active and passive participants in the media sphere
d. a differentiated monitoring of changes in the media sphere with respect to the different levels and quality of the media.
This would provide a real matrix for the functioning of an efficient media system.
If these principles had been approached using a step-by-step principle, it would
have been realistic to expect a democratic struggle with regard to the rules, criteria,
forms, discourses and values marking out the broadcasting sphere, instead of an approach based on experimentation. In the formation of the structure of the new
model, all its main protagonists both the media itself and the public must be active
participants. Todays democracy requires a system with credibility in which the media
learn critically to observe everything that happens in the wider environment and in
which citizens are actively involved in decision-making on all the issues and problems
which have a public interest dimension. This means that lawmakers must allow a little more than one-way communication a participatory system as a step towards
proper two-way communication. If, even then, they fall for mutual, senseless confrontation, they will enter a vicious circle from which everyone will emerge as losers. All
that would then be left would be the utopian vision of the equality of all subjects participating in the media space.
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Ali Pajaziti

1. The return of the sacred
The 21st century will either be a century of spirituality or it will not be at all. (Andr Malraux1)
After the end of the medieval period of human history and the rise of humanism, renaissance, enlightenment and scientific positivism, and especially after the French
Revolution of 1789, theories were launched about the end of religion as one of the
most important social institutions. In the name of science and the linear progress of
history, the saying of St. Augustine esse credimus Dei (In God we should believe)
was isolated and made profane. In addition, there were individuals such as Comte
who anticipated that the shrines and temples of religion would be changed by the factories of modern society. Others said that religious feeling was a human being's first
source of consolation and justification, the opium of the masses, the fantastic construction of human beings, an illusive sun,2 a typical example of the alienation of
man, a transitional stage in human conscience, etc. There were also opinions that,
with the permanent progress of society, religion would become history, i.e. the chapter of the sacred would be closed.
Nevertheless, historical and social events have indicated that such hypotheses
were incorrect and that religion has accompanied human destiny since homo primogenius (the first human) while, according to Francis Bacon, it remains praecipium vinculum societatis (the strongest chain of society).3 It has preserved its identity and continuity, playing a very important role in society.
Today, when, according to the typology created by well-known sociologists, we live in
a post-modern social era; when the colours of the absolute rule of modern rationalism and
homocentrism (which changed the ruling theocentrism of traditional society) are losing
their light; when, according to Gellner, the English sociologist, relativism is above all;
when it comes to the polycentrism of truth, the valuation of differences4 and deconstruction; and when the chains of hard uniformity (mono-elitism) are broken, we are left facing
a mosaic of various phenomena and trends that are, often, diametrically opposite such as
traditional and radical religious worship, secular religious feeling, dogmatism, spiritualism, atheism, deism, pantheism, nihilism, anarchism, satanism, and so on.
Modernity, with all its isms such as rationalism, positivism, marxism and laicism
(or secularism) has not succeeded in pleasing human beings. According to Havel, the
failure of these was due to their propensity to ignore a role for a Supreme Being.
1
2
3
4
Ahmet Gner: Mezhepler ve alevilik, p. 5; Lobi, No. 41, p. 34.

Karl Marx and Friedrich Engels: Rani radovi, Kultura: Zagreb, 1953, p. 73-74.
Hans Freyer (1964): Din Sosyolojisi, ev. Turgut Kalpsz, Ankara niversitesi, lahiyat
Fakltesi: Ankara.
Jean Francois Lyotard: The Postmodern Condition: A Report to Knowledge, translated by
Geoff Bennington & Brian Massumi, Manchester University Press, 1984, p. 82.
S. 67 80
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Ali Pajaziti
During recent decades, the world has faced great changes. Glasnost and perestroika
heralded that communist ideology was releasing its last breaths before, finally, one of
the systems that promised earthly heaven, as in More's Utopia, collapsed as if it was a
tower made of cards. On the agenda of the present times are such topics as the third
wave (Toffler), the end of history (Fukuyama), the clash of civilisations (Huntington), globalisation, universal culture, the Mcdonaldisation of society, etc.
Besides these, however, sociologists and social psychologists have come to the conclusion that, in the past few years, there has been a process of the return worldwide of
the Vox Dei (Voice of God), alongside the return of Homo Religiosus to the stage. After
several centuries of indifference towards religion, it is assumed that the century into
which we have just stepped, and the new millennium, will represent an era of spirituality
and of the rediscovery both of the religious element and of the sacred.
We can illustrate this with some specific data.
Statistics show that the Bible continually tops the best-selling book lists. A survey
carried out in the USA showed that 95% of Americans trust in God, and 90% say they
pray. According to the linguist L. R. N. Ashley, the author of the book What is in a
name, the christening of children with religious names like Darius, Elijah, Zachariah
and Isaiah is a growing trend.5 In Brazil, shintoism is spreading rapidly. Worldwide,
the meeting of the Pope in 1998 with the leader of one of the last citadels of atheistic
humanism, Fidel Castro (Cuba), was considered to provide a real boost to religion.
According to the English sociologist G. Davie, young Europeans are latching on
to a range of beliefs. In terms of religion itself, there are two trends in Europe:
priests who play rock music, walk about in training shoes and work as psychological
advisors send important messages on social justice and environmental protection and
also preserve religion against formalism;
an orientation toward older forms of the expression of religion, such as the fallacy,
a ritual held every year in Valencia and inherited from medieval times, is also
present.6
The decision of the Supreme Court of Germany to remove crosses from official
schools was accompanied by huge negative reactions amongst the German public.7
Day-by-day, religion and its symbols are gaining greater significance in different
countries across the world. For example, a recent method in the fight against car crime
in the US places at its centre the abbreviation WWJD (What would Jesus do?). The
Mexican government, using an iconic picture of Jesus, suggests to young people that
they should look for salvation in religion and not in drugs or other addictions.
The new experiences of western people are Buddhism, yoga, Krishna, Zen, various
religious groups such as the Jesus Army,8 reincarnation, metempsychosis and various
5
6
7
68
Newsweek, February 23 1998, p. 8.

International Herald Tribune, December 26 1998; Alpay ahin,Dinin Dn, Milliyet,
3 Ocak 1998, p. 20.
Newsweek, August 28 1995, p. 43.
pseudo-religious sects. Western people consider these as a kind of therapy against the
spiritual crisis and depression in which they reside.
Russians started publicly to celebrate religious holidays in the era of Mihail
Gorbachev. Since then, the churches have been filled with believers. According to recent surveys, the percentage of atheists in that country is just 20%. However, their
neighbours, the Polish, are probably the most religious nation of all (95% of Polish
people believe in God).9
We must also mention the striking religious faith of the members of one of the
universal religions Islam. The Islamic awakening is has been focused on by journalists, analysts and researchers of different profiles, as well as by scientific institutions
globally. Most recently, this religion has been reflected in the political field with, at
the beginning of the 1990s, the victories of FIS in Algeria and the SDA in Bosnia &
Herzegovina being the most notable. Similar examples are the victories in Turkey of
the Party for Well-being and the establishment of sharia law in Afghanistan in the
middle of the last decade of the 20th century. This religion is spreading so rapidly that
minarets are rising in several different European centres, including in Rome and
Munich. In addition, Muslim centres have been opened throughout Europe, such as
that of Yusuf Islam, alias Cat Stevens, the former pop singer, in London.
The growth of religious feeling is also evident in the Balkans area.
According to a survey carried out in 1991, almost two-thirds (64.3%) of Macedonian citizens say they believe in God. A little over four-fifths of the population consider that religion is necessary for people. In the period of the fundamental social
changes (1989-1991), an increasing interest in religion amongst young people became
quite evident. According to data referred to in the book ovekot i optestvoto vo tranzicija (Man and Society in Transition), published in 1995, 46% of students of a Macedonian ethnic origin considered themselves to be religious.10
The rest of this article focuses on research that we carried out in 1997, which explores data on the level of religious feeling amongst university students in Macedonia
at the end of the 20th century.
2. Religious feeling amongst students in the Republic of Macedonia
2.1 Objectives and importance of research
In this research, we intended to focus on one important dimension of students' lives in
our society in transition. Another objective was to obtain knowledge of the religious
position of young people in Macedonia in comparison to the process of the rise in religious feeling worldwide.
8
9
10
Ken Wilber, Nove religije, Kulture Istoka, god. VI, broj 21, Juli-Septembar, p. 18.
Zeki Arslantrk (1997): Tanrnn Dn, Din Egitimi Aratrmalar Dergisi, Say 4, p.
117.
Ilija Aceski (1995): ovekot i optestvoto vo tranzicija, Ekopres, kopje, p. 131.
69
Ali Pajaziti
2.2 Limitations
The research was limited to students from ten faculties of the University of St. Cyril
and Metodius (in kopje) during the 1997-98 academic year. The survey results are
limited by the sample and the time at which the research was carried out, while it is
important to bear in mind that the attitudes of respondents do change over time.
2.3 Basic notions
2.3.1 Young people
Scientists may disagree about the exact boundaries of the period of human life referred to as youth, although the majority define young people to be between 15 and
25 years of age. Youth is the most dynamic and most complex stage of human life. Its
main features are the physical and psychological development of personality. Young
people are, in general, dynamic, emotional, impatient, enthusiastic and in a constant
search for identity:
In this preparatory stage, many features are gained which are necessary for the performing of
different professional and family obligations. The individual starts acting independently and
with greater responsibility.11
2.3.2 Population and sample

Our sample was constituted entirely from among university-level students in the Republic of Macedonia who attended the University of St. Cyril and Methodius during
1997-1998. The sample was envisaged as consisting of 350 students, while 400 questionnaires were distributed (containing 46 questions in total). We received back 300
questionnaires that had been adequately completed and on which our evaluations are
based.
2.3.3 Basic features of the sample
The sample was constituted in detail as follows:
49.7% of respondents were students studying in different fields within the social
sciences while 50.3 % were involved in pure science
85 respondents were female (28.3%) while 215 (71.7%) were male
according to ethnicity, 146 of the respondents were Macedonians (48.7%) and 128
were Albanians (42.7%), while 12 were Turks (4%), 9 were Bosnians (3%) and 5
belonged to other ethnicities (1.6%). It is interesting to emphasise that none of the
respondents claimed to be Yugoslav or unspecified, which was a quite widespread
trend in socialist times
225 (75%) were students from urban environments, while 71 (23.7%) came from
rural environments (i.e. villages) and 4 (1.3 %) were born abroad
11
70
Mnir Kosta (1995): niversite grencilerinde Dine Bak, TDV Yaynlar/185 Ankara,
p. 4.
16 individuals (5.4%) considered that they belong to a high social strata, while 275
(90.6%) belonged to the middle class and 9 (4%) stated that they belonged to the
lowest class
according to religion, 141 students (47%) were Orthodox, 149 (49.7%) were Muslims, 1 was Catholic (0.3%), 4 were atheist (1.3%) and 5 (1.7%) did not say. Three
of the latter were Macedonians while one was Roma. It is interesting to emphasise
that the Macedonians nevertheless referred to Buddha, Confucius and the Dalai
Lama in their answers
34 of the respondents (11.3%) considered that their families were very religious,
while 207 (69%) were quite religious, 54 (18%) had little interest and 5 (1.7%) said
that their families would have nothing at all to do with religion.
2.3.4 Hypothesis
An increasing trend of religious feeling will be noticeable in the period of social transition through which Macedonia has been living, while age factors and the university
level of the young people concerned will also have an influence.
2.4 Belief and the concept of religion amongst students
In terms of this dimension, it is important to emphasise the attitudes of several respondents, articulated in the section of the questionnaire encouraging them to write in
their comments:
God exists; religion is useful if it is interpreted correctly.
Religion is a spiritual satisfaction that people experience in moments of fear, illness or poverty.
Religion should be correctly comprehended and respected; we should live according to its
principles and to succeed in contemporary times! There should be unity between the traditional and the contemporary.
Mankind has no alternative but Islam. Allah help us!
I see the future in religion and especially in Islam.
True religion makes people human beings. Non-believers have no boundaries for their actions,
they can do everything for profit.
2.4.1 Belief in God

The concept of a Supreme Being is the basic feature of all religions. This notion in
some religions is nebular, while in others it may have either a polytheistic, pantheistic
or monotheistic character. Belief in God is the basic principle of all monotheistic religions, as well as being the source of, and basic factor in, the beliefs and acts of their
followers. According to the sociologist of religion, Joachim Wach, to believe in God
is the basic element in the theoretical, or doctrinal, part of religious life.12
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Ali Pajaziti
We sought to gain an understanding of this aspect of religion through one question

in particular whether respondents had a belief in God through assessing their
agreement with the statement: God exists: He created the universe.
Fully 78% of our respondents, a strong majority, believed in the existence of God.
Male students (81.4%) were more likely to believe in God than were female ones
(69.4%) (see Table 1).
Table 1 Belief in God according to gender
Strongly
agree
Agree
Disagree
Strongly
disagree
Total
Female (%)
47.0
22.4
18.8
11.8
100
Male (%)
59.5
21.9
13.0
5.6
100
Total (%)
56.0
22.0
14.7
7.3
100
Crosstabulation of the variables of nationality and belief provides the following

results: 58.9% of the Macedonian students, and 98.4% of the Albanian ones, had a
positive attitude towards our statement. Similar results are obtained when we look at
the religious affiliation of respondents. Muslim students were much more convinced
of the existence of God than were members of the Orthodox faith (97.3% compared to
59.5%, respectively). Albeit in not so large a percentage, the same can be said to be
true with regard to young people from urban and rural backgrounds (93% compared
to 72.9%, respectively).
It is also interesting to mention the educational aspect of this question. Students
whose parents were illiterate almost exclusively believed in God (i.e. up to 100%)
while the lowest proportion of believers was found amongst those who had educated
parents (65.2%).
2.4.2 Belief in a future world
The end of the world and various associated eschatological topics is probably the
most important integral part of all religions. Some sociologists even define religion as
a belief in a future world.13
We came to the conclusion that 76% of students believed in a future world, while
24% of them denied the existence of such a thing. One of the respondents provided a
typical remark:
The existence of a future world has not yet been disputed by anybody.
Albanian students were also more positive with regard to this question than their
Macedonian colleagues (96.9% compared to 56.2%, respectively). Almost exactly the
12
13
72
Joachim Wach (1995): Din Sosyolojisi, ev. nver Gnay, M.. FAV: stanbul, p. 45.
Vuko Pavievi (1988): Sociologija Religije, BIGZ: Beograd, p. 11.
same results are obtained when comparing Muslims and Orthodox Christians (respectively, 96% and 57.4%). The attitude of one of the disbelievers (that he, nevertheless,
believed in a future world) is, however, striking.
2.4.3 Perceptions of religion
Throughout history, the phenomenon of religion has been considered sometimes as a
positive and sometimes as a negative factor. According to those who accept it as a
system of life, it is Gods law with regard both to this and the future world. For the
secular-minded, religion is a necessary institution although its proper field is not this
world but the future one. Scientists and positivists regard that, along with the development of science, the need for religion will disappear. To the communist ideology,
religion is the opium of the masses.
Our research indicated that 65.3% of students gave religion a central position in
life, 15% had a secular attitude while the marxist theory of religion was supported by
only 3.3%. As much as 81.9% of Muslim students, compared to 51.8% of Orthodox
Christians, considered religion to be their modus vivendi. A positive attitude towards
religion was much more likely to be adopted by students who come from urban environments than by those who come from rural areas, while the marxist attitude was
present only amongst a group of urban young people.
2.5 Students and the performance of religious rituals
Believers make efforts to come closer to God through various rituals, ceremonies,
prayers, ibadah and so on. All organised religions insist on their practical aspects. According to many scientists, catholicism puts more emphasis on dogma. On the other
hand, rituals are the differentia specifica of Orthodox Christianity.14 Islam commands
that its adherents perform physical rituals (salah, fasting etc.), material or economic
ones (zekat) and a combination of the two (pilgrimages).
2.5.1 Seeking the shelter of God and prayer
15.3% of our respondents said that they always felt a need to pray to God, another
22.7% said they often prayed, while 39% did so rarely.
If this question is crosstabulated with the variable of ethnicity, we obtain the following
results: 30.8% of Macedonian students said they never felt such a need, while the percentage of their Albanians colleagues who said the same was much lower, at 17.2%.
2.5.2 Performing religious rituals
26% of our respondents say they regularly performed religious rituals and 50.6% did
so occasionally, while 14% would like to perform them but, for various reasons, said
they could not. A further 7% of the sample did not perform any rituals at all. We can
clearly state that students have a positive attitude towards religious practice.
14
Dragomir Panti (1988): Klasina i svetovna religioznost, Institut drutvenih nauka, Centar za politika istra
ivanja i javno mnenje: Beograd, p. 16.
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Ali Pajaziti
Table 2 Performing religious rituals, by ethnicity

Regularly
Occasionally
Would
like to,
but can
not
Do not
perform
them
Total
Macedonian (%)
19.8
54.8
10.3
14.4
100
Albanian (%)
31.3
48.4
17.2
2.3
100
Others (%)
34.7
38.4
19.3
7.6
100
Total (%)
26.0
50.6
14.0
8.7
100
Table 2 indicates that the Albanian students were more active in performing religious
rituals than their Macedonian counterparts. Only 3% of Albanian students never performed religious rituals, while the percentage of Macedonians who never did so was
much higher (14.4%). Almost exactly the same conclusion can be obtained for the
variable of religious affiliation: 3.3% of young Muslims, but 12.1% of Orthodox
ones, said they never performed religious rituals.
Crosstabulating the answers with regard to the level of education of the students
parents, we concluded that the most active in this sphere were those whose parents had a
primary education (37.1% of these regularly performed religious rituals), whereas the
most passive were those whose parents had a university education (19.5%).
2.5.3 Places of worship
36.2% of students visited Orthodox temples only on special days, holidays or for family
occasions, such as the baptism of children, weddings or funerals. As can be seen, the
concept of these three tableaux is predominant amongst this group.15
2.6 Students and social relations
In this part of the article we turn our attention to explaining the social dimensions of
religion.
2.6.1 Sources of knowledge of religion and authors who have impressed students
As much as 31% of respondents gained their knowledge from within their families
and a further 20% did so from the church or mosque. However, almost one-half of
students said they had never attended religious lessons (48.7%). The latter figure
might be due to the former socialist system, its propaganda and the pressure put on
parents to educate their children in a spirit of atheism. 77.4% of young Albanians said
they were in some way religiously educated, but this percentage amongst Macedonians was only 16.7%. Young people from villages were more educated in religious
terms than their colleagues who came from urban areas (respectively 74.7% and
15
74
ibid., p. 8.
44.4%). Similar data were found regarding religious knowledge and the education
level of respondents parents, with less-educated parents having placed more importance on their childrens awareness of catechism.
Albanian students most preferred authors with regard to religion are Izetbegovi,
S. Kutub, M. Mahmud, Hamidullah, Deedat, Mevdudi, Dzozo, Benna, Bukhari, Navavi, Nursi, Ibn Taymiyyah, Ulvan, Kardavi, N. i S. Frasheri and Voka. In contrast,
Macedonian students, besides those authors who consider religion from a positive
perspective, such as Thomas Aquinus, Sofronius, Eliade and Kosidowski, there are
also authors with anti-religious attitudes, such as Nietzsche, Marx, Engels and Freud.
2.6.2 Relationships, religion and the family and social environment
Attitudes related to the family are recognised in terms of the role of the religious factor in the choice of spouse and in the behaviour patterns which follow an individual
coming to know that his or her partner has had previous sexual relationships.
18% of Albanian students esteemed the religious feeling of their partner to be
most important while only 8.9% of the Macedonian ones shared the same opinion.
However, the latter group esteemed more highly the beauty and wealth of their partner. For students from the towns, unlike those from the villages, physical features and
the financial situation of their spouse were the more important factors.
Male students were more harsh in terms of their fiance having had previous sexual
relationships prior to their wedding 52.6% said they would break off the wedding if
this happened. Female students were more tolerant in this respect; only 28.2% would
break off the wedding in such circumstances. If we take ethnicity as the grounds for
comparison, we can see that Albanian students were more conservative regarding this
aspect than were their Macedonian colleagues (respectively, 55.5% and 39.2%). We can
obtain similar data in terms of the variables of place of birth and level of parental education: greater importance to virginity was given by students from the villages and by
those whose parents were less educated.
The majority of respondents (60.7%) said they took religious feeling into consideration when they chose their friends.
2.6.3 Religion and education
Religion and education are very important elements which interact with each other.
Education aims to develop desirable modes of behaviour amongst citizens; it is said
that education makes human beings. At the same time, religion also plays a very important role in the process of the socialisation of individuals.
In our society in transition, there are still ongoing discussions about whether or
not to introduce religious lessons (catechism) in state schools. As much as 73.7% of
our respondents were in favour of this idea, including 86.7% of young Albanians and
61.6% of young Macedonians (and 85.9% of Muslim students compared to 62.4% of
Orthodox ones).
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Ali Pajaziti
2.6.4 Religion and science

People have debated the correlation between religion and science since the 16th century.
One opinion is that religion has sought to meet science head-on, evident in the negative attitude displayed by the church towards scientists (Bruno, Copernicus) during medieval
times. As much as 86.3% of our students thought that religion did not now directly challenge science. The opposite view was, however, supported by 19.2% of Macedonians and
by 18.3% of those whose parents were highly educated.
Some of the respondents' remarks are as follows:
An educated person should never challenge religion
Read in the name of Allah!
Religion is the agent of progress; religion is way ahead of science in finding solutions.
2.6.5 Religion, the state and politics

The state, according to some authors, is an instrument for establishing hegemony
while, according to others, it is a necessity because societies can not preserve their essence without the apparatus of the state:
The state is an organisation almost stuck to society itself.16
Political behaviour is one of the most important facets of people who organise themselves in political terms and who create political institutions.
We hoped to establish the attitudes of students toward the relationship between the
state, politics and religion via the phrase: Religion is an institution that contributes to
social integration and the question as to whether people, when voting, took into consideration the attitude of the political parties towards religion. The results indicated
that 79.3% of respondents considered that religion was a factor in social homogeneity,
integration and cohesion, and that the state should support it. According to ethnicity,
the results are as follows: 91.4% of Albanian students shared the opinion that religion
is an integrative element, compared to 67.1% of Macedonian students. The results according to religious affiliation are presented in Table 3.
Table 3 Religion plays an integrative and coherent role in society, by religious affiliation
Fully
agree
Agree
Disagree
Strongly
disagree
Total
Orthodox (%)
15.6
54.6
24.8
5.0
100
Muslim (%)
45.0
46.3
8.0
0.7
100
Others (%)
10.0
20.0
50.0
20.0
100
Total (%)
30.0
49.3
17.3
3.3
100
16
76
Sulhi Dnmezer (1994): Toplumbilim, Yenilenmi 11 Bas, Beta Basm-Yaym: stanbul,

p. 347.
As indicated in the table, 91.3% of Muslim students and 70.2% of Orthodox ones
considered that religion was a cohesive factor in society.
15.7% of respondents preferred a politically active and ideologically-based religion, although 56.3% did not sympathise with such an attitude and 11.3% preferred
pure religion. These data lead us to conclude that the majority of students are not in
favour of using religion for political goals. The Macedonian and Albanian students
shared such an opinion almost equally (respectively, 59.6% and 57.8%), i.e. they supported a non-political concept of religion. It is interesting to emphasise that the Macedonian students were more oriented towards pure religion than were the Albanian
ones: 15.7% of Macedonian students preferred pure religion, in contrast to just 5.5%
of the Albanians.
As regards their level of care over giving their votes only to political parties with
positive attitudes towards religion, the results were as follows: 37.5% of the Albanian,
but only 8.9% of the Macedonian, students always gave their vote to parties with more
developed religious attitudes.
2.6.6 Religion and the economy
One of the definitions of man is homo economicus. Religious criteria do play an important role in economic life: according to Weber, religion is the most influential factor that has an impact on economic mentality.17
The buying-selling relationship is one form of economic life. We sought to establish the role of religion in the economic life of students through a question on whether
they attempted to carry out transactions in the market place only with people from
their own religion. Just 7.3% said they always had regard to who they bought from or
sold to, while 13% said they did so often and 31% said they did sometimes. 48.7%
said they never paid attention to it. There was a strong divide on religious grounds in
that 32% of the Macedonian, but 71.9% of the Albanian, students took this factor into
consideration. Students from the villages (67.7%) took a more apparently isolationist
view in this area than did their urban colleagues (46.2%).
3. Conclusion
The results obtained in this research study, as well as those from others carried out
during the period of transition, clearly indicate an evident difference in the situation
compared to data from more than two decades ago. They indicate a rising curve of religious feeling in our society. In fact, the results confirm the general hypothesis that,
during the social transition, there has been a clear tendency towards a positive change
in the attitudes of students vis--vis religion and religious matters in general.
Based on our research, we came to the following general conclusions:
the theoretical or dogmatic dimension of religion, compared to the ritual or social
one, is stronger amongst young people at university
the majority of students give religion a central position in their lives
17
Ymni Sezen (1993): Sosyoloji Asndan Din, M.. FAV: stanbul, p. 135.
77
Ali Pajaziti
Albanian students and those from the Muslim religion are much more religious than
are young Macedonians and Orthodox Christians
students from rural areas have a higher regard for religion. Therefore, the villages
are more conservative than the towns
the higher the level of education of their parents, the lower the level of religious
feeling amongst the students. Modern education is closely related to laicism and
secularism
the majority of students are in favour of introducing religion in schools
religion is least influential in the economic life of students.
Finally, we can say that society and man can not live without God and without religion. Religion and belief are the essential needs of humans, which can be neither
destroyed nor denied. The man who Schopenhauer defines as animal metaphysicum
(a metaphysical being), is incurably religious,18 with the concept of the transcendent
and the sacred, or holy, experience being an integral part of human beings.
References
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Ali Pajaziti (1998): Gei Srecinde Makedonya, niversite Genligi ve Din Olgusu,
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Alpay ahin (1998): Dinin Dn, Milliyet, 3 Ocak.
Verica Stamenkova-Trajkova (1995): Optestvenite promeni i promenite kaj stavot
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Gjuro Shushnjiq (2000): Fuqia dhe pafuqia e shkencs n kritikn e religjionit,
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Ilija Aceski (1992): Religioznosta na naselenieto vo RM, Godien zbornik na Filozofskiot Fakultet, kniga 19 (45).
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Gjuro Shushnjiq (2000): Fuqia dhe pafuqia e shkencs n kritikn e religjionit, Penda:
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79
Ali Pajaziti
80
Vesna Dimitrievska
Qualitative analysis of poor households in the

Introduction
It is widely known that the Republic of Macedonia is a poor country. Following the
gaining of independence in 1991, it started a process of thorough changes in very specific and difficult circumstances. The pace that the transitional changes has taken has
been largely dependent on the negative economic effects that the country has had to face
caused by the war in former Yugoslavia, the well-known problems with Greece and the
Kosovo refugee crisis especially recently, when there have been increasing military
activities by Albanian gangs in western Macedonia and across the whole country.
When we analyse poverty in Macedonia we have to underline that, from the early 90s
until today, Macedonia did not have objective opportunities for a normal economic development as a result of the process of the abandonment of socialist collectivism and the acceptance of a civil capitalist society. Furthermore, when economic activities dramatically
decrease, when salaries are cut and there are structural changes in the economy, economic
differences between people widen, thus having a very negative effect on reform generally.
Poverty in Macedonia
The decrease in Gross Domestic Product by 18.3% in relation to the 1989 level
($2,080 in 1989; $1,700 in 2001), the high unemployment rate (32% in 2001) and the
constant increase in the number of people living on social welfare are just some of the
indicators of diminished living standards and the increasing inequality between the
population.
Thus, particular research results can be expected: 48.5% of those polled say that
they are neither rich nor poor but 39.9% consider themselves poor. Only 5.6% say
they are averagely rich and just 0.3% consider themselves very rich, while the rest are
undecided.1 Many Macedonian citizens who belonged a few years ago to the middle
classes are now afraid and nostalgic for the past: We are much poorer than before.
Asked to which class they thought they belonged, the majority of those polled, 32%,
said that they belonged to the working class. Then came the middle class (30%), the
lower (non-working) class (23%), the upper class (2%), while the rest gave no answer.
Especially hard hit by the changes across society have been the socially vulnerable
groups (the less educated, unskilled workers with only an elementary education,
housewives, one-parent families, unemployed, pensioners particularly those with
low pensions and the rural population).
1
Results of the research study Changes in Social Structure in the Republic of Macedonia,
conducted in 1998.
S. 81 88
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In this transitional period, there have been many movements in the social structure, both concerning changes in social categories and in the composition of social
groups: the rich are getting richer and the poor are getting poorer.
All these changes, as well as many others, are part of what accounts for the lower
quality of life in the country. The monthly income cannot even come near to satisfying
all the needs of a household. For 32.5% of interviewees, the monthly income is insufficient even to buy the cheapest food while a further 20.5% cannot even afford food
and are living from day to day. 21.8% are forced to use savings in order to satisfy
basic survival needs. The largest number of those interviewed (43.5%) said that they
spent their entire monthly income on food and that, sometimes, even that money was
not enough. 1.3% spend less than 20% of their monthly income on food, which accounts for some 21-60% of the income of a further 13.7%. The rest spend at least 70%
of their monthly income on food.2
These data clearly confirm the thesis that living standards are low. The lower quality of life is underlined both by the lower working capacity, and by the low salaries
and their irregular payment. In circumstances like these, it is to be perfectly expected
that many citizens of the Republic of Macedonia feel that they are poor.
Subsequently, who is poor, how poverty is defined and how it can be measured,
and so on, are issues which are immediately encountered. However, we have to accept
that, in this transitional period, and even beforehand, there has been no attempt at the
systematic and scientific measurement of the extent of poverty in Macedonia. The first
serious study was carried out by the Office of Statistics of the Republic of Macedonia
as part of the project Social Reforms Technical Aid and Sub-Project for Social
Aid, commissioned by the Macedonian government.
The poor are considered to be all those people, families and groups of people
whose resources (material, cultural and social) are at such a level as to exclude them
from the minimum accepted way of life in the country in which they live. When measuring poverty, there are certain pre-defined and pre-determined levels of living standards, called the poverty line, that have to be surpassed if a person is not to be categorised as poor. Poverty can be measured both by an absolute as well as by a relative
poverty line. The absolute poverty line is determined by the minimum expenditure
needed to meet the standard for survival, while the relative poverty line is determined
with reference to standards of impoverishment, i.e. the necessary level of income set
with reference to other groups in society.
Attempts at the measurement of poverty have shown a small increase in the
number of people existing below the poverty line (see Table 1). At the same time, with
the increase in the number of people who are impoverished, the extent of their poverty
deepens.
2
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ibid.
Qualitative analysis of poor households in the Republic of Macedonia
Table 1 Poverty index3

Poverty profile
1997
1998
1999
2000
Head count index
19.01
20.69
21.98
22.34
Poverty gap index
4.55
5.03
5.69
22.34
Source: State Office of Statistics (Poverty profile, 70% of median
expenditure)4
From Table 1, the rising trend in the head count index and in the poverty gap index
can be clearly noted. In closer detail, the statistics point to the following as the most
significant areas of concern:
the main total index is highest in rural areas (27.19 in 2000); in kopje, it is 21.97
while in other urban areas in the country it is 18.75
young families in which the head of the family is less than 40 years of age are at a
high risk of further impoverishment. The main total index for 2000 is 28.81 and the
depth index is 8.45
people under 40 living in kopje with lower levels of education face the highest risk
of further impoverishment
also at risk are households with children under 7 and rural one-member families.
Qualitative analysis of poverty
The projects Qualitative Analysis of Living Standards of the Macedonian Population
and Changes in the Social Structure in Macedonia enable us to analyse poverty in the
country thoroughly, since they embody a qualitative approach to the data. In the following
text, a number of different qualitative aspects will be presented.
How poor people define their position
The majority of those surveyed define poverty in the abstract. According to these, the
quantity and the quality of food are the main indicators (the determinants) of poverty.
The second ranking determinant is the inability to seek medical treatment on cost
grounds. Almost all the parents surveyed say that the main indicator of poverty for
them is their inability to provide for all their childrens needs.
3 For measuring and observing poverty, both the head count index and the poverty gap index are
used. The head count index shows the percentage of the population living below the poverty
line (and which can be households or individuals, depending on the chosen unit). This is the
main indicator of poverty and expresses the extent to which it is present. The poverty gap index can be defined as the average proportionate lack of income across the population as a
whole (instead of across all poor households or individuals). The poverty gap index can be understood as the minimum amount of income transfer necessary to eliminate poverty in relation
to the minimum amount of national income which is necessary to avoid poverty if income was
evenly distributed.
4 Novkovska, B (2000): Quantitative Analysis of Poverty, in the collection of papers:
Trends in Poverty and the Possibilities for Overcoming It, Friedrich-Ebert-Foundation
kopje office, p. 21.
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Different definitions in various types of households

One thing that must be underlined when analysing poverty in Macedonia is whether a
particular household had always had limited means and bad living conditions or
whether it was previously middle-class but had now become impoverished as a result
of the overall situation. One can easily notice differences in the perceptions of lack of
good fortune in the two categories of households and in their lifestyles.
Opinions of households that have always been poor
This first category of people has accepted their poor way of life and the low level of satisfaction of their needs as inevitable and they are not uncomfortable when talking about
themselves as poor, although feelings of dissatisfaction can be noticed in their statements.
These people tie poverty primarily in with an inability to provide the minimum means for
their physical survival: food, some heating and a roof over their heads are the top priorities
for them. They do not much mind the poor conditions in which they live, health-wise,
even though domestic hygiene is at a minimal level: their houses are old, often with damaged walls or bad and leaky roofs, and the doors and windows cannot be closed properly
or else the window panes have been replaced with plastic sheets or with cardboard. Regarding furniture, they often lack beds, tables, chairs, refrigerators, electric cookers, TV
sets and so on. For heating, they mostly use firewood; however; it does not satisfy even the
lowest standards. These people feel no need for cultural events, neither do they read books
or newspapers.
The majority are uneducated or have only a basic education. This is also reflected in
the extent of their level of motivation for educating their children: their lack of interest
in education is noticeable. It seems that they do not otherwise notice any differences or
inequalities. They compare their position with those who are equal or similar to them
and thus they do not see themselves as different. It is surprising that people from this
category do not think of themselves as very poor. They explain this with reference to
them not having started to look for food in garbage bins and that there are people worse
off than them. This category of people is incredibly unassuming when it comes to satisfying basic needs.
Opinions of impoverished households
The second category of surveyed people (which is the more numerous) differs significantly from the previous, mostly in expressing strong emotion (they speak with raised
voices, swear frequently, spit, tremble with agitation and so on). They also express
strong condemnations and criticisms (mainly of the current authorities and the company directors who have bought their companies cheaply, by theft, as they put it).
This category of people explain their position mainly comparatively and historically, frequently comparing themselves with the some who have gained wealth illegally, or else with those who have remained in company positions thanks to them being stooges or, otherwise, to their participation in the dirty tricks of the company.
They often compare their situation with the times when God walked the Earth, i.e.
under the previous socialist system. This was most noticeable amongst people in the
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survey who were over 40 years old, who frequently made comparisons with the time
of the previous system, regretting that such a period could not return.
Almost all the people surveyed in this category felt strongly that they were very
poor. It is interesting that, very often, they spend more than they can afford. They borrow from others and, when they have to pay it back, they hide or sell some of their furniture as a last resort.
All the household units in this category which were surveyed occupy either their own
individual houses and apartments, or else live in houses belonging to their parents and
friends. The houses and apartments were built or bought in the previous system. Difficulties in housing are mostly felt by the young (whose number is not inconsiderable), who are
unable to resolve their housing issues legally in the present situation. These young people
are often forced to live together with their parents. As the research has confirmed, they
sometimes even have to share their room with other family members (in-laws, nephews,
sons and so on). The furniture and equipment in such apartments are mostly old, having
been bought in times past (with the families unable to afford to replace them). Frequently,
these people are forced to sell furniture due to the lack of money and, often, they have to
face the problem of unpaid electricity bills.
The level of their education differs. People with secondary education are dominant, although there are some with higher levels of education as well as some with
lower. However, 75% of those surveyed were unemployed while the majority of those
who were still in work found themselves in loss-making companies. Struggling to survive, some of them, where nature allows, gather moss, mushrooms, juniper berries,
herbs and others. Some try to find a way out in illegal or semi-legal trade. Those
households which have a little capital (saved from before or borrowed from relatives
and friends) are involved in smuggling, while others are seeking a solution in prostitution, regardless of age or nationality.
Analysis of the expenditure patterns of poor households
In the text which follows only certain types of expenditure are examined: in particular, the quality of food. This does not mean that the rest of expenditure is undervalued
or that it is not analysed: it has simply been left to one side in this reportage.
Fifty households were analysed. When drawing up the sample, attention was paid
to the number of members in the household, whether the household was poor under
the previous system, the number of employed family members, nationality, the level
of development of the municipality, education and income. Special attention was
given to at risk households (single parents, pensioners, those with disabilities,
households with no member in work and households with employed members but on
minimum or irregular incomes).
Analysis was made of expenditure during spring (in May) and during the winter (in
December), observed over a longer period (between 1995 and 2000). The analysis provides a clear picture of the two types of households, especially how and on what they
spend their money. The broad analysis confirms the thesis already pointed to above
that the bulk of the resources available to people (frequently borrowed or obtained from
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Vesna Dimitrievska
a conscious overstepping of the limit of what they have available) is spent by both types
of household on food.
In households in the first category (those who had always been poor), it is noticeable
that consumption is based on products bought cheaply in the market, often with an expired shelf-life, or which had been collected as unsuitable for sale or which otherwise
came from fields where producers had concluded they were surplus. The consumption
of wheat products is within the range of permitted standards, while the consumption of
all other products necessary for a normal life is below the accepted limits. This situation
is present during both spring and winter, and is the case throughout the whole period of
observation. Such households spend a minimal amount of money on hygiene and some
spend virtually nothing (e.g. an eight-member family might use one 150 gr. bar of soap,
three rolls of toilet paper, 1kg of washing powder and one 50ml tube of toothpaste in
one month). They do not even consider buying clothes or footwear.
These households do not pay the bills and their electricity supply is frequently disconnected. It is interesting that this group contains many families whose members
smoke; they say that they always have to find money for cigarettes. When they speak
about their poverty, they nevertheless say that they cannot afford milk for their children.
An analysis of their expenditure frequently indicates that they spend more money on
cigarettes than they do on food (e.g. the same eight-member family might get through
56 packets of cigarettes in 15 days (1 288 denars) while spending only 700 denars on
meat, fish and eggs or just 850 denars on milk and dairy products).
A small change can be noted among impoverished households following the end
of the 90s when it comes to satisfying needs. The consumption of essential fats is on
the limit of the minimum recommended amount, while other products are consumed
relatively normally. It can be seen that these households consume less basic foodstuffs
during the winter, when family members are forced to live on a diet of mostly cabbage, beans and potatoes (the cheapest produce). As the majority themselves indicate,
this situation is due to their diminished buying capacity during the winter months:
The possibilities for additional income are limited during winter. In autumn, when the produce was cheaper, we did not have money to make preserves for the winter. The winter is cold
and we have to keep ourselves warm, so we eat less.
The second group of households spend somewhat more on hygiene than do the
former. Nevertheless, they pay their bills in arrears and, as a result, their water and
electricity supply are frequently cut off. They are able to spend a small amount of
money on clothes and footwear, mostly for their children, buying clothes in markets
where it is cheaper or else hand sewing them. These people still feel the need to look
good in new, fashionable clothing although they are able to do so only rarely. This,
among other things, adds to their anger.
As was the case with the former category, there are many families with smokers who
do not give up their habit even though they cannot fulfil the standards for the minimum
consumption of other products. It is interesting that these households spend a considerable
sum of money on lollipops, crisps and chewing gum yet, at the same time, they do not pay
86
attention to the quality and variety of other products. Very frequently, they try to find a way
out of their situation by playing games of chance (lottery or bingo).
It can be concluded that poor people in Macedonia do not eat food of good quality.
They buy foodstuffs cheaply, often when it is already out-of-date.
Conclusions
Compared to the standards of the European Union, it is evident from the data of the
Office for Household Development in Macedonia and the Office for Statistics that
poor families in Macedonia, with the exception of bread, oil and margarine, do not
satisfy the minimum necessary levels of food consumption. All recently impoverished
households (from the second category) spend more than their income.
Very frequently, household income is lower than expenditure. As a result of this lack
of money they have to borrow, pay in arrears and consciously overstep the limits of what
they can afford. This feature is more frequent among households that had not always
been poor but which were impoverished during the transition period in Macedonia.
Ultimately, the dilemma is whether we can obtain a real picture of poor households in Macedonia by analysing only the minimum need for food, or whether we
should also analyse how the poor satisfy the need for clothes and shoes, hygiene,
health protection, education, furniture and maintenance of the house, as well as recreation and entertainment. An alternative reading is that the question should be phrased
rather in terms of how any discussion can be held about other needs when 100% of
family money is spent on food and where, sometimes, even this is not sufficient.
References
Aevski, I (1995): Society and People in Transition, Ekspres: kopje.
Georgievski, P (1998): Poverty, Sociology, Studentski Zbor: kopje, p. 299.
Gataric, G (1998): Social Differences, August Cesar: Zagreb.
Friedrich-Ebert-Foundation (2000): Economic and Social Aspects of Unemployment
in Macedonia and Bulgaria and Perspectives on Overcoming it, Friedrich-EbertFoundation kopje Office.
Jakimovski, J (1997): Employment and Unemployment Problems and Perspectives,
Yearbook of the Institute for Political and Legal Research, kopje.
Macedonian Academy of Arts and Sciences (1997): National Strategy for Economic
Development of Macedonia, kopje.
UNDP (1999): National Human Development Report, UNDP Macedonia.
Social Security of the Population in Macedonia during the Transition, expert meeting,
Friedrich-Ebert-Foundation kopje office, 18-19 December, kopje.
Social Security of the Population in Macedonia during the Transition, expert meeting,
Friedrich-Ebert-Foundation, kopje office, 27 November 1997, kopje.
Various authors (2001): Socio-Economic Structure and Problems of the Population in
Macedonia, Institute for Political and Legal Research: kopje.
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Childrens social rights and their implementation in

Introduction
Ensuring children their social rights means providing opportunities for their psycho-physical development, as well as for their active and constructive participation in society.
Article 27 of the Convention on the Rights of the Child points out that the right of
every child to live at a level adequate for his or her physical, mental, spiritual, moral and
social development must be recognised. Parents or carers responsible for the child have the
primary responsibility in securing those rights. In addition, the state, according to need and
available resources, must take appropriate measures to assist parents and others in securing
those rights. Where there is such a need, the state must provide material and other forms of
assistance in order to provide adequate living conditions for a childs development. In order to ensure an adequate level of living standards for a child, basic needs in the following
specific areas must be satisfied: nutrition necessary for adequate physical development;
clothing adequate to the childs age; health protection and recreation; education according
to the intellectual predisposition of the child; etc.
However, satisfaction of a childs development needs is not only the responsibility
of parents or carers. In a contemporary society, individuals and families are dependent
on, amongst others: the global and macro-structural conditions related to employment; the level of monthly income; the power of those professionals who work with
children; and the level and scope of the social security system. In particular, legislation related to human rights protection stresses the role of the state which, with its internal laws, should provide decent conditions for parents or carers that allow them to
fulfil their responsibilities towards the children in their care.
The main factor which influences these indicators is the general level of living standards of the population or, at least, the level of satisfaction of childrens basic subsistence
needs. Therefore, the establishment of a system of social security has great importance
in the response of the state, as has peoples access to health services. Among the wellknown compensatory measures that many states use to underpin the social security of
the population are different funds, social programmes and the assistance of special laws
for social protection. Even so, the quality of childrens lives and their development depends largely on the level of protection of their health. Here, not only cure-based intervention and the organisation of health institutions for children are important, but also the
different forms of preventative measures, including with regard to disability, infant and
child mortality, etc. (Convention on the Rights of the Child, Article 24, point 2). Aside
of these, fiscal policy has an indirect influence, especially when personal taxation exclude matters relating to the support of children and spouses.
S. 89 98
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1. Legislation related to childrens social rights

With an acknowledgement towards global policy, there are many ways in which individual states can offer support in the guarantee of childrens social rights. Macedonia, a
state which signed the Convention on the Rights of the Child in November 1993, has a
basic law for ensuring childrens rights, i.e. the Law on Child Protection (Official Gazette No. 98, 2000).
According to Article 4 of this Law, there are certain forms and benefit entitlements
aimed at the protection of children. As benefits, the following are listed:
child allowance
special allowance
assistance regarding baby equipment
social participation.
According to this Law, a child is every person under 18 years of age; for children with
mental and physical disabilities, the cut-off age is 26.
Child Allowance is of a different amount for children under 15 years of age and
for those aged 15-18. Under special conditions, child allowance is available to children of foreign citizenship but is not paid when, either because of education, training
or re-habilitation, the child is in an institution in which everything is paid for. In the
previous Law on Child Protection (1981, as amended in 1987, 1991 and 1993), child
allowance was defined as a form of social protection for children from low income
families (i.e. the beneficiaries of permanent material social assistance). This type of
child allowance was available only for the first three children in a family.
Special allowance is paid in respect of children with special needs, i.e. with physical, mental or a combination of development difficulties, up to 24 years of age. It
should be noted that the amount of special allowance is four times larger than child allowance. In 1997, there were 2 402 children receiving special allowance, which
amounted to 2 500 denars (80 DM) per month per child.
Assistance regarding baby equipment is a package of measures provided only for
a first-born child. This means it has a discriminatory character towards subsequent
children in the family.
Social participation is provided out of the state budget, depending on the financial
situation of the family. It contributes assistance towards expenditure on education,
recreation and holidays in public institutions for such purposes.
In relation to child protection, it is important to note that eligibility for one right
does not exclude eligibility for others. In addition, there are many rights for families,
parents or carers from which the child will also benefit.
The Macedonian system of social protection offers two types of social assistance.
One is so-called social financial assistance, which predominantly encompasses those
unemployed people who are able to work but who are not eligible for unemployment
benefits, or those for whom the period of unemployment benefits has expired but
whose families have income below the poverty line. This form of assistance also
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Childrens social rights and their implementation in the Republic of Macedonia
includes low-paid workers and those with irregular salaries, as well as pensioners with
low pensions whose families meet the criteria for this type of social assistance as described in the governmental decree.
The other type of social assistance is so-called permanent financial assistance
which includes three types of beneficiaries: those declared by a special medical commission to be unable to work; single parents with children up to three years of age;
and the elderly who have no income and no close relatives to take care of them.
There is also an instrument of so-called special financial assistance which is delivered only in specific cases such as illness, death, environmental accidents, etc.
According to the Law for Health Protection (Official Gazette No. 17, 1997), health
insurance is guaranteed for all children and young people up to 18 years of age, as well as
for pupils and students up to the end of their education (Article 17), on the basis of the
contributions of members of their families or on the principle of mutual solidarity. According to Article 11 of this Law, the following health services are guaranteed: examination by a doctor; expert medical intervention; emergency care; preventative measures;
therapy; rehabilitation; dental care; medicines; and orthopaedic and other instruments.
Carers in charge of nursing sick children up to three years of age have the right to salary
compensation. Children themselves also have guaranteed rights to systematic medical
checks conducted under a contract between schools and health care institutions.
2. Social status of children
2.1 Education
Out of the total population of Macedonia, 32.9% are aged 0-19, while 24.8% are under 14.
The care and education of children up to seven years of age is carried out within 52
organisations (nurseries, kindergartens and other pre-school activities) which have 187
working units (Kamberski, 2000). According to 1997 data, 12% of children aged between nine months and seven years were enrolled in them. Most often, such children are
from families whose parents are employed and, mostly, those who have Macedonian nationality. These pre-school institutions are financed by the state.
Recently, there has been a notable rise in the number of children enrolled in preschool activities. Also notable has been a decline in the average number of children in
each pre-school group (from 24.9 in 1992 to 21.3 in 1998). The lowest proportion of
children enrolled in pre-school institutions is from the Turkish nationality, followed
by the Albanian and then the Serbian (Kamberski, 2000).
It is estimated that the participation of children in pre-school institutions is of great
benefit in preparing them for easier entry to, and success in, full-time schooling. It is important to note that many new educational models have recently been introduced at the
pre-school level. Well-known projects in this regard have been Step-by-Step and Interactive Education. However, there is a contradictory situation here in that children from
low-income families are rarely involved in such projects.
Primary education is free of charge and compulsory for all children. Within the education system, there is no discrimination in respect of gender or in terms of national, social or religious affiliation. More than 98% of children of appropriate age are enrolled in
primary education. The border age for enrolment is not strictly defined and varies from
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six to eight. Some detailed analyses indicate that, predominantly among Roma children,
some have not been enrolled in, or else have dropped out of, primary education.
Of greater concern is the situation of those children with disabilities (approximately 150) who are, literally, isolated within their families and who are without care
for their special needs. Less than 1% of such children have placements in adequate institutions. There are also many cases of the abuse of children with disabilities, often
by their parents who use them for begging (Bornarova, 2001: 97-98).
According to educational data relating to the 1996/97 school year, 99.2% of enrolled
children complete primary education. The largest proportion of drop outs is notable from
the fifth grade, especially among Albanian school groups and in rural areas. As result of
such a process, 5.4% of the total population in Macedonia aged over ten is illiterate
(Ministry of Education).
Education is free of charge, but pupils do have to meet the cost of textbooks (which are
partly subsidised from the state budget). However, many pupils, especially those from
low-income families, are assisted by textbooks being provided free of charge either from
the state or from non-governmental or other humanitarian organisations.
The right to enrol in secondary education is taken up in particular by young people
from urban areas (over 80% of pupils graduating from primary school had the opportunity to enrol in a secondary educational process). In 1992/93, 74.5% but in 1997/98,
84.7% of those who finished primary school enrolled in secondary schools).
According to the Constitution of Macedonia, secondary education is not compulsory. However, it is defined as a right on an equal opportunities basis. In order to make
access to education easier, the state offers different forms of assistance to young people
such as scholarships, credits, residential places, food, textbooks and discount on bus and
train tickets. There are also many summer camps.
Despite these measures, there are both subjective and objective barriers to the fulfilment of social rights in regard to education. Subjective barriers include, in the main,
the ability of the children; character problems; laziness; problems stemming from
complex family relationships or conditions; and the results of inadequate educational
or didactic activities in schools.
The objective barriers are more important and, in Macedonia, these include chiefly:
low-income families with children
limited investment
increased unemployment in passive areas which decreases the motivation of young
people towards secondary education.
2.2 Living standards
The rapid impoverishment of the state is limiting and endangering the bio-psycho-social
development of people in the state, and especially that of children.
The amount of the family budget allocated to satisfying cultural, educational, recreational and other needs is constantly decreasing and limits the aspirations and ambitions of
92
those children whose values and developing needs have already been degraded by their
circumstances (Donevska, 1998).
There has been no special research conducted into this topic, only some quasi-studies
from which we can, however, draw general points. Studies carried out in Kavadarci (Bopkova, 1993), as well as in the Novo Lisice district of kopje (Donevska and Apostolova,
1996) on 150 children from low-income families, indicate that of most concern is the low
levels of support and encouragement from the parental side in regard to their childrens development (meaning bad conditions for leisure, poor hygiene habits and poor nutrition)
and the poor development of their intellectual and aesthetic faculties (the low encouragement of their aspirations, low interest development, no participation in cultural events and
no books, newspapers, magazines or similar.
According to the Macedonian legislation, the minimum age of employment is 15
and while, according to the Family Law, young people of 15 can be employed, according to the Employment Law they should not be employed in working places
harmful to their health or moral standards.
It is estimated that there are around 9 000 young people aged 15-19 who are employed in Macedonia. For children up to 15, there is no official information on the extent of child labour. However, the non-governmental organisation First Children Embassy Medjasi has worked on this issue. According to its knowledge, around 1 000
under-age children every year drop out of school in Macedonia, offering their labour
to local businesses or to their parents (Dnevnik No. 1476). The most frequent forms of
child labour are bagging, working at crossroads or working with cattle, but it is also
evident in small-time smuggling, car washing, newspaper and cigarette sales, etc.
Studies analysing the different groups at risk show that the number of single parent
families is increasing, especially the number of single parents on social assistance. The
profile includes people between the ages of 16 and 36. Most are without formal education, are unmarried, predominantly come from the Roma ethnic group and do not have
proper housing conditions. Statistics also show that most divorces occur during the first
14 years of marriage, which is contributing to the growing emergence of single parent
families with children between the ages of 1 and 14 (Statistical Bulletin, 1998).
Also evident is the rise of street children (Saveska, 1999). According to studies
carried out in kopje on 127 street (Roma) children, 93% do not attend primary education, 41% are born out of wedlock and 61% do not visit doctors (Bati et al, 2001).
Teenage marriages are also evident in Macedonia: in 1996, 7 940 teenagers got
married.
The governments social financial assistance programme includes 70 000 households as beneficiaries, in which there live 110 000 children (Kotevska, 1999).
In the Social Work Centre in Kavadarci (a small town in southern Macedonia), the
following under-age children were beneficiaries of social protection in 1999: those
abandoned by their parents (six); those whose parents were obstructed in their parenting
(ten); those from low-income families (six); those from families with disturbed family
relationships (eleven); and those whose parents are divorced or in divorce procedures
(eleven) (Bojanova, 2000).
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2.3 Health protection

The largest number of children are born to mothers aged 20-29 (70.5% in 1996), but
around 10% are born to mothers below the age of 19. The particular engagement of
social-health professionals is needed in supporting such young mothers. It should be
stressed that, even so, there have been few projects undertaken in this respect such as
on, for example, family planning or breast feeding.
The infant mortality rate for 1996 had declined to 16.4 deaths per 1 000 live
births. This represents a big success for Macedonia. Some years ago, the infant mortality rate was especially large in rural areas but, today, there is no significant difference between rural and urban areas. The mortality rate for children below five years
of age was 3.2 per 1 000 live births. However, there is an issue surrounding the register of the births and deaths of children.
In relation to breast feeding, it is evident that 78.3% of babies are breast-fed up to
the age of four months, which is the result of a positive tradition as well as of certain
education programmes introduced by UNICEF.
Home visits have a special role in the protection of the health of children and of mothers, while there are child counselling services within dispensaries in all municipalities.
It is estimated that 91-94% of children are immunised. Total immunisation cannot
be achieved because some children, although registered at birth, are not registered
with the health services. Also, some children, especially girls, drop out of school,
where child immunisation is usually carried out. In relation to children aged 1-4, there
has been a notable rise in upper respiratory infections, as well as in skin rashes. Also
notable has been the rise in anaemia, vitamin deficiencies, rickets and diarrhoea as a
result of the decline in living standards and unhygienic living conditions, as well as
the absence of sewage and water supply systems in rural municipalities.
3. The role of non-governmental, international and religious organisations
in the protection of childrens social rights
In the field of the protection of childrens social rights, there is a huge range of civil
sector activities, including an interesting range of NGOs which concentrate their activities on children. There exists in Macedonia a National Convention of NGOs for
the Protection of Childrens Rights, established on 13 November 1997 at the initiative
of the First Children Embassy Medjasi; other members include the following NGOs:
Friends of Children without Parents
Association for Recreation, Fun and Friendship
Association for the Protection of Childrens Rights
Council on Protection against Child Sexual Abuse
Association of Parents of Children with Cerebral Palsy
(Pirkovska-Zmijanac,1999).
Macedonian NGOs are included in the worldwide network of NGOs on the protection
of childrens rights as well as in international child organisations with a high world
reputation, such as the Group for the Convention on the Rights of the Child-Geneva,
Child Rights Information Network-CRIN-London, etc.
94
According to research carried out in the Christian religious community, the following entities also provide services in relation to the protection of childrens social rights:
the Orthodox Church, with the humanitarian organisation Milosrdie (Charity) and Gakonija; the Catholic Church, with the Macedonian Karitas and Mother Teresa organisations; and the Protestant Church, with the Macedonian Association for Humanitarian
Support and Charity Service. These organisations provide the following services:
material assistance (food, clothing, heating)
soup kitchens from which children may benefit
foster families
informal education, especially for girls in under-developed areas of kopje
education of children similar to a kindergarten (in the Protestant church)
(Mihajloska, 2000).
Studies carried out in the municipality of Cair, in kopje, indicate that the satisfaction of
childrens needs depends on there being a well-organised local community, as well as
the existence of activities of NGOs and humanitarian organisations with child-oriented
agendas (Ilioska, 2000).
4. Implementation of the Convention on the Rights of the Child
Better implementation of the social rights of Macedonian children can be had by enacting
new decisions in respect of the health and social protection of children and young people:
there are efforts to make health protection free of charge for all children and young
people up to 18 years of age, regardless of their own or their parents social status
special protection and support should be provided for children without parents who
are placed in foster care or institutions. Foster parents should enjoy high financial
and social benefits
new solutions need to be created for the protection of street children
in pre-school institutions, the expenses which have to be met by families should be
reduced. Currently, such expenses constitute 30% of the total price which is subsidised from the state budget
counselling services for children and their parents which will improve child care in
kindergartens need to be established
adequate professional orientation for children entering secondary education which
will assist them in making the right choice
according to the Law on Primary Education, parents who do not let their children go to
school, or who do not take care of their attendance at school, must be punished with a
fine of 1 500 denars (around DM 50). On the other hand, if they pay this amount they
can keep their children out of school for the whole year and use them for their own ends.
In 2000, 776 children did not attend school, out of which only 178 cases were filed in
court; the remainder were either old cases or where the inspectors could not establish
contact with the parents (Dnevnik, No. 1476). This situation needs to be improved.
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Maria Donevska
Due to the escalation of the war crisis in Macedonia, the number of problems faced by
children, especially refugee children and those living in the critical areas, have increased. Macedonia, though both governmental and non-governmental effort, is seeking
to answer to the needs of those children while respecting their social and other rights.
References
Bati, D i drugi (2001): Fenomenologija na ulicni deca/deca na ulica vo kopje
(Phenomenology of Street Children/Children on the Streets), in Filozofski
Fakultet: Zastita na ulicni deca/deca na ulica (Protection of Street Children/Children on the Streets), kopje.
Bornarova, S (2001): Socijalnite problemi na romskite deca (Social Problems of
Roma Children), in Filozofski Fakultet: Zastita na ulicni deca/deca na ulica (Protection of Street Children/Children on the Streets), kopje.
Bojanova, A (2000): Analiza na aktivnostite na drzavnite institucii i nevladinite organisacii vo mala urbana zaednica (Analysis of the Activities of Governmental Institutions and Non-governmental Organisations in a Small Urban Community), diploma work at the Institute of Social Work and Social Policy (ISPiSR), kopje.
Blazevski, I (2001): Decata-mali robovi na svoite roditeli (Children Small Slaves
of their Parents), Dnevnik od 13.02.2001 br. 1 476.
Donevska, M (1998): Ogranicuvanja i perspektivi vo primena na modelot na ednakvost
na sansi vo obrazovna politika (Obstacles and Perspectives in the Implementation of
the Model of Equal Chances in Educational Policy), in Univerzitet Sv. Kiril i Metodij: Opstestvo, tranzicija i obrazovanie (Society, Transition and Education), kopje.
Ilioska, I (2000): Lokalna zaednica kako prostor za zadovoluvanje na potrebite na decata na ucilisna vozrast (Local Community as a Field for the Satisfaction of the
Needs of School Children), diploma work at the Institute of Social Work and Social
Policy (ISPiSR), kopje.
Kotevska, M (1999): Pravata na deteto od aspekt na socijalnata zastita (Childrens
Rights from the Aspect of Social Protection), in Zbornik na trudovi od simpoziumot za pravata na deteto (Compilation of Papers from the Conference for Childrens Rights), kopje.
Konvencija na prava na decata (1993) (Convention on the Rights of the Child), kopje.
Mihajloska, A (2000): Socijalnite aktivnosti na hristijanskite verski zaednici (Social
Activities in Christian Religious Communities), diploma work at the Institute of Social Work and Social Policy (ISPiSR), kopje.
Pirkovska-Zmijanac, G (1999): Ulogata na NVO i makedonskata nacionalna koalicija za zastita na pravata na deteto vo implementacijata na konvencijata za pravata na
deteto (The Role of NGOs and the Macedonian Coalition for the Protection of
Childrens Rights in the Implementation of the Convention on the Rights of the
Child), in Zbornik na trudovi od simpoziumot za pravata na deteto (Compilation of
Papers from the Conference for Childrens Rights), kopje.
96
Statisticki bilten od oblast na socijalna zastita (1998): Zavod za statistika (Statistical

Bulletin), kopje.
Saveska, S (1999): Ulicni deca-deca na ulica (Street Children/Children on the
Streets), in Zbornik na trudovi od svetskiot detski samit (Compilation of Papers
from the World Childrens Summit), kopje.
Zakon za zdrastvena zastita (Law for Health Protection) (1997), Sluzben vesnik na R.
Makedonija, br. 17.
Zakon za zastita na decata (Law for Child Protection) (2000), Sluzben vesnik na R.
Makedonija, br. 98.
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Trends in the socio-economic structure of the rural population
A decrease in the agricultural population in the Republic of Macedonia has proceeded
simultaneously with an increase in agricultural production per unit of cultivable land,
but it has not led to an increase in the overall land area held by agricultural holdings, as
has taken place in developed countries. During the last decades, Macedonia has undergone a more intensive process of the abandonment of agriculture and the depopulation
of villages, especially in rural and mountainous areas, as opposed to the process of the
introduction of up-to-date machinery in individual agricultural holdings. Unlike urban
centres, the Macedonian village has never become a favourable place for the development of industries and non-agricultural activities. As a result, there has been a migration
from villages to the towns and to the cities and their suburbs. New town dwellers have
faced unemployment, as former agricultural producers have turned out to be agricultural
consumers after their migration to urban areas. Consequently, this trend has caused the
abandonment of at least 120 000 hectares of cultivable agricultural holdings which have
been turned into pastures and forests.1
Furthermore, this migration from rural to urban areas, in whose suburbs and on
whose peripheries non-urban settlements, or quarters, based on unlicensed construction
have emerged, has led to a decrease in the proportion of the population who live in rural
areas. More precisely, the rural population constituted 72.4% of the total Macedonian
population in 1948; by 1981, this number had been reduced to 46.1% and, by 1994, still
further to 40.2%.
Migration and the decrease in the agricultural population has especially negative consequences for hill and mountain villages located remotely from urban centres and completely lagging behind them in development terms. The decrease in the population of these
villages and areas is a result of the neglect of the development of agricultural and other rural economic activities, the unresolved infrastructure needs of settlements, etc.
According to the 1994 Census in the Republic of Macedonia, the distribution of
villages, according to the number of inhabitants, is as follows:
1 The text of this article was presented at the 73rd EAAE Seminar Policy Experiences with
Rural Development in a Diversified Europe, European Association of Agricultural Economists: Ancona, 28-30 June 2001.
S. 99 108
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Jorde Jakimovski
Table 1 Village size

Size of village
No.
Totally abandoned
121
7.1
Up to 100 inhabitants
573
33.5
101-300 inhabitants
387
22.6
301-800 inhabitants
332
19.3
More than 801 inhabitants
302
17.5
1 715
100.0
Total
A special problem here are those villages which have less than 50 inhabitants. These are
360 in number 68.2% of the total number of villages with less than 100 inhabitants and
one in five of the total number of villages in the Republic of Macedonia. Out of the
number of these villages, it can be expected that some people especially in villages with
less than ten inhabitants will seek resettlement. There are 104 villages in this situation.
The 1994 Census reported that 121 villages 35 more than in 1981 were unpopulated.
This was 7.1% of the total number of Macedonian villages.
The biggest motive for leaving remote hill and mountain rural settlements during
the last few decades has been identified as the poor local infrastructure or else its
complete absence or unresolved infrastructure problems, more precisely:
1. poor or non-existent electric illumination in villages
2. lack of modern roads (asphalt or macadam) linking villages and their rural or municipal centres
3. non-established bus routes between villages and rural or municipal centres
4. lack of a regular food supply (where the village has no food shop)
5. lack of partial primary schools (i.e. up to 4th grade) in villages, or even entire primary schools (i.e. up to 8th grade) in the close vicinity
6. poor or non-existent supplies of drinking water
7. non-existence of a medical centre either in the villages of respondents or in the surrounding area.
Infrastructure facilities are unevenly allocated in Macedonia. Thus, there is a sharp distinction between rural and urban areas in favour of the latter with respect to economic and
non-economic facilities located nearby; these are significant elements making up social
standards. The same distinction exists between small and remote hill and mountain villages and those in the plains near the towns. It is certain that differences in social standards
amongst the population in the various types of places, and the differences in incomes between people living in each, are crucial reasons behind the depopulation of hill and mountain villages located far away from either urban centres or communications links.
100
We must acknowledge fully that it is unrealistic to expect that people will stay in
villages where there are no electric lights or where electricity power is so low that it
can not produce a standard picture on the screens of their TV sets while, at the same
time, other domestic appliances, like boilers, electric fires, refrigerators, etc. do not
work at all. The same frustrations among these people exist if there are no asphalt or
tarmac roads leading towards their villages or where, if they do exist, they are so
badly damaged that even freight vehicles avoid them; if the closest bus route linking
urban centres and the bigger villages in the area are many kilometres away from the
smaller villages in which they live; if there are no food shops in their villages; if they
have to walk for hours to reach the nearest medical centre; if there are no primary
schools in their villages; if they are not in a position to receive TV programmes; etc.
On the other hand, it is worth mentioning that there are widespread and strongly felt
feelings of nostalgia among such people as regards the places of their birth; as a result,
sometimes they need only slight economic or moral incentives from the government (or
society) to stay in their villages, or to return there once they have left; these are the places
where they were born, grew up, attended schools and experienced their first love. Besides,
country life has its own advantages: direct contact with nature; fresh air; and opportunities
for the production of healthy food for the needs of village households and for extra income
from the sale of surplus products to urban fruit and vegetable markets. In addition, there
are some opportunities for the development of both summer and winter tourism. However,
research proves that the processes of the agricultural desertion of the land, the migration
from rural to urban centres and the quantitative growth of the urban population (which can
not be equated with the real urbanisation of towns and cities in the Republic of Macedonia) have proceeded in a much faster way than either the implementation in rural areas
of technological innovations in agricultural machinery and methods, or the industrialisation and development of non-economic activities in urban centres.
Two basic factors can have a crucial impact on the rural population to stay in the
places of their birth infrastructure and the economy. Conditions should be created
for meeting both the economic and non-economic infrastructure requirements of the
rural population, thus raising their social standard, including both the establishment of
networks for supply systems (electricity, water, sewage) and other local services like
post offices, shops, craft services, as well as schools, medical centres, cultural centres,
youth clubs, etc. The economic factor is very important, too. Rural people must have
satisfactory revenues both from their agricultural activities and from any other job
they do. Such revenues are the most important constituent element both of living
standards and, consequently, the social standards of the rural population.
There have been expectations that the dynamic and uncontrolled demographic desertion of the land would lead to a reduction in the number of private individuals involved in agriculture, thus enlarging the average size of agricultural holdings. Unfortunately, these expectations have proved to be wrong. Agricultural households have rid
themselves of surplus labour, but not of the possession of their land. Indeed, the number
of individual agricultural holdings has actually been growing. For instance, there were
156 676 such holdings in 1960 and 178 087 in 1994 13.7% more. The predominant
holdings in 1981 were those up to two hectares in size (66.8% of the total number), and
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there were fewer large holdings i.e. more than two hectares in 1981 than there were
in 1960. Consequently, these were becoming smaller in size as time passed.
In this context, Macedonia is characterised by a very interesting phenomenon; that
is, the reluctance of households to give up their agricultural holdings. This can be illustrated by the statistic that 38.5% of the total number of households with agricultural holdings in 1981 did not even have a single member of the family to deal with
agriculture. Many of these households lived in towns or were composed of old people
who could not work, and their land was cultivated or used for some other purpose by
their relatives. It is worth mentioning that the economically active members of many
of these households were involved not in agriculture but in non-agricultural activities.
The reasons for this can be found both in the governments inappropriate agrarian
policy and in the extensive development of non-agricultural activities, especially industry where salaries are low, thus forcing industrial workers, otherwise former agricultural labourers, back to the fields now in a part-time capacity. Thus, it is a general
conclusion that there has been a tendency for former agricultural labourers to hang on
to their holdings.
Therefore, the role of agriculture within the overall economy has undergone important changes. Besides those agricultural households which are market-oriented, another
type of household has appeared whose economic activities can not be explained by
standard agro-economic analysis. These new households have developed a specific way
of life different to that of classic agricultural households.
All of these changes have led to the formation of a new socio-economic structure
in rural areas which has had an impact on the utilisation of production capacities and,
both directly and indirectly therefrom, entire swathes of rural development.
Thus, an average household possesses 7.7 allotments of land, the average size of
which is 0.14 hectares. Of course, there are huge differences between households in
respect of the number of allotments they each possess: eight per cent of all households
possess just one while 31% possess more than ten. In this way, agriculture holdings
are broken up into many small pieces dispersed across an area.
This division of agrarian land into small parcels is a huge obstacle towards the
economic and productive organisation of agricultural production and means that it is
simply unable to attract the capital necessary for sustained development.
Changes in the period of the transition have, unexpectedly, led to a dramatic deterioration both in the material and the social security situation of many families, including rural ones. Owing to an inept social policy, many of these families have only a
minimum or basic human existence.
Research has shown that the economic problems of existence are widespread in rural areas in Macedonia and are becoming more and more acute. Rural families are not
objectively in a position to resolve the problems of their existence by themselves and,
therefore, the much greater involvement of the government in social policy is necessary
to prevent the development of such negative trends. It is very important that a new strategic policy towards the improvement of the living conditions of the rural population be
launched, one that could be practically carried out during the next medium-term period.
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Strategic approach
As already mentioned, rural development is geared towards changes in two essential components the economy and the local infrastructure. If the dominant rural economic activities are able to provide similar incomes to the dominant urban ones, the first condition for
the rural population to stay in the places of their birth will have been fulfilled. And if the
rural infrastructure becomes as similarly developed as the urban, the second condition will
also have been fulfilled. In other words, if all rural families, like their urban counterparts,
are covered by water supply, sewage and electricity supply systems, and if there are asphalt streets, street lights, playgrounds, cultural centres, etc. in the village as in any urban
location, then villagetown migration would take place in both directions and, as a result,
rural areas would not become depopulated.
A dilemma that may appear in rural development policy is what sort of investment
is preferable or, more precisely, whether priority should be given to infrastructure or
to production investment.
In considering the issue of priorities, it is necessary to bear in mind that the absorption of investment capacity is low in under-developed areas which lack infrastructure. In order to provide a full utilisation of both human and material resources in under-developed areas, it is thought that investment aimed at improvements in the local
infrastructure and social institutions, and in raising the quality of the human factor,
has a primary importance. Infrastructure investment should change the social and economic milieu, creating the necessary prerequisites for the modern development of
rural areas and making them capable of attracting capital for production.
The importance of infrastructure as a condition for development should not be denied, especially if we consider both its material and its social or human component.
Traffic links have a special importance within infrastructure as a dynamic factor
for change. Transportation improves the situation both in industry and in other nonagricultural activities, and is a significant factor in social and economic development.
For this reason, economic theory provides many arguments in favour of infrastructure
as an important factor in rural development.
Certainly, the production structure of a particular area can be changed only where a
functional correlation between infrastructure and the growth of direct production investment in the area can be established. But, a further question can be raised: what type
(branch) of industry would be the most effective in the rural area, with regard to its ability
to set in motion changes in the agrarian structure? The answer offered by some academics
is that the type of industry selected should be one which best suits the regional conditions
and that the most suitable industries for under-developed areas are labour intensive ones.
In this respect, it is regarded that traditional branches of light industry (food products, textiles, etc.) would be a driving force in rural development.
The economic impact of traditional branches of industry are much more visible today, when the rate of overall production growth is relatively low. But the selection of
the industry sectors involved must correspond to contemporary trends in technical
progress whose tempo is, currently, accelerating more and more quickly. In that sense,
a combination of sectors producing short-term and long-term effects is desirable. In
the selection of those sectors which are the most apposite for rural development, it
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Jorde Jakimovski
should be possible to identify those that are both labour intensive as well as those
most adjusted to the labour force structure in rural areas at the time.
It is worth mentioning that no single industry sector would be able to play an important role in rural development if it is forced to develop in isolation; that is, it must
develop in conjunction with related activities in a complex whole in which the sector
chosen would, naturally, form the core element.
The selection of the right industry sector for a particular area is an essential commitment both for central and local authorities. The negative consequences if their choice is
wrong are much more serious in comparison to any sectoral disproportion or to any individual failures related to the projection, dimensions or structure of a single enterprise.
Misallocated capacity can not be simply carried to some other better place it remains
and operates where it has been initially located.
It is clear, with respect both to the agricultural and the rural situation, that the need for
integrated rural development is an imperative. In this, consideration must be paid on the
one hand to natural resources and, on the other, to having both settled places with infrastructure facilities and a population with a pre-determined demographic and social composition. Therefore, it should be demanded that existing production capacities be fully utilised as an important factor in determining the future of a village. Also, a conceptualisation
is needed that does not disturb the environmental balance; this implies taking into consideration the values of harmonious development which can not be measured just by their
economic impact. This would stimulate both regional and local development, reducing the
flow of emigration to municipal and industrial centres. The new concept of rural development requires special efforts towards the mobilisation of available rural production resources, as well as the launching of a new agrarian policy. The village can have a future if
is populated and well-provisioned with all the accomplishments of civilisation, such as
electricity and water supply, road communications, modern transport, etc.
In this sense, it is necessary that the government changes its attitude towards the
village. Villages need an all-inclusive economic and cultural development, i.e. the
planned allocation of economic facilities, social institutions and other infrastructure
elements, in order for the rural population to be provided with civilised living conditions and, consequently, a better standard of living.
Accordingly, rural development needs a multi-sectoral (or cross-sectoral) approach,
adjusted to the specific spatial features. Special attention should be paid to the most underdeveloped hill and mountain regions in Macedonia. If we fail to undertake swift and appropriate measures, it is expected that, even in the case of a dynamic period of overall economic development in the Republic, the negative trends in rural economic and demographic development will not be overcome.
Elementary orientations and practical measures for future Macedonian
rural development
The concept of rural development must:
1. stimulate the economic and social development of the region
2. create a good living and working climate.
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Firstly, the concept of the development of municipal centres should be abandoned in

favour of one of spatial development. In the latter case, the entire natural and human
resources of a broader area should gain their full expression. More precisely, in some
areas economic growth (growth in GDP) would not be the primary development goal,
but special attention would be paid to environmental aspects (the production of
healthy food).
Secondly, special attention must be paid to primary agricultural production, by
maximising the utilisation of available resources in rural areas.
Agricultural policy should be based on the concept of the market economy: respect for
the specific features of agricultural production; provision of incentives towards such a
structure and quantity of agricultural production that guarantees economic efficiency and
the rational use of available resources; the economic status of an individual agriculture
worker to be equal to that of any other economic actor; the introduction of favourable
credits as agricultural incentives; an organised pay-off for agricultural products and the
implementation of a favourable tax policy; more favourable pensions and ill-health insurance for agriculture workers; etc.
However, agricultural economic products are not by themselves sufficient to bear
the burden of an integrated rural development policy. The average holding of two hectares (especially in hill and mountain areas) is not able to provide enough food even
for the households that cultivate them; it is obvious that no money is left for other
needs and infrastructure facilities. In such circumstances, non-agricultural activities
would be good investment sources for rural development.
A well-designed programme of production can play a significant role in agricultural
development. This can provide both higher revenues and security to agricultural producers. Within the conception of rural development policies, a selective approach would produce better effects so that, in some circumstances, incentives would be given towards the
encouragement of professional agricultural employees while, in others, where this solution
was not possible, the notion of people having dual agriculturalist-worker status would be
supported instead.
An important issue contributing to rural development is the provision of support for
the rural population which has such dual status, along with other mixed families. According to the statistics, only 3% of private agricultural holdings in the Republic enjoy
conditions appropriate to modern and efficient agricultural production (i.e. holdings of
more than eight hectares). The largest part of the land in Macedonia which is available
for cultivation is divided into small lots (67% of the total number of households in Macedonia possess holdings of two, or less than two, hectares), so it is realistic to treat
mixed households (those performing two or more activities) as a permanent category.
These households help to maintain demographic stability, particularly in areas with very
small lots of land, high agrarian density and poor land quality more precisely, in the
areas endangered by depopulation.
Thirdly, one other possible solution for agricultural promotion is a development
model based on small and medium-sized enterprises. This model is basically unchallenged, but there is a dilemma in reference to its structure. Therefore, any decision on
the location of industrial sectors in rural areas must be based on careful analyses of
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Jorde Jakimovski
the characteristics of the area, including demographic aspects, the skills of potential
workers, road links, communications infrastructure, etc.
Fourthly, incentives should be provided for the development of small-scale economies,
tourism, etc. It is very important to develop microeconomic models, or entrepreneurship
across a wide spectrum, in the rural setting from traditional crafts to co-operation with
modern industry. The development of domestic crafts can be based on the assumption of
considerable economic interest. Research dealing with opportunities for the development
of such activities has proved that they can be prosperous, considering the extent of unused
natural resources found in a particular area, local capacities and the time available in those
periods when no agricultural activities can take place.
Fifthly, the radical improvement of rural status, sufficient to enable its intensive development, can be achieved globally by a myriad immediate and indirect measures. Indirect
measures imply both legal changes and current instruments that seek to raise the efficiency
of the political system through stronger political competition and enhanced opportunities
for pressure by an opposition capable of using rural backwardness as an argument against
the ruling parties. In that way, pressure can be exerted towards the promotion of an effective rural development strategy. Immediate measures are a set of solutions that would exert
influence on the acceleration of agricultural development on the one hand, and which
would change some segments of the political system on the other. This would enable the
better representation of rural interests in overall decision-making mechanisms, as a result
of which the investment-based financial structure at the level of the Republic would be redirected to provide much greater funds than at present for rural infrastructure.
Sixthly, action should be taken to promote activities geared towards extending cooperation in terms of co-operatives and other similar associations. The goals and objectives of such associations should be:
to help members benefit from higher incomes or lower production expenditures
than when they work individually, but allowing them to preserve their economic
identities
to influence the agricultural policy of the government
to establish specific agricultural institutes in order to keep track of the most contemporary technical accomplishments in the sector
to form common agricultural associations among all specific sectoral associations that
would establish a marketing centre able to finance the training of experts to examine
foreign markets in order to assist with the export there of Macedonian agricultural
products.
Summary
Despite the positive achievements in agricultural and rural development in the former period in the Republic of Macedonia, the processes of rural emigration and the desertion of
the land have carried on in a basic, or uncontrolled, way. This has resulted in a fall in the
biological birth rate of the rural and agricultural population, and its increasing ageing.
Thus, many villages have been demographically emptied, in contrast to the towns and
106
cities which have absorbed the population abandoning them; the suburbs of the latter have
been swollen dramatically by such newcomers. However, the speed of the processes of
rural emigration and desertion of the land has been much higher than those of both industrial development and urbanisation. In addition, the modernisation of the private agricultural sector has caused many difficulties. The biological-genetic capacity of the rural population in some hilly and mountainous areas has been dramatically reduced, threatening
to depopulate many villages and, even, whole areas.
Given the dynamic and uncontrolled nature of these processes (the percentage of the
population engaged in agriculture in the Republic of Macedonia was 71.5% in 1948, declining dramatically to 11.8% in 1994), there has been an expectation that the number of
private agricultural producers would be reduced, with each one possessing larger estates
and greater allotments but, unfortunately, this has not happened. The number of lots per
household is 7.7, while the average size of an allotment is 0.14 hectares. Thus, rural
households have released surplus numbers of people but the latter have not subsequently abandoned their rights of land possession. This can be illustrated in that the
number of households possessing agricultural land increased from 156 676 in 1960 to
178 087 in 1994, with an average land surface of two hectares.
This means that the Republic of Macedonia can be characterised by an unusual
phenomenon, i.e. the persistence over time of the non-agricultural population in inheriting and retaining land. According to the 1981 Census, 38.5% of households possessing agricultural land existed without an active agriculture worker (i.e. a labourer
whose main economic activity was agricultural production). The reasons why the
non-agricultural population have preserved their land possessions have usually been
either their insecure position in economic activities where they have been employed,
or else their low incomes.
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Biljana Aevska
Entrepreneurship under difficult circumstances:

factors hindering SME growth in the Republic of
Macedonia
Introduction
In past socialist times, legislation allowed the setting up and running of privately-owned
businesses, but the establishment of new private enterprises became more intense at the
beginning of the 1990s, along with the independence of the Republic of Macedonia and
the start of the key reform processes. After the very beginning of the transition, the best
workers left public companies and started their own businesses, taking with them their
previous business partners. These entrepreneurs were real pioneers as few had any family
history of private business operation. This article seeks to provide some information about
the entry and role of private SMEs in the national economy, as well as to elaborate on the
factors hindering SME growth.1
The process of transition in the Republic of Macedonia has involved several interrelated components, placing in focus the macroeconomic stabilisation of the country
at the beginning of the 1990s. The stabilisation policy was successful in reducing inflation and steadying the exchange rate through a combination of strict fiscal and
monetary policy mechanisms, backed up by measures to control the wages of public
sector workers in order to restrain domestic demand within non-inflationary levels.
All these measures resulted in very high interest rates in the banking sector, reducing
the ability of local SMEs to use loans from commercial banks. On the other hand, the
banking system was severely burdened with bad loans approved to former socially-owned
enterprises and the negative effects arising from the freezing of foreign currency assets.
Furthermore, due to the breakdown of traditional economic exchange links with the neighbouring markets of the former Yugoslav states, Macedonian SMEs faced severe problems
with gaining access to external markets. The Kosovo crisis, the recent threat of war and
ethnic tensions in Macedonia have all led to a deterioration in the socio-economic environment and SMEs have been particularly severely exposed to the hostile impacts of this.
About one-third of existing enterprises were established in the early years of the reforms (1989-1993) while another one-third have been established since 1994, when the
economy began to recover following the lifting of sanctions against Yugoslavia and the
economic blockade imposed by Greece (in the early 1990s). Thus, the establishment of
SMEs in Macedonia has been spread out over a long period of time and has been less
concentrated in the immediate post-democratisation phase than has been the case in
some other transition economies. One of the possible reasons for this was the need for
1 This article is based on the findings of survey-based research into small and medium-sized
enterprises (SMEs) in the Republic of Macedonia, carried out under the ECPHARE ACE 97
Programme, grant No. P97-8089-R: Barriers to Small Business Development in Slovenia,
Bosnia and Herzegovina and the Republic of Macedonia.
S. 109 122
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Biljana Aevska
entrepreneurs to feel the effects of the economic stabilisation programme and to ensure
that enterprises had stable growth. Along with privatised companies, the number of
SMEs has increased so that, currently, they predominate, accounting for 98% of all
enterprises. They have thus come to play a key role in the national economy.
Economic indicators for 20002 show downward trends and a deterioration in the position of SMEs compared to the position during 1997-1999. In spite of the projected growth
in GDP being 6% (and 14% in exports), GDP growth reached just 2%. The expected
growth in exports was overly optimistic as a result of the war activities and the economic
recession that followed in 2001. In fact, industrial production decreased by 3.4% in the
first six months of 2001 compared to the same period in 2000. The internal debts of enterprises increased in 2000 to DM 1bn, 4.9% higher than in 1999. Consequently, 24 056
Macedonian enterprises, mostly involved in manufacturing, trade and agriculture, were insolvent by January 2001. It is expected that this problem will become more severe and that
the majority of enterprises are ineligible for credit support due to debts and insolvency.
The country has re-affirmed the increased importance being given to SMEs in
general, but this article suggests that the unstable political, economic, institutional and
social environment has been extremely unfavourable for sustained SME growth.
Survey-based findings
The research findings reported in this section of the article are based on the results of
a unique survey of 300 Macedonian SMEs carried out in late autumn 2000 (Acevska
et al., 2001). This represents a distinctive source of data for studying the conditions
and difficulties facing Macedonian SMEs.
What does a typical Macedonian SME look like? It is rarely specialised in only
one or two activities. Usually, it is registered for a whole spectrum of different fields
of activity, starting with production and ending in different kinds of services. Consequently, the proportion of activities carried out in industry sectors differs slightly from
the overall distribution of recorded activity. The average division of sectoral activities
at the company level is 38% in manufacturing, 22% in services and 35% in trade,
while the remainder lies in construction or transport. Thus, it is evident that even firms
which can be classified as manufacturing ones are quite heavily engaged in trade and
services. Wholesale and retail activities are carried out by 53% of the total number of
enterprises. Nevertheless, services is still one of the most neglected sectors, with a
share in the national economy of just 12%.
Activity
Only one-third of all registered companies in Macedonia are active, the remainder being
either only partially active or else completely inactive. Most SMEs produce a single
product or service, or a limited number of them, and they are typically registered for a
wide spectrum of different activities which gives the enterprises the space to survive in
a hostile business environment.
2
110
Statistical Yearbook of the Republic of Macedonia for 2000, kopje, 2001.
Biljana Aevska
Ownership
The clearest indicator of the transition towards a market economy is ownership structure. Besides all the other features inherited from the previous socialist system, multiple
ownership patterns imply a real change in the economy. Nevertheless, most firms remain single proprietorships (62%) and only a minority have taken up limited liability
(22%). Most firms are independent companies and have few ownership or financial
links with other firms.
Entrepreneurs
Macedonian entrepreneurs are typically both managers and owners of the business. Most
entrepreneurs are middle-aged (46%). The tendency to have more younger people involved in the management of micro- and small enterprises is stronger than in the past, but
the growth of SMEs still depends mainly on the skills and knowledge of middle-aged
managers educated in the former socialist educational system.
Management
Managerial staff comprise just 1.6% of the total workforce. This might be the consequence of the previous so-called contractual economy, when managerial skills and tasks
were not required and in which the environment towards the development of this kind of
highly-skilled worker was unsympathetic. The under-developed market still does not provide an adequate framework within which the training of future managers can be stimulated and encouraged. Only one-third of SMEs have hired managers, although it is very
difficult for firms to find someone who is eligible for such a position within an enterprise
and it can take years for owners to train their management staff. However, when managers
are hired they usually have complete responsibility for managing the firm; less frequently,
they may share responsibility for this with the owner.
Business strategy
Increasing market share is the most important business strategy (65%), while providing
secure employment (54%) and achieving the greatest possible sales figures (55%) are also
important business objectives. Macedonian entrepreneurs can therefore be regarded more
as growth and sales maximisers than as classical short-run profit maximisers.
Finance
As a result of the under-development of the banking and institutional system, most firms
are self-financed. The current capital structure reflects this as the main form of enterprise
finance, accounting for nine-tenths of firm capital while loan capital accounts for only 4%.
Family and friends were the most important source of start-up finance.
ROI
The return on investment (as measured by IRR) in almost half the firms (i.e. 45%) is quite
high (on average, over 35%). The average period of seeing a return on invested funds is
four years. On average, 60% of the profits is re-invested in new assets for the firm.
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Job creation
Aggregate data indicate that the share of employment in the small firm sector has increased since 1990 but that, by 1995, it had still reached only 18% in the Republic of
Macedonia. Taking small and medium-sized firms together, the employment share of
the sector was 37.7% in Macedonia, compared to 48.4% in Slovenia, 50.6% in
Croatia and 41.4% in Yugoslavia (Bartlett and Aevska, 2001). These data can be
compared to the 66% share of employment in small and medium-sized enterprises in
the European Union.
As could be expected, most new job creation in Macedonia has happened as a result of the entry and expansion of new small firms. However, this has not taken place
at a rate sufficient to prevent overall employment totals from falling.
Labour and wages
The high level of labour taxation leads Macedonian firms to disguise their true employment figures. Furthermore, owing to labour relations legislation, there are virtually no part-time employees in SMEs, many of which seek to avoid the labour laws.
The wage levels of employees in SMEs are mostly around the average for equivalent
work in large firms but public opinion remains that employees in newly-established
enterprises are underestimated and underpaid.
Markets
Macedonian SMEs operate mainly in the domestic market, but also depend a great deal
on imports of raw materials from foreign markets. On average, firms sell over threequarters of their output on the domestic market while only one-fifth is exported. The
biggest obstacles that prevent SMEs from increasing sales on the domestic market are
price dumping, unfair or too fierce competition and the weak prices of goods and services. Almost two-thirds (65%) of respondents report a high degree of competition on
the domestic market and over three-quarters (76%) report a similarly high degree of
competition on foreign markets. At the same time, SMEs import over one-third of their
inputs from overseas markets. This is worrying since a permanent payments deficit is
one of the long-term problems of the Macedonian economy. On the other hand, these
data disguise that a relatively small proportion of firms export a high percentage of their
output (one-tenth export over 60%).
Innovation
Macedonian entrepreneurs appear to be surprisingly innovative. Almost one-half of
the firms (45%) had introduced some type of innovation in the past two years. Of
those who had done so, the most frequent type of innovations were related to their
main product (55%), the process of production (53%), the firm's services (52%) or
marketing activities (48%).
Unfair competition and corruption
SMEs are exposed not only to fierce but also unfair competition, the latter being linked
to the grey economy and tax evasion. The other main causes are political influence and
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voluntarism. Due to the existing barriers to growth, businesses operating in the informal sector (the grey economy) are said to account for up to 50% of economic activity
(Economist Intelligence Unit, various dates). In addition, the majority of firms report
that the extensive levels of corruption hinder growth because as much as 90% of all
firms regularly face some form of corruption. Respondents' answers about their level of
trust in political parties, state administration and business partners coincide with their
previous evaluations of the level of corruption. Generally speaking, entrepreneurs trust
neither the political parties nor governmental structures. Fortunately, entrepreneurs have
enough trust in their partners and clients to be able to run their businesses (75%). The
opinion of entrepreneurs about banks is pretty much divided, but there is an evident tendency for micro-enterprises to show the highest levels of distrust in banking institutions.
Grey economy
The informal economy has penetrated deeply into the national economy and it continues
to escalate under the pressure of the evident discrepancy between, on the one hand, the
dynamic process of the liberalisation of foreign trade and, on the other, the slow process of
internal structural, institutional and market reforms. Anecdotal evidence suggests that
entrepreneurs operating in the formal economy generally consider that an energetic repression of the informal economy is urgently needed to resolve this harmful phenomenon in a
positive way. However, the economic crisis, as well as a weakly-enforced legal system,
have contributed directly to these problems.
Efforts to make the transition towards an open market economy and the liberalisation
of foreign trade have never been a controversial matter, but these have contributed to the
development of this harmful phenomenon through the generation of illegal channels for
cash payment operations, mostly as a result of the unregistered flow of foreign currencies
and illegal customs operations. It has also been caused by the negative influence exercised
by the ruling central authorities which support illegal operations on discriminatory principles either for friends from their political party or their relatives, thus stimulating the
breakdown of law as well as nepotism and corruption.
All these observations imply that market instruments have not yet been properly
developed, causing functional weaknesses within the institutional system and an evident absence of control mechanisms over the state and its institutions.
Low liquidity and insolvency
In consequence of the present obstacles, many firms suffer from low liquidity and extensive insolvency. Low demand, due to the low purchasing power which has resulted
from the ongoing economic crisis in the local market, has also figured as an important
obstacle. The usual way of resolving the payment problems that arise from these situations is by transforming cash obligations into some kind of barter system based on
other goods or services, or whatever can be charged from debtors. In the worst case,
firms look for help to the courts but, due to their inefficiency, it usually takes years
before payments are finally received.
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Legal constraints
A stable legal environment appears to be crucial for SMEs in Macedonia. The frequent
amendments to the laws and changes in regulations by state institutions are the most important legal barriers. The inadequate or biased implementation of laws and regulations,
due to the high level of nepotism, corruption and political influence, have extensively
burdened SME development.
Linkages with other firms
The under-developed economy is, among other things, reflected in the state of the networks that exist between businesses. Our survey indicates that these kinds of connections
between enterprises usually happen on an accidental basis. When they do link up with
each other, it usually concerns either the exchange of information (65%) or for joint purchasing (49%) in order to provide better sales conditions (i.e. lower prices, faster delivery
or bigger quantity). Inter-firm linkages are less extensive for other purposes. Financial and
ownership links are particularly weakly developed. Only a few of the respondents are
linked to other firms in any way, while most of them do not communicate at all with other
firms. They consider closer ties between several partners to be crucial, although there are
relatively few which are even loosely connected with a range of partners. In general, the
social networks of entrepreneurs mainly consist of their relatives, friends, acquaintances or
employees. In a critical situation, the most helpful contacts are employees and friends.
Government assistance
Almost all the enterprises not only started without any form of formal assistance but have
also continued without any (92% of all firms). In almost all cases, those who have received some kind of state assistance (just 7%) consider it to have been useful. The main
schemes of assistance have been government programmes, such as the Agency for Investment and Development, or foreign government programmes, such as EC Phare, USAID,
World Bank, EBRD, IFAD, etc. The situation of a low utilisation of government assistance is reflected in most of the programmes being supported by various foreign donors;
the data indicate that larger companies are more easily supported than smaller ones. Consequently, and because the majority of government assistance schemes are carried out via
the commercial banks, activities need to be seriously undertaken at the institutional level
in order to resolve the imbalance of formal financial support available to the SME sector.
Most salient barriers to SME growth
During a decade full of political tensions alongside the transition into a market-oriented
economy, Macedonian entrepreneurs have struggled with growth constraints. The factors hindering SME growth are easily identified in terms of the institutional, regulatory,
social and market barriers, as well as the array of financial constraints, which are presented in this sub-section.
Institutional (regulatory) barriers
The most serious institutional barriers for Macedonian SMEs are the high taxes and employers wage-based contributions (with an average score of 4.17 out of 5); high income
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taxes (3.99); high profit taxes (3.94); high social security taxes (3.84); the requirement
for too many licences (3.20); public procurement regulations (3.14); and a general concern about the obstructive effects of too much bureaucracy (3.14) (Table 1). The research study showed that the most prominent problems related to start-up enterprises
were the difficulties in acquiring the necessary documents from state institutions and
their bureaucratic procedures. The main obstacles to growth were associated more with
the general economic climate and included high taxes, high interest rates and a lack of
demand for the product.
Table 1 Institutional (regulatory) barriers to SME growth
Score
High taxes and wage-based contributions
4.17
High income taxes
3.99
High profit taxes
3.94
High social security taxes
3.86
Too many licences required
3.20
Public procurement regulations
3.14
Too much bureaucracy
3.14
Note: The Tables which follow show the most important barriers which
recorded a score of more than 3 on a scale of 1-5, with 3 indicating medium importance, 4 important barrier and 5 very important barrier.
Financial barriers
The most persistently worrying class of barriers to business growth is the set of factors
which are linked to finance. Without exception, financial barriers were perceived as posing substantial constraints on the growth of SMEs. The most important financial barriers
are the high cost of credit and loans (4.07); the lack of access to equity capital (3.91);
banks not being interested in small firms (3.90); the lack of access to venture capital
(3.89); the delays in obtaining loans (3.88); the refusal of bank finance (3.87); high collateral requirements (3.82); banks bureaucratic procedures (3.81); the cost of preparing a
business plan (3.77); and too high bank charges and fees (3.77). As indicated by our research, the lack of finance and the high costs of investment capital (Table 2) are particularly acute problems in spite of the efforts which have been made to alleviate them. To
maximise the benefits of financial structures, the provision of finance should be accompanied by parallel efforts to improve the investment climate and to develop SME support
services.
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Table 2 Financial barriers to SME growth

Score
High cost of credit and loans
4.07
Lack of access to equity capital
3.91
Banks not interested in small firms
3.90
Lack of access to venture capital
3.89
Delays in obtaining loans
3.88
Refusal of bank finance
3.87
High collateral requirements
3.82
Banks bureaucratic procedures
3.81
Cost of preparing the business plan
3.77
Too high bank charges and fees
3.73
Market barriers
The most serious market barriers are the late payment of bills (3.88); too high labour
costs (3.35); threats from competitors (3.14); and the lack of demand for the product
(3.13) (Table 3). Settlements took more than 60 days in 44% of cases, between 31 and
60 days in 24% and up to one month in 20%. Only 8% of firms managed to receive
payments for their goods or services within 8-15 days. The economic crisis and a
weakly-enforced legal system, have been direct causes of problems in charging for
goods and services sold to other firms in 66% of cases. As indicated above, the usual
means of resolving these payment problems is by resorting to barter trade, given the
inefficiencies involved in taking court action.
Table 3 Market barriers to SME growth
Score
Late payment of bills by customers
3.88
Too high labour costs
3.35
Threats from competitors
3.14
Lack of demand for the product
3.13
Too high rents for premises
3.00
Difficulties in exporting product
2.78
Difficulty in access to raw materials
2.69
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Export barriers
The research study demonstrated that the development of exports is limited by quality,
price and the under-developed transport infrastructure, as well as access to information involving foreign markets and a weak local currency value. The most important of these
turned out to be access to information about foreign markets; this was considered to be a
factor which placed severe limitations on export development by 24% of firms. The other
main factors limiting export development were the quality and price of transport (22%),
access to foreign distributors (22%) and information about foreign partners (19%). An additional obstacle pointed out by entrepreneurs was the strict visa regime for travelling
abroad, very often preventing them from taking initiatives for export development.
Social barriers (development coalitions)
The Macedonian business environment has not been friendly toward SMEs, a finding confirmed once more in the section on social barriers. The most important social barriers are
the lack of support from the state (3.73); the lack of trust in society (the economy) (3.46);
the lack of support from the Chamber of Commerce (3.11); inadequate information on
finance (3.10); and inadequate information on the market (3.05) (Table 4).
Table 4 Social barriers to SME growth
Score
Lack of support from the state
3.73
Lack of trust in society
3.46
Lack of support from Chamber of Commerce
3.11
Inadequate information on finance
3.10
Inadequate information on the market
3.05
Lack of support from local government
2.95
Inadequate business support services
2.88
Lack of support from business association
2.87
Lack of links with foreign partners
2.86
Lack of consultancy services
2.54
Need to bribe officials
2.47
Lack of support from friends and family
2.04
Internal barriers
The only serious internal barrier is the low quality of equipment (3.20) (Table 5). Firms
did not seem to be troubled by a lack of capacity or a lack of space in which to produce;
low productivity and lack of demand for the product are probably greater problems
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which have prevented them from increasing production. There does not appear to be
any specific concerns about the skills of the labour force or the availability of training
opportunities. Neither the lack of management skills nor the lack of management time
were considered by survey respondents to be serious barriers to SME growth.
Table 5 Internal barriers to SME growth
Score
Low quality of equipment
3.20
Lack of capacity to produce more
2.80
Lack of space to produce
2.76
Low skills of the labour force
2.76
Lack of training opportunities
2.72
Lack of management skills
2.71
Poor labour relations
2.56
Lack of management time
2.42
Shortage of labour
2.42
Not enough family members to fill management positions
1.54
SME development institutional infrastructure

A national SME institutional framework for development, consisting of a National Enterprise Promotion Agency (governmental) and nine regional business support agencies
(non-governmental), was created in 1998 with donor funds in order to provide direct assistance to entrepreneurs. Unfortunately, despite the four years since the establishment
of these agencies, our research results demonstrate a very low utilisation of the support
infrastructure. They also show that significant positive effects of its operation as regards
the SME sector are still hardly noticeable.
The dominant opinion of local SMEs is that they lack adequate guidance and information on finance, markets and development opportunities, as well as other types
of business support. These observations indicate that the institutional framework for
SME development has not yet succeeded in fulfilling the role for which it was established. These institutions also suffer from bad practices in that they employ staff based
more on their membership of one or other of the ruling political parties than for their
competencies in enterprise development. There is a clear need to improve the level
and quality of assistance offered to SMEs.
Despite a number of initiatives in recent years to develop an SME support service
infrastructure, business owners still perceive the lack of information about finance and
markets as constraints on their growth. Lack of support from the Chamber of Commerce
also falls into this category of difficulties, largely due to its persistent focus on supporting large firms rather than the SME sector. This points to the need to develop effective
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Biljana Aevska
and independent business associations which would cater for the special needs of SMEs
for support, and which would also develop their ability to join together in networks and
collaborative partnerships.
Finally, it is of key importance that international donors and their SME programmes
in Macedonia provide much greater assistance for capacity building within the SME
support institutions through technical assistance and training. Donors should also be
persistent as regards the implementation of strict monitoring and control mechanisms
over SME institutions, thus ensuring the full transparency of their operations.
Table 6 Most important barriers to SME growth
Score
High taxes and wage-based contributions
High cost of credit and loans
High income taxes
High profit taxes
Lack of access to equity capital
Banks not interested in small firms
Lack of access to venture capital
Late payment of bills by customers
Delays in obtaining loans
Refusal of bank finance
High social security taxes
High collateral requirements
Banks bureaucratic procedures
Cost of preparing business plan
Too high bank charges and fees
Lack of support from the state
Lack of trust in society
Too high labour costs
Too many licences required
Low quality of equipment
Too much bureaucracy
Threats from competitors
Public procurement regulations
Lack of demand for the product
Lack of support from Chamber of Commerce
Inadequate information on finance
Inadequate information on the market
4.17
4.07
3.99
3.94
3.91
3.90
3.89
3.88
3.88
3.87
3.86
3.82
3.81
3.77
3.73
3.73
3.46
3.35
3.20
3.20
3.14
3.14
3.14
3.13
3.11
3.10
3.05
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Conclusions
The impact of the transition can be felt in all segments of Macedonian society. In the transition to a market economy, weak performance points to one of the major difficulties of
entrepreneurship and the growth of small and medium-sized enterprises. As suggested by
Matei (1999), it is necessary better to conceive and to develop the management of performance both in the interests of entrepreneurs and those of wider society.
Support for SME development has been defined as a government priority, but the most
practical support has come from international financial and donor organisations. More importantly, central authorities and SME development institutions have yet to begin closely
to watch the SME sector and to measure its performance in order to create and implement
adequate policies. The national statistical system, on the other hand, acts as registrar of
SMEs and their performance and, as such, is able to support the creation of suitable policy.
Neither of these can achieve their objectives if policies are not coherent.
The national economy should draw up a strategic guide to be incorporated in an
SME policy, one based on the development of an entrepreneurial culture. This
should be the rule against which local policy-makers and executives can develop and
deliver successful and effective business support services for entrepreneurial society.
Many circumstances have provided difficult conditions for SME growth in the past,
but the current political and economic crisis in the Republic of Macedonia indicates the
major importance also of distorted governance structures. Why should a country in transition care about the quality of governance? There are several reasons, an immediate one
being that poor governance can harm SME performance and, ultimately, the national
economy as a result of inefficient economic decision-making (Witherell, 2000). The
economic crises in the Republic of Macedonia have demonstrated this beyond question.
Lack of transparency and accountability have led, in turn, to distorted state structures reflected in the recorded high level of corruption, low growth and the dangerously high
levels of indebtedness of the economy. Moreover, poor state governance has undermined the confidence of Macedonian entrepreneurs in the institutional system and in the
market. These factors hold hostage the entire SME sector.
Therefore, the prerogative of the central authorities has to be the creation of an environment conducive to SME growth. The state can make a vital contribution to economic
development and to SME growth when its role matches its institutional capability.
Moreover, state capability encompasses not only the administrative and technical capacity of state officials, but also the deeper institutional mechanisms that give politicians
and civil servants the flexibility, rules and restraints to enable them to act in the collective interest (World Bank, 1997).
The country, however, lacks several basic factors that influence the success of SMEs:
a stable social and economic environment
the design and implementation of a coherent national SME policy
an efficient and effective SME institutional infrastructure that creates new opportunities for the development and expansion of businesses
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a consolidated tax system that enables low tax and interest rates to stimulate entrepreneurial activity
incentives assigned to local entrepreneurs by the state
stronger co-operation between entrepreneurs and local communities based on privatepublic partnerships.
Taking all these into consideration, it is easy to understand the manifest distrust of Macedonian entrepreneurs, as well as their non-cooperativeness and their preferences for doing
business mostly on their own in such an environment (without any formal support from
the government, without networking with other businesses, without having trust in the
business environment and without useful business associations).
All these indicate the low level of market development, which is clearly only in an initial phase (viz. the data on the existing level of competition, the legal systems capacity for
enforcement, the grey economy, bribery and corruption, and lack of trust in the relevant institutional structures) as, correspondingly, are the business results within both the SME
sector and the whole economy. Strengthening the support available for SME development
matters greatly to the long-term competitiveness of the national economy. Finally, the
long-term stability and economic prosperity of the country will largely depend on the creation of a strong SME sector able to deal with the challenges of the globalising economy.
References
Aevska, B., W. Bartlett and V. Stojanova (2002, forthcoming); Barriers to SME Development in the Republic of Macedonia, in: W. Bartlett, M. Bateman and M. Vehovec (eds.): Small Enterprise Development in South East Europe: Policy Issues
and Future Perspectives, Dordrecht: Kluwer.
Bartlett, W. and B. Aevska (2001): Statistics, Surveys and SME Strategies in South
East Europe, conference paper, for the international conference on Statistics as a
Base for the Creation of Economic Policy and Economic Development in South-East
Europe, October: kopje.
Economist Intelligence Unit (various dates): Quarterly Country Survey: Macedonia,
EIU: London.
Matei, A (1999): Optimum Innovation Strategies for Small and Medium-Sized Enterprises, Proceedings, 29th European Small Business Seminar: Lisbon.
Witherell, W. (2000): Corporate Governance: A Basic Foundation for the Global
Economy, OECD Observer, September.
World Bank (1997): The State in a Changing World, World Development Report.
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122
About the Authors

Biljana Aevska is owner and Principal Consultant at Market Com Ltd, a kopje-based
consulting firm, and is a training specialist in adult education, SME development, social
and economic research, marketing and international business networking
Violeta aeva, PhD, is head of the Centre on Criminology in the Institute of Sociological, Political and Juridical Research (ISPiSR) in kopje
Vesna Dimitrievska, MA is from the Faculty of Philosophy in kopje
Maria Donevska, PhD is a researcher in the Institute for Social Work and Social Policy
of the Faculty of Philosophy, kopje
Lidija Hristova, PH D is the head of the department of political science at the Institut
of sociological, political and juridical reasearch in kopje
Jorde Jakimovski, PhD Prof. works at the Institute for Sociological, Political and Juridical Research in kopje.
Mirjana Maleska is a Senior Research Fellow in the Institute of Sociological, Political
and Juridical Research, kopje.
Blagoja Nanevski, PhD works in the Institute of Economics in kopje.
Ali Pajaziti, MA in sociology, works as a part-time journalist for the weekly magazine
GLOBI in kopje.
Vesna Sopar, Prof. heads the Centre for Communications, Media and Culture and teaches
a postgraduate course on communications at the Institute for Sociological, Political and
Juridical Research in kopje.
Ljubica oneva PhD is a Senior Research Fellow at the Institute of Sociological, Political and Juridical Research in kopje.
S. 123 - 124
123
The Authors
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SOUTH EAST EUROPE REVIEW

FOR LABOUR AND SOCIAL AFFAIRS
Publisher: Hans-Bckler-Stiftung
Editor: Peter Scherrer
Associate Editor: Calvin Allen
Editorial Board: Dr. Jens Becker, Johann-Wolfgang-Goethe University,
Frankfurt/Main; Dr. Bla Galgczi, Institute for Social Studies, Budapest;
Reiner Hoffmann, Director of the European Trade Union Institute, Brussels; Dr.
Dobrin Kanev, New Bulgarian University, Sofia; Dr. Darko Marinkovi,
Megatrend, University of applied sciences, Belgrade; Dr. Igor Munteanu,
Viitorul Foundation, Chiinau; Dr. Kemal ke, Abant Izzet Baysal University,
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SPECIAL ISSUE OF THE SOUTH-EAST EUROPE REVIEW FOR LABOUR AND SOCIAL AFFAIRS
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SPECIAL ISSUE OF THE SOUTH-EAST EUROPE REVIEW FOR LABOUR AND SOCIAL AFFAIRS

SOUTH EAST EUROPE REVIEW

Annual subscription: 30, , US$ 33.50, 20,

QUARTERLY OF THE HANS-BCKLER-FOUNDATION

What is the Hans-Bckler-Foundation?

The political and security crisis in Macedonia

The macroeconomic policy of the Republic of

Criminal activity during the period of transition

Social policy and transitional changes in the

The media system in the Republic of Macedonia:

Young people and religion

Vesna Dimitrievska Qualitative analysis of poor households in the

Childrens social rights and their implementation in

Rural development in Macedonia

Entrepreneurship under difficult circumstances:

About the Authors

This publication is printed

South-East Europe Review

South-East Europe Review

The political and security crisis in Macedonia

South-East Europe Review

The political and security crisis in Macedonia

South-East Europe Review

The political and security crisis in Macedonia

South-East Europe Review

The macroeconomic policy of the Republic of

South-East Europe Review

The macroeconomic policy of the Republic of Macedonia achievements and problems

South-East Europe Review

South-East Europe Review

The macroeconomic policy of the Republic of Macedonia achievements and problems

As a consequence of the low competitiveness and the slow restructuring of the

South-East Europe Review

South-East Europe Review

The macroeconomic policy of the Republic of Macedonia achievements and problems

South-East Europe Review

The macroeconomic policy of the Republic of Macedonia achievements and problems

South-East Europe Review

South-East Europe Review

Inflation (end of period)

Exchange rate (average)

Exchange rate (end of period)

Current account balance

Foreign exchange reserves

Import coverage (reserves/imports)

South-East Europe Review

Criminal activity during the period of transition in

Chart 1 Registered criminal acts during the period 1981-1999

13429 17149 22816 20283 19269 19452 19277 20582

South-East Europe Review

10481 10584 11513

Chart 2 Registered and sentenced crimes against property

An analysis of the structure of criminal behaviour according to the level of criminal

1991 1992 1993 1994 1995 1996 1997

2205 4932 8461 6953 6243 5819 6653

South-East Europe Review

Chart 3 Registered criminal acts during 1991-1999

Table 4 Registered and sentenced crimes during 1981-1999

South-East Europe Review

Chart 4 Registered and sentenced crimes during 1981-1999

2.4 Unregistered criminal acts

V. aeva (1998): Bribes as Part of Everyday Life of Macedonian Citizens Security,

South-East Europe Review