THE REPUBLIC OF

MACEDONIAfacts & figures 2007

Macedonian Information CentreМакедонски информативен центар

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re THE REPUBLIC OF MACEDONIA - facts & fi gures, June 2007© by Macedonian Information Centre, 1993 - 2007. All rights reserved

For the publisher: Dragan Antonov, DirectorEditorial Board: Antonie Mitrev LLM, Director, Mircela Dzuvalekovska-Casule, Sonja Kiridzievska, Aleksandra IlievskaContributors: Lidija Velkovska, Sonja Efremova, Marica Jovanovska, Karolina Ristova-Asterud LLM, Very Rev. George Mitrev, etc.Translation: Aleksandra Ilievska, Aleksandra NoveskaPhoto: Rumen Kamilov, Dragan Todorovski, Nace Popov, MIADesign: Simco SandulovskiPrinted by: Datapons DOO, Skopje

Previous editions: Th e Republic of Macedonia: facts & fi gures, August 2004; July 2003; July 2002; June 1995; May 1993

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1. Macedonia ID CARD Macedonia the Country .................................................... 7 Administration & Legal System .......................................... 7 Leaders & Government ..................................................... 8 Economy ........................................................................ 12 Communications ............................................................ 16 Education and Science ................................................... 18 Cultural Events ............................................................... 20 Holidays ......................................................................... 23

2. Country and People The Country ................................................................... 24 Cultural Heritage ............................................................ 28 The Population ............................................................... 30

3. History Outline of Macedonian History

from Ancient Times to 1991 ......................................... 32 Road to Independence ................................................... 33 The Christianizing of Macedonia and the

Macedonian Orthodox Church .................................... 36

4. Macedonian Statehood International Public and the Ilinden Uprising .................. 40 Realization of Century Long Ideals

of the Macedonian People ........................................... 44

5. The State Order The Constitution ............................................................. 48 Framework Agreement ................................................... 49 Fundamental Organs of the State ................................... 53 Unitary Structure of the State and the

Local Self-Government ................................................. 56 The Political Parties and the Electoral System .................. 58 The Legal System ............................................................ 60

6. The Macedonian Economy Macroeconomic Developments ....................................... 62

Transition - Monetary Independence - Foreign Debt - Taxation in Macedonia - Unemployment - Relations to IMF and World Bank

Developments in the Economic Sector ............................ 68 Banking - Stock Exchange - Macedonian Industry -

Power and Energy - Transportation - Agriculture Perspectives and Projections ........................................... 80

Privatization - Foreign Direct Investments - Hospitable FDI Environment - Free economic zones - Concessions

7. The Republic of Macedonia Towards the EU and NATO

The Republic of Macedonia Towards the EU ................... 86 NATO candidate country ................................................ 89

8. Macedonia in the World On the Foreign Policy of the Republic of Macedonia ....... 90 Chronology of the Main Events in the Foreign Policy ...... 91 Diplomatic Missions of the Republic of Macedonia ........ 101

SOU

RC

ES: Agency for Foreign Investments

Alliance of Independent Trade UnionsAlliance of Trade Unions of MacedoniaArchive of the Assembly of the Republic of MacedoniaBroadcasting CouncilEmployment Service AgencyGovernment of the Republic of Macedonia

(Ministry of Culture, Ministry of Economy, Ministry of Education and Science, Ministry of Finance, Ministry of Foreign Aff airs, Secretariat for European Aff airs)

Macedonian Chamber of CommerceMacedonian Stock ExchangeMuseum of MacedoniaNational and University LibraryNational Bank of the Republic of MacedoniaState Statistical Offi ce

Contents

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In 2002 we wrote: "There is nothing like a crisis to prove one’s

strength and value. And the Republic of Macedonia has been through several crises since it proclaimed its independence in 1991. It managed to escape the whirlwind of destruction from the break up of the former Yugoslavia, it survived the crippling Greek embargo against Macedonia, it survived the UN embargo against rump Yugoslavia, it kept its wits about it during the Kosovo crisis and most recently prevented the spill-over of the confl ict from Kosovo.

Any other country would have buckled under such pressure. Th e Republic of Macedonia on the other hand, even under such stringent conditions, established a one digit infl ation rate, increased foreign currency reserves, stabilized the foreign exchange rate, privatized 90% of the economy, established a stock exchange and is introducing reforms in virtually all sectors of the economy and society.

We conclude that there can be no doubts as to the future of Macedonia and to the determination of its people to develop a market oriented democratic country..." and today:

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Th ree years ago we mourned President Boris Trajkovski who made the ultimate sacrifi ce in the service of his country the Republic of Macedonia. A humanitarian, Trajkovski dedicated his time in offi ce towards accomplishing our ideas for a better, prosperous and stronger Macedonia. His life and tragic death united the nation on these premises.

Yet, even this tragic event showed us the character and strength of Macedonian society. Th e institutions of the system continued to perform their duties without a fl utter and respecting tight constitutional deadlines the state organized its third democratic presidential elections. Th rough the election of the third President of the Republic of Macedonia we also witnessed the consolidation of views on the future of Macedonia. While there were diff erences on dynamics and avenues, the candidates shared common goals, visions and perspectives for a European Macedonia.

In line with these goals and visions, the Republic of Macedonia, backed by a consensus of political and public opinion, submitted the application of the Republic of Macedonia for European Union membership.

Two years ago, the European Council recognized the Republic of Macedonia as a candidate for EU membership.

Th is event in-itself is a signal of the level of maturity that Macedonian society attained since it proclaimed independence. Fifteen years ago the world might have wondered about the capacity of the Macedonian nation and democracy to face the challenges of statehood. Yet through these years of transition and consolidation we managed to defend our statehood and identity, we managed to critically reassess and reinvent ourselves, our values and beliefs, the design of our institutions and the very foundation of Macedonian society.

From all this we draw the conclusion that the period of historic refl ection, struggle, transition and consolidation are over for Macedonia.

Th is year, as a responsible member of the international community, the Republic of Macedonia is not only contributing to lasting stability in this part of Europe but is also sharing its hard earned lessons exporting stability to far-fl ung corners of the world and is actively involved in the war against terrorism side by side with its partners from NATO.

Furthermore, in anticipation of an invitation for NATO membership and the start of negotiations for EU membership, we are refi ning our institutions and mind-set in a manner that will materialize the dreams, hopes and visions of the people of Macedonia – integration into the European family of nations.

Dragan Antonov, Director Antonie Mitrev LLM, Director

Towards the publication

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NATIONAL INSIGNIA

Macedonia - ID Card

NATIONAL CURRENCY

Denar (MKD), 1 denar = 100 deniEquiva lent : Euro 1.00 = 61,17 MKD(December 31, 2006) US$ 1.00 = 46,45 MKD

CA$ 1.00 = 40,03 MKDAU$ 1.00 = 36,65 MKDCHF 100.00 = 3.806,96 MKDGBP 1.00 = 91,10 MKD

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ADMINISTRATION & LEGAL SYSTEM

Government type: Parliamentary democracyLegal system: Based on civil law system, judicial review of legislative actsLegislative branch: Unicameral Parliament - 120 deputiesExecutive branch: President, Government, Prime MinisterJudicial branch: Constitutional Court (9 judges), Supreme Court (25 judges), Courts of Appeal (4 - Skopje, Bitola, Stip, Gostivar), First Instance Courts (27), Republican Judicial Council (15 members), Public Prosecutor’s Offi ce, Ombudsman's Offi ceAdministrative division: Municipalities (84)

MACEDONIA - THE COUNTRY

Constitutional name: REPUBLIC OF MACEDONIAInternational abbreviation (ISO): MKIndependence: 8 September 1991Total area: 25,713 sq. kmPopulation: 2,022,5471

Currency: Denar (MKD)Capital: SkopjeOffi cial language: Macedonian2

Religions: Christians 65.2% (Orthodox Christians 64.8%), Muslims 33.3%, Others 1.5%Time: Central European Time zone (GMT+1)Internet ccTLD: .mk

1 2002 Census data. Based on the 2002 Census total population data, Macedonia’s total population in 2006 was estimated at 2,042,894.

2 …In the units of local self-government where at least 20 percent of the population speaks a particular language, that language and its alphabet shall be used as an offi cial language in addition to the Macedonian language and the Cyrillic alphabet.… (Constitution of the Republic of Macedonia).

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BRANKO CRVENKOVSKI, President of the Republic of Macedonia(inaugurated 12 May 2004)

"Macedonia - a state of equality,of mutual solidarity and loyalty, of common interests and goals. Macedonia united and unifi ed, Macedonia integrated at home, integrated in Europe. Th is is the Macedonia we desire, this is the Macedonia that we will together work for."

Branko Crvenkovski 12 May 2004

President of the Republic

Biography: Born on 12 October 1962 in Sarajevo. Married to Jasmina, father of two, son Ljupco and daughter Marija.

Education: Graduated at the Faculty of Electrical Engi-neering in Skopje, School of Information Technology and Automatics.

Career: Elected President of the Republic of Macedonia at the early presidential election on 28 April 2004. President of the Social Democratic Union of Macedonia (SDSM) since April 1991 until inauguration. Elected Member of Parliament at the elections in 2002.

In May 2001, during the crisis in the Republic of Macedonia, SDSM joined the government of political unity, and he was one of the signatories of the Ohrid Framework Agreement, signed on 13 August 2001 in Skopje.

Prime Minister of the Republic of Macedonia from Sep-tember 1992 to November 1998. In 1992, aged 29, he was the youngest head of government in Europe. In 1994 he was re-elected President of the Government of the Republic of Macedonia.

In November 1990, at the fi rst multiparty elections held in the Republic of Macedonia, he was elected to the Parliament of the Republic of Macedonia for the fi rst time.

Photo: UN, New York, September 29th, 2006.

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President of the Assembly

Biography: Born on 30 May 1937 in Bitola, Republic of Macedonia.

Education: He graduated from the Department of Th eatre and Radio Direction at the Academy of Th eatre, Film, Radio and Television in Belgrade in 1974.

Career: Ljubisa Georgievski is a theatre and fi lm director, playwright and essayist, theatre theoretician and professor of theatre direction and playacting at the Faculty of Dramatic Arts in Skopje.

He was a visiting professor of theatre ontology and phe-nomenology at the University of Southern California in Los Angeles and the University of Texas at Dallas, the USA.

Ljubisa Georgievski is a socially engaged individual, journalist and polyglot. He has published over ten books. As a fi lm director, he has directed four fi lms. As a journalist, he has authored over 200 columns in the daily Dnevnik.

As a director, he has worked in Los Angeles and Dallas, in Poland, Romania, Italy, Croatia, Serbia and Bulgaria; his scripts and plays have been staged in Moscow, Vienna, Paris, Warsaw, Budapest, Bucharest, Lodz, Sofi a, Belgrade, Zagreb and Trieste.

At the 1994 Presidential election, he was a VMRO-DPMNE presidential candidate.

In the period 2000-2004 he was Ambassador Extraordinary and Plenipotentiary of the Republic of Macedonia to the Republic of Bulgaria. Ljubisa Georgievski speaks English, French, Italian, Russian and Bulgarian, and uses Slovenian, Polish and Romanian languages.

LJUBISA GEORGIEVSKI President of the Assembly

(elected on 1 August 2006 )

“Allow me today, when we are marking the 15th anniversary of the adoption of the fi rst

Constitution of the independent and sover-eign Republic of Macedonia to call on all of

you that we jointly continue our eff orts for Macedonia as a full EU and NATO member.

I do hope that in 5 years, when we mark the 20th anniversary of the fi rst Constitution, here,

under this roof, we will speak of some new aspirations and dreams, which will above all

benefi t the future of the Republic of Macedonia and its citizens.”

Ljubisa GeorgievskiNovember 17 2006

Photo:With Honorary President of the

International Paneuropean Union Otto von Habsburg,

Skopje, 19th May, 2007.

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reHead of Government

Biography: Born on 31 August 1970 in Skopje.

Education: In 1994, Nikola Gruevski graduated from the Faculty of Economics in Prilep at the University of St. Kli-ment Ohridski, Bitola, and in 2006 defended his MA thesis entitled “Foreign Direct Investments, Economic Development and Employment”. He was awarded a certifi cate from the London Securities Institute.

He is fl uent in English and has knowledge of French and German.

Career: He has been President of VMRO-DPMNE since May 2003. He was a member of the Macedonian Parliament from September 2002 until August 2006. In the period from December 1999 until September 2002, Nikola Gruevski served as Minister of Finance in the Government of the Republic of Macedonia after fi lling the posts of Minister without Portfolio and Minister of Trade from 1998 until 1999. He was also Governor of the Republic of Macedonia in the World Bank and the European Bank for Reconstruction and Development (EBRD), President of the State Securities and Exchange Commission (2000-2002) and President and founder of the Broker’s Association of the Republic of Macedonia (1998).

From 1994 until 1998 he worked for Balkanska banka AD Skopje, and in 1998 he was appointed Director of the Li-quidity Department of the bank upon serving as the bank’s broker at the Macedonian Stock Exchange.

In 2003, he was engaged as an advisor to the Minister of Finance of Serbia within a USAID project.

During his professional career, he participated in various conferences, forums, initiatives, seminars etc. both in Europe and worldwide, organized by the International Monetary Fund, the World Bank, the World Trade Organization and other relevant international institutions.

NIKOLA GRUEVSKIHead of Government (Prime Minister)(August 2006 - )

“I would like to emphasize that there should not be any dilemmas as to whether the continuation and intensifi cation of all activities aimed at fulfi llment of the Copenhagen and Madrid criteria for accession to the European Union is an issue of topmost priority ...We are aware that on this road we shall face many challenges, we will have to make hard decisions and we will have to enforce such decisions in practice...Th e citizens deserve to see the European standards that we discuss as part of their everyday lives...Th e integration of the Republic of Macedonia into the EU and NATO, an issue that we shall tackle with utmost seriousness, shall mark the fi nal victory of peace, coexistence and interethnic tolerance to which we as a state and Government heartily aspire.”

Nikola Gruevski, 26 August 2006(Address in the Assembly of the Republic of Macedonia)

Photo:With German Chancellor Angela Merkel Berlin, 16 October 2006.

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GOVERNMENT of the Republic of Macedonia

Prime Minister: Nikola GruevskiDeputy Prime Ministers: Gabriela Konevska Trajkovska Zoran Stavreski Imer Aliu Zivko JankulovskiMinister of Foreign Aff airs: Antonio MilososkiMinister of Defense: Lazar ElenovskiMinister of Interior: Gordana JankulovskaMinister of Justice: Mihajlo ManevskiMinister of Finance: Trajko SlavevskiMinister of Economy: Vera RafajlovskaMinister of Agriculture,Forestry and Water Supply: Aco SpasenovskiMinister of Health: Imer SelmaniMinister of Education and Science: Sulejman RushitiMinister of Labor and Social Policy: Ljupco Meskov Minister of Local Self-Government: Abdurahman MemetiMinister of Culture: Arifhikmet XhemailiMinister of Transport and Communication: Mile JanakieskiMinister of Environment and Physical Planning: Dzelil BajramiMinisters without Portfolio: Vele Samak Adnan Cahil Gligor Tashkovich Ivo Ivanovski

Government

Note: Th is government is a coalition of the election coalition “For a Better Macedonia”

(VMRO-DPMNE – 11 members of the Cabinet, including the PM, LPM – 1 member, SPM – 1 member and Party for the Movement

of Turks in Macedonia – 1 member), DPA–5 members of the Cabinet,

NSDP – 3 members of the Cabinet and PPD – 1 member of the Cabinet.

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Contribution to GDP:

Economy

Figure: Gross domestic

product(real growth rates

in %)

Source: State Statistical Offi ce

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 20051

GDP in per capita US$ 1209 1420 1480 1573 1656 1771 1821 1917 2032 2114 2219

GDP in million US$ 2377 2815 2955 3157 3340 3588 3706 3872 4119 4298 4519

GDP real growth rates -1.1 1.2 1.4 3.4 4.3 4.5 -4.5 0.9 2.8 4.1 3.8

GDP defl ator 117.1 102.9 103.4 101.4 102.7 108.2 103.6 103.4 100.3 101.3 103.3

GDP:

D i s t r i bu t i o n ( ) 2000 2001 2002 2003 2004 20051

Agriculture, hunting and forestry 10.0 9.8 10.0 11.4 11.3 10.9

Fishing 0.0 0.0 0.0 0.0 0.0 0.0

Mining and quarrying 0.8 0.6 0.4 0.4 0.4 0.5

Manufacturing 17.3 16.9 15.5 15.8 15.0 15.6

Electricity, gas and water supply 4.4 4.3 3.7 4.7 4.2 3.6

Construction 5.7 5.0 4.9 5.4 5.6 5.1

Wholesale and retail trade; repair of motor vehicles and household goods 10.7 11.2 11.2 11.2 13.6 13.4

Hotels and restaurants 1.5 1.5 1.7 1.9 1.6 1.5

Transport, storage and communication 9.0 9.3 8.4 8.4 7.8 8.2

Financial services 3.1 3.2 3.0 2.4 2.8 2.9

Real estate, renting and business activities 3.2 3.6 3.3 3.4 3.3 2.8

Public administration and defense; compulsory social security 6.1 6.2 6.6 6.8 6.7 7.3

Education 3.5 3.4 3.6 3.8 3.7 3.6

Health and social work 3.8 3.7 3.8 3.9 3.6 3.4

Other community, social and personal service activities 2.2 2.4 2.3 2.2 2.3 2.2

Extra-territorial organizations and bodies 0 0 0 0 0 0

Imputed rents 4.4 4.5 4.4 5.5 5.9 5.5

Minus: Imputed banking services 2.2 2.0 1.7 1.5 1.8 2.1

Value added 83.5 83.5 81.4 85.5 86.0 84.5

Net taxes on production 16.5 16.5 18.6 14.5 14.0 15.5

1) Preliminary data

-5

-4

-3

-2

-1

0

1

2

3

4

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Source: State Statistical Offi ce1) Preliminary data

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Infl ows and outfl ows in the gross foreign exchange reserves of the NBRM (in millions of Euros, end of period)Source: National Bank of the Republic of Macedonia

2005 Q.1 Q.2 Q.3 Q.4 2006Amount of the foreign reserves of the Republic of Macedonia 1,122.9 1,157.8 1,241.3 1,370.1 1,416.7Net increase in foreign exchange reserves 34.8 83.6 128.7 46.6 293.7Realized change in foreign exchange reserves, on net basis - Transactions with commercial banks 10.6 94.0 76.3 60.2 241.1

- Purchase and sale 5.6 85.8 69.5 43.0 203.8 - Securities 5.0 8.3 6.8 17.2 37.4

- Interest received of foreign currency deposits 5.4 5.9 8.8 9.4 29.5 - Government deposits 9.7 -8.8 40.4 -22.3 19.2 - Reserve requirement on foreign courency deposits 3.0 2.6 5.6 6.0 17.2 - Trancactions with IMF, net -0.5 -4.0 -0.6 -4.6 -9.7 - Cross-currency reletions 6.5 -6.2 -2.7 -4.8 -7.3 - Other 0.1 0.1 1.0 2.7 4.0

Debt stock by year (by creditors on basis of long-term loans, in million US$)Source: National Bank of the Republic of Macedonia

1999 2000 2001 2002 2003 2004 2005 2006Offi cial creditors 730.72 771.78 746.22 840.58 971.77 1,076.12 1,024.80 1,094.88

Multilateral creditors 420.45 456.37 474.18 581.90 730.96 855.03 842.80 916.47IBRD 87.55 93.90 94.93 109.39 133.52 168.66 201.07 213.84IDA 222.47 249.93 255.26 295.81 357.90 388.06 362.32 384.37IFAD 1.68 3.07 4.05 5.20 6.76 10.75 12.94 16.46CEDB 4.64 6.97 5.66 14.50 17.39 23.01 19.80 23.64EBRD 12.33 10.31 7.88 6.65 8.50 19.05 20.67 26.71EIB 38.17 41.87 53.76 80.42 94.43 123.07 119.82 132.91EU 40.18 37.22 44.07 64.62 112.46 122.44 106.17 118.53EUROFIMA 13.41 13.09 8.57 5.32 0.00 0.00 0.00 0.00

Bilateral creditors 310.27 315.42 272.04 258.68 240.81 221.09 182.00 178.41Private creditors 245.27 252.70 262.09 254.12 243.54 232.96 400.22 198.30

London club 245.27 252.70 261.62 253.77 243.30 232.84 222.38 0.00Euro bonds 0.00 0.00 0.00 0.00 0.00 0.00 176.95 197.55Other private creditors 0.00 0.00 0.47 0.35 0.24 0.12 0.89 0.75

Public funds 53.44 49.19 42.12 40.23 41.21 42.07 44.12 56.99Monetary Authorities 101.71 81.57 70.79 67.39 68.35 62.54 62.13 55.83

IMF 101.71 81.57 70.79 67.39 68.35 62.54 62.13 55.83Public enterprises 163.35 175.48 109.62 118.76 148.28 189.70 168.87 201.26Private sector 152.14 164.37 198.15 255.94 325.47 404.13 481.19 740.27

Private Banks 69.33 60.74 51.90 91.59 77.16 62.01 117.82 180.15Non-bank private sector 82.81 103.62 146.25 164.35 248.31 342.11 363.37 560.11

TOTAL 1,446.63 1,495.09 1,428.99 1,577.01 1,798.62 2,007.51 2,181.34 2,347.52

Debt service payments by year (by creditors on basis of long -term loans, in million US$)Source: National Bank of the Republic of Macedonia

2003 (in mill.US$) 2004 (in mill. US$) 2005 (im mill. EUR) 2006 (im mill. EUR)Principal Interest Total Principal Interest Total Principal Interest Total Principal Interest Total

1. Offi cial creditors 101.0 34.0 135.0 101.6 28.9 130.6 73.3 24.9 98.1 92.31.1 Multilateral 58.0 21.0 79.0 55.0 20.5 75.6 40.3 18.6 58.9 60.71.2 Bilateral 43.0 13.0 56.0 46.6 8.4 55.0 33.3 6.3 39.3 31.6

2. Private creditors 85.0 16.0 102.0 97.2 17.9 115.1 71.2 19.3 90.4 321.42.1 London club 10.0 6.0 17.0 10.5 4.8 15.3 8.4 5.9 14.32.2 Others 75.0 10.0 85.0 86.7 13.1 99.8 62.8 13.3 76.1

TOTAL 186.0 50.0 237.0 198.8 46.8 245.7 144.5 44.2 188.5 413.7

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1) Preliminary data

Export and Import (in '000 US$)

Foreign trade structure (in '000 US$)

Exports 2004 Exports 20051 Imports 2004 Imports 20051

TOTAL 1,675,877 2,041,265 2,931,626 3,227,998 Europe 1,523,849 1,814,424 2,508,138 2,701,417

Albania 23,589 27,522 6,346 9,068 Austria 8,514 9,001 68,858 69,184 Belgium 15,158 34,620 22,098 27,276 Bulgaria 51,543 76,097 209,746 234,331 Slovakia 3,594 1,482 8,449 11,747 Czech Republic 5,363 6,050 17,474 23,345 Denmark 2,311 2,781 14,834 14,293 Ukraine 2,157 2,043 74,101 72,032 France 77,323 19,914 67,548 60,978 Greece 228,757 312,931 282,637 296,830 Germany 317,220 364,015 368,187 334,884 Netherlands 47,311 44,579 57,127 53,226 Italy 134,552 169,606 168,808 193,668 Cyprus 4,801 5,542 4,693 3,468 Liechtenstein 314 284 364 596 Bosnia and Herzegovina 33,226 50,456 16,306 23,577 Slovenia 27,189 31,807 140,338 127,986 Croatia 80,158 81,054 65,782 75,230 Hungary 2,189 2,701 30,988 36,250 Belarus 165 496 218 242 Poland 2,620 4,042 78,305 94,642 Romania 1,827 4,190 113,061 64,908 Russia 19,671 21,419 271,010 424,494 Spain 23,034 14,008 30,975 32,305 Switzerland 6,446 7,518 45,697 63,676 Sweden 5,749 8,335 25,105 20,058 United Kingdom 42,460 42,929 54,748 44,030 Th e then Serbia and Monte Negro 347,602 459,544 243,715 264,206 Other European countries 9,006 9,459 20,620 24,889

Asia 70,821 86,879 288,531 384,984Africa 4,310 4,036 10,941 8,737North and Central America 73,634 131,405 59,234 70,119South America 489 2,540 61,676 55,092Oceania 2,541 1,734 3,077 7,505Other countries 233 247 29 65

Exports 2004 Exports 2005 Imports 2004 Imports 2005TOTAL 1,675,877 2,041,265 2,931,626 3,227,998 Production materials 816,228 1,110,198 1,904,653 2095173 Capital goods 30,577 39,832 312,845 348425 Consumption goods 827,739 890,422 711,836 782301 Undivided 1,333 814 2,293 2099

Source: State Statistical Offi ce

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Fiscal Year: 1 January – 31 December

Labor force (2006): 891,679 total, 570,404 employed, 321,274 unemployed

(Source: State Statistical Offi ce)

Major export products:iron and steel products, textile products, wine, fruit, vegetables, processed food

Principal export partners:Germany, Serbia, Greece, Italy, USA

Major import products:oil, vehicles, equipment

Principal import partners:Germany, Serbia, Ukraine, Greece, Russian Federation, Slovenia

Industries:electricity, crude oil processing, steel, metal refi ning, metal processing, buses, synthetic fi bers, cigarettes, textiles, shoes, machinery, furniture

Mining:coal (lignite), zinc ore, lead ore, silicon ore, nickel ore, chromium ore, marble

Agriculture:principal crops (wheat, corn, sugar beet), rice, sunfl ower, tobacco, grapes, early-market garden

vegetables (tomatoes, cucumbers, peppers, cabbage) Macedonia has propitious conditions for agriculture and is nearly self-suffi cient in food production. Over 60,000 tractors are in use. Th e private sector accounts for over 80% of agricultural production.

Forestry (31.12.2005):Forests cover an area of 955,228 hectares, of which 857,805 is state property.

- beech tree 232,644 hectares- oak tree 284,253 hectares- pine tree 61,795 hectares

Enterprises (31.12.2005): 67,026 total Structure by type of property:

- Private 63,973- Social 809- Mixed 769- Cooperative 1,436- State 39

Structure by origin of capital:- Domestic 64,164- Foreign 980- Mixed 1,882

* For your convenience, the MIC has presented in Euros the data for 2007 Budget at a rate of 1 Euro = 61.17 MKD (December 31, 2006 / NBRM).

BUDGET OF THE REPUBLIC OF MACEDONIA 2007*

in mill. Denars in mill. EurosTotal revenues 108,635 1,775.95

Taxes and contributions 92,825 1,517.49Taxes 61,722 1,009.02Contributions 31,103 508.47

Non-tax revenues 13,755 224.87Capital revenues 550 8.99Foreign donations 1,505 24.60Revenues from repayment of loans 0 0

Total expenditures 112,029 1,831.44Current expenditures 99,833 1,632.06

Wages and allowances 24,852 406.28Goods and services 14,737 240.92Transfers 57,279 936.39

Transfers to local self-government units 2,363 38.63Subsidies and transfers 3,814 62.35Social transfers 51,102 835.41

Interest 2,965 48.47Capital expenditures 12,196 199.38

Budget balance -3,394 -55.48

Financing 3,394 55.48Infl ow 14,942 244.27

Domestic 4,300 70.30Foreign 3,477 56.84

Reducing NBRM deposits 7,165 117.13Outfl ow 11,548 188.78

Repayment of principal 11,548 188.78Domestic 5,087 83.16Foreign 6,461 105.62

Increasing NBRM deposits 0 0Buying securities 0 0

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Oil pipelines:Th e Th essaloniki-Skopje oil pipeline, put into eff ect in July 2002, is 214 km long, 144 km of which run on Macedonian territory. Its capacity is 2.5 million tons of oil a year. Th ere are plans for extending the oil pipeline to the north. AMBO is an oil pipeline projected to run from the Bulgar-ian port of Burgas at the Black Sea to the Albanian city of Vlora on the Adriatic coast, crossing Macedonia.Th e corridor through the Republic of Macedonia stretches from Deve Bair on the east to the country’s western border with Albania via Kriva Palanka, Sveti Nikole, Veles, Bo-gomila, Krusevo, Sopotnica, Botun and Lakaica.Th e construction of the oil pipeline is expected to start by the end of 2008, while the fi rst quantities of crude oil are expected to fl ow through AMBO by the end of 2010 or the second quarter of 2011. AMBO will be 894.5 km long, approximately 273 km of which will run through Macedonia. It will have a diameter of 914 mm (36 inches) and four pump stations (two in Bulgaria and one each in Macedonia and Albania). Th e capacity of the oil pipeline will be 750,000 barrels per day, or an average of 30 to 40 million tons of crude oil a year. Th e whole investment is estimated at US$1.2 billion. On 31 January 2007, Macedonia, Bulgaria and Albania signed a trilateral convention on the construction of the Balkan pipeline AMBO.

Gas pipeline:Th e Macedonian gas pipeline was put into use in 1997, stretching from Deve Bair (Macedonia-Bulgaria border) to Skopje.Th e annual capacity has been projected at 800 million m3, while its current capacity utilization stands at 10%.Th e realisation of a project for construction of a thermo-electric gas power plant in Skopje is underway.

Terrestrial satellite station of the Macedonian telecom

Macedonia is at the crossroads of Southeastern Europe. Its developed road and railway infrastructure and the two international airports with regular direct connections to several major European transport centers make it an ideal transit and distribution center.Th e two large Pan-European corridors – Corridor 8 (east-west) and Corridor 10 (north-south) are currently being upgraded. Th is will additionally strengthen the capacity of the Macedonian transport network.

Source: Regional and National Road Fund

PIPELINES:

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Roads: 13,278 km total (2005) - by type of road: 7,285 km asphalt, concrete or cobbled 1,262 km macadam 4,731 km dirt/projected road

- by road category: 906 km national 3,806 km regional 216 km motorways 548 km int. "E" roads 8,566 km class IV- local roads

ROAD TRAFFIC:

Passengers carried (in '000) 20011 2002 2005 200613,724 13,854 9,442 8,862

Transport of goods (in '000 tons) 20011 2002 2005 20066,661 7,359 8,433 16,390

1) Data from 2001 is calculated by new methodology

Railroads: 925 km Number of railroad stations: 132

RAILROAD TRAFFIC:

Passengers carried (in '000) 20011 2002 2005 20061,344 930 903 962

Transport of goods (in '000 tons) 20011 2002 20052 20062

2,799 2,208 3,129 3,7971) Data from 2001 is calculated by new methodology 2) Transit is included

Two main airports: SKOPJE Alexander the Great Airport (http://skp.airports.com.mk) OHRID St. Paul the Apostle Airport (http://ohd.airports.com.mk)

AIR TRAFFIC:

Passengers carried (in '000) 2001 2002 2005 2006508 556 575 584

Transport of goods (in tons) 20011 2002 20052 20062

2,329 2,139 1,624 1,6701) Data from 2001 is calculated by new methodology 2) Transit is included

Network and customers in telecommunication traffi c2000 2001 2002 2004 2005

Telephone exchanges (telecom. network units) 385 446 418 420 357Fixed-line telephone lines 805,885 792,036 793,132 732,468 670,421Single lines 645,563 670,818 718,517 714,102 651,856Double lines 151,580 110,100 61,869 - -Telegraph lines 800 800 800 460 460Public pay phone lines 1,811 1,835 1,811 2,105 2,528Internet lines 10,074 22,040 36,639 69,798 92,361Cellular lines 170,000 170,000 450,000 1,305,000 1,477,142Fixed-line telephone customers 507,316 538,507 578,278 597,957 533,185Cellular telephone customers 99,944 137,927 366,348 997,756 1,261,328

TV and Radio:

Public sector: - MRTV – Public broadcasting service: 3 television, 4 radio, and 1 satellite television channels; - 29 local radio stations, 10 of them broadcasting television too.

Commercial sector: 5 television stations with national concessions, 50 local television stations;- 3 radio stations with national concessions, 65 local radio stations

TELECOMMUNICATION:

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Th e educational system in the Republic of Macedonia is conducted in four levels: pre-school education, elementary education, secondary education and university education.Th e pre-school level includes nurseries, kindergartens and prep schools. Elementary education comprises of two cycles – first to forth grade and fifth to eighth grade (in the 2007/2008 school year, nine-year primary education will begin for children aged 6, including three education periods: fi rst-third, fourth-sixth and seventh-ninth grade), while secondary education includes general high schools and art schools. Th ere are two types of university education: colleges (one to three years study program) and faculties. Standard faculty duration is four years and in certain faculties it is longer (four and a half or fi ve years in some technical facul-ties, six years in medical school).

SS. CYRIL AND METHODIUS UNIVERSITY IN SKOPJE

www.ukim.edu.mk

23 faculties:Medical sciences: Medicine, Dental Medicine, Pharmacy and

Physical Education.Technical sciences: Natural Sciences & Mathematics, Architec-

ture, Civil Engineering, Mechanical Engineering, Electrical Engineering & Information Technologies, Technology & Metallurgy and Mining & Geology.

Social sciences: Philosophy, Philology, Economics, Law, Pedagogy (in Skopje and Stip).

Biotechnical sciences: Agriculture & Food, Forestry and Veteri-nary Medicine.

Arts: Music, Dramatic Arts and Fine Arts.

10 institutes: National History, Macedonian Language, Folklore, Economics, Sociological, Political & Legal Research, Agriculture, South Crops, Earthquake Engineering & Engineering Seismol-ogy, Cattle-breeding and Macedonian Literature.

Th e Ss. Cyril and Methodius University in Skopje is the fi rst state university in the Republic of Macedonia founded in 1949. Over 115,000 students graduated, while 5,000 post-graduates received their Master’s and over 2,500 received their Ph.D. degrees from this University. Foreign students from over 80 countries have taken part in its educational process.Today, there are 37,000 students studying at the Ss. Cyril and Methodius University. Around 600 foreign students are included in the student programs of the University at all its faculties every year. At the moment, there are about 2,400 educational profes-sionals and associates engaged at the faculties and institutes, over 170 undergraduates and over 250 postgraduates.

ST. KLIMENT OHRIDSKI UNIVERSITY IN BITOLA

www.uklo.edu.mk

5 faculties: Technical Sciences in Bitola, Economics in Prilep, Tourism & Catering in Ohrid, Teaching and Biotechnol-ogy.

1 college: Medical.3 institutes: Tobacco in Prilep, Hydrobiology in Ohrid and

Ancient Slavic Culture in Prilep.

STATE UNIVERSITY OF TETOVO

www.unite.edu.mk

4 faculties: Natural Sciences, Human Sciences & Arts, Eco-nomics and Law.

1 college: Center for Polytechnic Studies.

SOUTH EAST EUROPEAN UNIVERSITY IN TETOVO

www.see-university.com

5 faculties: Business Administration, Public Administration, Communication Sciences & Technologies, Law and Teacher Training.

OTHER HIGHER EDUCATION INSTITUTIONS IN THE REPUBLIC OF MACEDONIA:

European University - Republic of MacedoniaUniversity of New York in SkopjeUniversity American College SkopjeFON UniversityFaculty of Business Economics - SkopjeFaculty of Tourism - Skopje

MASA - MACEDONIAN ACADEMY OF SCIENCES AND ARTS

www.manu.edu.mk

Th e Macedonian Academy of Sciences and Arts was established by the Macedonian Assembly on 22nd February 1967 as the highest scientifi c, scholarly and artistic institution in the country.

Academic Cvetan Grozdanov, presidentMembership: - 44 regular members - 1 honorary member - 42 external associatesDepartments: - Linguistic and literary sciences - Social sciences (economy, law, history) - Mathematical and technical sciences - Biological and medical sciences - Arts Research centres: - Energy, Informatics and Materials - Genetic Engineering and Biotechnology - Lexicographical - Areal Linguistics - Strategic Research

UNIVERSITY EDUCATION:

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Table: Schools, pupils, students and teachers, school year 2001/02 - 2005/06 Source: State Statistical Offi ce

Table: Number of pupils in schools where instruction is in the languages of the minorities, 2001/02 - 2005/06

"As we know, in the frameworks of our secular and spiritual history St. Clement’s University operated from the end of the 9th century to the beginning of the 10th century, that is to say until the passing away of St. Clement of Ohrid, the fi rst Slavic bishop, a saint, and an enlightener of the Macedonian people.

In the historic science, this early-middle-age educational and cultural institution is called the First Slavic University, the oldest in Europe. It is known that St. Clement and his associates had educated

over 3,500 students who, after his death, spread among the Slavic countries and expanded the Christian religion, literacy, and science among the peoples of Slavic origin.

Th e space where St. Clement’s University operated is today’s Plaosnik in Ohrid, in the vicinity of St. Clement’s Church of St. Pantelejmon, in the south pedestal of the citadel of Samoil’s Fortress."

Pasko KUZMANMacedonian Aff airs, January 2007, Vol. VI, No. 1

ST. CLEMENT’S UNIVERSITY IN OHRID OF THE 9th CENTURY

Elementary education Secondary education Higher education University educationSchools Pupils Teachers Schools Pupils Teachers Schools Students Teachers Schools Students Teachers

2001/02 1010 242707 13508 95 92068 5550 1 1123 60 29 43587 15012002/03 1020 235516 13678 96 93526 5749 1 893 32 29 44731 1487 2003/04 1012 229564 13791 96 93791 5863 1 9601 301 29 456771 25971

2004/05 1010 223876 13970 100 94053 5946 1 11123 29 38 482523 28932005/06 1005 235185 14917 101 93908 6136 1 12762 312 36 470922 28263

Number of pupils in regular elementary schools Number of pupils in regular secondary schoolsTotal Albanian Turkish Serbian Total Albanian Turkish Serbian

2001/02 82489 76087 5874 528 16538 15844 694 -2002/03 81851 75543 5825 483 17897 17135 762 -2003/04 81190 75015 5712 463 19286 18361 925 -2004/05 80260 74200 5602 458 20442 19362 1090 -2005/06 86864 79428 6972 464 21419 20291 1128 -

1) Data from the universities in Skopje and Bitola

2) Data from the state universities in Skopje and Bitola and the private European University in Skopje.

3) Data from the state universities in Skopje and Bitola and the private European University in Skopje and the SEE University in Tetovo.

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THEATERS & CINEMAS

PROFESSIONAL THEATERS: 12 Th eater performances: 954 Visitors: 228,000

CINEMAS: 21 Cinema performances: 1,974 Visitors: 98,000

(2005/2006 data, source: State Statistical Offi ce)

Ohrid Summer FestivalStarted in 1961, it is an international cultural event that takes place annually at various locations in Ohrid, but mostly in the magnifi cent Cathedral Church of St. Sofi a (11th century) from 12 July through 20 August. Th e festival is a member of the European Festivals Association (EFA) and is regarded as one of the most prestigious events of this kind. Its program focuses on classical music, ballet, opera and theatre. In recent years, the festival has opened up to alternative works and performances and to other contemporary European and international cultural developments.

Seminar on Macedonian Language, Literature and CultureOrganized by the Ss. Cyril and Methodius University in Skopje, the seminar is held in Ohrid in August and is attended by par-ticipants from numerous countries across the world, studying the Macedonian language, literature and culture.

Struga Poetry Evenings Held every year in the second half of August and lasting for a week, the Struga Poetry Evenings is one of the world’s most prestigious poetry events. Over 3500 poets from all the con-tinents of the world have participated in the festival over the last 44 years. Th e Golden Wreath Award for lifetime poetry achievements has been presented every year to the grandest names of contemporary literature, such as Wystan Hugh Auden and Ted Hughes (United Kingdom), Allen Ginsberg and Joseph Brodsky (United States), Pablo Neruda (Chile), Eugenio Montale (Italy), Andrey Voznesensky (Russia) and many others.

Manaki Brothers International Film Camera FestivalHaving its fi rst edition held in 1979 in honor of the fi rst cameramen in the Balkans, Milton and Janaki Manaki, who shot the fi rst documentary in 1905 with their Camera 300 in their hometown of Bitola, it is the world’s oldest fi lm camera festival paying tribute to the cinematographers’ artistic motion picture achievements. Eminent camera masters from all over the world have been presented with Golden, Silver and Bronze Camera 300 awards.

Youth Open Th eater (MOT)It is an international theater festival, at which more than 250 theatrical performances have thus far been presented, most of them by alternative, experimental theatre groups engaging young playwrights and actors from the former SFRY constitu-ents, the United States, France, Russia, Spain, Japan, Poland, Museum of Contemporary Art, Skopje, 2004

Grand Th eater, Skopje, 1935 (destroyed in 1963 earthquake).

Cultural Events

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Italy, India and many other countries. Youth Open Theater became a member of the Brussels Informal European Theatre Meeting, a network of 250 world theatre festivals, institutes and companies.

Vojdan Cernodrinski Theatre Festival Named after the founder of drama and theatrical life in Mace-donia, Vojdan Cernodrinski (1875-1951, the festival is the oldest theatre event in Macedonia taking place in Prilep. It has presented the best achievements of Macedonian professional theatres for more than 40 years. Every four years it is fully dedi-cated to Macedonian playwrights. The festival is competitive presenting awards for best performance in general, best actor, best director, best script by a Macedonian author, best costume design, etc., as well as a lifetime achievement award.

Risto Siskov Chamber Theatre FestivalHeld in Strumica in honor of one of greatest Macedonian actors, Risto Siskov, the festival presents the best chamber theater performances of the previous 12 months in the coun-try. A few years ago, it grew into an international event with participation of chamber theatre groups from Macedonia’s neighboring countries.

International Festival of MonodramaEstablished in Bitola in 1999, the International Festival of Monodrama takes place in early July and more than 70 monodramas have so far been staged by actors from Greece, Ukraine, Croatia, Bosna and Herzegovina, Serbia, Montenegro and Albania. They all compete for the only Best Monodrama Award.

May Opera EveningsHeld at the Macedonian National Theater in Skopje every year throughout the month of May, this traditional international music event had its 35th jubilee edition this year. Distinguished opera singers and directors from about fifty countries the world over have so far took part in this highly popular event. Participating in all the performances, the ballet and opera companies of the Macedonian National Theater have grown into highly acclaimed ensembles worldwide.

Skopje Jazz FestivalConsidered one of the best jazz festivals in Europe, the Skopje Jazz Festival was established in 1982 by a group of jazz enthu-siasts from Skopje. It is an international jazz event, taking place in Skopje’s Universal Hall every year in October. This is one of

May Opera Evenings. The Macedonian Opera marked the 60th anniversary of the performance of its first opera

on 9 May 1947.

Fascinating performance of the Russian Royal Ballet in Ohrid.

World-renowned tenor José Carreras accompanied by the Macedonian Philharmonic Orchestra at the opening of the 45th

international Ohrid Summer Festival.

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Macedonia’s leading music events nurturing all jazz styles. Over the past 25 years the Skopje Jazz Festival program featured a great many jazz celebrities including Freddie Hubbard, Ray Charles, Tito Puente, Chick Korea, Count Basie, etc.

Balkan Festival of Folk Song and DanceTraditionally held in Ohrid for almost 40 years from 5 to 10 July, the festival hosts folklore groups from the Balkans, as well as from other European countries, Australia, Canada and the United States.

Pece Atanasovski FestivalHeld in late June and early July in the village of Dolneni, it is a festival of original ethnic folk music played on traditional instruments. Musicians from Macedonia and other Balkan countries participate in the event.

Skopje Summer FestivalStarting on the fi rst day of the summer (21 June) and being considered Macedonia’s most varied cultural festival, it takes place every year, presenting a wealth of off -season cultural events including musical concerts, operas, ballets, plays, avant-garde theatre performances and multimedia projects. It was established as an expression of the growing potential in the fi elds of music and drama in Macedonia. Th e festival has hosted many artists from all over the world, including names that marked the second half of the 20th century.

Galicnik Art ColonyEstablished in 1990, the colony assembles eminent artists in the village of Galicnik every year in August. In addition, the Galicnik Art Colony has established cooperation with presti-gious art centers, where it has staged numerous exhibitions.

Ressen Pottery ColonyOver 800 works have been produced in the UNESCO-pro-tected colony studio in the resort of Otesevo on Lake Prespa over the last 35 years by numerous artists from all over Europe and the United States.

St.Joakim of Osogovo International Art ColonyTh e event promotes the cultural tradition of Macedonian monasteries, and aims to unite the spiritual energy of Mace-donian contemporary painting with other art cultures. Every September it attracts artists from all over the world.

Small Montmartre of BitolaOrganized by the Cyril and Methodius Children’s Art Studio from Bitola, this international children’s art colony takes place every year in Bitola from 23 and 30 May. Young artists from all over the world create works of art on the subject of the old Macedonian architecture. All their paintings are then displayed in Bitola and in many other towns in Macedonia.

Skopje Jazz Festival – the venue where diff erent cultures from all over the world meet.

After four decades, Maestro Zubin Mehta in front of the Skopje audience again.

Macedonian world-renowned pianist Simon Trpcevski in front of the home audience.

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Holidays

NATIONAL AND OTHER HOLIDAYS:

Day of the Slav Educators, Ss. Cyril and Methodius - 24 MayDay of the Republic - 2 August (Day of the Ilinden Uprising against the Turks in 1903

and Day of the Antifascist Assembly of the National Lib-eration of Macedonia in 1944 – 1 non-working day)

Independence Day – 8 September (Day when the Macedonian people voted for independence

in the referendum held in 1991 – 1 non-working day)Day of the Macedonian Rebellion – 11 October (Day when the fi rst armed actions of the Macedonian revo-

lutionaries against the fascists were carried out in the towns of Prilep and Kumanovo in 1941 – 1 non-working day)

Day of the Macedonian Revolutionary Fight – 23 OctoberSt. Clement of Ohrid – 8 December_______________________

New Year’s Day – 1 January(Celebrating the New Year – 1 non-working day)

Labor Day – 1 May(International Day of Workers – 1 non-working day)

Christmas – 7 January(1 non-working day)

Easter – Second Day of Easter(1 non-working day)

Ramadan Bajram, First Day of Ramadan Bajram

RELIGIOUS AND OTHER HOLIDAYS:

ORTHODOX CHRISTIAN:Badnik, Day before Christmas – 6 JanuaryEpiphany (Vodici) – 19 JanuaryGood Friday, Friday before EasterAssumption of the Holy Mother of God – 28 AugustPentecost, Friday before Pentecost

MUSLIM: Kurban Bajram – First Day of Kurban Bajram

(for those professing Islam)

ROMAN CATHOLIC:First Day of Christmas, Second Day of Easter and All

Saints’ Day (for those professing Catholicism)_______________________

Day of the Albanian Alphabet (for ethnic Albanians) – 22 November

Day of Teaching the Turkish Language (for ethnic Turks) – 21 December

Yom Kippur – First Day of Yom Kippur (for Jews)St. Sava (for ethnic Serbs) – 27 JanuaryInternational Roma Day (for the Roma) – 8 AprilNational Day of Vlachs (for Vlachs) – 23 MayInternational Day of Bosniaks (for Bosniaks) – 28 September

European Canoe/Kayak Slalom Championships 2004. Skopje hosted also the World Canoe/Kayak Slalom Championships on the River Treska rapids in 1974.

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Th e Republic of Macedonia is a landlocked country located in the heart of the Balkans, between 40°51’ and 42°22' north geographical latitude, and 20°27' and 23°02' east geographical longitude. Situated in South East Europe, it is surrounded by Bulgaria to the east, Albania to the west, Greece to the south and Serbia / Kosovo* to the north. Th ese borders were marked after the Second World War, when Macedonia became member of the United Nations as a federative unit of the then Democratic Federative Republic of Yugoslavia. With its signifi cant geo-strategic position, the Republic of Macedonia is a major transportation corridor from Western and Central Europe to the Aegean Sea.

Th e total area of the Republic of Macedonia is 25,713 km2, out of which 25,279 km2 is land area. Th e distance between the furthest points is 160 km from north to south and 215 km from east to west.

Th e total length of the borders is 850 km, out of which 191 km is shared with Albania, 165 km with Bulgaria, 262 km with Greece, and 232 km with Serbia (out of which Kosovo accounts for about two-thirds of the frontier). Macedonia has lake borders with Albania (28 km) and Greece (20 km) and river borders with Albania (12 km) and Greece (4 km).

Th e population of the Republic of Macedonia is approxi-mately 2 million. Th e basic characteristic of the distribution of the population is that nearly one third of the total number of people live in the capital, Skopje, where the density of the population is 291 people per square kilometer. In general

THE COUNTRY

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Country and People

* Kosovo is a province which has been under United Nations ad-

ministration since 1999

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the central and the western parts of the country are more densely populated than the eastern part.SURFACE MORPHOLOGY. Th e relief map of the Republic of Macedonia shows that Macedonia is a mountain-valley country with dominantly mountainous terrain (80% of the total area), whereas the remaining 20% are plain surfaces. Th e average altitude above sea level in Macedonia is 829 m. About one quarter of the land is 500 m high or less, and slightly less than half of the territory is 500-1000 meters above the sea level. In Macedonia there are 34 mountaintops higher than 2000 m, the highest of them being Korab at 2,764 m.

Th e Macedonian mountains are very diff erent by their shape. Ranging from mild round shape in the eastern part, to fully Alpine in the western part, they off er great possibilities for developing a variety of sports. Th ere are a number of ski centers, such as Popova Sapka on Sar Planina, Mavrovo on Bistra, Begova Cesma on Baba, Krusevo, Otesevo on Galicica and other smaller ski-centers.

According to the tectonic morphology, Macedonia is divided to four zones: Rodopi zone, Vardar zone, Pelagonija zone, and Western-Macedonian zone.

Th ere are three large lakes, all of them with tectonic origin and divided by frontier lines:

Lake Ohrid – situated 693 meters above sea level, stretches over 349 km2, out of which 119 km2 belong to Albania. Th e average depth of the lake is 164 m and the maximum depth is 286 m. A little less than half of the water in Lake Ohrid comes from its tributaries. Th e remaining infl ow comes from

the springs fed by water fl owing out of the porous karst mountains.

Over thousands of years, holes and channels have formed within the mountain rock, carrying water that originates in the Prespa watershed to Lake Ohrid. Because Lake Prespa sits about 150 m above Lake Ohrid, its waters run ”downhill” to Lake Ohrid through the channels in the karst.

Water fl ows out of Lake Ohrid near Struga, into the Black Drim River.

In 1979, the UNESCO World Heritage Commit-tee decided to inscribe Lake Ohrid on the World Heritage List under natural criteria. In 1980, this property was extended to include the cultural and historical area, and cultural criteria were added.

Lake Prespa – situated on three-border junction between Macedonia, Albania and Greece is 853 meters above sea-level, stretches over 274 km2, out of which 49,4 km2 belong to Albania and 47,8 km2 to Greece. Th e maximum depth of the lake is 54 m. Since May 1995 Lake Prespa has been included in the Ramsar List of Wetlands of International Importance.

Lake Dojran – situated on 148 meters above sea level, stretches over 43 km2, out of which 16 km2 belong to Greece. Th e maximum depth of the lake is 10 m.

Main Macedonian natural resources include chromium, lead, zinc, copper, nickel, low grade iron ore, sulfur, timber, and quartz.

Lake Ohrid, Trpeica beach. A holiday retreat off ering tranquility and a wealth of historic venues.

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CLIMATE. In Macedonia there are three climate types – altered Mediterranean climate, moderate continental climate and mountain climate. Th e altered Mediterranean climate, which comes as a result from the proximity of seas (the Aegean Sea is 60 km away and the Adriatic Sea is 80 km away), can be sensed mostly along the river Vardar. Th e moderate-continental climate is characterized with relatively cold and wet winters and warm summers, whereas the springs are usually colder than the autumns. Th e average temperature of air is 11,5°C. Th e warmest month in the year is July with an average temperature of 22°C, whereas the coldest month is January with an average temperature of 0,3°C. Th e highest temperature is up to 44,5°C, whereas the lowest can reach -31,5°C. Th e average annual quantity of rains is 742 mm.

ENVIRONMENT. Macedonia suff ers from high seismic hazard. In the period between 1985 and 2003, 44 earthquakes of over 5 grades intensity of shake in the epicenter according to the international seismology scale were registered. According to the seismic movements, there are three seismogeneous zones

in Macedonia (along the rivers Drim, Vardar and Struma) and four epicentral regions.

Macedonia pays much attention to protection of the living environment. Air pollution from metallurgical and other plants and sources are subject of continued investigation by domestic and international science institutions.

PROTECTED AREAS. Protected areas in the Republic of Mace-donia are classifi ed according to the criteria of the World Conservation Union (IUCN) and the Law on the Protection of Rare Species (adopted in 1973).

Th e protected area network covers 187,895 hectares, or 7.3% of the country’s territory.

Th e status of protected environments or species has been assigned to three national parks (108,338 hectares), four strict natural reserves (12,855 hectares), three protected areas with special natural characteristics (2,338 hectares), 14 plant and animal species living in areas outside the natural reserves (2,709 hectares), and to 33 natural en-vironments within the category of natural monuments (61,655 hectares).

Th e art of wild fruits and plants from the Macedonian national parks.

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iaPelister National Park (12,500) is the oldest, having obtained this status in 1948.

Among its fl ora elements, the presence of the fi ve-needle pine molika (Pinus peuce) - a unique species of tertiary age - is especially signifi cant.

Mavrovo National Park (73,088 hectares) is the largest. It is presumed that it includes more than 1,000 types

of higher plant forms, about a hundred of which are extremely rare or endemic to the Balkans.

Galicica National Park (22,750 hectares) is located between Lake Ohrid and Lake Prespa. Nineteen diff erent forest communities have been discovered here, indicating that the vegetation is very rich, including several extremely rare types of fl ora.

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Ohrid region - Brief DescriptionSituated on the shores of Lake Ohrid, the town of Ohrid is one of the oldest human settlements in Europe. Built mainly between the 7th and 19th centuries, it has the oldest Slav monastery (St Pantelejmon) and more than 800 Byzantine-

style icons dating from the 11th to the end of the 14th century. After those of the Tretiakov Gallery in Moscow, this is considered to be the most important collection of icons in the world.

http://whc.unesco.org/en/list/99

Nomination: Natural and Culturo-Historical region of Ohrid.

Th e City of Ohrid is one of the eldest human establish-ments not only of Macedonia and of the Balkans, but also of Europe. It contains same of the most ancient Neolithic archaeological sites, and others from the Bronze Age and the Hellenistic period; it also has houses and churches from the 7th to the 19th century, including the most ancient Slavonic monastery dedicated to St. Pantelejmon.

Its churches exhibit more than 2.500 sq. metres of frescoes and famous icons of worldwide fame. Th e town’s architecture represents, with its old typical streets and houses and its particular atmosphere around old squares, the best preserved and most complete ensemble of ancient urban architecture of this part of Europe.

Writing, education and Slavonic culture spread from Ohrid. It is a cultural centre of great importance for his-tory not only of this part of the Balkan Peninsula, but also for all nations of

Slavonic tongue and literature and for world history and literature.

Furthermore, this city and its historico- cultural region are located in a natural setting of exceptional beauty already included in the World Heritage List in October 1979.

Inclusion of this cultural property to the World Heri-tage List is recommended under criteria 1,3 and 4 of the Convention.

Th e various buildings and structures are the property of the State, the Macedonian Orthodox Church and the Islamic Religious Community, and partly private property; the religious and military buildings are generally wall preserved, but special eff orts should be devoted to housing which is generally in a worst state of preservation.

ICOMOS, Paris, 1980.05

* Cited from the original document of the INTERNATION-AL COUNCIL ON MONUMENTS AND SITES - ICOMOS

World Heritage List No.99*

St. Jovan Bogoslov, Kaneo, Lake Ohrid, late 13th century.

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KOKINOholy mountain and ancient observatory

KOKINO - a village located 1,030m above sea level, where

remains of a megalithic observatory more then 3,800

years old have been found. Several markers (two major

ones) have been established that helped ancient people

observe the sky, determine the position and the movement

of the Sun and the Moon and measure time.

In the Republic of Mace-

donia in 2001, under the

mountain peak of Tatikev

Kamen, an archaeological

site was discovered from the

Bronze Age of the civilization’s

development. Th e discovered

artifacts in the archaeologi-

cal campaigns, as well as the

archaeological analysis in the

following years, demonstrated

that the site had all the char-

acteristics of a mythical mountain, as well as of an ancient

observatory. Today, this site is known under the name of the

Megalithic Observatory Kokino, or simply Kokino.

Th e Kokino Megalithic Observatory is located in the

north-east part of Macedonia near its border with Serbia

(more precisely: geographic latitude 42.15 degrees, geographic

longitude 21.57 degrees). It is situated in the region of

the village of Kokino, on the border with the village of

Arbanasko.

In the broader region a rising number of archaeological

sites from the Roman and the broader ancient period, as

well as a large number of sites of the Iron, the Bronze, and

the Neolithic ages have been registered. Th is means that the

entire region has a long history of at least 7,000 years full of

important dwellings, holy places, events, and personalities.

Skopje, January 2007

Jovica Stankovski and Gjore Cenev

for Macedonian Aff airs Vol. VI, No. 1

Liste Du Patrimoine Mondial*

Bien proposé: Contrée naturelle et culturo-historique d’Ohrid.

La ville d’Ohrid est un des plus anciens lieux peuplés non seulement en Macédoine et dans les Balkans, mais encore en Europe. Elle renferme des sites archéologiques parmi les plus anciens du néolithique, des sites de 1’Age de bronze et de la période hellénistique; des habitations et des églises du VII éme au XIX éme siècles, dont le monastère slave le plus ancien, celui dédié à St. Pantelejmon.

Ses églises sont ornées de plus de 2.500 m2 de fresques et de célèbres icônes connues mondialement.

L’architecture de la ville avec ses rues et ses vieilles maisons typiques et son ambiance particulière autour des vieilles places, représente l’ensemble le mieux conservé et le plus complet de l’architecture urbaine ancienne de toute cette partie de l’Europe. C’est d’Ohrid que s’est propagée l’écriture, l’instruction et la culture slave. Ohrid est une contrée culturelle d’une très grande importance pour l’histoire non seulement de cette partie de la pé-ninsule balkanique, mais encore pour toutes les nations de langue et littérature slaves, ainsi que pour l’histoire et la littérature mondiales.

De plus, cette ville et sa contrée culturelle et historique sont situées dans une région naturelle d’une beauté excep-tionnelle déjà inscrite à la Liste du patrimoine mondial en octobre 1979.

L’inscription de ce bien culture1 est recommandée en vertu des critères 1, 3 et 4 de la Convention.

INTEGRITE, AUTHENTICITE ET ETAT DE PRESERVATION

En partie propriété de l’état, de l’Eglise orthodoxe macédonienne et de la Communauté religieuse islamique et en partie propriété privée, l’ensemble des bâtiments religieux et militaires est généralement bien préservé. Il faudrait faire un eff ort pour les habitations qui elles sont en plus mauvais état.

ICCMOS, Paris, 1980.05

* Cité du document original du CONSEIL INTERNA-

TIONAL DES MONUMENTS ET DES SITES - ICOMOS

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Table: Population according to declared ethnic affi liation, by censuses

Macedonia has a population of 2.042.894 according to the estimated statistical data for 2006. Th e last census of the population was taken in 2002, when 2,022,547 citizens were registered. Th e previous census was taken in 1994, when the population totaled 1,945,932. Th is counting was preceded by the census taken in 1991, before the disintegration of former Yugoslavia and it encompassed all citizens who were staying in Macedonia at the time. Th e census in 1994 was the fi rst census conducted in independent Macedonia and it encompassed the entire population with legal residence in the Republic. In the census of 2002, for the fi rst time Macedonian citizens residing out of Macedonia for more than a year were not taken into account.

Th e basic characteristic of the movement of population in Macedonia is its decreasing growth rate, particularly in the past decade. From 1976 to 1991, the growth rate de-creased from 15.4 ‰ to 9.7 ‰, whereas in 2002, it stood at 4.8 ‰. Th e population growth rate was 4.4 ‰ in 2003,

2.7 ‰ in 2004, 2.0 ‰ in 2005, and was estimated at 2.2 ‰ for 2006.

Th e growth rate is not equal on the entire territory of the Republic of Macedonia, but varies from one municipality to another. Th e municipalities populated by Macedonian Alba-nians and others professing Islam , like Tetovo, Gostivar, Saraj, Cair, and Struga, have the highest growth rate, while Resen, Bitola, Demir Hisar Berovo and Kratovo have the lowest.

Th e Republic of Macedonia is not a relatively densely populated country. Th e average density was 78.7 people on square kilometer in 2002 and was estimated at 79.4 people on square kilometer in 2006. Th e most densely populated regions with over 100 people on square kilometer are the Skopje valley (291 people/km2), the Polog valley (Dolni Polog 167 people/km2 and Gorni Polog 87 people/km2), the Kumanovo valley and the Strumica valley. All other regions are less densely populated with average density. Th e number of people per square kilometer is the lowest in the Porec region

THE POPULATION

1953 1961 1971 1981 1991 19941 2002TOTAL 1,304,514 1,406,003 1,647,308 1,909,136 2,033,964 1,945,932 2,022,547Macedonian 860,699 1,000,854 1,142,375 1,279,323 1,328,187 1,295,964 1,297,981Albanian 162,524 183,108 279,871 377,208 441,987 441,104 509,083Vlach 8,668 8,046 7,190 6,384 7,764 8,601 9,695Roma 20,462 20,606 24,505 43,125 52,103 43,707 53,879Turkish 203,938 131,484 108,552 86,591 77,0 80 78,019 77,959Austrian 24 12 9 30 15 8 35Bosniak ... ... ... ... ... 6,829 17,018Bulgarian 920 3,087 3,334 1,980 1,370 1,682 1,487German 136 94 77 288 230* 68 88Greek 848 836 536 707 474 368 422Jew 55 47 32 27 26 23 53Egyptian - - - - 3,307 3,080 3,713Italian 41 57 48 96 74 61 46Muslim 1,591 3,002 1,248 39,513 31,356 15,418 2,553Polish 24 26 72 223 248 158 162Romanian 103 135 105 97 87 37 38Russian 672 640 516 359 332 340 368Ruthenian 127 124 59 23 51 11 24Slovak 20 64 46 67 56 60 60Slovene 983 1,147 838 648 513 403 365Serb 35,112 42,728 46,465 44,468 42,775 40,228 35,939Ukrainian - - 50 68 74 102 136Hungarian 207 252 229 280 222 128 128Croat 2,770 3,801 3,882 3,307 2,878 2,248 2,686Montenegrin 2,526 3,414 3,246 3,920 3,225 2,318 2,003Czech 114 92 80 164 143 84 60Other 1,950 2,350 22,845 18,792 36,313 2,408 5,332Ethnically undeclared ... ... 414 505 1,791 1,882 404Regional affi liation - - 684 943 1,303 593 829

Source: State Statistical Offi ce

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(12 people/km2), the Malesevo region (24 people/km2) and the Prespa region (31 people/km2).

Demographic analyses of the data from the 2002 census present concerning information on the age structure of the population. Due to a gradual drop in the birth rate in the past 30 years and due to the migration of the younger popula-tion abroad the population up to 15 years of age participates with 21.8% in the total population while population older than 65 years of age participates with 10.57% in the total population. According to the estimated data for 2005, this population constitutes 11%. For comparison, in 1994 the young population accounted for 23.99%, while the old population made up 8.82% of the total population. As far as the sex structure is concerned, in the Republic of Macedonia according to the last census 50.2% of the population are men and 49.8% are women.

Th e majority of the population in the Republic of Mace-donia is Macedonian. Th e percentage of the many ethnic groups that live in Macedonia varied depending on the migration movements and the growth rate.

According to the 2002 census, 64.8% were Orthodox Christians, Muslims 33.3%, Catholic 0.3%, and 1.5%

professed other religious affi liation. According to the data from the same year, 66.5% of the population said that the Macedonian language was their mother-language, 25.1% said that it was the Albanian language, 3.5% Turkish and 4.9% said that it was some other language.

Out of the migration movements, the village-town migra-tion has the largest infl uence on the structure of the population in the Republic of Macedonia. Starting from the second half of the 20th century and following the process of urbanization, the number of urban population is constantly increasing at the expense of the number of rural population.

Th e number of households in Macedonia increased by over 200% in the last 50 years, whereas the average number of family members per household decreased from 5.3 to 3.6. According to the census of 2002, in Macedonia there are 564,296 households.

Th e latest data indicates an increase in one-member families from 8.89% in 1994 to 9.6% in 2002. Th e older population, especially in the rural areas, accounts for most of these one-member families, or 57.32%. Young people of up to 25 years of age, account for 1.26% of this category of households.

Skopje. Front: Chivte Amam (Old Turkish bath), 16th century.

Behind: Mustafa Pasha mosque, 1519 with especially attractive tall minaret,

made of carved stone, whereas the expanded part is decorated with ornaments.

BASIC DEMOGRAPHIC INDICATORS

Growth rate: 4.8/1,000 populationBirth rate: 13.6/1,000 populationDeath rate: 8.8/1,000 populationInfant mortality rate: 10.2/1,000 born childrenPopulation density: 78.7 inhabitants/km2

Vitality index: 154.6 livebirths/100 deathsMarriage rate: 7.1/1,000 populationDivorce rate: 90.2/1,000 marriagesLife expectancy: (2000-2002) all: 73.12 males: 70.77 females: 75.56 (2003-2005) all: 73.62 males: 71.44 females: 75.88

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Macedonia is a historical region that originates from the ancient period1. Th e zenith of the Macedonian kingdom, its unity, independence and predominance – political, military and economic – reached its apogee in the 4th century BC when the famous Philip II ( – 336 B.C.) and Alexander III2 (356 - 323 B.C.) ruled the prestigious Kingdom of Mace-donia the Great.After the dissolution of the Empire, the territory of Macedonia fell fi rst under Roman and later under Byzantine rule. In the course of several centuries, the ancient Macedonians mixed with other ethnic groups such as Roman colonists. Th e penetration of Slavic tribes towards the Balkans ended at the beginning of the seventh century and created a new situation – Macedonia’s population mixed with the Slav

newcomers but retained the Macedonian name, traditions and culture. At the beginning of this period the Macedonians were organized independently in their own tribal communities (sklavinas). Later, they fell under Byzantine and Bulgarian rule, alternatively. After the death of Bulgarian czar Peter (969), an uprising started intended to overthrow central Bulgarian rule. Th e Macedonian brothers David, Moses, Aaron and Samuel3 headed the uprising. Historical sources indicate that later there were uprisings against the Byzantine Empire as well. When three of the brothers, David, Moses and Aaron, were killed in the battles against the Bulgarians and Byzantines, Samuel (976 – 1014) took over all power. Applying similar battle tactics as Alexander the Great in his numerous quests, Samuel managed

AN OUTLINE OF MACEDONIAN HISTORY FROM ANCIENT TIMES TO 1991

1 Th e history of the ancient Macedonian kingdom begins with Caranus, who was the fi rst known Macedonian King (808-778 BC). By the 5th century BC the Macedonians expanded and forged a unifi ed kingdom under Alexander I (498-454 B.C.).

2 Also known as Alexander the Great.3 Sons of Macedonian Prince Nikola. All carry biblical names indicating that Christianity had already spread to Macedonia.

History

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to liberate the entire territory of ethnic Macedonia and even expand his kingdom through neighboring territories reaching Danube in Bulgaria, Peloponnesus in current day Greece, Epirus and current day Albania, Zeta and Srem current day Serbia. At the peak of his kingdom, Samuel moved the seat of his kingdom from the island St. Achilles, Prespa to Ohrid where he was crowned king. In the period from 969 until 1018, a vast empire of the Macedonians emerged, second empire of the Macedonians after the empire of Alexander the Great, the Empire of King Samuel with its capital in Ohrid. Testimonies to this empire are the castles he built, of which the most well known is located above Ohrid, which exists even today.Th is Empire was destroyed by strong assaults of the Byzan-tine army headed by the emperor Basil II. Th e last crucial battle was the battle at the mountain of Belasica (current day eastern Macedonia) in the year 1014. In this battle over 50,000 Macedonian soldiers were killed, whereas 15,000 captured soldiers were blinded. Th e Byzantines left one eye

25 January 1991:Macedonia’s Parliament, following the fi rst multi-party elections, unanimously adopted a Declaration of Sovereignty.

8 September 1991:An overwhelming majority of the Macedonian public approved a referendum on independence. - 1,495,807 were registered to vote for the referendum. - 1,074,855 (71.86%) actually cast their vote.Out of registered voters, 1,021,981 (68.32%) voted for inde-pendence. Out of those who actually voted, 95.08% were for independence. Out of the registered voters, 38,986 (2.61%) voted against independence. 13,986 ballots were registered as invalid.

17 September 1991:Macedonia’s Parliament passed a declaration affi rming the results of the referendum. As a result of the declaration, Yu-goslav federal laws have no further eff ect where they confl ict with Macedonian law.

17 November 1991:A new Constitution was adopted by the Parliament.

2 December 1991:Th e Macedonian Parliament instructed the republic’s president Kiro Gligorov to send a letter to European heads of states and governments seeking recognition of Macedonia.

11 January 1992:Th e European Community Arbitration Commission made the following recommendation:“Macedonia satisfi es the tests in the Guidelines on the Recogni-tion of New States in Eastern Europe and in the Soviet Union and the declaration of Yugoslavia adopted by the Council of the European Communities on 16 December 1991.”

30 July 1992:President Gligorov sent a letter to the United Nations Secretary General, Dr. Boutros Boutros-Ghali, in which the republic ap-plied for UN membership. Another letter was sent stating that Macedonia accepts the obligation in the UN Chapter.

8 April 1993: Macedonia became a member state in UN.

ROAD TO INDEPENDENCE

Skopje, whichever way you turn, centuries of history.

Front: church St. Dimitrija 19th century built on the

foundations of a medieval church.

Center: Th e Old Skopje Fortress. Its original foundations

are more than 4000 years old. Th e fortress received its

current form in approximately 535 AD when its walls were

constructed using stones from the ancient town of Skupi.

Behind: Mustafa Pasha mosque, 1519 AD.

Far right: Daut Pasha Amam, 15th century. Old Turkish

bath, today the national gallery of Macedonia.

Right center: entrance to the old Skopje Bazaar.

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to every hundredth soldier to lead the others back to their king4. When king Samuel learned of the fate of his army, he suff ered a heart attack and died on his throne in the Prilep castle. Th e tradition of King Samuel’s state remains deeply rooted in the minds of the Macedonian people, praised in numerous folk tales and folk songs fueling the fantasies of Macedonian patriots striving towards the future creation of an independent state.Th e period of expansion of medieval states on the Balkan and in Macedonia was followed by the occupation of the Ottoman Empire in the 14th century. Macedonia remained a part of the Ottoman Empire for 500 years, i.e. until 1912. By 1870, Greece, Bulgaria and Serbia, with the help of their patrons France, Russia and Austro-Hungary, liberated them-selves from the Ottoman Empire.5 In 1870, peace was declared between Greece, Bulgaria and Serbia on one side and Turkey on the other. In the period of the Eastern Crisis and the Berlin Congress (1878), Macedonia was left under the Ottomans although some concessions were granted to the people.During the rule of the Ottomans, the Macedonians organized a number of uprisings against the Turkish yoke headed by leaders called “voivodas”6. Some of the most famous uprisings were the Mariovo – Prilep uprising (1564-1565), Karposh uprising (1689), the Kresnen Uprising (1878) and many more local uprisings.

Th e greatest uprising in Macedonian history occurred on August 2, 19037, on St. Elia’s Day, when Macedonian revo-lutionaries8 organized the Macedonians and the entire popu-lation to a rebellion against Ottoman rule. Large parts of Macedonia were liberated. Th e largest free territory was the town of Krushevo and the territory around it. Th e Krushevo Republic was declared, the fi rst republic on the Balkans with a President and Parliament with representatives of all ethnic communities. However, the Republic existed only 10 days, because the Ottoman Empire sent a large army that crushed the uprising and put an end to the Republic and demolished the town and the surrounding villages.Even after the destruction of the Republic, the Macedonians continued to resist, and the Ottoman rule weakened. Soon after the Vinica Uprising, the Revolution of the Young Turks began in 1908. Macedonian soldiers headed by Jane Sandanski from the organization VMRO9 took part in the revolution. After the revolution, the Ottoman Empire was taken over by the Young Turks (one of their leaders was Mustafa Kemal Attaturk10 who managed to establish the Republic of Turkey after the First World War). Th e newly formed Parliament of Turkey included in its composition two Macedonians as representatives of Macedonia. In this period, Macedonia was granted the right to national Macedonian self-organizing, more precisely autonomy.

4 Th e famous monastery of Vodocha in Strumica, Republic of Macedonia, was built on the site where the soldiers were blinded. (Vodocha – take eyes out, transl.)5 In the liberation wars, the Greek, Bulgarian and Serb armies did not proceed onto Macedonian territory because it was not theirs. Th e Greek armies stopped

at the mountain Olympus, the Bulgarian at the mountains Rila and Kitka, whereas the Serb armies stopped advancing near Vranje.6 Famous leaders were Karposh, Goce Delchev, Jane Sandanski, Nikola Karev, Damjan Gruev, Pitu Guli, Lazo Trpovski, Parapunov, Dimitar Pop-Gjorgjiev,

Nikola Petrov-Rusinski and others.7 Th is year Macedonia is celebrating the 100 year jubilee from the uprising.8 Organized in TMORO – Secret Macedonian - Odrin Revolutionary Organization, which was formed in 1893 in Th essalonica (current day Greece).9 VMRO (Internal Macedonian Revolutionary Organization) is the successor of TMORO.10 Mustafa Kemal Attaturk was raised and educated in Macedonia.

Left: Mosaic compositions with fi gurative fl oral and zoomorphic motifs. Part of approximately 100m2 of mosaics unearthed recently in the central part and baptistery of a monumental early Christian church built in the 5th century. Th e church was located on Plaoshnik above Ohrid and its splendor indicates that it was the seat of the bishopric of Lichnidos. Right: Detail from the newly constructed church of St.

Pantelejmon on Plaoshnik built on the foundations of the church constructed by St. Clement in the 9th century. In 2002 the remains of St. Clement, the great Slavic educator, were returned to their original resting place in the tomb in this church after 530 years of absence.

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However, in 1912 and 1913 three Balkan states – Bulgaria, Serbia and Greece, waged the Balkan wars intending to conquer and divide ethnic Macedonia between them. Th e Balkan Wars between Greece, Bulgaria and Serbia ended with the treaty of Bucharest in 1913, with which, in spite of the protests of the Macedonians, ethnic Macedonia was divided into three parts. 50% of Macedonian territory fell under the Kingdom of Greece11, 39% under the Kingdom of Serbia (later Kingdom of Yugoslavia)12 and 10% under the Kingdom of Bulgaria13. 1% of Macedonian territory went to Albania.During World War II (1941-1945), Macedonians from all three parts took part in the anti-fascist coalition for creating their own state Macedonia, respecting the promise from the Atlantic charter that all nations who take part in the struggle against fascism shall choose their own form of government and shall be aff orded “the means of dwelling in safety within their own boundaries, and which will aff ord assurance that all the men in all lands may live out their lives in freedom from fear and want”. As a result, in 1941 in the Vardar part of Macedonia there was simultaneous uprising against the fascist occupation in Prilep and Kumanovo, whereas in 1942 there were upris-ings in the Aegean part of Macedonia (in Lerin and Kostur) headed by Lazo Trpovski and in the Pirin part of Macedonia (in Dupnica) headed by Parapunov. In spite of the lack of coordination, the intention was clear – liberation of the entire territory of Macedonia. However, only the people in the Var-dar part managed to create a state in the face of the People’s Republic of Macedonia within the framework of then Federal Republic of Yugoslavia. Th e Macedonians in the Pirin part

of Macedonia were granted autonomy and certain cultural and ethnic rights in 1946, but these rights were revoked at the end of the decade at the height of the cold war. In the Aegean part of Macedonia there was a civil war in which the Macedonians took part hoping to acquire certain ethnic and cultural right, however at the end of the civil war hundreds of thousands of Macedonians were exiled and any show of ethnic Macedonian identity was banned.Th e Republic of Macedonia was proclaimed at the fi rst ses-sion of the Antifascist Assembly for the People’s Liberation of Macedonia (on St. Elia’s Day – August 2, 194414). Later, by special Act, it became a constitutive part of the Federal Republic of Yugoslavia.The first multi-party elections for representatives in the Parliament of the Republic of Macedonia were held on November 11th, 1990, establishing parliamentary democracy in Macedonia.In accordance with the Charter of the United Nations con-cerning self-determination and equal rights, the Assembly of the Republic of Macedonia adopted the Declaration for Inter national Recognition of the Republic of Macedonia on Septem ber 17th, 1991, which confi rmed the will of the citizens to live in a sovereign and independent state. According to the Constitution adopted November 17th, 1991, the Republic of Mace donia is a sovereign, independent, democratic and social state.

April 8, 1993, Macedonia becomes a UN member state.

11 Popularly called Aegean Macedonia.12 Popularly called Vardar Macedonia.13 Popularly called Pirin Macedonia.14 As a continuation of the famous St. Elia’s Day uprising on August 2nd 1903.

Shadrvan in the Arabati Baba Teke (Dervish monastery), 18th century, Tetovo. Inset: Cupola of the Shadrvan recently renovated with a donation from the Government of Turkey.

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Th e Christianizing of Macedonia and Europe began in the year 51 A.D. when, for the fi rst time on European soil, in the Macedonian towns of Filippi and Th essalonica, St. Paul preached Christianity. As a result many regard Macedonia a biblical country, one of the rare few to be mentioned in the Holy Scriptures. St. Paul made two journeys1 to Macedonia2 accompanied by the apostles Timothy and Silas who would remain in Macedonia to continue St. Paul’s work. At the beginning of the 4th century the Christians in Macedonia already had an organized church with an established eccle-siastical hierarchy whose bishops regularly participated at ecumenical councils.

Th e work of the holy apostles was the basis for the evangelic work of the St. Fifteen Martyrs at the beginning of the 4th century and St. Teofi lo in the 7th century. Th is is a period in which signifi cant Christian basilicas would be built throughout Macedonia, the remna nts of which can still be found today.During the rule of the Byzantium Emperor Justinian I (527 – 565), who was born in the village Tauresium near current day Skopje, a new town was built on the Emperor’s birthplace and named in his honor Justiniana Prima. Th e bishop of Skopje was raised to an autocephalous Archbishop. Cathellian is the fi rst recorded Archbishop of Justiniana

THE CHRISTIANIZING OF MACEDONIA AND THE MACEDONIAN ORTHODOX CHURCH

“Virgin Mary” (Bogorodica Psihosostrija), beginning of 14th century

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Prima to be followed by Benenat, Paul, John I, Leaon and John IX who in 680 – 81 would participate in the Trullian Council in Constantinople.Th e spreading of Christianity and literacy in the region was continued in the 9th century by the Slavic Illumina-tors, educators and teachers, St. Cyril and St. Methodius (826-869 and 815-885), Macedonian brothers from Solun (today Th essalonica) who created the new Glagolica and later Cyrillic alphabet, translated the Bible, holy scriptures and numerous religious books from Greek and Latin into Macedonian and Slavic languages, and laid the foundations of Macedonian and Slavic literacy and literature3. Th e fi rst Slavic alphabet Glagolica was created on Macedonian soil, for the needs of the Macedonians, but received pan-Slavic character with the Moravija4 and Bohemia mission of St. Cyril and St. Methodius who spread the alphabet among the other Slavic peoples. As a sign of his gratitude and ad-miration Pope Adrian II named the two brothers bishops. After their death on December 31, 1980, Pope John Paul II declared St. Cyril and St. Methodius co-patrons of Europe along with St. Benedict.After the death of the holy brothers St. Cyril (in Rome) and St. Methodius (in Moravija), their disciples, the most famous being St. Clement (840-916) and St. Naum5 (the Ohrid miracle-workers), Sava, Gorazd and Angelarij, returned to Macedonia, settled in Ohrid and continued the work of their teachers. After founding the fi rst Slav-Macedonian bishopric in Vodocha near Strumica, and opening a number of schools throughout Macedonia, St. Clement went to Ohrid and established the fi rst University on the Balkan6. More than

3,500 priests, deacons, doctors, agronomists and teachers would graduate from the University7. In Ohrid, St. Clement founded the well-known Ohrid Archbishopric and in 893 was ordained the fi rst bishop of Velika (the Ohrid region). Th e Ohrid Archbishopric would remain of exceptional importance for Christianity, culture and identity of Macedonia and the Macedonians throughout the centuries.In the 10th century king Samuel, after obtaining the Pope’s blessing, raised the Ohrid Archbishopric to the level of a Patriarchy. Ohrid then became the ecclesiastical and spiri-tual center of the Macedonian State and grew into a true medieval metropolis.After the fall of king Samuel’s Empire, the Byzantium Emperor Vasileus II believed that his subjects would be obedient if the Church was involved. Th us, he decided to reduce the church to the level of an Archbishopric but allowed for Ohrid to remain the center of the Ohrid Archbishopric, which would continue to exist as such until 1767. During the reign of Vasileus II the Ohrid Archbishopric consisted of 32 dioceses. When the Ottoman Empire conquered the Balkan Peninsula they decided not to change signifi cantly the ecclesiastic map of the Balkans8. At the time the dioceses of the Ohrid Archbishopric encompassed the entire territory of ethnic Macedonia. Furthermore, during this period of its existence the Ohrid Archbishopric managed to maintain power over nine dioceses and fi ve bishoprics. During the rule of the Ottoman Empire in Macedonia, i.e. by the middle of the 18th century, the Ohrid Archbishopric

1 St. Paul made his fi rst journey in 51 A.D. In 52 and 53 A.D. he sent apostles to the people of Th essalonica and in 57 A.D. he made his second trip to Macedonia.2 As described in the Holy Scriptures: First journey: During the night Paul had a vision of a man of Macedonia standing and begging him, “Come over to Macedonia and help us.” (Acts 16:9) After

Paul had seen the vision, we got ready at once to leave for Macedonia, concluding that God had called us to preach the gospel to them. (Acts 16:10). From there we traveled to Philippi, a Roman colony and the leading city of that district of Macedonia. And we stayed there several days. (Acts 16:12).

Second journey: St Paul was in Ephesus when he decided to go to Jerusalem, passing through Macedonia and Achaia. “After I have been there,” he said, “I must visit Rome also.” (Acts 19:21) He sent two of his helpers, Timothy and Erastus, to Macedonia, while he stayed in the province of Asia a little longer. (Acts 19:22). After that, Apostle Paul met with the Macedonians Gaius and Aristarchus, the fi rst from the town of Dobor (near current day Strumica) and the second from Th essalonica and traveled to Macedonia with them, visiting the Christians in Filippi, Th essalonica, Dobor, Stobi and Heraklea (now Bitola) along the Roman road Via Ignatia to Rome. As it is written in the works of the apostles when he left Macedonia he had established Christian evangelic life in Macedonia. And now, brothers, we want you to know about the grace that God has given the Macedonian churches. (2 Corinthians 8:1)

3 In the constellation of the Christian cultures of the time, St. Cyril and St. Methodius had to wage a fi erce struggle against the supporters of the three-lingual stance, who considered that the word of God could only be spread in Hebrew, Greek and Latin. St. Cyril vanquished these positions, affi rming the right of each and every nation to an education in its own language.

4 Today in the Czech and Slovak Republic.5 St. Naum would establish the fi rst monastery on the shores of lake Ohrid.6 Within the frame of the university, the Ohrid Literary School would continue to produce numerous books on religious service, long after the university ceased

to exist. Among the best known is the Bologna Psalter - an important Macedonian manuscript. Today this literary work is kept in Bologna (Italy) and it bears the name by this city. Th e Bologna Psalter contains 264 papyrus sheets. It was written by Beloslav, Josif and Tihota, literates from the village of Ramne, Ohrid region, in the period between 1230-1242. In those days manuscripts were usually written by hand on papyrus, and lavishly ornamented and gilded. It is said that the Bologna Psalter is one of the most magnifi cent Slavic manuscripts from XIII century. It was edited in Macedonian, and its orthography is characteristic for the Ohrid Literary School.

7 As part of his eff orts to spread knowledge, St. Clement reformed St. Cyril’s alphabet, naming it the Cyrillic alphabet in honor of his teacher. St. Clements’s alphabet closely resembles the modern alphabet used today in Macedonia, as well as in Russia, Serbia, Montenegro and Bulgaria.

8 Four independent (autocephalous) churches existed within the empire: - the Ohrid (Macedonian) Archbishopric, which governed ethnic Macedonia; - the Con-stantinople Patriarchy which governed Greece; - the Pec (Serbian) Patriarchy which governed Serbia; - the Trnovo (Bulgarian) Patriarchy which governed Bulgaria.

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was unable to pay the high taxes to the Sultan because the Christian people in Macedonia were poor and the churches had no money. Th at is why Sultan Mustafa III passed a decision banning the Ohrid Archbishopric and ordered the Archbishop to be imprisoned. Th e management of the Macedonian ethnic territory from ecclesiastic aspect was handed over to the Constantinople Patriarchy in 1767.Th e high priests in Macedonia made several attempts to reestablish St. Clements’s archbishopric, but the Constanti-nople Patriarchy would not allow that. After the division of Macedonia in 1913, the Serbian and the Bulgarian church purchased from the Turks the bishoprics in Macedonia, thus buying the religious power over them. Only the part that was given to Greece and the bishoprics in it remained under the rule of the Constantinople Patriarchy, as they are today9.In accordance with the two centuries long struggle to re-establish the Ohrid Archbishopric, Macedonian Orthodox Christians and the clergy held an assembly in Izdeglavje in

1943 on the fi rst small piece of free Macedonian territory, when the battle against the fascists was still in progress, and reached a formal decision to re-establish the Ohrid and Macedonian Archbishopric. Just before the end of the war, in 1944, in the village Gorno Vranovci an Initiative Board was formed for re-establishing the Ohrid Archbishopric. In 1945, in the independent People’s Republic of Macedonia, a Resolution was passed at the First clergy-national Assembly to re-establish the Ohrid Archbishopric as the Macedonian Orthodox Church. Th is decision was further formalized at the Second clergy-national Assembly in 1958 when bishop Dositej was appointed the fi rst Archbishop10. In 1967, the Macedonian Orthodox Church was proclaimed Autocepha-lous at the formal session of the Holy Synod in the church of St. Clement in Ohrid. Th e Holy Synod of the Macedonian Orthodox Church made the act of proclamation public during Holy Liturgy on July 19, 196711/12.

9 As a result of this, in the Aegean part of ethnic Macedonia (current day Greece), all old monasteries and churches, along with the bishoprics, are still governed by the Constantinople Patriarchy. In many bishoprics and towns in Aegean Macedonia, there are two bishops – one appointed by Constantinople, one by Athens.

10 Th e Holy Synod of the Serbian Orthodox Church agreed with the decisions of the Macedonian clergy-national Assembly in the resolution AS. No 47/1959 and 6/1959, minutes 57 of June 17/4, 1959.

As a sign of agreement with the formation of the Macedonian Orthodox Church, the Serbian Patriarch German held Liturgy with Archbishop Dositej on July 19, 1959, in Skopje, in the church of St. Mina. At the same time, Clement was ordained the bishop of Prespa and Bitola and later in the church of St. Nicholas in Shtip, Naum was ordained the bishop of the diocese of Zletovo and Strumica. With this a suffi cient number of bishops were ordained allowing for the formation of the Holy Synod of the Macedonian Orthodox Church, established together with other administrative bodies and dioceses in compliance with the Constitution of the Macedonian Orthodox Church. In May 1962, accompanied by Patriarch German and other representatives of the Serbian Orthodox Church, Patriarch Alexis of Moscow visited the Macedonian Orthodox Church. Among them were bishops Nicodemus, Pimen and other dignitaries of the Russian Orthodox Church. On St. Cyril and St. Methodius day, in the church of the Holy Mother of God Kamenska, in Ohrid, Patriarch Alexis of Moscow, Patriarch German and the Macedonian Archbishop Dositej held a joint Holy Liturgy. It was the fi rst Holy Liturgy to be held by the head of the Macedonian Orthodox Church with heads of other Orthodox Churches.

11 Exactly on the second centennial after the Ohrid Archbishopric was banned by Sultan Mustafa III in 1767. 12 Today the Macedonian Orthodox Church has established 7 dioceses in Macedonia and 3 abroad (Australia, Europe and the USA and Canada).

Monastary St. Naum. Th e original monastary was built by St. Naum himself

at the end of the 9th century. It received its current form in the 16th and 17th century.

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hen Julian the Apostate comes to power in Rome (361-363) he banned Christianity and declared his paganism. His orders reached the nobles in

the city of Nicea, Asia Minor, the same city in which the fi rst Ecumenical (universal) Council was held in 325 AD. As a result many Christians would leave the city of Nicea in search of safety. Among those who left the city were Timotej, Komasoj, Efsevij and Tedor. Th ey would fi rst fl ee to Solun (current day Th essalonica, Republic of Greece), where they were met with the same persecution. Th erefore they relocated to Tiveriopol (current day Strumica, Republic of Macedonia) where Timotej was appointed bishop of the church of Tiveriopol, which had been established by St. Paul on his visits to Macedonia. Here they were joined by other Christians and would form a group of 15. Of the fi fteen Timotej and Teodor were bishops, while Komasij, Evsevij, Teodor, Peter, John, Sergej and Nikifor were priests. Vasilij and Toma were deacons. While Jerotej, Danil and Hariton were monks and Sokrat, once a soldier, now dedicated himself to preaching Christianity.

Th e fi fteen preached Christianity throughout the region and built a church on the site of an old Christian basilica. Th e church of Tiveriopol would become a beacon drawing many and enlightening other cities in the region. According to old scriptures describing their lives, not one soul would remain a pagan in Tiveriopol and that all accepted Christianity after hearing their sermons.

Word of their good deeds and the miracles they performed spread in all directions and eventually reached the nobles Valent and Philip in Th essalonica. Th ey went to Tiveriopol and commanded the fi fteen to renounce Christianity. Th e fi fteen not only refused but publicly confi rmed their Christian faith, adding that even though Emperor Julian the Apostate renounced his faith they would never renounce God. At that point the nobles ordered that the fi fteen be tortured. Even during their torture the fi fteen did not renounce Christian-ity but they shamed their tormentors with the wisdom of their words. Because of this the tormentors decided to kill them. Each of the fi fteen was placed on the ground and cut to pieces and the pieces thrown all over and left for the dogs and animals. Yet no animal ate from the fl esh of the fi fteen. One of the soldiers cut the hand of Peter and threw it into the hands of a blind woman standing by the road waiting for someone to throw her food. Th inking it was food, she raised the hand to take a bite, when a miracle occurred and she could see again. Bewildered she wrapped the hand in fi ne cloth and took it home. Th e family entrusted the hand to each next generation until it was decided to place the hand in the church “St. Dimitrija” in Strumica. In 1913 AD, during the division of ethnic Macedonia (between Greece, Serbia and Bulgaria), retreating Greek bishops and priests fi rst took the hand to Th essalonica and later to Kukush (current day Kilkis,Republic of Greece) where it is kept even today, protected in a silver glove, in the church “St. Fifteen Martyrs".

Th e Fifteen Martyrs ended their earthly life in the year 362 AD on December 11 (28 of December according to the old calendar) , in the city of Tiveriopol blessing with their blood the earth, which to this day is called “St. Fifteen”. At the place of their death the Christians built a church and with holy prayers

each of the fi fteen was buried in a separate grave in the church. A magnifi cent fresco of the fi fteen would be placed in middle of the church. Many would come and fi nd salvation and would be healed of their illnesses in the church.

Th e city of Tive rio pol itself will become even more known in the 7th century through the work of St. Teofi lo of Strumica. In the 9th century the barbarian tribes of the Obri who were pagans would attack many cities in Macedonia among which was also Tiveriopol. Th ey burned houses, killed and eventu-ally leveled to the ground the church of “St. Fifteen” and its location was lost over time.

When the Byzantium Empire conquered Macedonia, as noble and ruler of the Strumica/Bregalnica region would be placed St. Methodius (in the period 855-865) who would be joined by his brother Constantine, later known as St. Cyril. Here he would write the fi rst Slavic alphabet for the Slavic population of Bregalnica and he would convert to Christianity 54 000 people. St. Cyril and Methodius and their disciples St. Clement and St. Naum would also establish the fi rst Slavic bishopric in Tiveriopol.

Th roughout this period the resting place and the location of the old church of the St. Fifteen Martyrs would remain forgotten and would be overgrown with old oak trees. Yet the citizens of Strumica would consider this place holy and would light candles and pray in this place. Th e earth protected this holly place though the darkness of the rule of the Ottoman Empire, the chaos of the partitioning of Macedonia after the Balkan wars and the World Wars.

After the re-establishment of the Macedonian Orthodox Church in 1958 and the re-establishment of its Autocephal-ity, the citizens of Strumica decided that they would build a church dedicated to the St. Fifteen Martyrs on the piece of land that all felt was a holy place, the site where people often gathered to pray and light candles.

In a miraculous way when the construction work started in 1972 it immediately uncovered the foundations of the original church of the St. Fifteen Martyrs. In the middle of the church on the fl oor would be found the magnifi cent fresco of the St. Fifteen, while their graves would be found around the altar.

Th e construction of the new church was moved slightly and build next to the foundations of the old church which would be transformed into a museum. Th e new church would be consecrated on May 9th 1982 in a ceremony massively attended by Macedonians, beleivers and clerics of many countries.

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In 1903, the Macedonian issue attracted the attention of diplomats and international public opinion. Th e event that contributed to the affi rmation of the Macedonian cause was the Ilinden Uprising1, the Macedonian revolution from August 2, 1903.

Th e Ilinden Uprising from 1903 represented the surfacing of the century-long strive of the Macedonian people, suff ering under the fi ve century long rule of the Ottoman Empire, to reach the pedestal of freedom.

In the course of the 18th century, important changes oc-curred in Macedonia: the Ottoman feudal system started to fall apart, transition from a barter economy to a monetary economy, growth of large Macedonian cities, creation of a middle class and beginnings of a cultural and national awakening, expansion of an education network, creation of a contemporary literature and publication of numerous books in Macedonian. Th is brought about a period of enlightenment and awakening of the Macedonian nation.

In the last decade of the 19th century, conditions were fi nally ripe for the creation of an organization that would channel the aspirations of the Macedonian people for freedom. In 1983, Macedonian revolutionaries met in Aegian Macedonia, in the city of Th essalonica (current day Greece) and created the

organization named “Secret Macedonian-Odrin Revolution-ary Organization” (TMRO). Th e organization would play a crucial role in uniting the people of Macedonia in their strive towards freedom and an independent Macedonian state.

In only one decade, this organization managed to unite all Macedonian forces, spread the network of the organization on the entire territory of ethnic Macedonia and channel the liberation movement in the right direction.

At the beginning of January 1903, the Central Committee of the Organization, in spite of the unfavorable domestic and international situation and against the better judgement of some prominent revolutionaries, decided to start an upris-ing that summer. Th at decision marked the beginning of a new phase in the development of the Macedonian national liberation movement, and represented a turning point in its history.

Once the decision to start an uprising was passed, seri-ous preparations were undertaken to carry out the uprising within Macedonia’s historic and geographic borders. Th e uprising started on August 2, 1903, on St. Elia’s day, and it was therefore called “Ilinden Uprising”.

Th e uprising encompassed all parts of Macedonia, but it was the best organized in the western parts, in the Bitola

International Public and the Ilinden Uprising

Macedonian Statehood

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vilayet (province). Th e revolutionary forces there, numerous and well organized, showed most enthusiasm in protecting the Macedonian uprising. As a result in the liberated Mace-donian mountain town of Krushevo, not far from the railroad Skopje-Prilep-Bitola, the leaders of the uprising established a free Macedonian Republic, the Krushevo Republic. It existed for ten days. Th ere were similar actions for creating free territories in Ohrid, Kostur, Lerin and other regions in ethnic Macedonia. For three months, Macedonia was in a revolutionary wave of resistance and fi ght for freedom.

Th e Ottoman Empire mobilized large military forces and sent huge expeditions to the bastions of the uprising. As a result, the Macedonian Ilinden uprising was crushed in a wave of blood and destruction.

Th e struggle of the Macedonians in the Ilinden Uprising to attain their freedom, the unrivaled heroism and the inde-scribable massacres of unprotected civilians by the Sultan’s armies resulted in a wave of sympathy and solidarity among the international public. Th e epic fi ght of the Macedonians received wide publicity in the press, which increased the inter-est of the international public for the Macedonian uprising. A worldwide movement called “pro-Macedonian” or “fi l-Macedonian movement” supporting the Macedonian cause

Krusevo at the turn of the 20th century.

Photo: Archives of the Museum of Macedonia

Th e world press informs about the Ilinden Uprising in Macedonia protecting the distressful population

MISS CLARA BARTON, FOUNDER OF THE AMERICAN RED CROSS, PERSONALY DISTRIBUTED AID TO MACEDONIANS

Th e American Red Cross played a signifi cant role in disseminat-ing aid after the Ilinden uprising.

Macedonian committees throughout America organized events to collect humanitarian aid for the Macedonians. As a result, signifi cant aid in the form of money, clothes and medicines were gathered, sent to Macedonia and distributed among the people by representatives of the committees, Protestant missionaries and representatives of the Red Cross.

In December 1903, Miss Clara Barton visited Macedonia and personally participated in distributing humanitarian aid to the people in the Bitola and Kostur region.

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sprung up, organizing all kinds of pro-Macedonian events in a number of countries in Europe and America.

Th e press played a large role in spreading the truth about Macedonia. Almost the entire world press commented the event to some extent. Th e larger newspapers and agencies sent special correspondents and reporters to Macedonia to report on the real situation in Macedonia. Most of the reports were supportive of the Macedonians, full of sympathy and solidarity for the Macedonian uprising, whereas most of the newspapers described the Ilinden Uprising as an all out uprising and an event of extreme signifi cance for Macedonian liberation. Th us the world press became regulator and contributed to expanding the interest for the Ilinden Uprising.

Th e world public got acquainted with the battle of the Macedonians and within its abilities, started an action for indirect engagement in the Macedonian issue. In order to better organize this pro-Macedonian movement, special

“Macedonian committees” started to appear aiming to promote the Macedonian struggle for freedom and to collect aid for the Macedonian population.

On the American continent, in the United States of America, Macedonian committees were formed in New York, Boston and Philadelphia between September and November 1903. Members of these committees were eminent individuals from American society and culture who sent an appeal to the American people, in which they described the struggle of the Macedonians for freedom and their suff erings after the uprising. Th e activities of these committees contributed to an increase of American sympathy for the Macedonian struggle for freedom, as well as an increase of American aid for the Macedonian people.

Signifi cant pro-Macedonian activities also took place in Great Britain. Th e general public there was upset by the events in Macedonia and called for the organizing of pro-Macedonian

“We have a duty to love our language, because it is ours,

just like our fatherland is ours…”

Excerpt from: On the Macedonian Matters,

September 1903Krste Petkov MISIRKOV

(1874-1926)Founder of contemporary

Macedonian literate language.

Goce DELCEV (1872-1903),A key leader and ideologist of the Macedonian National Liberation Movement.Even after he was killed his words would remain a guiding force in Macedonia’s struggle for freedom.

Th e church “St. Bogorodica” (Mother of God) in Krusevo. Th e bells of the church signaled the start of the Ilinden uprising.Th e photo captures part of the destruction infl icted on the town by the vengeful Ottoman armies.

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events for helping the Macedonians. Th e British Parliament also showed interest in what was happening in Macedonia, dedicating several sessions of the Upper and Lower House of Parliament to Macedonia and the Macedonian uprising.

Th e “Balkan Committee”, formed in 1903 in London, coordinated activities to aid Macedonia. Its members were eminent members of British society and culture who worked on raising the interest of the people of Great Britain in the Macedonian issue. In 1903, 1904 and 1905, over 200 rallies were held in Great Britain in support of the Macedonian people and their struggle for freedom. On all those gatherings, the participants passed resolutions expressing their sympathy and solidarity with the fi ght of the Macedonians, and demanded the resolving of the Macedonian crisis with an intervention by the world powers and introduction of reforms that will result in a solution to the Macedonian issue. Th e resolutions demanded autonomy for Macedonia and appointing of a European governor under protection of the world powers.

Pro-Macedonian activities were also organized in France. Th e French public was very vividly interested in the events in Macedonia during the Ilinden Uprising, as was the French Parliament, which asked the Government to take a tougher stance on solving the Macedonian issue. Th e eminent tribune Jean Jauresse was particularly fi ery in his defense of the Macedonian and Armenian cause.

Th e Macedonian committee, formed in Paris even before the Ilinden Uprising, carried out pro-Macedonian activi-ties. Th is committee developed a campaign for promotion

of Macedonia and a campaign to collect humanitarian aid for Macedonia. Th e committee also organized rallies for Macedonia in Paris and the French provinces. Th e Macedo-nian international meeting, held in the Paris Th eater “Sara Bernhard” on October 25, 1903, attracted especially large attention. Eminent persons from a number of European and American countries took part in the meeting. During the meeting, in the name of “world conscience” a resolution was unanimously passed asking the world powers to put an end to the slaughter in Macedonia and to establish real control over the events in Macedonia.

Th e pro-Macedonian movement spread to Italy as well, where the committees for Macedonia and Armenia started activities even before the Ilinden Uprising. Th ese committees organized a number of rallies and collected humanitarian aid for Macedonia throughout the country.

Russia expressed its sympathy for Macedonia through pro- Macedonian events organized by the “Slav Humanitarian Society”. Th e Great Russian authors Lav Tolstoy and Maxim Gorky took an active part in the cause, by starting an initiative for publishing an anthology on Macedonia.

Pro-Macedonian activities also took place in other European countries such as Belgium, Czechoslovakia, Poland, Bulgaria, Croatia, Yugoslavia and other countries. Pro-Macedonian events were always followed by activities to collect aid for the people in Macedonia who suff ered greatly in the uprising. Great Britain organized a special “Macedonian committee” which established a mission in Macedonia, which delivered aid to the people. Th is mission is remembered as playing an important role in improving the situation after the uprising.

Th e International Red Cross and other humanitarian organizations also participated in aid activities. Th e pro-Macedonian activities of the international public during and after the Ilinden Uprising in 1903 played an important role in raising awareness of Macedonia and the Macedonian struggle for freedom.

Source: Selected works, volume V,Hristo Andonov - Poljanski

“Th e struggle of the Macedonians represents a struggle for freedom of an obviously developed and conscious nation”.

Edward BOYL, a prominent Englishman

Macedonian revolutionaries resting between battles. Drawing (and photograph) published in the Daily Graphic, London, 1903.

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Th e history of the Macedonian state is a continual of historic processes, aspirations, battles and uprisings. Th e struggle to establish an independent Macedonian state reached its apogee in 1903 with the Krusevo Republic and the Ilinden Uprising of August 2, 1903. While the foundations of the modern Macedonian state were established at the First Assembly of ASNOM1 on August 2, 1944.2

Th e modern Macedonian state, which was established through the decisions of ASNOM in 1944, represents the realization of the ideals of the Ilinden uprising, the Krushevo

Republic and a confi rmation of the century long struggle, sacrifi ces and suff ering of the Macedonian people in its historic aspirations to create their own state. Exactly because of this the First Assembly of ASNOM was named from the start the Second Ilinden of the Macedonian people.

From the start of the anti-fascist struggle in Macedonia during the Second World War the people of Macedonia would start to establish a separate system of courts and various bodies that would begin to govern Macedonia. Th e military victories of 1943 would speed up the development

Realization of Century Long Ideals of the Macedonian People

1 Anti-fascist Assembly for the National Liberation of Macedonia.2 As a continual of the Ilinden Uprising August 2, 1903.

1944 - ASNOM

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D E C L A R A T I O NOf the Anti-fascist Assembly for the National Liberation of

Macedonia on the fundamental rights of the citizen of democratic Macedonia.

1. Regardless of their nationality, gender, race and religion all the citizens of the federal Macedonian state are equal before the laws;

2. Th e national minorities of Macedonia are guaranteed all rights to freely express and practice their nationality;

3. Each citizen is guaranteed the security of their person and assets, ownership rights and honest initiatives on the market;

4. Each citizen is guaranteed the right to religious freedom and right to freely express ones conscience;

5. All citizens are guaranteed the freedom of speech, press, to assemble, agreement and freedom to associate;

6. Th e electorate exercises their electoral rights in democratic Macedonia through closed voting on the basis of general, equal, direct and individual electoral rights;

7. Every male and female citizen who has at least 18 years of age has the right to vote and to be elected to any bodies of government; …….

10. In a manner envisaged by law, every citizen is guaranteed the right to an avenue for submitting appeals against decisions issued by the organs of government.

Every citizen has the right to submit an appeal and complaint to any organ of government;

11. Th e authorities will make an eff ort to eliminate illiteracy, to raise the people’s culture and to secure free education for all.

In the Monestary St. Prohor Pcinski” on Ilinden, August 2, 1944.

For the Anti-fascist Assembly for the National Liberation of Macedonia.

Secretary PresidentLjupco D. Arsov Metodia Andonov Cento

Expressing their overwhelming joy Macedonians celebrating the Proclamation of the Macedonian state

in the midst of the Second World War. Monastery of St. Prohor Pcinski, August 2, 1944.

of the organs of government, as a result the entire territory of Macedonia will be governed by Liberation councils. Higher organs of government would start to be established on the permanently liberated territories called regional Liberation councils. All of this would press the need to start preparations to hold a Constitutional assembly that would express the sovereign will and the right to self-determination of the people of Macedonia through the formal proclamation of the Macedonian state.3

Th e First Assembly of ASNOM held on August 2, 1944 in the monastery St. “Prohor Pcinski”, was a constitutional assembly of the Macedonian state. Th e organization of

(Photo: Museum of Macedonia)

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the highest organs of government in Macedonia as well as the organization of the state and the political system were established. The Declaration of the fundamental rights encompasses a wide specter of democratic rights of the citizens, which are guaranteed by the constitutions of all democratic states. Th is document also encompasses minority rights guaranteeing their full equality as citizens and additional minority rights. Th e fundamental principles on the rights of the nationalities presented in the Declaration are also determined in the Manifest of the First Assembly of ASNOM.

Today the Republic of Macedonia, with the proclamation of its independence on September 8th 1991, is a sovereign and independent state. We can not but look back with grate respect at First Assembly on August 2, 1944 (the date of the fi rst Ilinden uprising) and to link the centuries of struggle to establish an independent Macedonian state.

Th e meeting room of the First Session of ASNOM

Seal and Manifest issued by the delegates of the First Session of ASNOM. Th e Manifest proclaims the sovereign Macedonian state in which all nationalities are free and treated as equals. Th e issuing of the Manifest upholds the tradition of the Ilinden Uprising 1903 when a Manifest was also issued outlining the basis for brotherly coexistence among nationalities in the future Macedonian state.

3 In compliance with decisions at later meetings of the Assembly Macedonia would become an equal partner in the Democratic Federative Republic of Yugoslavia.

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Delegates at the First Assembly of ASNOM during a break.Front row fi fth from left Metodija Andonov Cento the President of ASNOM. Front row second from right Kiro Gligorov a delegate,

who would become the fi rst president of the Republic of Macedonia after proclaiming independence in 1991.

Battalion “Mirce Acev” formed August 18, 1943, part of the Macedonian Army, which by 1944 would be 66.000 soldiers strong, divided in 7 divisions and 3 corps. Mirce Acev, national hero, was one

of the leaders of the anti-fascist movement in Macedonia and member of the general Staff of the NOV and POM, killed in jail by the Bulgarian occuppators after being mercilessly tortured.

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Th e Constitution – Th e Republic of Macedo-

nia, in a relatively short time frame, has had a very dynamic constitutional development, which can be divided in two main periods. Th e fi rst period encompasses the years 1944-1991. Th e modern Macedonian statehood was established in the struggle of the Macedonian people against the fascist occupation during WWII on the fi rst session of the An-tifascist Assembly for National Liberation of Macedonia (ASNOM), held on 2-3 August 1944. Th e Declaration of ASNOM and the other acts of ASNOM declared the

centuries - long determination of the Macedonian people to found their statehood, and stated their political will to constitute the Macedonian state as a (socialist) republic and a founding member of the Yugoslav federation on basis of equality of all member states and equality of all Yugoslav peoples, including all national minorities. While being a member state of the Yugoslav Federation, and following the adoption of the federal constitutions in 1946, 1963 and 1974, Macedonia had also adopted three constitutions in 1946, 1963 and 1974. Th e constitutional development

The State Order

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iaSkopje, a modern city and capital of

the Republic of Macedonia.

of this period was marked with two tendencies: fi rst, the socialist nature of the state was deepened by moving from state socialism to self-management socialism; second, the powers of the federation were gradually decreased for the benefi t of the powers of the federal republics. Th e second period of the modern Macedonian constitutionalism began with the Declaration of sovereignty and independence, which was adopted by the Macedonian Parliament on 25 January 1991 as a reaction to the on-going process of dissolution of SFR Yugoslavia. In the situation of extreme economic,

FRAMEWORK AGREEMENT

Th e Framework Agreement is a historic tool leading to an up-grading of European standards in Macedonian society, standards established with the Stabilization and Association Agreement of the Republic of Macedonia with the European Union. Created and signed as the most acceptable avenue for exiting the political crisis in western Macedonia in 2001, the Framework Agreement is a democratic step forward in improving the social, political and economic status of minorities in general.

In its current phase of implementation and harmonization in the political system of the Republic of Macedonia, the Framework Agreement has proven that it is a permanent tool that can be used in fi nding solutions to future challenges. As such, the Framework agree-ment has grown into an important instrument of prevention.

Th e project for a multi-cultural society, as the future goal of the people of the Republic of Macedonia, is not exhausted with the Framework Agreement. Furthermore, the agreement itself has not been exhausted. To complete this ambitious project, the Republic of Macedonia has undertaken steps towards decentralizing the state with the adoption of laws for fi nancing local self-government and territorial re-organization.

With this goal behind it, Macedonian society will truly become avant-garde and will again begin to create values to which others aspire.

Th e Ohrid agreement has started to outgrow the borders of Macedonia, fi rst of all as an appropriate example for civil progress in an average society in transition. Having in mind that ethnic and religious minorities are characteristics present in almost all South-east European countries, the Framework Agreement will contribute to the resolution of existing and future minority problems. In this way the Republic of Macedonia, with its Framework Agreement, is already contributing to the approximation of the region towards Europe. Th e Republic of Macedonia is also well aware that this is its obligation now that it is aspiring to full EU membership.

Th erefore, the Framework Agreement has an avant-garde dimen-sion, even for Europe. It is already compatible with the idea of a community of free people and citizens of a united Europe.

Th is contemporary and avant-garde European equal distribution of obligations for respecting human rights for all and by all in the region, with the assistance of the political system established by the Framework Agreement, will contribute towards equality among states, people and individuals in South-eastern Europe.

Th e Framework Agreement will not remain a palliative re-sponse to a certain challenge. Rather it becomes a (South-eastern) European standard.

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political, and constitutional crisis in the former Yugoslav federation, and wars among some of the other member states of the federation, Macedonian citizens expressed their political will for independent statehood in a democratic and peaceful manner, and with overwhelming majority (72.16%), on a national referendum, held on 8 September 1991. Today, this date is celebrated as a national holiday – Independence Day. After declaring independence, the Macedonian Parliament adopted the fi rst constitution of the independent and democratic Republic of Macedonia on 17 November 1991.

- Th e overall constitutional order is based on the following fundamental values: basic freedoms and rights of the individual and citizen as recognized in international law and set down in the Constitution; free expression of national identity; rule of law; division of state powers into legislative, executive and judicial; political plural-ism and free, direct and democratic elections; legal protection of property; freedom of market and enter-preneurship; hu-manism, social justice and solidarity; local self-government; proper urban and rural planning to promote a congenial human environment, as well as ecological protection and

development; and, respect for the generally accepted norms of international law. In addition, the Constitution declares that anything that is not prohibited by the Constitution or by law is permitted in the Republic of Macedonia. Th e core of the constitutional provisions is dedicated to a wide list of basic freedoms and rights of the individual and citizen that are grouped in two basic groups. Th e fi rst group is composed of civil and political freedoms and rights. Th e second group is composed of economic, social and cultural rights. Foreign subjects enjoy freedoms and rights guaranteed by the Constitution and under conditions regulated by law and international agreements. According to the Constitu-tion, rights and freedoms of the individual and citizen may be limited only in cases determined by the Constitution. Rights and freedoms of the individual and citizen may be limited in situations of state of war and state of emergency, declared in accordance with the Constitution. Limitation of the rights and freedoms may not be discriminatory on the basis gender, race, skin color of , religious fate, national or social origin, property or social status. Th e right to life, prohibition of any form of torture, inhuman or humiliating conduct or punishment, freedom of personal conviction, conscience, thought, public expression of thought, and freedom of religion may not be limited in any situation. Th e constitution provides legal guarantees and redress for the violation of the rights and freedoms of the individual and citizen, that eff ectively includes legal redress before the Constitutional Court, the regular courts and the European Court of Human Rights in Strasbourg. Republic of Mace-donia has ratifi ed all the major international and regional (the Council of Europe’s) conventions concerning human and minority rights. Th e founding principles and characteristics that defi ne the Macedonian statehood are also set in the Constitution. Th e Republic of Macedonia is defi ned as a sovereign, indepen-dent, democratic, and social state. Th e territory of the state is indivisible and inviolable. Th e sovereignty of the Republic is indivisible, inalienable, and nontransferable. Th e state is a unitary republic, in which the sovereignty is derived from the citizens and belongs to the citizens and the right to local self-government is guaranteed. Th e citizens exercise their authority through democratically elected Deputies, through referendum, and through other forms of direct expression. Citizens of the Republic have citizenship of the Republic of Macedonia, of which they may not be deprived. Furthermore, the citizens may not be expelled or extradited to another state. Th e political system that is enshrined in the Constitution is a parliamentary democracy founded on the principle of the division of state powers on legislative, executive, and judiciary.

Th e fi rst Constitution of modern Macedonia, December 31, 1946.

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Th e principle of supremacy of the law is in the foundation of the Macedonian State. Th e Republic of Macedonia is a secular state where all religious communities and groups are separate from the state and equal before the law.

– Under intense political pressure from Greece, directly, and through EU and other international institutions and intermediary countries, the Assembly of the Republic of Macedonia adopted two amendments to its constitution, which were promulgated and entered into force on 6 January 1992. Th e fi rst amendment changed Article 3 of the Constitution in order to explicitly articulate that the Republic of Macedonia has no territorial claims toward any neighboring state and that the borders of the Republic can be changed not only in accordance with the Constitution, as previously stated, but also in accordance with the generally accepted international rules. Th e second amendment changed Article 49 of the Constitution in order to clarify that when Macedonia safeguards the cultural, economic and social rights of the Republic abroad, it will not interfere in the sovereign rights of other states or in their internal aff airs. Th e constitution of 1991, including these amendments, were put under legal scrutiny by the Arbitration Commission (also known as “Bad enter Commission”) that was set up in the framework of the Peace Conference on the Yugoslav crisis of 1991, sponsored by the E. Communities. Th e task of the Commission, which consisted of fi ve presi-dents of constitutional courts of EU Member States, was to evaluate whether the Republic of Macedonia satisfi es the tests in the Guidelines on the Recognition of New States in Eastern Europe and in the Soviet Union and the Declaration on Yugoslavia adopted by the Council of the E. Communities on December 16, 1991. After analyzing the Constitution, the Arbitration Commission issued its Opinion No. 6 in which the Commission concluded that Macedonia did satisfy the set conditions for recognition, including high standards in the sphere of human and minority rights and that “ Republic of Macedonia has renounced all territorial claims of any kind in unambiguous statements binding in international law” and that Macedonia pursuant to the Article 49 of its constitution has undertaken an international legal obligation to refrain from any hostile propaganda against any other state. However, despite this advisory opinion of the Arbitration Commission, the recognition of Macedonia by the Member States of the EU did not follow immediately, an issue that is dealt with elsewhere in this brochure.

– Th e Constitution of 1991 was once again amended almost exactly on its tenth

anniversary. On November 16, 2001, the Parliament of the Republic of Macedonia adopted 15 amendments to the Constitution that at the time of the adoption and today still remain to be most controversial issue with respect both to the way they came to life and to their content. Th ese amendments were agreed upon by the four biggest political parties of the “Macedonian block” (VMRO-DPMNE and SDSM) and of the “Albanian block” (PDP and DPA) in the Macedonian Parliament, as part of a more comprehensive “Framework Agreement” signed in Skopje on 13 August 2001 under the auspices of the President of the Republic and with the a faciliatory role of the representatives of the international com-munity i.e. representatives of the EU and USA. Th e aim of this Framework Agreement was to terminate the violent confl ict between the legitimate state military and police forces and the paramilitary Albanian organization called NLA (National Liberation Army), and to prevent a full-scale civil war. Th e agenda of NLA was and still remains controversial among the citizens and the political elite: was NLA an organization with separatist ambitions masked with the human rights rhetoric, or was it an organization that legitimately demanded widen-ing the rights of the Albanians in Macedonia, even through illegitimate use of force against the Macedonian state and citizens? In any case, these constitutional amendments were not agreed upon by following the procedure for constitutional amendments as set in the Constitution of 1991 but in an informal, non-institutional and extra-legal manner. In their content, the constitutional amendments aimed at satisfying the political aspirations of the Albanian ethnicity in Macedonia and eff ectively strengthen their constitutional position and collective rights. Th e majority of the Macedonian scholarly authorities in constitutional law and theory are of the opin-ion that these constitutional changes are compromising the previous liberal democratic character of the Constitution and promote “ethnicitizaton” of the Constitution. Here is a brief overview of these constitutional amendments. In the Preamble of the Constitution, the terms “Macedonian people”, “national state of the Macedonian people in which full equality as citizens and permanent co-existence with the Macedonian people is provided for Albanians, Turks, Vlachs, Roma and other nationalities living in the Republic of Macedonia”, and “ the constitutional and legal continuity of the Macedonian state as a sovereign republic within the Federal Yugoslavia” were abandoned and replaced with the terms “citizens of the Republic of Macedonia”, “Macedonian nation” and, “citizens who live within its borders and are part of the Albanian nation, Turkish nation, Vlach nation, Serbian nation, Roma nation, Bosniak nation and others.” Th roughout the normative text, the amendments intervened,

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rewhere relevant, with introduction of the term “communities” and “communities that are not majority in the Republic of Macedonia” to refer to all ethnic communities/groups to which the Macedonian citizens belong . With respect to the offi cial language(s) in the country, the constitutional amendments abandoned the previous solution according to which the Macedonian language, and its Cyrillic alphabet, is the offi cial language in the Republic, and in the units of the local self-government where the majority of the inhabitants belong to one nationality, in addition to the Macedonian language and Cyrillic alphabet, their language and alphabet are also in offi cial use. Instead, with the amendments, the languages that are spoken by 20% of the population are also offi cial, together with their alphabet, not only on the level of local self-government, but also with respect to the personal documents, in communication with the local offi ces of the ministries and other organs of the central government. Th e Macedonian language and its alphabet remain to be of-fi cial language on the whole territory of the Republic and the only offi cial language in international relations. A new fundamental value of the constitutional order is added: adequate and just representation of the citizens belonging to all of the communities in the organs of the state and other public institutions on all levels of governments. Th e distinct naming of the Macedonian Orthodox Church in the Constitution was abandoned by additional naming of some of the other major religious communities and groups, in particular the Islamic Religious Community, the Catholic Church, the Evangelist-Methodist Church and the Jewish Community. Th e previous list of the rights of the “communi-ties” (previously, nationalities) with respect to expression and preservation of their identity is widened with the right to use the symbols of their community and the right to establish separate educational institutions in addition to cultural, language, artistic, and scientifi c institutions and associations. Th e laws that are directly aff ecting the culture, the use of languages, education, personal documents, use of symbols, and local self-government are subject to special majority voting of all present members of the Parliament, including the majority of all present members of the Parliament that belong to communities that are not majority in the Republic of Macedonia. Also, the Public Attorney (Ombudsman) is elected by the Parliament with majority voting not only of the total number of all members of the Parliament, but also with majority voting of the total number of members of the Parliament belonging to communities that are not majority in the Republic of Macedonia. (Th e same majority is also required when electing three out of seven members of the Judicial Council of the Republic and three out of nine

judges in the Constitutional Court). Th e Public Attorney has also gained new competence – to pay special attention to the principle of non-discrimination, proportionate and just representation of the members of the communities in organs of the central government, local self-government and other public institutions. When naming three members of the Security Council of the Republic, the President of the Republic is obliged to make sure that the composition of the Council refl ects the composition of the Macedonian population. Th e position of the local self-government is also strengthened, and its jurisdiction widened.

- Th e article 17 of the Constitution which protects the freedom and secrecy of all forms of communication of individuals was amended to enable the use of special investigative techniques in order to strengthen the state fi ght against organized crime, corruption and terrorism.

- In December 2005, the Assembly of the Republic of Macedonia adopted eleven new amendments primarily aimed to provide more independence for the judiciary of the country (for more details, see under “Judiciary”).

– Th e Constitution of 1991 contains provisions that stipulate that the Constitution may be changed, amended, or have new provisions added by way of constitutional amendments. A proposal to initiate a change in the Constitution may be made by the President of the Republic, the Government, at least 30 Representatives in the Parliament, or 150,000 citizens. Th e decision to initiate a change in the Constitution is made by two-third major-ity vote of the total number of Deputies in the Parliament. Th e draft amendment(s) to the Constitution is confi rmed with a majority vote of the total number of Deputies and then submitted to a public debate. Th e decision to change the Constitution is made by the Parliament by a two-third majority vote of the total number of Deputies. Th e con-stitutional amendments of 2001 introduced a change in the required majority with respect to the adoption of any future constitutional amendments to the Preamble of the Constitution, provisions on the local self-government and to all other provisions that aff ects the rights of the members of the communities. For adopting constitutional amendments to these constitutional provisions, a two third majority vote of the total number of Deputies, including majority of the total number of the Deputies belonging to the communities that are not majority in the Republic, is required.

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Th e fundamental constitutional value of the division of state powers into legislative, executive, and judicial is em-bodied through the constitutional provisions regarding the organization of state power and through the constitutional provisions regarding competencies of certain fundamental organs of the state.

- Th e Parliament of the Republic of Macedonia (“Sobranie”) represents the citizens of the Republic and exercises the legislative power. Th e Parliament may be composed of 120-140 deputies, although, ever since 1991 it is composed of only 120 deputies. Th e deputies must be elected in general, direct and free elections by secret ballot every four years. Th e mandate of the deputies may be prolonged only in a state of war or state of emergency. Deputies may not perform any other public function or profession that is incompatible with the function of a deputy. In representing the citizens, each deputy votes in accordance to his/her conviction and may not be recalled during his/her mandate. Th e Deputies enjoy immunity from criminal prosecution or detention for expressed opinions or voting in the Parliament. Th e deputies may not be detained without approval of the Parliament, except in situations when caught committing a crime for which the punishment provided by law is at least fi ve years of imprisonment. Th e Parliament is represented by its President, which is elected by the deputies. Th e Parliament has many competencies,

of which most importantly: adoption and changing of the Constitution; adoption and interpretation of the laws; establishing taxes and other public expenditures; adoption of the budget of the Republic and its fi nal account; ratifi -cation of international agreements; decisions on war and peace; changes in the borders of the Republic; entering in or abandoning alliances and unions with other states, and scheduling a referendum; electing the Government of the Republic, judges in the Constitutional Court, and holders of other public functions and offi ces; exercising a political control over the Government and other holders of public functions and offi ces that answer to the Parliament; giving amnesty, and other competencies as determined by the Constitution. In performing its competencies, the As-sembly may form permanent or temporary working bodies (committees). Th e Constitutional amendments of 2001 introduced a new body that is affi liated to the Parliament – Committee on Inter-Community Relations. Th e Com-mittee is composed of 19 Representatives in the Parliament, of which 7 Macedonians, 7 Albanians, 1 Turk, 1 Vlach, 1 Roma, 1 Serb, and 1 Bosniak. If any of these communities does not have representation in the Parliament, the Public Attorney, in consultation with the relevant representatives of the non-represented communities will propose the remain-ing members of the Committee. Th e Parliament elects the Committee members. Th e main objective of the Committee is to look at issues of the inter-community relations and give

Fundamental Organs of the State

Th e church of St. Ilija. Lake Prespa.

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proposals and opinions for their resolution. Th e Parliament is obliged to deliberate and make a decision on the proposals and the opinions of the Committee. Th e Parliament may only be self-dissolved before fi nishing its mandate. Th e sessions of the Parliament are public and they are regularly transmitted on the national television and radio.

– Th e executive branch of the state power is divided between the President of the Republic and the Government.

Th e President of the Republic performs the functions of Head of State. He/she represents the Republic and he/she is supreme commander of the Macedonian military forces. Also, the President presides over the Security Council of the Republic, which also includes the President of the Govern-ment, the President of the Parliament, and the ministers of internal aff airs, defense, foreign aff airs, and justice, and three other members appointed by the President. In accordance with the constitutional amendments of 2001, in appoint-ing three members of the Security Council, the President, overall, must ensure his nominations refl ect the composition of the population of country. Th e main objective of the Security Council is to deliberate on issues of great concern for the national security and defense and give proposals to the Government and Parliament thereafter. In accordance with the constitutional amendments of 2001, the President is elected on general and direct elections, by secret ballot for a period of fi ve years. 10,000 citizens or 30 Deputies in the Parliament can nominate candidates for President. Nobody can hold the offi ce of President more than twice. Th e President must hold Macedonian citizenship, he/she may not be less

than 40 years of age on the day of the elections, and he/she must have been living in the Republic of Macedonia more than 10 years in the last 15 years up to the day of the elec-tions. In case of death, resignation, permanent prevention to perform the duties of the offi ce, or termination of the mandate of the President by the force of the Constitution, which is always determined by the Constitutional Court, the function of the President is performed by the President of the Parliament until new President is elected. In addition, the function of the President is performed by the President of the Parliament when the President is prevented to perform his/her duties (temporary absence or prevention), in which situations the President of the Parliament has no right to vote in the Parliament. Th e offi ce of the President is incompatible with other public functions, professions or functions in a political party. Th e President enjoys immunity during his/her mandate, which can be lifted only with a two-third-major-ity decision of the Constitutional Court. Th e President has the following competencies: giving mandate for formation of the Government; appointing and recalling ambassadors or representatives of the Republic abroad; accepting the letters of accreditation and recall of foreign diplomatic representatives; proposing two candidates for judges in the Constitutional Court; proposing two members of the Judicial Council of the Republic; appointing three members of the Security Council of the Republic; appointing and recalling other holders of state and public functions as determined by the Constitution or law; awarding medals and honors in accordance to law; giving pardon in accordance to law; and performing other functions in accordance with the Constitution. Th e President addresses the Parliament with respect to the issues of his competence at least once a year. Th e President is held accountable for violations of the Con-stitution and the laws in performing his competencies. Th e issue of the President’s accountability may be initiated by the Parliament, with two-third majority of the total number of Deputies, and is decided by the Constitutional Court, with a two-third majority of the total number of judges. If the President is found accountable, his/her mandate as President is terminated by the force of the Constitution.

Th e Government is the main organ of the executive branch of state power. Th e candidate of a political party or political parties that have the absolute majority in the Parliament forms the Government. Th e Government and each of its members are accountable to the Parliament, which may take a vote of no-confi dence. Moreover, the Government itself has a right to raise the question of confi dence or to submit its resigna-tion. Th e mandate of the Government also ceases when the Parliament is dissolved. Ministers in the Government may resign or the President of the Government may propose to

Macedonian President Branko Crvenkovski and Foreign Minister Antonio Milososki meet UN Special Envoy Matthew Nimetz.

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A joint press conference of Macedonian Prime Minister Nikola Gruevski and NATO Secretary General Jaap de Hoop Scheff er, Brussels, February 2007.

the Parliament a dismissal of a Minister. Th e President of the Government and the ministers in the Government may not be Deputies in the Parliament or perform other public functions or professions. Th e major competencies of the Government are: determination of accountability for the policies of carrying out the laws and other regulations of the Parliament; proposals of laws, budget of the Republic and other regulations that are adopted by the Parliament; adoption of regulations and other acts for the execution of laws; laying down of principles on the internal organization and work of the Ministries and other administrative bod-ies, and directing and supervising their work; deciding on recognition of other states and governments; establishing diplomatic and consular relations with other states; making decisions on opening diplomatic and consular offi ces abroad; proposing appointment of ambassadors and representatives of the Republic abroad and appointing chiefs of consular offi ces; proposing candidates for Public Prosecutor and other holders of public and other offi ces in accordance with the Constitution and laws, and other duties determined by the Constitution and laws. Th e state administration consists of ministries and other administrative bodies and organizations as determined by law. Political organization and activities in the state administration are prohibited. Civilians must head the ministries of defense and police, as well as other organs of state administration in these spheres. Th e state adminis-tration must perform its competencies in accordance with the Constitution and the laws, for which it is accountable to the Government.

– According to the Constitution, the judi-ciary power is exercised by the courts, which are autonomous and independent. Th e court system has a single organiza-tions. Emergency courts are prohibited. Th ere are 27 Courts of First Instance, and four Courts of Appeal. Th e highest court is the Supreme Court of Macedonia. With the new Law on courts of 2006, a separate Administrative Court was introduced with jurisdiction for the territory of the whole country. Courts must perform their adjudication function on the basis of the Constitution, the laws and international agreements ratifi ed in accordance with the Constitution. A judge serves without restriction of his/her term of offi ce and he/she may be removed from offi ce only in cases laid down in the Constitution. Judges enjoy immunity. Th e performance of the offi ce of a judge is incompatible with other public offi ce, profession or membership in a political party. Political organization and activity in the judiciary is prohibited. Th e court hearings and passing of verdicts are public, although the public may be excluded in cases determined by law. Th e courts try cases in chambers and

only in cases determined by law. A single judge can try a case. Juries take part in trials in cases as determined by law. Special and independent role in the judiciary is given to the Judicial Council of the Republic of Macedonia, and the Offi ce of the Public Prosecutor.

With the constitutional amendments of 2005, the par-liament no longer elects and removes the judges from offi ce. Th at is the competence solely put on the Judicial

Council of the Republic of Macedonia, performed as it is laid down by the Constitution. Th e Council also decides on the immunity and disciplinary accountability of judges, the competence and ethics of judges in the performance of their offi ce, and proposes two judges in the Constitutional Court of Macedonia. Th e Judicial Council is composed of fi fteen members with a term of six years with the right of only one reelection. Th e President of the Supreme Court and the Minister of justice are ex offi cio members of the Coun-cil. Eight of its members are elected directly by the judges, including three that have to be from the ethnic minority communities of the country. Five members are elected by the Assembly of the Republic, of which two are proposals of the President of the Republic, including one that has to be from the ethnic minority communities. Th e Assembly elects the members of the Judicial Council with an absolute majority, including absolute majority of MPs that belong to the ethnic minorities. Members of the Judicial Council may not hold other public offi ces or professions and may not be members of a political party.

With the constitutional amendments of 2005 (amendment 30), there has been constitutional reforms aimed at more independent and more effi cient offi ce of public prosecution,

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Unitary Structure of the State and the Local Self-Government

Th e Constitution of 1991 guarantees the right of citizens to local self-government. Th e nature and the way this right is exercised is in close relation with the unitary character of the Macedonian state, whose sovereignty is indivisible and exercised by the central government. Th e national Parliament adopts all laws regarding local self-government. Th e legal acts that are adopted by the organs of the units of local self-government (statutes, programs, plans, regulations, decisions, and other acts) must be in accordance with the Constitution and the laws. Th e ministries of the central government and

other organs of the state administration exercise control over the units of local self-government with respect to the legality of the their legal acts, the legality of their activities and the legality of their material and fi nancial dealings.

- In the units of local self-government, the citizens have a right to participate in the decision-making process on issues of local relevance, particu-larly in the areas of urban and rural planning, protection of the environment, communal activities, culture, sport, social security and child protection, and in other areas as determined

charged with the function of persecution of persons who have committed criminal and other off enses as determined by law. Th is offi ce is composed of the Public Prosecutor of the Republic of Macedonia and other public prosecutors. Th e duties of the Offi ce must be performed in accordance with the Constitution and the laws of the Republic. Th e Assembly appoints the Public Prosecutor of the Republic of Macedonia for a term of six years with the right of reelec-tion of one more term, while the other public prosecutors are appointed by the Council of Prosecutors with no term limits. Th e offi ce of public prosecution is incompatible with the performance of any other public offi ce, profession or membership in a political party.

– Th is court is not part of the regular court system of the Republic, but a special organ of the Republic, which is established for the protection of the legal principles of constitutionality and legality. Th e Constitutional Court competencies include: decisions on the conformity of laws with the Constitution and on the conformity of other regulations and collective agreements with the Constitution and laws; protection of the freedoms and rights of the individual and citizen relating to the freedom of personal conviction, conscience, thought, and public expression of thought, political association and activity, and prohibition of discrimination of citizens on the basis of sex, race, religion, national, social, or political affi liation; decisions on confl icts of competencies between holders of offi ces in the legislative, executive and judicial branch of state power; decisions on confl icts of competency between the organs of the central government and organs of the units of self-government; decisions on the accountability

of the President; decisions on the constitutionality of the programs and statutes of political parties and associations of citizens; and, decisions on other issues as determined by the Constitution. Th e Court has the power to repeal or invalidate a law if it determines that the law does not conform to the Constitution, as well as power to repeal or invalidate other regulations, collective agreements, statutes, or the program of a political party or association, if it determines that they do not conform to the Constitution or the laws. Th e decisions of the Court are fi nal and executive. Th e Court is composed of nine judges, who are elected by the Parlia-ment for a nine year term, without a right to reelection, and enjoy immunity during their term in offi ce. In accordance with the 15th constitutional amendment of 2001, three of the judges are elected with an absolute majority of MPs, including an absolute majority of the MPs who belong to the communities that are not a majority in the country. Th e judges in the Court must come from the ranks of outstanding members of the legal profession. Th ey may not hold other public offi ce, profession, or membership in a political party and may not be called for military service.

5. - Th e offi ce of the Public Attorney protects the constitutional and legal rights of the citizens from violations committed by the organs of state administration and other organs and organizations which have public authority, and it has some new competencies as elaborated in the part about the constitutional amendments of 2001. Th e Public Attorney is elected by the Assembly for a term of eight years, with a right of one reelection. (For details on the way the Public Attorney is elected, see the part on the constitutional amendments of 2001.)

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by law. As a form of decentralization, organs of the central state administration may delegate the execution of some of their competencies to the units of local self-government (concretely, to the mayor), for which the organs of the state administration retain subsidiary accountability. Furthermore, the constitutional amendments of 2001 have widened the issue areas where the units of local self-government have competencies, most importantly, in the area of health care, education, public services, and local fi nances. Th e law on local self-government of 2002 represented a further step at providing for both better fi nancial position and higher fi scal responsibility of the units of local self-government. Better and more effi cient fi nancing and fi nancial dealings of the local self government is expected to be achieved by the new law on fi nancing of local self-government units. Its intention is to create a new fi nancing system aimed at granting full independence to local self-government units, high-quality execution of competencies, and establishment of a modern public administration. Th e law was enforced as of January 1, 2005. Th e units of local self-government are fi nanced from their own sources of income, subsidies from the central government, and other sources as determined by law. In particular, the Republic of Macedonia secures fi nancial resources for underdeveloped areas of the units of self-government, in accordance with criteria that are determined by law. Th e constitutional amendments of 2001 have also widened the offi cial use of minority languages, as presented in the part dedicated to these amendments.

From an organizational aspect, Macedonia has a one-level local self-government. Th e municipalities (in Macedonian: opstini) are the units of local self-government. Th e territorial division of the Republic and the territorial areas of each municipality are defi ned by law. In order to enable the municipalities to carry out new and wider com-petences, as well as to refl ect better the ethnic realities and the multiethnic balance of the country, in August 2004, the Parliament adopted new law on territorial organization of the local self-government, reducing the numbers of municipalities from 123 to 84. After the successful collection of 150,000 the law was subjected to a referendum vote in November 2004, on which the law was upheld. Each municipality has its own name, coat of arms, and fl ag, which must be distinct from the ones of other states, the Republic of Macedonia, and other municipalities. Th e Constitution gives the possibility of establishing forms of urban and local self-government (In Macedonian: urbani zaednici and mesni zaednici), but only within the municipalities. Given its status as the capital of the Republic, the City of Skopje has a special status in the

organization of local self-government. Th e new Law on City of Skopje adopted in August 2004 enlarged the City, which is now composed of 10 municipalities and defi nes the relations between the City and municipalities in terms of competences and fi nancial dealings and responsibilities. Important novelty is the offi cial use of both the Macedo-nian and the Albanian language in the City. Th e use of the languages of ethnic minorities, other than the Albanian, has to be decided by the City Council. For purposes of protection and advancement of their mutual interests, several municipalities may form associations of munici-palities in accordance with the law and otherwise cooperate among themselves. Th e citizens exercise their right to local self-government through direct participation or through representation. Th e forms of direct participation are: citizen’s initiative, assembly of the citizens, referendum, petitions, and proposals made through public debates and surveys. Th e representation of the citizens in local self-government is realized through the two main organs of each municipal-ity (and the City of Skopje): the mayor and the council of the municipality. Th e citizens elect both these organs on universal, direct elections, by secret ballot, for a mandate of four years. Mayors are elected in accordance with a majoritar-ian electoral model, while the members of the councils are elected in accordance with a proportional electoral model.

MUNICIPALITIES:

Aracinovo, Berovo, Bitola, Bogdanci, Bosilovo, Brvenica,

Valandovo, Vasilevo, Veles, Vevcani, Vinica, Vranestica,

Vrapciste, Gevgelija, Gostivar, Gradsko, Debar, Debarca,

Delcevo, Demir Kapija, Demir Hisar, Dojran, Dolneni,

Drugovo, Zelino, Zajas, Zelenikovo, Zrnovci, Ilinden,

Jegunovce, Bogovinje, Kavadarci, Karbinci, Kicevo,

Konce, Kocani, Kratovo, Kriva Palanka, Krivogastani,

Krusevo, Kumanovo, Lipkovo, Lozovo, Makedonska Ka-

menica, Makedonski Brod, Mavrovo, Mogila, Negotino,

Novaci, Novo Selo, Oslomej, Ohrid, Petrovec, Pehcevo,

Plasnica, Prilep, Probistip, Radovis, Rankovce, Resen,

Rosoman, Sveti Nikole, Sopiste, Staro Nagoricane, Struga,

Strumica, Studenicani, Tearce, Tetovo, Caska, Centar

Zupa, Cesinovo, Cucer Sandevo, Stip, Aerodrom*, Gazi

Baba*, Butel*, Gjorce Petrov*, Karpos*, Kisela Voda*,

Saraj*, Centar*, Cair*, Suto Orizari*.

Note: * - Skopje municipalities

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reTh e Political Parties and the Electoral System

With the adoption of the Constitution of 1991, the Republic of Macedonia has embarked on its transition from an undemocratic to a democratic political system. Th is democratic transformation represents a process of trial and error, with relatively frequent changes in the electoral system and a lot of dynamics in the party system. Th e Constitution has set up the general framework for the development of both of these systems. One of the fundamental values of the Macedonian constitutional order is the political pluralism and free, direct and democratic elections. Every citizen acquires the right to vote when reaching 18 years of age. Th e right to vote is equal, universal and direct, and is exercised at free elections by secret ballot. Only citizens who are deprived from their legal capacity are deprived from the right to vote. Every citizen has the constitutional right to hold a public offi ce. Citizens may freely establish, join or cease membership in a political party, except citizens who are performing certain public offi ces, such as judges in the regular courts, judges in the Constitutional Court, public prosecutors, and members of the Judicial Council of the Republic. Th e monopoly of the Communist Party of Macedonia was terminated and the party pluralism was introduced in June 1990, with the court registration of the political party named Movement for Pan-Macedonian Action (MAAK).

- According to the amendments on the Law on Political Parties of 2005, a political party may be founded by at least 1000 citizens who hold Macedonian citizenship and have permanent residence in the country. Th e newly founded political party has an obligation to register

in the Court Register of Political Parties at the First Instance Court in Skopje. Th e programs and the activities of the political parties may not be directed at a violent destruction of the constitutional order of the Republic, or at encouragement or incitement to a military aggression or ethnic, racial or religious hatred or intolerance. Whether that is the case, with respect to the programs, it is decided by the Constitutional Court, and with respect to the activities, it is decided by the competent court of fi rst instance. In the fi rst case, the political party may cease to exist outright, and in the latter case, its further activities may be initially prohibited, although the political party may appeal the decision to a higher court, which, if affi rmed, may lead to termination of the political party. So far, there has been only one court refusal to register a political party. Financing of political parties is regulated by law. As of January 1, 2005 there is a special law of party fi nancing being enforced. Th e main legal sources of party fi nancing are: membership fees, donations, income from party property, loans, gifts, legacy, sale of party promotional and propaganda materials, as well as the budget of the Republic. Of the budget money, 30% are divided among parties that have participated on the parliamentary or local elections and had received at least 1% of the votes and 70% are proportionally divided among parties according to the seats won in parliament on parliamentary elections or according to the mayorships and seats in municipality councils won on local elections. Political parties may not acquire fi nancial resources from nongovernmental or religious organizations, anonymous sources, as well as international institutions, foreign governments, or other foreign physical

Table: Members of the Parliament of the Republic of Macedonia, 2006 - 2010TOTAL WOMEN

VMRO-DPMNE 38 13Social Democratic Union of Macedonia (SDSM) 23 8Democratic Union for Integration (DUI) 13 4Party for Democratic Prosperity of the Albanians (DPA) 11 3New Social democratic Party (NSDP) 7 2VMRO-People’s Party (VMRO-NP) 5 2Liberal-Democratic Party (LDP) 5 1Liberal Party (LP) 2 1Socialist Party of Macedonia 3 1Party for Democratic Prosperity (PDP) 3 -Democratic renewal of Macedonia (DOM) 1 1Party for European Integration (PEI) 1 -Democratic Alliance (DS) 1 -Roma Alliance (SR) 1 -United Party for Emancipation (OPE) 1 -Democratic Party of the Turks of Macedonia (DPTM) 2 -Democratic Party of Serbs (DPS) 1 -Independent Deputies 2 -TOTAL 120 36

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or juridical persons. Furthermore, political parties may not acquire fi nancial resources from state organs, organs of the local self-government, or companies that are in state property or involve state share of property. Th e fi nancial dealings of the political parties are subjected to a fi nancial audit by the competent state organs. Political parties may be organized only territorially. Th e party system is extremely fragmented. As of 2007, there are 91 registered political parties. Most of these political parties have never been represented in the Parliament. Th e political parties that are represented in the 2006-2010 composition of the Parliament are: VMRO-DPMNE -38 , Social Democratic Union of Macedonia (SDSM) -23, Democratic Union for Integration (DUI) -13, Party for Democratic Prosperity of the Albanians (DPA) -11, New Social democratic Party (NSDP) – 7, VMRO-People’s Party (VMRO-NP) – 5, Liberal-Democratic Party (LDP) -5, Liberal Party (LP) -2, Socialist Party of Macedonia -3, Party for Democratic Prosperity (PDP) -3, Democratic renewal of Macedonia (DOM) – 1, Party for European Integration(PEI) – 1, Democratic Alliance (DS) – 1, Roma Alliance (SR)- 1, United Party for Emancipation (OPE)- 1, Democratic Party of the Turks of Macedonia (DPTM) -2, Democratic Party of Serbs (DPS)- 1 and two independent MPs. Since 1990, the VMRO-DPMNE, the main center-right political party, and SDSM, the main center-left political party, have proven to be the kingmakers of the Macedonian govern-ment. Apart from the ideological criterion, there are political parties organized by either ethnic or religious criterion, which is permitted. For most of the 1990ies, the PDP and DPA used to be the two major political parties of the Albanian community of Macedonia, and ever since 1992, one or both of them have been represented in the Government in continuum. However, the elections of 2002 have marked a sweeping victory of DUI, a brand new political party of the Albanians in Macedonia, winning remarkable 16 seats in the Assembly. Its success on the elections is widely viewed as direct consequence of the image of the party as a political successor of the paramilitary NLA active in the 2001 confl ict in the country. In addition, the 2002 elections have marked, for a fi rst time, the entrance of other political parties formed by the smaller ethnic communities in Macedonia. As a result, there are MPs in the Assembly belonging to virtually all ethnic communities living in Macedonia.

– Since the introduction of free and multi-party elections in 1990 the Macedonian parliamentary democracy has tested two types of electoral models. In the 1990 and 1994 parliamentary elections a majoritarian electoral system was implemented. Th ere were 120 electoral districts for election of 120 members of the Parliament. Th e members of

the Parliament were regularly elected in the second round of the elections, with a relative majority of the voters. Th e 1998 parliamentary elections were held in accordance to a new, mixed electoral model. Th e Parliament continued to be composed of 120 members. However, 85 members were elected in accordance with a majoritarian rule, again with regular election of the members of the Parliament in the second round, with a relative majority. 35 members of the Parliament were elected in accordance with the proportional rule, whereby the Republic was a single electoral district, and with the implementation of the d’Hondt formula for the distribution of the mandates, and with implementation of a 5% electoral threshold. Th e new Law on election of representatives in the Parliament, adopted in May 2002, has again changed the electoral model. It introduces a pure proportional electoral model, with six electoral districts, each giving 20 mandates in the Parliament, which is still composed of 120 members. Th e main electoral organs are the State Electoral Commission, six regional electoral commissions, and numerous electoral commissions affi liated with each of the voting units. According to the electoral law changes of 2006, the State Electoral Commission is composed of seven members who are professionally engaged in its work. Th e President of the Commission is proposed by the parliamentary opposition, and his/her deputy by the parliamentary majority. In each of the fi ve parliamentary elections so far (1990, 1994, 1998, 2002 and 2006), the voters’ turnout has been relatively high, the lowest being on the last parliamentary elections of 2006, 55,98%.

Th e presidents of the largest governing and opposition parties address the Macedonian public.

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reTh e Legal SystemTh e Republic of Macedonia has a civil law type of a legal system, and thus belongs to the continental European countries that are following the great traditions of the Roman Law. Th e county has a written constitution, and all the laws must be in accordance with the Constitution, and all the other legal acts must be in accordance with the Constitution and the laws. Th e international agreements that are ratifi ed in accordance with the Constitution are part of the internal legal system of the country, and can not be amended by law. Th e Republic also respects the generally accepted norms of the international law. Th e rule of law is a fundamental value of the constitutional order. Everybody must respect the Constitution and the laws, and all citizens are equal before the laws. Th e legal principles of constitutionality and legality in abstracto (with respect to general legal acts) are protected by the Constitutional Court, and, in concreto (implementation of the general legal acts to individual cases), by the regular courts. Th e laws are the core legal act in the legal system of the Republic by which all the major areas of social activity are regulated. Th e Constitution dictates that all laws must be construed around the paramount need to respect the constitutionally guaranteed rights and freedoms of the individual and the citizen, and consequently, anything that is not prohibited, according to the Constitution is allowed. With respect to the legal traditions followed, the content of the laws has always been infl uenced by the legal systems of the continental, western European legal systems, most notably, the ones of France and Germany, especially

in the area of criminal and civil law. Nowadays, each new law is prepared and adopted with consideration of the legal standards of the Council of Europe and the European Union. In particular, special eff orts are made to approximate the laws with the relevant legal instruments of the EU. Each member of the Parliament, the Government, and at least 10,000 citizens may give formal proposals for adoption of a new law. Each citizen, group of citizens, institution or association may submit initiative for adoption of laws to these holders of the formal legislative proposal power. Th e laws, as well as the other legal acts, must be published before entering into force in the Offi cial Gazette of the Republic of Macedonia, seven days after their adoption at latest. After adoption, laws must be proclaimed by decree that is signed both by the President of the Parliament and the President of the Republic. Th e latter has a right not to sign the decree of proclamation of the law (right of suspensive veto), which triggers a new deliberation over the law in the Parliament. If the Parliament adopts the law again with an absolute ma-jority of the total number of its members, the President of the Republic must sign the decree. In cases of laws that are adopted by the Parliament with a two-third majority of its total number of members, the President of the Republic must sign the decree. Th e laws, in principle, enter into force, at the earliest, 8 days after their publication, and, in extraordinary cases determined by the Parliament, they may enter into force on the day of their publication. Th e laws, as well as the other

Th e highest legislative body, the Macedonian Parliament, at work.

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ialegal acts, may not have a retroactive legal eff ect, except in extraordinary cases, and only when the retroactivity benefi ts the citizens that are aff ected. Th e Parliament adopts other acts with legal nature and legal eff ect, such as decisions, the budget, the fi nal account of the budget, etc. Th e main legal acts adopted by the Government are decisions (for example, on recognition of other states and governments, on opening diplomatic and consular offi ces in other countries, etc.), regulations, and other acts (most notably directives) for implementation of laws adopted by the Parliament. In cases of state of war or state of emergency, and only while they last, the Government may adopt the so-called regulations with a force of law (regulation-law), by which, the Government takes over the legislative function from the Parliament. Th e courts implement the laws by two main legal acts-verdicts and decisions. Th ese court legal acts are not formal source

of law, though, when adopted by higher courts (courts of appeals and the Supreme Court) they do infl uence the way the laws are implemented by the lower courts and secure unifi ed approach to the implementation and interpretation of laws. Th e opinions and conclusions with respect to the implementation of the laws adopted on joint sessions of the higher courts have the same eff ect. All individual legal acts adopted in the fi rst instance by the courts, the state adminis-trative organs and institutions, as well as other organizations with public authority, may be appealed by those aff ected. All individual legal acts must state their legal basis and instruct the addressee with respect to the further legal recourse and remedies that are available to him/her. Th e proposals and the adoption of all general legal acts, before and after adoption, must be accompanied with an elaboration with respect to its legal basis, justifi cation and purpose.

Arabati Baba Teke (Dervish monastery), 18th century, Tetovo.

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Macroeconomic Developments

The transition process of the Macedonian economy started at the end of 1995. Th e other countries in Eastern Europe had commenced the process several years earlier. Macedonia’s delay was a result of a series of factors that left gross economic consequences: the disintegration of former Yugoslavia (1990-1992), the imposition of sanctions against FR Yugoslavia (spring 1992 – autumn 1995), and the Greek embargo (February 1994 – September 1995). Th erefore, Macedonia suff ered severe damages. With the dissolution of the Yugoslav market, Macedonia lost a great portion of its traditional markets. Th e sanctions against Yugoslavia caused losses topping 3 billion dollars. Th e Greek embargo blocked the main traffi c artery towards Europe along which 90 percent of Macedonia’s exports ran. Th e sanctions coupled with the embargo increased the prices of the Macedonian products by around 80 percent on average.

During this period, almost all relevant macroeconomic indicators had a downward trend. Th e fi rst modest GDP increase was registered in 1996. In the following couple of years the Macedonian economy took an upward course as a result of the well-carried out strenuous reforms. Macedonia managed to end 1999, an extremely diffi cult year due to the Kosovo crisis, with a 4.3% GDP growth rate, followed by a 4.5% GDP growth rate in 2000. Th e positive trend, however, was thwarted in 2001 because of the military crisis in Macedonia. In 2001, the infl ation rate reached 5.5% and the GDP fell by 4.5%. In 2003 the infl ation rate was 1.2%, while GDP increased by 2.8%. One of the key policies for 2004 remains the maintenance of the stable exchange rate of the denar, as it is the basis for all other policies.

In 2005 the real GDP growth rate was 3.8%, and the nominal GDP growth rate stood at 7.2% relative to 2004.

TRANSITION

The Macedonian Economy

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Macedonia is one of the few countries that managed to avoid a system-banking crisis, although there were more reasons for that in Macedonia than in any other country. Macedonia’s monetary inde-pendence was declared in April 1992 when the first Macedonian de-nars went into circulation. They lasted for a year and their introduc-tion marked the beginning of the fight against hyperinflation, which amounted at the time to around 2,000%. By way of anti-inflation programs Macedonia managed to bring the hyperinflation down and to keep it on a one-digit level since 1995 against the influence of external factors. Maintaining the stable purchase power of the denar by preserving price stability has been one of the major achievements of the Macedonian National Bank over the past ten years. Although the denar exchange rate is fluctuating, the National Bank manages to keep it stable with regular interventions on the exchange market, in supply and demand alike.

The monetary modernization developed mostly between 1993 and 1996, mainly by severing ties between the National Bank and the financing of agriculture through the primary issue models. In addition, ties were cut off between the monetary and the executive branch and as a result of certain legislative modifications the Nation-al Bank became independent in managing its credit and monetary policy. Macedonia proclaimed the internal denar convertibility and the National Bank said it would not directly determine interest rates of commercial banks. Finally, banks underwent a rehabilitation pro-cess considering their poor solvency and the fact that almost 80% of the bank credits since Macedonia’s independence were non-perform-ing loans. The Republic of Macedonia assumed from bank balances liabilities incurred by using foreign credits from the Paris Club and the London Club, as well as the foreign exchange saving debts.

Monetary Independence

Over the past three years, that is to say from 2004 to 2006, Macedonia’s economic growth rate stood at about 4 %, prompted chiefly by the considerably increased exports.

According to the macro-economic projections for 2007, GDP is expected to rise by 6%*, and the inflation rate to reach about 3.0%.

The stable macroeconomic situation, characterized by a low inflation rate, stable denar exchange rate, conservative fiscal policy, growing foreign currency reserves and intensified structural and institutional reforms, helped Macedonia enter a period of a higher and sustainable economic growth.

* “DespitethehighlyrealisticassumptionsbehindtheprojectedrealGDPgrowthrates,westicktotheconservativeapproachandbaseourmacro-financial calculationsonaverywatchfulmacroeconomic framework.Therefore,weproposearealGDPgrowthrateof4.0%in2007and4.5%in2008and2009”

(NationalDevelopmentPlan2007-2009)

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Change in real GDP % -7.5 -1.8 -1.1 1.2 1.4 3.4 4.3 4.5 -4.5 0.9 2.8 4.1 3.8* 3.1** Inflation (avg.)1 % 349.8 121.8 15.9 3.0 4.4 0.8 -1.1 5.8 5.5 1.8 1.2 -0.4 0.5 3.2 Inflation (end-year) % 229.6 55.4 9.2 0.2 4.5 -1.0 2.3 6.1 3.7 1.1 2.6 -1.9 1.2 2.9 General Government balance % GDP -13.4 -2.9 -1.2 -0.5 -0.4 -1.7 0.0 1.8 -7.2 -5.7 -1.1 0.0 0.2 -0.6 Exchange rate, end of year DEN/EUR / / / / / / / 60.7 60.9 61.0 61.3 61.3 61.3 61.2 Exchange rate, end of year DEN/US$ 23.6 43.2 38.0 40.0 49.8 54.5 56.9 65.9 68.0 64.7 54.3 49.4 49.3 48.8 Exports (FOB) US$bn. 1.06 1.09 1.20 1.15 1.24 1.29 1.19 1.32 1.16 1.11 1.36 1.67 2.04 2.40Imports (FOB) US$bn. 1.01 1.27 1.43 1.46 1.62 1.81 1.69 2.01 1.68 1.92 2.21 2.78 3.10 3.685

Trade balance US$bn. 0.04 -0.18 -0.22 -0.31 -0.39 -0.52 -0.50 -0.69 -0.53 -0.80 -0.85 -1.11 -1.06 -1.29Current account balance US$bn. -0.08 -0.26 -0.30 -0.33 -0.29 -0.27 -0.03 -0.07 -0.24 -0.36 -0.15 -0.41 -0.08 -0.02

as % of GDP2 % -3.3 -7.8 -6.7 -7.7 -7.7 -7.5 -0.9 -2.0 -7.1 -9.5 -3.2 -7.7 -1.4 -0.4 Foreign exchange reserves US$bn. 0.12 0.17 0.28 0.28 0.26 0.32 0.45 0.70 0.76 0.72 0.90 0.97 1.32 1.87 Import cover (Reserves/imp.) months 1.2 1.3 1.9 1.9 1.6 1.9 2.8 3.7 4.7 4.0 4.3 3.6 4.4 5.3 Total foreign debt3 US$bn. 1.14 1.26 1.43 1.17 1.13 1.47 1.50 1.55 1.49 1.64 1.84 2.08 2.27 2.43

as % of GDP2 % 45.4 37.2 32.1 26.5 30.3 41.1 40.9 43.1 43.5 43.5 39.7 38.7 39.1 39.2 Total debt service4 US$bn. 0.02 0.14 0.05 0.14 0.12 0.14 0.16 0.19 0.21 0.23 0.25 0.25 0.23 0.48

Table:Basic macroeconomic indicators Sources:NationalBankoftheRepublicofMacedonia,StateStatisticalOfficeandMinistryofFinance

* Preliminarydata(SSO).** Estimateddata(SSO).

1 Upto1999,accordingtotheretailpriceindex,since2000,accordingtotheconsumerpriceindex.

2 CalculatedonthebasisofSSOnominalGDPindenarsconvertindollarsusingaverageexchangerate

3 Since1998,totalexternaldebtcomprisesshortandlong-termcreditsandloans.

4 Referstolong-termexternaldebt.5 Additionallyadjustedforthetime

laginimportsofelectricity.

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re Figure: Structure of the long-term debt by types of creditors (as of December 31, 2006; in millions of Euros)

Source: National Bank of the Republic of Macedonia

Th e policy of restricted indebtedness with foreign credits and loans, as well as the policy of regular servicing of the due liabilities in the public sector continued in 2003. As a result of the implementation of the reforms in the country and the adherence to the policy agreed with the International Monetary Fund, the Fund extended the Stand-By Arrangement. Th e renewal of the cooperation with the International Monetary Fund represents a positive signal to the international community and prerequisite for obtaining the announced funds from donors and creditors. Th e external debt of the Republic of Macedonia consists of liabilities of residents to non-residents, which rose on the basis of used short-term and long-term loans and credits extended by multilateral, bilateral and private creditors.

On November 30, 2003, the total external debt of the Republic of Macedonia amounted to US Dollar 1,789.43 million. Out of this amount, 95.01% or US Dollar 1,700.22 million was a long-term debt, while the short-term debt equaled US Dollar 89.21 million or 4.99%. In the fi rst half of 2003, funds in the amount of US Dollar 77.41 million were withdrawn on the basis of long-term credits and loans. A total of US Dollar 98.23 million was repaid on the basis of servicing foreign liabilities, US Dollar 73.24 million of which is principal and US Dollar 24.99 million is interest.

Th e largest portion of the external long-term debt or 85.62% consists of the public sector debt in the amount of US

Dollar 1,383.17 million, while 14.38% is a debt of the private sector in the amount of US Dollar 232.22 million. With respect to the original date of maturity, the largest portion of the public debt, in the amount of US Dollar 454.62 million or 32.89%, matures in 10 to 15 years, US Dollar 450.79 million or 32.62% becomes due in 15 to 20 years, US Dollar 332.81 million or 24.08% matures in 30 years. Th e share of credits and loans with maturity of up to 10 years in the amount of US Dollar 119.27 million or 8.63%, and the share of those which become due in 20 to 25 years in the amount of US Dollar 23.91 million or 1.73% is considerably smaller.

As of June 30, 2003, the short-term debt equaled US Dollar 81.38 million. Of these US Dollar 77.78 million were liabilities based on principal, US Dollar 0.47 million were overdue interest, and US Dollar 3.13 million are estimated late fee charges. Th e short-term debt outstanding consists of the planned repayments of principle maturing in the following period, the capitalized amounts of the arrears based on principle and interest, and the estimated late interest.

In order to reduce its external debt as of January 2004 the Republic of Macedonia increased its debt towards citizens, domestic companies and banks. By the end of 2004 the Government intends to increase its home debt by additional 2 billion denars with which it will service its external debt. Th e Government has allocated 200 million denars in the budget expenditures for payment of interests on these loans.

FOREIGN DEBT

Figure: Structure of the long-term debt by Multilateral creditors (as of December 31, 2006; in millions of Euros)

IBRD22,7%

IDA33,1%

EIB14,2%

EBRD10,0%

EU10,2%

Other creditors9,8%

I N D I C A T O R S 31.12.2001 31.12.2002 31.12.2003 31.12.2004 31.12.2005 31.12.2006

Total external debt/GDP (criterion: moderate indebtedness 30-50%) 45.50% 40.25% 36.99% 36.89% 44.28% 39.50%

Total external debt/export(criterion: lower indebtedness 0-165%) 107.77% 98.75% 98.25% 99.59% 111.47% 90.40%

Debt servicing/ export of goods and services (criterion: lower indebtedness 0-18%) 14.69% 15.66% 14.86% 12.99% 10.99% 20.51%

Repayment of interest/export of goods and services(criterion: lower indebtedness 0-12%) 4.43% 3.55% 3.19% 2.53% 2.65% 3.23%

Table: Indictors for the level of indebtedness of the Republic of Macedonia

Tax relieves concern domestic and foreign taxpayers, and their prime goal is fostering foreign investments. Some of them include:� extremely low corporate income tax rate of a mere 12%.� three-year exemption from corporate income tax for foreign

investors being 100% owners of Macedonian companies.� reduced corporate income tax base for investors investing part of

their profi t in underdeveloped regions. Th e reduction equals the invested funds of the profi t, up to 50% of the base though.

� reduced corporate income tax from the base when investing in environmental protection. Th e reduction equals the size of the investment.

� profi t tax exemption in a period of 10 years for a company that uses a customs-free zone.

� tax relieves when investing in technological modernization or if a company is listed on the offi cials market of the Macedonian Stock Exchange, etc.

Th e tax structure in Macedonia is as follows:� personal income tax – 12% for all taxpayers as of 2007, which

will decline to 10% in 2008.� corporate income tax (profi t tax) – 12% as of 2007, which will

decline to 10% in 2008.� value added tax – a general rate of 18% and a reduced rate of 5%.� customs – ranging from 0% to 30%, with some food items be-

ing subject to a higher rate of 60%. Th e Republic of Macedonia was admitted to the World Trade Organization on 4 April 2003, which resulted into a customs rate reduction for approximately 3,000 products as of 1 January 2004. Th e average customs rate of 12% in 2003 was reduced to 10.7% in 2004, while in 2006 it stood at less than 7%.

� excise – sales tax on specifi c products: oil and oil derivatives, tobacco products, alcohol beverages, and cars.

Th e Government introduced a fl at tax rate of 12 percent on corporate and personal income in 2007, which will fur-ther decline to 10 percent in 2008. Th e previous corporate income tax rate was 15%, while the personal income tax rates stood at 15%, 18% and 24%. With the aim of encouraging additional foreign and domestic investments, the corporate tax rate on re-invested profi t is set at 0%. Th e tax authorities have established a Special Unit for large taxpayers.

Th ere are special tax incentives in the technological and industrial development zones (TIDZ). Th e most important include a 10–year corporate income tax exemption and a 50 percent personal income tax reduction for a period of 5 years. After the expiry of the 10-year corporate income tax exemption, companies in the zones will be able to take advantage of the 0% re-invested profi t tax rate. Th e eff ective personal income tax amounts to 5%[1].

In order to avoid double taxation of foreign companies located in the Republic of Macedonia, 34 double taxation agreements have been concluded on a bilateral basis, 25 of which are in force[2]. Th e remaining 9[3] are expected to be ratifi ed soon.

Th e tax system of Macedonia came to resemble developed countries’ tax systems at the outset of 1994 when new tax laws came into practice. Th e sweeping tax system reforms ended a few years later with the enactment of the Value Added Tax Law, which came into eff ect on 1 April 2000 after many years of preparations.

As part of the obligations the Macedonian Government undertook with the arrangement with the IMF, modifi cations were made to the Value Added Tax Law, and in April 2003, the general rate was decreased from 19% to 18%, whereas the reduced rate for certain items remained 5%. As of April 1, 2003, the general rate of 18% applies to electricity for industry, heating, apartments, medicaments, hygiene products, sweets and alcohol drinks, while as of June 2003 this rate also applies to electricity for households. Th e reduced rate of 5% applies to water for households and alimentary products.

TAXATION IN MACEDONIA

Th e social contributions, under Macedonia’s tax system, are deducted from salaries and paid directly to the three social funds: the Pension and Disability Insurance Fund, the Health Insurance Fund and the Employment Fund. Th e social contribution rates are as follows:� contribution for pension and disability insurance – 21.2%.� contribution for health insurance – 9.2%.� contribution for employment – 1.6%.� contribution for additional health insurance – 0.5%.

Figure: Tax revenues structure for Budget 2007

[1] Only in 2007, the personal income tax will amount to 6% in TIDZ.

[2] Croatia, Turkey, the then Federal Republic of Yugoslavia, Poland, Italy, the People’s Republic of China, the Russian Federation, Alba-nia, Sweden, Ukraine, Slovenia, the Netherlands, Bulgaria, France, Egypt, Denmark, Switzerland, Romania, the Czech Republic, Iran, Finland, Hungary, Belarus and Spain.

[3] FR Germany, Slovakia, Moldova, Austria, Latvia, Belgium, Bosnia and Herzegovina, Great Britain and Ireland.

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Th e unemployment rate in Macedonia had been con-stantly on the rise until 2005. According to the data of the Employment Agency in the period between 1991 and 2003, the number of the jobless rose by more than 100%. In 1991, there were over 167,000 unemployed people in Macedonia. Ten years later, in December 2001, the fi gure had jumped to 355,000, whereas in December 2003 it was 390,361. Th is growing tendency is mainly a result of the transition process and the corporate reforms. A major por-tion of the unemployed are laid-off workers of loss-making enterprises and other companies that failed to adjust to the new business conditions.

Within the frame of its macro-economic policy for 2004, the Government adopted a National Action Plan for Employment, which envisaged a 3% reduction in the unemployment rate.

Th e Plan, which was produced by the EU’s CARDS Program, was tested until 2005. It cost 10 million euros, 2 million of which came from the Union’s funds, while the remainder was provided from the budgets of the economic ministries. Th e Plan fostered ten pilot projects, with precisely defi ned measures and directions, which were implemented in the employment sphere and in accordance with the EU regulations.

According to the Plan, the Employment Bureau was transformed into an Employment Agency following the western European model. Th e detection of active measures for creating new jobs is the priority of this institution.

In April 2003, according to the workforce survey con-ducted by the State Statistical Offi ce , there were 861,000

economically active people, and the number of the unem-ployed was 316,000. According to the Employment Agency in 2003 the unemployment rate reached 36.7%. Th e dis-crepancy between the fi gures presented by the Employment Agency and the State Statistical Offi ce is a result of their diff erent methodologies. One of the major characteristics of the unemployed in Macedonia is their youth. If analyzed by sex, 56.98 % of them are men, and if analyzed by age, 34.04 % are under 30.

Around 57% of the employed in 2004 worked in the pri-vate sector, which is a 20% increase from 1997. Macedonia’s employment rate had a downward trend until 2004. Th e

negative trend was stalled in 2005 when the number of the employed increased by 4.4% from 2004 and in 2006 went further up by 4.6% from 2005, while the number of the jobless in 2006 noted a 0.8% decline from 2005.

In spite of these facts, the unemployment rate is still excessively high. According to the labor market survey conducted by the State Statistical Offi ce, the unemployment rate in 2005 stood at 37.3%, where 59% of the unemployed were men, while the unemployment rate in 2006 was 36 percent, where 59.7 percent of the jobless were men.

Th e Employment Relations Law adopted in 2005, which is considered very fl exible, aims to encourage growth, invest-ments and job migration from the informal to the formal sector, increasing at the same time the employees’ rights.

Within the framework of the Program of the Government for the period from 2006 to 2010, an operative employment plan has been developed for 2007, which lists a series of active measures intended to subdue unemployment.

UNEMPLOYMENT

Source: Employment Agency2004 2005 2006

Figure: Age structure of the unemployed (December, 2006)

110.762 (30.22%)

93.391 (25.48%)

81.529(22.24%)

80.866(22.06%)

Figure: Unemployment 1991-2006

Table: Labor force (according to the Labor Force Survey). Source: State Statistical Offi ce in ‘000 persons

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006Active population 789.1 800.5 823.8 806.7 811.6 862.5 825.0 861.0 832.3 869.2 891.7Employed 537.6 512.3 539.8 545.2 549.8 599.3 561.0 545.1 523.0 545.3 570.4Unemployed 251.5 288.2 284.1 261.4 261.7 263.2 263.0 315.9 309.3 323.9 321.3

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Th e arrangements with the IMF and the World Bank helped Macedonia sort out problems related to the defi cits in the balance of payments and obtain other fi nancial aid in the form of grants or “soft” loans from developed countries. Th ey also helped the country regulate its relations with the Paris and the London Club of Creditors. So since independence until the end of 2001, Macedonia managed to repay external debts of $713.8 million.

Th e arrangements with the international fi nancial institutions and the fulfi llment of the criteria for their execution were conducive to a disciplined conduct by all relevant entities in the realization of Macedonia’s economic policy, and attaining a macro-economic stabil-ity as a precondition for a sustainable economic growth.

MACEDONIA – IMF. Th e Republic of Macedonia is rectifying its image and is turning from a medium-indebted country into a low-indebted one. On 23 May 2007, Macedonia made advance repayment of its entire outstanding obligations to the International Monetary Fund (IMF), amounting to the equivalent of SDR 29.19 million (about US$44.2 million). Th ese liabilities resulted from the current three-year Stand-By Arrangement approved on 31 August 2005, as well as from liabilities under previous arrangements. Th e repayment of its debt to the IMF ahead of schedule comes in the wake of the April 2007 decision for early repayment of the country’s debts to the World Bank and the European Investment Bank. Debts of $103 million to the Paris Club of Creditors had been previously repaid too.

Macedonia’s debt to the IMF was due in 2010. Th e early pay-off will save the country 2.7 million dollars, which would have otherwise been spent on interest rates.

Th e IMF will continue to support the government’s reform eff orts in the context of Macedonia’s 2005-2008 Stand-By Arrangement.

Th e country started its cooperation with the IMF on 14 December 1992 and has so far concluded a number of arrangements with this international fi nancial institution. Th e fi rst arrangement with the IMF for structural adjustment of the economy was carried out in 1994. For the following two years, Macedonia entered a stand-by arrange-ment that was also successfully put into practice. At the beginning of 1997, the ESAF/PRGF arrangement came into eff ect. Th e process was scheduled to take three years, but was terminated in 1999 in the heat of the Kosovo crisis when Macedonia suff ered enormous losses and had to put up around 300,000 refugees. Macedonian and IMF offi cials agreed then to replace the ESAF with an EFF arrangement approved in late November 2000. According to the IMF rules, EFF arrangements are concluded with countries having suff ered substantial economic loss.

Once the Kosovo crisis was over, negotiations were resumed and resulted in a new PRGF arrangement in December 2000. However, the outbreak of Macedonia’s military crisis put the arrangement on

hold. In the period January-June 2002, Macedonia was under the Staff Monitoring Program. On 30 April 2003, the Board of Directors of the IMF approved a stand-by arrangement for Macedonia. Th e arrangement worth 27.6 million dollars ends in June 2004.

MACEDONIA – WORLD BANK. Th e Government decided in 2007 to repay an impressive amount of a total of 292 million dollars ahead of schedule, 137 million dollars of which constitute eight loans from the World Bank and the European Investment Bank taken before 1997. Th e early debt repayment will save the budget for 2007 about 9.4 million dollars, which will be reallocated.

Macedonia joined the World Bank in 1993 and is represented within the Dutch constituency of countries along with Armenia, Bosnia & Herzegovina, Bulgaria, Croatia, Cyprus, Georgia, Israel, Moldavia, the Netherlands, Romania and Ukraine. Since Macedonia became a member of the World Bank Group in 1993, the World Bank has approved 20 IDA credits and 12 IBRD loans for the Republic of Macedonia for 25 projects, totaling more than US$ 630 million.

Th e main spheres of the World Bank support to Macedonia are social protection and health, agriculture, infrastructure, legal reform, public sector management and power sector reforms.

Th e cooperation also encompassed activities to strengthen the social safety net, education and health through investment lending and technical assistance and to improve infrastructure facilities. Th e joint eff orts of the World Bank team and Government offi cials resulted in the preparation of the Country Assistance Strategy (CAS) in 1998, with three main aspects: promoting private sector growth and job creation, enhancing the effi ciency of the state and alleviating poverty, and developing human capital. A CAS Progress Report was issued in June 2000 to take stock of progress in CAS implementation and to assess the impact of the Kosovo crisis on the country.

On 9 September 2003, the Board of Directors of the World Bank approved the new support strategy for Macedonia. Th e strategy con-tains the planned operations of the bank – structural and investment loans, economic and sector studies, and technical assistance for the period 2004 – 2006 with a total value of 165 million dollars.

In spite of the crises in 1999 and 2001, which seriously interrupted the development of the country, signifi cant progress has been achieved in the economic reforms. Th is includes progress in the health care and fi nancial sectors, and to a certain extent in the management of public assets. Th e primary future economic challenges remain the improvement of public sector management, strengthening trans-parency and effi ciency of public expenditures, and rendering of the public administration professional. According to the World Bank, the eff orts to improve the investment climate in order to attract greater foreign and domestic investments will be of crucial importance for the long-term development of the country.

RELATIONS TO IMF AND WORLD BANK

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Th e fi nancial system in Macedonia consists of the National Bank of the Republic of Macedonia (central bank), com-mercial banks, and savings houses or institutions, as well as insurance companies and a stock exchange. Th e system is still rather weak compared to Western standards, but it compares favorably to other former socialist countries. Th e fi rst years of independence witnessed volatility in the fi nancial markets and banking sector, but conditions have settled down to a considerable extent. Th e National Bank has worked closely with the International Monetary Fund, the World Bank, and other international and national fi nancial institutions in implementing an orthodox stabilization program. Th e strategy of bank rehabilitation, restructuring and privatization produced signifi cant results. International transition reports assess the banking sector reforms as the most successful com-pared to those made in the other areas. During the transitional period, the fi nancial sector underwent radical reforms, which enabled it to off er accelerated activity for investments and a guarantee for long-term and stable economic and trade cooperation with foreign countries and encouragement of investing activities on all grounds.

THE NATIONAL BANK OF THE REPUBLIC OF MACEDONIA is the country’s central bank. Its functions include maintaining price stability, safeguarding the value of the national currency, ensuring liquidity in the economy and supervising the activi-ties of the banking system. Th e National Bank is independent institution and is free to undertake monetary measures and determine instruments necessary to achieve these goals. Th e Parliament appoints the members of the Bank’s board. Th e President of the Republic proposes a candidate for Governor of the Bank, but Parliament issues the actual appointment. Th e Policy is implemented through a mixture of monetary instruments, including reserve requirements, National Bank bills, Lombard credits and interests rate policy.

Th e National Bank of Macedonia, as supervisor of the banking sector, plays this role based on the provisions of the Banking Law. Although the law has been harmonized with the EU legislation, modifi cations, being part of the 3-year arrangements with the IMF and the World Bank, will be made in 2007.

THE COMMERCIAL BANKING SECTOR consisted of 19 private banks, 1 state-owned bank and 15 savings institutions at the end of 2005. In 2005 the interest of certain important international banks in setting up branches in the Republic of Macedonia increased. In the middle of 2007, the French Société Générale entered Ohridska banka. Th e analysis of the capital structure reveals that the two major banks, Stopanska banka and Komercijalna banka, dominate and the largest portion of the banking industry is located in the capital city of Skopje. Th e level of privatization of the banking capital in 2005 was 95%, with only one completely state-owned bank. Th e share of the foreign capital in the total banking capital of the Republic of Macedonia is 52.5%. Sixteen Macedonian banks have foreign capital, while 8 banks are owned by foreign shareholders (the share of the foreign capital exceeds 51.8% of the total capital of these banks). Out of these 8 banks, 4 are subsidiaries of foreign banks. Th e success of the banking sector in the Republic of Macedonia is relatively good, as demonstrated by the growing trust of the population, whose bank deposits are on the rise. At the end of 2004, the banks’ deposit base increased by 17.2%, to 1,342 million euros, rela-tive to 31 December 2003. On 31 December 2005, banks’ savings deposits hit their high since Macedonia’s monetary independence of 1,575 million euros.

In parallel, interest rates have been steadily decreasing, but still remain high. Average inter-bank interest rates in 2005 were about 8%. Commercial loans are available at rates ranging from 6-13%. Th e three largest banks – Komercijalna

BANKING

Developments in the Economic Sector

Jubilee gold coin,10 Years Indepen-dent Republic of Macedonia(1991-2001)

Jubilee silver coin,2000 Years of

Christianity

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banka, Stopanska banka AD Skopje, and NLB Tutunska banka dominate the banking system. In 2005, these banks held 66.1% of the total net assets of the banking system, and 73.1% of the total deposits of non-fi nancial entities. Several other smaller foreign banks, as well as the third larg-est Turkish bank T.C. Ziraat Bankasi, are also present in the Macedonian banking through investments. ProCredit Bank, owned by the EBRD, IMI, IFC and KfW-Frankfurt, started its operations in the middle of July 2003. Th e minimum limit for the capital of a bank, with major authorization, is EUR 9 million.

Macedonia transformed its former one-layer payment system into a multi-layer payment system consisting of three levels. Th e fi rst level, the gross settlement system, functions through the Macedonian inter-banking payment system (MIPS) located at the National Bank of Macedonia. Th e second level, which is operated by a specialized institution – the Clearinghouse (derived from the Bureau of Payment Operations) – functions as a net clearing system for small inter-banking payments on a multi-lateral basis. Th e third level encompasses payments of clients within the framework of the same bank.

INSURANCE SECTOR Th ere were 11 insurance companies work-ing on the insurance market in the Republic of Macedonia in 2006, together with 5 insurance brokerage companies operat-ing on the market as mediators between insurance companies and their clients. One of the 11 insurance companies has a license to issue non-life insurance and reinsurance, two have a license to issue life insurance, and the remaining eight are registered only for non-life insurance activities. Foreign capital makes up 67% on average of the stocks of the insur-ance companies. Five of the insurance companies are wholly foreign-owned, while in three foreign capital accounts for over 51%. QBE Inter Insurance LTD London holds the controlling stake of the largest one. Th e basic legal framework regulating the incorporation, operations and supervision of insurance companies and insurance brokerage houses in the Republic of Macedonia is the Insurance Supervision Law, which is harmonized on several bases with the EU insurance legislation.

In 2005, the insurance companies in the Republic of Mace-donia realized a total gross premium of EUR 82.9 million, 2.15% of which was for life insurance. Within the Ministry of Finance there is a department for supervision of insurance, which makes sure the legislation on insurance is observed.

Figure: Structure of total deposits by sector (2006)

Table: Groups of banks LARGE BANKS

(asset over 15 billion denars) MEDIUM BANKS

(asset between 4.5 - 15 billion denars) SMALL BANKS

(asset lower than 4.5 billion denars) 1 Komercijalna banka AD Skopje 1 Alfa banka AD Skopje 1 Eurostandard banka AD Skopje 2 NLB Tutunska banka AD Skopje 2 Investbanka AD Skopje 2 Internacionalna privatna banka AD Skopje 3 Stopanska banka AD Skopje 3 Izvozna i kreditna banka AD Skopje 3 Komercijalno investiciona banka AD Kumanovo

* Banks are in alphabetical order

4 Ohridska banka AD Ohrid 4 Macedonian Bank for Develop. Prom. AD Skopje 5 Prokredit banka AD Skopje 5 Makedonska banka AD Skopje 6 Stopanska banka AD Bitola 6 Postenska banka AD Skopje 7 UNI banka AD Skopje 7 Sileks banka AD Skopje

8 T.C. Ziraat bankasi AD Skopje 9 TTK banka AD Skopje

Households(67,1%) Enterprises

(30,7%)

Non-profitable non-financial organizations (0,9%)

Other sectors(1,3%)

68.2%

34.5% 0.2%

11.6%

21.5% 32.3%

Short-term credits to enterprisesShort-term credits to householdsLong-term credits to enterprisesLong-term credits to householdsOther sectors

24.5%

0.3%7.0%

0%

DENAR PLACEMENTS FOREIGN CURRENCY PLACEMENTS

Figure: Maturity and sector structure of the banks’ placements on December 31, 2006

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Th irteen Macedonian banks, three insurance companies and three savings banks founded the Macedonian Stock Exchange (MSE) in March 1995 with authorized capital of 500,000 euros. In the middle of 2001, the Macedonian Stock Exchange AD Skopje was transformed into a profi t-making stock company and became the fi rst stock exchange in the region that started a process of transformation from a non-profi t into a classical profi t-making joint stock company. Any domestic and foreign legal and physical entities can be shareholders on the Macedonian Stock Exchange. Th e share of an individual shareholder on the Stock Exchange is limited to 10% of the fi xed assets of the Macedonian Stock Exchange. Under the Securities Law of 1997, brokerage houses were the only members of the Stock Exchange, and under the Securities Law of 2000, banks were allowed to participate too as of 2002. Th e members of the Stock Exchange have to receive a license for trading in securities from the Securities and Exchange Commission of the Republic of Macedonia. Only authorized brokers (in Macedonia there are about 300 licensed brokers), employed in the Stock Exchange members, may perform direct trading in securities. Under the Securities Law of 2000, brokerage houses must have at least 75,000 euros of authorized capital in order to obtain the basic license (just for a mediator in trading) and 500,000 euros of authorized capital for a full license.

At the moment (May 2007) the Stock Exchange has 20 shareholders (8 brokerage houses, 8 banks, 1 insurance company and 3 private investors). Th e turnover realized on the Macedonian Stock Exchange by way of classical trading from January to December 2006 totaled over 175 million euros, which is a 61.08 % increase from 2005. Th e

most prominent events on the Macedonian Stock Exchange in 2006 were the sale of AD ESM, the announcement of Komercijalna banka’s sale, the introduction of a 5-day trading week, the introduction of SEI-NET - Internet ap-plication for posting information by listed companies, the introduction of discontinued auctions in trading, as well as the public stock market auctions through which the sale of a few packages of bank shares was realized. Th e stock market results in 2006 were the best ever. Th e total turnover noted an increase of 248 % from 2005. Block transactions in classical trade, which account for 45% of the turnover, noted an enormous increase too, while the Macedonian offi cial blue-chip index, MBI-10, which is an indicator of the share price fl uctuations, peaked at 3,702.54 points in 2006, which was a 61.54% rise from 2005.

Th e prominent improvement of the transparency of the listed companies’ performance, the infl ux of foreign portfolio investors, the pension system reforms, the invigoration of the banking system, the stable denar exchange rate, the developed and safe market infrastructure, as well as the more favorable business environment are some of the more important reasons for the turnover and share price increase in 2006.

In the middle of 2001, the shares of the fi rst commer-cially privatized company, Toplifi kacija AD Skopje (Skopje’s heating company), became listed on the Macedonian Stock Exchange. On 1 November 2001, the offi cial stock exchange index was introduced including the fi ve most liquid shares in 2001 (the shares of Toplifi kacija, Makpetrol, Alkaloid, Komercijalna banka and Evropa). In January 2005, the new Macedonian Stock Exchange Index, MBI-10, through the weighting of which through market capitalization movements

STOCK EXCHANGE

0

5.000

10.000

15.000

20.000

19971996 1998 1999 2000 2001 2002 2003 2004 2005 2006

1.10135

1.824658

5.237

3.240 2.8313.791 3.147

7.145

17.047

Figure: Turnover by Year (1996-2006) (in mill. denars)

Source: Macedonian Stock Exchange

Figure: Structure of the Stock Exchange turnover in 2006

Source: Macedonian Stock Exchange

Official marketUnofficial marketOther securitiesBlock-transactionsGovernment segment

29.58%

5.22%

45.04%

0.05%20.11%

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0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

04.0

120

.01

08.0

223

.02

14.0

330

.03

18.0

409

.05

25.0

508

.06

23.0

607

.07

25.0

715

.08

31.0

819

.09

03.1

018

.10

03.1

122

.11

08.1

226

.12

12.0

126

.01

09.0

223

.02

09.0

323

.03

06.0

420

.04

09.0

523

.05

06.0

620

.06

04.0

719

.07

03.0

817

.08

31.0

815

.09

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916

.10

30.1

013

.11

27.1

111

.12

25.1

2

0

20

40

60

80

100

120

140

160

180

MBI-10

2005 2006

Classical trading (in mill. denars)

of share prices on the Stock Exchange can be more realisti-cally presented, was introduced. MBI-10 is made up of the ordinary shares of 10 listed companies, Alkaloid AD Skopje, Toplifi kacija AD Skopje, Komercijalna banka AD Skopje, Makpetrol AD Skopje, Granit AD Skopje, Stopanska banka AD Bitola, Beton AD Skopje, ZK Pelagonija AD Bitola, Makstil AD Skopje and Ohridska banka AD Ohrid.

In order to foster the promotion of Macedonia’s capital market, several signifi cant institutional modifi cations were made:

– corporate income tax on listed companies in 2006 was reduced by 30% and in 2007 by 15%.

– on 1 January 2006 tax was introduced on capital gain made through trading in securities.

Th e Athens Stock Exchange purchased the latest issue of 155 shares of the Macedonian Stock Exchange for 93 million euros, taking hold of 10% of the capital of MSE. Th e entry of the Athens Stock Exchange is considered recognition of the quality with which MSE functions and of the quality of the entire infrastructure of the capital market in Macedonia. In 2004 the Macedonian companies established dual listing abroad, as well as linking of the computer systems of the Macedonian and Athens Stock Exchanges.

MSE is a member of the Federation of Euro-Asian Stock Exchanges (FEAS) since 1996. MSE has so far signed Memorandums of Understanding with the Ljubljana Stock Exchange (2001), the Hellenic Exchanges (2002), the Th es-saloniki Stock Exchange Center (2003) and the Belgrade Stock Exchange (2003).

Figure: Macedonian Stock Exchange index (MBI-10) in 2005-2006

Th e Closing Bell of the Macedonian Stock Exchange.

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reMACEDONIAN INDUSTRY

In the course of its EU integration, the Republic of Mace-donia focuses on radical reform processes in its state bodies, institutions and the whole system in general, laying thereby special stress on its economy. Th e opening of the Repub-lic of Macedonia to the world implies a higher degree of liberalization and membership of international economic organizations. Radical legislative modifi cations are made in the area of taxes and customs tariff s, as special attention is called to the regulation of the conditions for enticing foreign investments, not just as a guarantee to investors, but also for the purpose of creating promotional measures for their stimulation.

Th e analyses of the structural changes in the production of the national economy revealed that Macedonia is capable of a successful transformation from a country in transition into a modern economy by means of intensifying private sector investments. Hence, in the past few years, activities to promote small and medium business developed in paral-lel to activities to increase the existing industrial structure. Th e restructuring of the production went in the direction of increased technological activities, more pronounced export orientation, higher degree of fi nalization and di-versifi cation of the structure by decreasing dependency on imported raw materials and energy, and development of new sectors. Th e Republic of Macedonia does not lack natural resources (non-metal and metal ores, arable land and water) in order to raise primary agriculture on a higher level and adapt it to the demands of the choosy European and world consumer. Within the framework of the new development strategy, it was necessary to reconcile laws and make them compatible with the European legislation. Hence, over the past few years, all free trade agreements were signed in compliance with the European directives and the directives of the World Trade Organization. In the meantime, a number of laws were passed, such as the law on protection of consumers, the law on protection of industrial property, the law on prevention of monopoly and restriction of competition, the anti-money laundering law, the law on concessions, leasing, etc.

As of 1 June 2001 Macedonian steel has been exported freely to European markets. Under Protocol 2, which is an integral part of the Stabilization and Association Agreement between the Republic of Macedonia and the EU, customs and quantity restrictions on Macedonian steel were lifted. Th e system of double control, however, stayed in force, which means that Macedonian steel products are

freely exported to European markets, as the origin of the goods and the double control are the only non-tariff protec-tion of the EU against Macedonian products, and represent a type of “self-restriction”.

Th rough the system of double control, Europe will keep close watch over the issuance of documents and certifi cates proving the origin of the steel products. Th e provisions of the SAA Protocol 2 are an extraordinary opportunity to export Macedonian steel to European markets. Th e project “Steel European Star 2001” has announced Macedonia’s prospects as an epicenter of the regional metal complex. Makstil - Duferko, the company that is responsible for this project, promoted the Macedonian steel, the steel with a “Macedonian sun”, as a national product with identifi ed standards, compatible with the European ones.

In compliance with the obligations undertaken with Protocol 2, the Republic of Macedonia prepared a national program for restructuring the steel industry, which allows the state, by the end of April 2007, to stimulate the devel-opment of the steel industry with various interventions. Th ese measures refer to the price of electricity or other fi scal alleviations. Th e National Program encompasses 6 domestic capacities, Makstil-Duferko, Valavnica za lenti (Hot Strip Mill), Ladna valavnica (Cold Mill), Nikolfert, IGM and FZC 11 Oktomvri. Of these the greatest progress was achieved in Makstil, which is already utilizing EBRD credit lines aimed at advancing the production process and reducing production costs.

Th e investments that the six companies announced in the National Strategy for Reconstruction should improve the present conditions. A total of $35.25 million should be invested in this industrial branch by 2007. Th e upcoming three years should witness the greatest intensity of investment. Th e goal of the investments is to improve the competitiveness on the market and produce more ecological products.

Makstil announced investments of $15.2 million, Vala-vnica za lenti (Hot Strip Mill) $7.7 million, Ladna valavnica (Cold Mill) $4.8 million, FZC 11 Oktomvri $5 million, IGM $1.5 million and Nikolfert $1 million.

More than half of Macedonia’s major exported products are textile-related. Th eir export to the EU alone earns Macedonia an annual profi t of more than $250 million. Th e textile industry as an export-oriented branch exports most of its output to EU business partners. Trade is regulated by the Agreement on Textile Products between the Republic of Macedonia and the EU.

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Th e Macedonian textiles are mainly exported to Germany, Greece, the Netherlands, Great Britain, France, Italy, Bel-gium, and Denmark. Exporting men’s and women’s shirts and blouses, jackets, trousers, dresses, skirts, and working overalls makes the greatest profi t. Still, lohn production is the principal feature of the Macedonian export of textiles, as classical exports play a minor role.

An important segment in the implementation of the Agreement on Textile Products between the Republic of Macedonia and the EU is the origin of the products. In case a foreign investor brings raw materials to produce the fi nal product in Macedonia, he could not receive an origin certifi -cate and export the product duty free to any member of the European Union. Th e limiting factor is due to the fact that diagonal cumulation of origin does not refer to Macedonia and the other countries from the western Balkans.

At the regular Councils for Cooperation with the Union, the issue of including these countries in the system of diagonal cumulation has been raised on a number of occasions, but there are still no concrete answers.

Ever since its independence, the Republic of Macedonia committed itself to developing open market economy, the principles of which are incorporated in the bases of its institutional system. Around 90% of Macedonia’s overall trade in 2006 was carried out under the preferential conditions of liberalized trade. Macedonia concluded 12 free trade agreements, with Slovenia, Croatia, Serbia and Montenegro, Bulgaria, Turkey, Romania, the EFTA countries, Ukraine, Albania, Moldova and Bosnia and Herzegovina, and the Interim Trade Agreement with the European Union. Th us Macedonia is the fi rst to fulfi ll the obligations arising from the Stability Pact and has emerged as a leader with the establishment of a network of free trade agreements in South-eastern Europe.

Th e fact that 85 % of the Macedonian export is targeted at duty-free foreign markets shows that the preferential treatment of certain goods is of major signifi cance to the position of the Macedonian export. Free trade agreements provide entrepreneurs, who decided to invest in Macedonian production, with a duty-free market for their products,

Electrodes of the furnaces of Makstil the largest producer of steel in Macedonia.

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which is among the largest in Europe with more than 500 million consumers. Macedonia is the leading country in the region by the number of concluded free trade agreements. Once the new CEFTA agreement, which should be ratifi ed in the course of 2007, comes into force, all the separate trade agreements will blend into one. Th e prime feature of Macedonia’s external trade policy is building of open trade relations in the international economy. Th e process of trade liberalization with the countries deemed as Macedonia’s greatest trade partners is of special importance. In this regard, with the extant legal frame, the area of foreign invest-ments is fully liberalized too. Property, rights to property, and free capital transfer and profi ts are all guaranteed to foreign investors. Th e fact that the imports from countries with which free trade agreements were signed account for 75% of Macedonia’s total imports reveals that Macedonian businessmen supply the major portion of the necessary raw materials, intermediate goods and energy under preferential conditions of customs exemption or minor customs tariff s.

Th is also points to the relevance these agreements have for the competitiveness of the Macedonian products on foreign markets.

Almost every year, Macedonian inventors return from the world exhibition of innovations, research and new technologies, Brussels Eureka, with a wealth of gold and silver medals. A few years ago, the Macedonian delegation returned form Eureka with the fi rst award, the Grand Prix. Th e international jury gave this award to Vanco Dimtrov for the invention System for Absorption of Exhaust Gases. At the 50th Brussels Eureka 2001 World Exhibition, 2 inventions of the team of inventors, employees or associates in Prilep’s Mikrosam, were presented with a gold medal and 3 special prizes. For his results and achievements, the owner of Mikrosam, professor Blagoj Samakoski, was awarded the offi cial Belgium decoration for invention and the title Knight of Invention. Th e Macedonian State Offi ce of Industrial Property presents the annual Patent of the Year Award.

World renowned Macedonian construction companies, carving out the face of a mountain to make room for progress: Construction of access road towards the new cascade hydro power plant St. Petka (Matka 2) an investment of US$ 60 million.

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Th e consumption of energy in the Republic of Macedonia totals about 120,000 TJ a year. Home production of energy covers about 60% of the consumption, while the remaining 40% are provided from imports. Macedonia’s basic energy infrastructure includes the system of electric power, coal mines, gas pipeline, oil refi nery, oil pipeline, and thermal and geothermal systems.

Having in mind that electricity accounts for 60% of the total consumption of energy in Macedonia, the existence and operability of the overall Electric Energy System (EES) in Macedonia is of an enormous and strategic importance. Th e total power of EES installed in Macedonia is 1,524 MW, 1,010.0 MW (69.95%) of which are steam power plants, and 514 MW (30.5%) are hydro electric power plants. Th e largest plant, and the hub of the whole EES, is the Bitola power plant, REK Bitola, where 675 MW power is installed in 3 thermo blocks. Th is coal-driven electricity production plant, along with another power-producing facility, TEC Oslomej, covers around 80% of Macedonia’s home production of power. Th e rest is covered by the thermoelectric power station Negotino

(the second largest plant according to the power installed), and the hydroelectric power stations Vrutok, Raven, and Vrben within the Mavrovo Electrical Energy System, and Spilje, Globocica and Tikves.

Macedonia does not have oil and gas deposits. Th e whole amount of crude oil and gas is imported. Oil is transported from Th essaloniki (Greece) to the refi nery near Skopje, while gas is transported through the 98 km-long pipeline from the country’s border with Bulgaria to Skopje. Macedonia’s only oil refi nery, OKTA, was privatized to the Greek company Hellenic Petroleum in 1999. At the end of 1999, the project for construction of the 210km-long Th essaloniki-Skopje oil pipeline got underway. Th e pipeline cost a total of $110 million, $60 million of which was provided by Hellenic Petroleum. Th e remaining $50 million was a loan from the European Bank for Reconstruction and Development. Th e Macedonian government owns 20% of the pipeline, while Hellenic Petroleum holds an 80% stake. Th e oil pipeline was put into use in June 2002, and is supposed to be extended to Kosovo. In December 2002 the OKTA refi nery lost its

POWER AND ENERGY

About sixty power stations will be built in the fi rst stage and over a hundred concessions will be issued for building small hydroelectric power stations on the rivers Vardar, Strumica and Crn Drim.

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remonopoly and all the privileges it had at the Macedonian market of oil and oil derivatives in the last three years. Th is primarily refers to the privilege OKTA had in importing oil derivatives. Macedonia’s largest distributor of oil derivatives and gas is Makpetrol, a private joint stock company holding 114 petrol stations and 12 depots of oil products.

Macedonia has hydro-potential of 5.5 GWh. Th e utiliza-tion of its water resources amounts to only 19%. As far as the geothermal water is concerned, Macedonia has a total heating power of 173 megawatts, total power of 1,400 liters per second, and available exploited reserves of 1,000 liters per second. Apart from the hydro-potential, the natural resources of energy are limited to lignite. Macedonia has 940 millions tons of lignite, while its largest mines are part of the thermoelectric power stations, and their coal is used for production of electricity (about 7 million tons a year). At the moment, fi ve district systems for heating, working on crude oil, natural gas and lignite, are in use and their capacity totals 600 MW. Approximately 50,000 households are connected to these heating systems.

Until 2005 Macedonia’s whole power system was verti-cally integrated. Th e country’s electric power company ESM (Elektrostopanstvo na Makedonija) was state-owned and fully responsible for generation, transmission, distribution, import and transit of electricity, as well as for system stability mainte-nance. ESM was constantly troubled by fi nancial diffi culties and in 2003 its outstanding receivables totaled US$200 million, almost 80 % of which were liabilities of industrial consumers. In 2004 the Government adopted an ambitious plan for its privatization and restructuring and in 2005 it was divided into a company for transmission (MEPSO) and a company for production and distribution (ESM), which later split up into separate companies for production and distribution. At the moment there are four companies having emerged from the former power utility ESM: the power distribution company AD ESM, which owns 11 mini and small power stations, the largest power-producing company ELEM, the thermoelectric power station TEC Negotino as a separate company, and the power transmission system operator MEPSO.

In March 2006 ESM Distribution was sold to EVN of Austria for 225 million euros, while ELEM’s privatization was postponed until after the parliamentary elections of 2006. ESM’s division is considered crucial for the sector liberalization and resolution of the local energy problems. In May 2006 the Parliament adopted the new Energy Law harmonized with the EU legislation.

Gas Pipeline. One of the greatest energy facilities in the Republic of Macedonia is the gas pipeline, the goal of

which is stepping up security in the provision of electricity and introducing an ecologically more acceptable high-grade fuel. Th e gas pipeline has an installed annual capacity of 800 million cubic meters of natural gas and is made up of 2 technological entities: a major pipeline and city gas pipeline networks. Since it came into use in 1997 until now, a major pipeline has been constructed with a total length of 98 km (from the Deve Bair border crossing at the Macedonia-Bulgaria border to Skopje) with maximum permeability of 145,000 cubic meters of gas. Th e network connecting the major pipeline to the city networks is 25.3 km long, and the city networks total 37.3 km. Th e city gas pipeline in Skopje is 19 km long and around 12 more km remain to be constructed. Th is will put an end to the fi rst stage of the construction of the gas pipeline in Skopje and as a result all major industrial facilities will become gas-supplied. Makstil, FZC Kumanovo, OHIS, the cement-producing industry USJE, the Skopje brewery Skopska Pivara, the leather facil-ity Godel , Zitoluks, Evropa, the Skopje heating company Toplifi kacija, TIPO Idnina, etc., have so far been connected to the system and are using natural gas.

Development plans envisaged natural gas supply for house-holds in Skopje. At the end of May 2007 the construction of the fi rst gas power station in Skopje went underway. Apart from AD Toplifi kacija, Sintez of Russia is also involved in the project of US$140 million. Th e station will consume 250–260 million m3 of natural gas, producing heating energy and electricity.

Th e consumption of natural gas in 2006 was estimated at around 100 million cubic meters. Th is rate of consumption is not enough and represents 15% of the available capacity of the gas pipeline system. Despite all eff orts to raise the natural gas consumption, thus fi nally making this investment worthwhile, at the moment this is impossible because the ownership status of the gas pipeline is unresolved. Sixty-fi ve million dollars has so far been spent on the construction of the gas pipeline, 43% of which is state funded, $16 million is a Russian credit, and the rest has been provided by Makpet-rol. In 1997, the government of the Republic of Macedonia reached an interim decision to put Makpetrol in control of the gas pipeline. Th is company also took on the responsibility to repay the Russian credit.

However, the unresolved issue of the ownership of the gas pipeline has hindered its development. Th e dispute over the ownership rights has been going on for 10 years. Two account-ing reports were prepared in 2003 aimed at determining the share of the Government and Makpetrol.

Th e independent report of the documentation indicated that 51.94% of the gas pipeline was owned by the state.

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Th e transport sector plays an important role in the Macedo-nian economy primarily owing to the good traffi c position of the Republic of Macedonia. Road transport constitutes the greatest portion of the country’s overall transport of goods and passengers. At the moment the country’s overall road network totals 8,216 km, 915 km of which are national roads (Source: NDP 2007 – 2009), and over 200 km are motorways.

Th e spine of Macedonia’s road network is the two Pan-Eu-ropean Corridors. Th e E-75 road along the main north-south Corridor 10 (from Tabanovce at the border with Serbia to Bogorodica at the border with Greece) is 172 km long. Th e branch Xd (from Veles to the Medzitlija border crossing with Greece via Prilep and Bitola) is 127 km long. Seventy percent of Corridor 10 is a highway, and plans are to modernize the remaining 29.1% by highway standards too. Th e Pan-Euro-pean Corridor 8 East-West E-65 road (from Kjafasan at the border with Albania to Deve Bair at the border with Bulgaria via Skopje) is 304 km long. It is in its initial stages of modern-ization to a highway. Only 27.6% is a modern highway, 8% is under construction, while construction projects are being developed for 63% of it.

Th e railway infrastructure follows the two Pan-European Corridors 8 and 10. Th e railway line along Corridor 10 is 217 km long, is of standard size, has been electrifi ed and has a modern communication and signaling system. Th e total length of the railway line that will follow Corridor 8 in Macedonia will be 339 km, 57% is fi nished and operational. At the moment the country has no railway links to Bulgaria and Albania.

International air traffi c is carried out at two airports in Macedonia, in Skopje and Ohrid. Th e airport in Skopje has installed state of the art technology, but its current traffi c is modest with about 500,000 passengers a year. Th e Govern-ment has launched reform programs for airport privatisation and capacity upgrading.

Corridor 8 and Corridor 10 are in the list of European traffi c priorities, and this sector receives signifi cant support

from international fi nancial institutions, which only confi rms the interest of the foreign capital in this sector. Serious con-sideration is also being given to the implementation of other models of fi nancing like public-private partnerships, conces-sion management and management contracts.

In the Macedonian Public Investment Program for the 2003-2005 period, which amounted to 1,825.64 million Euro, 1,061.61 million Euro was allocated to the transport sector.

Macedonia is attributed additional signifi cance in this fi eld thanks to the Skopje-Th essaloniki oil pipeline, likely to be extended towards Kosovo, and thanks to the possible realization of the AMBO project for building an oil pipeline from Burgas, Bulgaria, to Vlora, Albania. In some of the more far-reaching projections, Macedonia should become connected to the Croatian oil pipeline and the Adriatic highway.

Th e primary strategy of the Ministry of Transport and Communications is to implement institutional reforms in this sector. Reforms in the road sector are being carried out through loans from the EBRD. In the Ministry’s study, the primary goals focus, among other things, on an analysis of road infrastructure fi nancing and recommendations to improve competition in road maintenance.

Railway reforms are being implemented through a loan from the World Bank, and according to the Action Plan the existing state-owned Macedonian Railway Company should be divided into two parts, one taking over the infrastruc-ture and remaining state-owned and the other taking over transportation services and being transformed into a private shareholding company.

In the fi eld of telecommunications, a specifi c part of the transport sector, the Republic of Macedonia is one of the leading countries in the region. Th is is made possible by the fi nished process of privatization of the Macedonian telecom, the introduction of concessions, as well as the investments in the sector, which creates new prospects for domestic and foreign investments.

TRANSPORTATION

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With a share of about 12% of GDP and engagement of 20% of the total economically active population in 2004, agriculture is a signifi cant segment of Macedonia’s economy. Great invest-ment potentials lie within it, particularly bearing in mind the advantages of Macedonia as a relatively clean environment.

Over 80% of the arable land (close to 463,000 hectares) in 2004 was property of or was rented out to family fi rms. Th e remainder of the land was farmed by about 136 agricultural privatized companies. Most of the pastures were state-owned and managed by public enterprises.

In early June 2007 the Government took an agricultural census, the fi rst in thirty-eight years, given that the previous was taken back in 1969.

However, the agricultural activity over the past two years had smaller growth rates, which reduced the sector’s share of GDP. According to agricultural production estimates for 2006, production of fruit and cattle went up by 3.7% and 1.5% respectively, while production of grain and cash crops and production of grapes declined by 1.7% and 2.7% respec-tively from 2005. As for the export performance of the sector in 2006, fruit exports increased by 45%, vegetable exports by 9%, tobacco exports by 8.2%, and exports of seeds and other cash crops by 34%. On the other hand, exports of grain dropped by 21% and of cotton by 1.5%.

In the total territory of the Republic of Macedonia, ag-ricultural area accounts for 49%, or 1.27 million hectares, including about 700,000 hectare of pastures. Most of the arable land, or 461,000 hectares (82%), is used for raising grain and vegetables, 26,000 hectares (5%) for growing vine, 15,000 hectares (3%) are hothouses and the remaining 58,000 hectares (10%) are meadows. Grain covered most of the arable land in 2004 (around 190,000 hectares), which was a 14% decline from 2003. On average, the yields of the Macedonian farming products are not very high, except for those of the grapes, peaches, tomatoes and plums. In 2004 agricultural produces constituted 15.9% of Macedonia’s total exports and 14.4% of the country’s imports. Th e main export potentials are vegetables and vegetable products, fruit and fruit products,

lamb, wine, and tobacco, as a result of which their produc-tion has priority in the development of the agricultural and industrial sector. Th e Republic of Macedonia is a net importer of grain, sugar, oil, milk, meat and exotic fruits.

Th e vegetable crops are located in the northern and southern part of Macedonia, taking up about 53,000 hectares in 2004, 6% more than in 2003, and covering additional 10,500 hectares at intervals. Around 300 hectares are hothouses fi tted with heating systems, which allows Macedonia to off er fresh vegetables at the market throughout the year. Macedonia is a net exporter of vegetables and has a production surplus of 60%. Exports are dominated by fi ve main produces – tomato, pepper, cabbage, watermelon and cucumber – and their chief destinations are the markets of the EU (the Czech Republic, Slovakia, Poland, Greece, Germany and Slovenia), as well as the neighboring countries (mostly from former Yugoslavia). Half of the total annual produc-tion of about 600,000 tons of vegetables is being exported, mainly to the neighboring countries. Orchards took up 15.000 hectares in 2004 and half of them were apple trees. Th e annual crop is estimated at 130,000 to 150,000 tons of fruit. Macedonia also produces plums, sour cherries, apricots, etc., and annually exports up to 30,000 tons of fruit, mainly to the neighboring countries.

Th e most present products in the processing industry are the mashed tomato concentrate, ajvar (red pepper salad), ketchup, preserved sour cherries, fruit juices, and apple concentrate, which are generally exported to the countries of the European Union. Herbs and wild mushrooms are an important part of Macedonia’s exports.

In Macedonia there are three wine regions and sixteen wine areas, while 85% of the Macedonian wine is produced in the Vardar Valley. Th e vineyards in Macedonia take up an area of about 26,000 hectares, and annual production var-ies from 220,000 to 250,000 tons of grapes a year. Almost 90% of the output is wine grapes, most of them being red

wine sorts like Merlot, Cabernet Sauvignon, Red Burgundy, Sta-nusina, Prokupec and Kavadarka, and white wine sorts, such as Chardonnay, Sauvignon, Rhine Riesling, Smederevka, R’kaciteli, etc. Macedonia’s fi ne wine mak-ing tradition reaches back in his-tory to the days before Alexander

AGRICULTURE

Table: Production of some agricultural products in ‘000 tons

2000 2001 2002 2003 2004 2005 2006Wheat 299.3 246.2 266.9 225.3 356.8 333.9 329.4Maize 125.3 117.1 140.7 136.5 141.9 148.2 147.3Sugar beet 56.4 38.3 43.8 40.2 47.2 57.8 44.0Sunfl ower 7.4 5.5 8.8 6.8 7.8 6.7 6.0Tobacco 22.1 23.2 22.9 24.0 21.6 27.7 25.1Grapes 264.2 229.8 118.9 243.8 254.6 265.7 258.6

Source: State Statistical Offi ce

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the Great. However, more recently Macedonia has produced wines that sold in bulk at low cost, largely to Germany. In keeping with the overarching goal to move up the value chain by selling higher value-added products to more demanding customers, USAID’s Macedonia Competitiveness Activity (MCA) project support to Macedonia’s wine industry has focused on quality and marketing improvements to facilitate increased sales of the country’s high-end specialty wines in Europe. In only two years, since its formation in April 2004, cluster members launched new varieties and become better able to compete with other regional and international wines. Th e average price of bottled wine increased by 40 percent since 2003. Macedonian wineries invested $9 million in new facilities and equipment since 2003, an annual increase of 350 percent. Industry bottled wine exports of $8.7 million in 2005, a 20 percent increase over the 2003 base year export fi gure.

Great eff orts are also made on the other markets worldwide, such as Japan, the US, Canada, and Australia.

Th e infl ow of foreign exchange totaled $36.1 million in 2005, with good prospects of increasing to over $40 million.

Macedonia is a net exporter of lamb. Lamb meat accounts for 90% of the whole export of lamb products. Th e main export destinations are Italy, Greece, Croatia, Slovenia and Jordan. In 2003 Macedonia exported a total of 2,570 tons of lamb, which was 12% less than in 2002. In order to boost lamb production, it is suggested that the Macedonian Government should make sure that larger quantities of lamb are exported throughout the year, and not just during the Easter holidays.

Macedonian-grown tobacco is recognized to be of high quality. Tobacco made up more than two-thirds, or 18,490 hectares, from a total of 27,000 hectares of cash crops in 2005. It is traditionally one of the most important cash crops, engag-ing a considerable portion of the rural population. Four large tobacco industries operete in Prilep, Skopje, Kumanovo and Strumica, and there are over 40 processing stations. Tobacco is also the most important exported farming product constituting 24%, or 26.9% including tobacco products, of Macedonia’s total exports in 2004. However, over the past few years, land sown with tobacco has been steadily declining. Raw tobacco output in 2005 totaled 27,691 tons.

Th e most frequently planted tobacco brands are Prilep (49.9%), Jaka (32.1%), Jebel (4.76%), Otlja (5.61%), Virginia (7.27%), and Burley (0.40%). In regard to the types, the share of the oriental types is the largest (86.72%), followed by the semi-oriental (5.61%), and the large-leaf types (7.67%). Macedonia generated over $102 million of revenues from the export of tobacco and cigarettes in 2005.

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After a decade and a half Macedonia’s privatization process is completed in more than 95% of the state-owned enter-prises. By the end of 2005, the process fi nished in almost 1,700 enterprises from the whole portfolio of the former Privatization Agency, which included approximately 1,750 enterprises.

Th e law on transformation of state-owned companies applied to around 1,200 companies of the commercial sec-tor. Agriculture companies started going private in 1996 (around 35), games of chance and insurance companies in 1997, and veterinary cooperatives in 1998. According to certain estimates of the Privatization Agency, the total value of the state-owned capital that was privatized in the past 15 years amounts to 2.3 billion euros. Th rough the privatization of 1,687 companies, the Government collected 500–600 million euros. Th e privatization process is yet to be carried out in 50 companies.

At the start of the privatization process, the Government only sold companies without transforming them fi rst. Th e fi rst privatizing and restructuring program, which encompassed 25 major loss-making companies, went underway in 1995. Th e Government then met the obligations set in the FESAL 2 arrangement with the World Bank by solving the status of over 40 loss-makers, while the last restructuring program is currently in progress. Th e Privatization Agency completed its mission and was dismantled in 2005.

Th e Macedonian Government is now engaged in a fi nal process of public sector privatization through management concessions. Th e privatization of the public utilities was initiated with the privatization of the Macedonian telecom to the Hungarian telecommunications company MATAV in 2000. Th e state kept 47 percent of the company’s capital stock, 10 percent of which were sold in the fi rst half of 2006, while the rest are in a process of disposal.

Th e fi nancial sector was likewise subject to a special priva-tization program, while some banks went through a process of massive rehabilitation. Many of the banks found foreign investors that invested either independently or together with the European Bank for Reconstruction and Development and the International Financial Corporation, which proved good for the entrance of foreign capital. Th e Government has already started selling its remaining shares in commercial banks except for the Postal Service Bank (Postenska banka) and the Macedonian Bank for Development Promotion.

In March 2006, the power distribution segment of the Macedonian power utility ESM (Elektrostopanstvo na Makedonija) was sold to EVN of Austria. Th e Macedonian Railway Company is yet to be privatized and according to its privatization program, it should split into two parts, one for transport and the other for infrastructure.

Privatization began in the social sector and the public administration too. Some of the non-core activities in the

PRIVATIZATION

Perspectives and Projections

Table: Privatization - Status report as of December 31, 2003

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sectors of health, education, and administration were divested and placed under the management of private fi rms.

Privatization dates back to 1989 when the law on state-owned capital was passed (known as the law of Ante Markovic, the then prime minister of Yugoslavia), which introduced the concept of internal shares. Employees in state-owned companies were thus entitled to acquiring shares by putting aside funds from their salaries. As a result, 660 companies were transformed into joint stock or limited liability com-panies. Th e new concept of privatization, promoted after independence, with the adoption of the law on transforma-tion of state-owned companies, in June 1993, considerably intensifi ed the privatization process in Macedonia.

Th e privatization process in Macedonia created strategic shareholders in the major companies, thus helping locate the responsibility for the future corporate management. Privatization through management buy-out could meet the two basic criteria – to pay for the shares and to identify the owner. A weakness of the paid privatization, experts say, was giving preference to domestic managers against interested foreign investors. Still, this type of privatization took place only in the initial stage of the process of transforming state-owned capital, while in the subsequent stages, domestic management teams took interest in negotiating with foreign investors, rather than let the state, which proved a bad owner, do that on their behalf.

Figure: Equity in privatized companies by model, in million EUR (31.12.2003)

Figure: Number of privatized companies by model of privatization (31.12.2003)

Figure: Employees in privatized companies by model (31.12.2003)

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The most significant foreign investments in the

Republic of Macedonia are the ones in:

- Macedoniantelecom(MATAV,Hungary)- StopanskabankaADSkopje(NationalBankofGreece,

EBRDandIFC)- SkopskaPivara(BalkanbrewHoldingLTD,Greece)- RefineryOKTA(HellenicPetroleum,Greece)- CementarnicaUsje(Titan,Holderbankfinanciere

Glaris,Greece)- ADORMakedonija(QBEInter.InsuranceLTD,England)- Makstil(DuferkoSkop.InvestmentInc.,Liechtenstein)- LadnavalavnicaAD(BalkanSteel,Liechtenstein),- TutunskikombinatADSkopje(TobacnaLjubljana,Slovenia)- FENI-Kavadarci(SCMM,France)- Radika-Debar(KNAUF,Austria)- ZitoLuksADSkopje(ElbiskoSAAtika,Greece)- SkopjeFair(ERA-Velenje,Slovenia)- MermerenKombinatADPrilep(FHLKiriakidisSA,Greece)

FosteringinvestmentsisparticularlyimportantfortherealizationofthetransitionprocessandforthetransformationoftheRepublicofMacedoniafromatransitioncountryintoamoderneconomy.OneoftheMacedonianGovernment’sprioritiesisincreasingthecountry’sforeigndirectinvestment(FDI).Inordertoattainthisgoal,theGovernmentestablishedtheAgencyforForeignInvestments(InvestMacedonia)inJanuary2005topromoteMacedoniaasanattractivebusinessdestination.Thisstate-fundedAgency,amongotherthings,recommendspoliciesaimedatattractingandsupportingforeigninvestors inrealizingtheir intendedinvestments.TheAgencyisaone-stopshopwhereinvestorsmayobtainallnecessary information.AttractingforeigninvestmentsisalsotheprimaryobjectiveofthetwoMinisterswithoutPortfoliointheGovernmentoftheRepublicofMacedonia,GligorTashkovichandVeleSamak.

Statisticsfromthefirstyearsofindependencedemonstratethatin1993FDIinMacedoniawasthelowest($0.8million),asopposedtotheamountof$15.1millionin1990.After1993,FDIstartedclimbingupagain,peakingat81millionin2003.In2004itamountedto$140millionandwentfurtherupto$116millionin2005and$350millionin2006.FDIaccountedforabout2.1%ofGDPin2006,whichisnotsufficientforvigorouseconomicdevelopment.

That iswhy theGovernmenthas set itself the targetofbringingmoreFDI.

According to analyses of the investment structure,the most interesting sectors to foreign investors weretelecommunications, finance and insurance, foodandbeverages,andalsometalsandoil,whichabsorbed80%of the total investments. Investments in industry andminingaccountedfor18%,andthose intrademadeup4.8%.Theexpertanalyses identifiedanumberofotherattractivesectorswherepotentialforeigninvestmentscouldbedirected.Theyincludefinishedtextilegoods,vehicleandbusassembly,finishedleathergoods,electronicequipment,shoes,telecommunicationsequipment,packaging,electricmotors, lamb,metal fabrications, fruit andvegetables,furniture,processedfood,wine,construction,automotiveaccessories,andtobaccoandcigarettes.

Macedonia’smajorforeigninvestmentsin2007aretheconstructionofJohnsonControls’facilityforproductionofautomotiveelectricequipmentattheBunardzikfreeeconomiczone,JohnsonMatthey’santicipatedconstructionofafacilityproducingcar catalysts alsoatBunardzik, theopeningofanewmilkcompanywithSwedishcapital,SwedmilkMakedonija,andtheFrenchbrandSociétéGénérale’stakeoverofOhridskabanka.

Foreign Direct investments

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Table: Foreign Direct Investments in the Republic of Macedonia in 2005, by Country Source: State Statistical Offi ce

C O U N T R Y No. of business

contractsParticipation

(in %)Value

(in '000 US$)Value structure

(in %)TOTAL 282 100.0 116,168 100 Developed countries 219 77.6 74,767 64.4

EU Countries 174 61.7 55,273 47.6 EFTA Countries 14 5.0 16,691 14.4 Other developed countries 31 11.0 2,803 2.4

Countries from Former Yugoslavia 27 9.6 4,315 3.7 Countries from Central and East. Europe and former Soviet Union 29 10.3 14,794 12.7 Developing countries 7 2.5 22,292 19.2 By countries

Austria 11 3.9 12,026 10.4 Australia 4 1.4 1,094 0.9 Albania 3 1.1 34 0.0 Bosnia and Herzegovina 1 0.4 31 0.0 Bulgaria 20 7.1 7,015 6.0 Germany 24 8.5 3,349 2.9 Greece 82 29.1 13,318 11.5 Virgin Islands,British 1 0.4 7 0.0 Italy 16 5.7 17,091 14.7 Iceland 1 0.4 6 0.0 Canada 2 0.7 13 0.0 China 1 0.4 3 0.0 Cyprus 2 0.7 94 0.1 Korea,Republic of 1 0.4 13 0.0 Liechtenstein 1 0.4 12 0.0 United Kingdom 4 1.4 488 0.4 Panama 1 0.4 481 0.4 Poland 2 0.7 249 0.2 Russian Federation 2 0.7 7,723 6.6 USA 10 3.5 927 0.8 Saint Vincent and the Grenadines 2 0.7 21,701 18.7 Slovenia 19 6.7 6,694 5.8 Serbia and Montenegro 16 5.7 1,893 1.6 Taiwan 1 0.4 40 0.0 Turkey 13 4.6 722 0.6 Ukraine 1 0.4 7 0.0 Finland 1 0.4 6 0.0 France 4 1.4 23 0.0 Netherlands 9 3.2 1,892 1.6 Croatia 10 3.5 2,391 2.1 Czech Republic 3 1.1 15 0.0 Switzerland 12 4.3 16,673 14.4 Sweden 2 0.7 137 0.1

FENI a ferro-nickel producing plant - once a loss-maker, today an example of a successful FDI.

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In the Program for Stimulation of Investments, adopted by the Macedonian Government in March 1999 as part of the strategy for investing in the country, emphasis was put on forming free economy zones to attract foreign direct invest-ments. Th e establishment of free economic zones (treated as duty-free zones) is conducive to increased exports and has a positiveeff ect on the foreign trade and the balance of payments. It also ensures transfer of new technologies and techniques, identifi cation of new production processes and methods of implementation, which creates conditions for a more dynamic development of the domestic technologies and increases competition in the economy. Th e largest free

� No restrictions for foreign investment regarding the sectors of economic activity� 100% foreign ownership of a company allowed� No restrictions for repatriation of profi ts� Duty exemptions and tax holiday in the fi rst 3 years of operation of the foreign company� Incentives:1. Free zones 2. Underdeveloped regions

Profi t tax holiday for the fi rst fi ve years and permanent tax holiday for specifi c regionsDuty exemptions for importing equipment and machinery

� Free trade agreements, Stabilization and Association Agreement with the EU� Main advantages

Reputation for maintaining political and economic stability even in hard timesBusiness friendly legal environment, being subject to further adjustmentsPossible competitive advantages in several sectors, especially natural resources and human resources based Relatively good and improving infrastructureCritical mass of educated and comparatively inexpensive labor forceHuman resources, especially technicalEntrepreneurial spirit of populationAn existing diversifi ed industrial basePossible hub for some businesses in the Balkan area

� Attractive environment:Sustainable developmentOpen for cooperation with all countriesAbundant investment opportunitiesNational treatment for domestic and foreign investorsContinuity in structural reformsSimulative tax and other legal relieves and exemptions (the profi t tax of 12% is the lowest in the region)Foreign investors can import machinery and equipment duty free, provided they are not locally producedMore inducements are foreseen under the Law on Economic ZonesIntellectual and industrial property legislation is well developedCompetition rules ensure fair conditions for business operationsWork permits liberally issued to foreign citizens

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HOSPITABLE FDI ENVIRONMENT

FREE ECONOMIC ZONES

Johnson Matthey15 Ha

Johnson Controls5.4 Ha

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The basic premise of the Law on Concessions is the pro-tection of goods of general interest, rational exploita-tion of natural resources and protection of public interest in public services without disrupting the economic and commercial interests of the concessionaire. Transparency, non-discrimination, and competitiveness are the basic poles on which the procedure for giving concessions rests. The procedure has been regulated under the most modern principles of the World Bank and UNIDO, which can be seen particularly in tender procedures . In the regulation of the issues connected with public issues and services, the EU directives play the main role. This is not applied in the existing state-owned companies until they are restructured and privatized, or unless otherwise envisaged by some other law. The adoption of the Law on Concessions, the Law

on Construction Land, and the Law on Mineral Wealth provides opportunity for foreign investments, especially through guaranteed right of ownership of construction land and legal protection of ownership. Under the Law on Agricultural Land, the Government of Macedonia can give concessions of state-owned agricultural land to domestic and foreign legal entities and individuals. The long-term lease can range from 5 to 40 years, whereas the short-term is up to 5 years. As stipulated in the Law on Forests, concessions can be issued for use of game on hunting grounds to domestic and foreign legal entities and hunting clubs (beneficiaries of hunting grounds game). Under the Law on Water, water can be given for use by concession for a definite period of time to domestic and foreign legal entities and individuals, for certain business activities.

ConCessions

intention to build a factory in Bunardzik in March 2007. Other recommended locations are Rzanicino and Kamnik in Skopje, Prdejci in Gevgelija and Novo Lagovo in Prilep and the Customs terminal in Bitola.

The monetary advantages of making investments in free economic zones include VAT and excise exemption, income tax and property tax exemption for 10 years, no customs duties for goods, equipment and machinery, no municipal fees for construction land, water supply, sewerage, heating, gas and electricity, and 50% personal income tax reduction for a period of 5 years. In addition, the long-term lease may be extended for another 25 years at low prices.

economic zone Bunardzik (near the Skopje Airport) is located on 159 hectares of land divided into small, medium and large construction parcels. Investors in Bunardzik are exempt from paying taxes, various contributions and municipal fees. At the same time the Government undertook to construct the whole infrastructure for the zone while all the other con-struction works inside the zone are at the investor’s expense. Anything can be produced in the zone except textile. The American automotive interior producer, Johnson Controls, has recently launched its first significant investment in the zone, while the English producer of autocatalysts and pol-lution control systems, Johnson Matthey, announced its

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Th e membership of the European Union is the highest strategic interest and priority of the Republic of Macedonia. It is the country’s ultimate goal, widely viewed upon as a confi rmation of its European identity, undeniable belonging and contribution to the European civilization and culture, identifi cation with the European values and ideas, and an open European perspective.

Th e European Council decided to grant the Republic of Macedonia a candidate country status for membership of the EU on 17 December 2005. Th e Heads of State and Government of the EU member states thus recognised the progress that Macedonia had made in meeting the Copen-hagen criteria.

In the Report of the European Commission of 9 No-vember 2005, the Union principally spoke in favor of the progress that the Republic of Macedonia had accomplished in the implementation of the Stabilisation and Association

Agreement (SAA) and the fi rst European partnership signed with the Union.

Together with the reception of the candidate country status, the Republic of Macedonia established its second European partnership, which lists short-term and mid-term priorities for the country in its preparation for further integration with the EU. Th e European Partnership Action Plan and the National Programme for Adoption of the Acquis (NPAA) are strategic documents having resulted from the European partnership and defi ning the process of Macedonia’s EU integration.

In adherence with the recently negotiated financial framework of the EU for the period between 2007 and 2013, the pre-accession assistance will be channeled to the candidate countries through the Instrument for Pre-Acces-sion Assistance (IPA).

The Republic of Macedonia Towards the

Th e Republic of Macedonia Towards the EU

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iaTh e Republic of Macedonia presented its application for

membership of the European Union on 22 March 2004. Th e application was a result of a continuous process of rap-prochement with the European Union since the country’s independence in 1991.

Th e European Union clearly recognised the countries of the Western Balkans as potential candidates for membership of the European Union at the Feira European Council in 2000 and reaffi rmed the prospect at the Th essaloniki EU –Western Balkans Summit of 2003.

Th e transition reforms, which the country has been going though since its independence, are now closely converging with its EU accession objective. Aware that diffi cult conditions and criteria have to be fulfi lled, the authorities of the Republic of Macedonia clearly set the goals and on 6 September 2004 the Government of the Republic of Macedonia adopted the National Strategy for European Integration.

Macedonian Deputy Prime Minister for European Integration Gabriela Konevska-Trajkovska meets Geoff Hoon, Minister for Europe of the British Foreign Offi ce, Skopje, November 2006.

A meeting of the Committee for Stabilization and Association between the Republic of Macedonia and the European Commission.

Lake Ohrid

EU and NATO

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alignment of its policies and institutions with those of the European Union, including the area of justice and home aff airs. Macedonia has also paid special attention to the implementation of the Internal Market rules.

Th e Interim Agreement on Trade and Trade-Related Mat-ters, a part of the SAA that entered into force in June 2001, allows for preferential access of Macedonian products to the market of the European Union (with the exception of the “sensitive” products, mainly agricultural). Th e Macedonian economy has been closely tied to the European market given that the EU is the main trading partner of the Republic of Macedonia, constituting 47% of the country’s total trade (51% of its total exports and around 45% of its total im-ports). Furthermore, the Macedonian currency, the Denar, is pegged to the EURO.

As a small land-locked country, the Republic of Mace-donia is committed to an open economy, establishing good neighbor relations and intensifying regional cooperation. It has taken a constructive stance on developing regional cooperation in both economic and political terms, and has concluded free trade agreements with all the countries in the region and beyond. Th us, an enterprise based in Macedonia has access to a free trade area including the EU, Southeast Europe, Turkey and Ukraine.

A national system for coordination of the process of European integration, headed by a Deputy Prime Minis-ter, was set up in 1998. Since August 2006 Mrs. Gabriela Konevska-Trajkovska has been fi ling the post of Deputy Prime Minister in charge of European Integration. Th e Secretariat for European Aff airs serves as a coordination body in the process of Euro-integration at the central govern-ment level, while Sectors for the EU have been established at the level of ministries, and they are complemented by the foreign aid coordination system, aimed at eff ective utilization of the fi nancial aid, mostly coming from the EU and its member states. Th e main objective is to fully benefi t from these programs, especially in the institution building process. At the parliamentary level a Committee on European Issues has been established, charged with control over the executive branch, monitoring of the legislation approximation process and raising of public awareness of the Euro-integration process.

Th e Republic of Macedonia as an EU candidate country is looking forward to launching negotiations for membership of the European Union.

1 Greece opposed the recognition of the country under the constitutional name Republic of Macedonia. A compromise was reached to enable Macedonia’s admission in the United Nations – Macedonia joined the UN under the provisional reference “former Yugoslav Republic of Macedonia” and talks with Greece under UN mediation were launched – still ongoing. However, this solution unblocked the international recognition of Macedonia. Two thirds of the countries with whom Macedonia has established diplomatic relations recognise it under its constitutional name.

Th e Republic of Macedonia established diplomatic relations with the European Union in 1995, after the diffi culties with its international recognition.1 Its relations with the European Union and its member states have continuously and progres-sively developed since. In 1996 the Republic of Macedonia became a member of PHARE. In 1996 the country signed the Cooperation Agreement, which entered into force in 1998. In 1999 the European Union launched the stabiliza-tion and association process for the countries of the Western Balkans. Th e Republic of Macedonia was the fi rst country from the region to sign a Stabilisation and Association Agree-ment. Th e Agreement, which entered into force on 1 April 1 2004, was the fi rst to be ratifi ed in all EU member states.

Th e Stabilisation and Association Agreement defi nes not only Macedonia’s trade relations, but also the gradual

Deputy Prime Ministers Gabriela Konevska-Trajkovska and Zoran Stavreski on a visit to France.

Macedonian EU Info Center

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NATO CANDIDATE COUNTRY

Th e Republic of Macedonia is an aspiring partner country to the North Atlantic Treaty Organization. NATO member-ship is its top foreign policy priority.

In the closing Declaration of the NATO Riga Summit in 2006, NATO welcomes the eff orts of Macedonia, Croatia and Albania to prepare themselves for the responsibilities and obligations of membership and reaffi rms that NATO remains open to new European members, underlining the importance of the Membership Action Plan (MAP) as a crucial stage in preparing countries for NATO membership. Eight cycles of the Membership Action Plan implementation have helped transform Macedonia from benefi ciary of security investments into a contributor to security in the region.

NATO has also recognized Macedonia’s increasing con-tribution to its international peacekeeping and security operations as well as the country’s eff ort to improve regional cooperation, which is an additional encouragement for Macedonia to carry out the responsibilities and obligations stated in the Riga Declaration in order to become a NATO member state.

At the forthcoming NATO Summit in 2008, the Alliance intends to extend further invitations to those countries that meet NATO’s performance-based standards and are able to contribute to the Euro-Atlantic security and stability.

Th e Republic of Macedonia is working hard to complete the required reforms and stands a great chance of receiving the invitation for NATO membership in 2008, thus achiev-ing its major foreign policy goal, and contributing to lasting stability in this part of Europe.

23 December 1993 – Th e Parliament of the Republic of Macedonia adopted a resolution for accession of the Republic of Macedonia to the North Atlantic Treaty Organization – NATO.

15 November 1995 – Th e Framework Document for the Partnership for Peace Program was signed at the NATO Headquarters in Brussels.

22 December 1995 – An agreement was signed between Macedonia and NATO for transit of IFOR forces (for the purpose of their coordination with the UN in support of the implementation of the Peace Plan for Bosnia-Herzegovina).

30 May 1996 – Macedonia signed the Partnership for Peace Status of Forces Agree-ment (SOFA).

4 June 1996 – Th e Parliament of the Republic of Macedonia unanimously adopted the Law on the Ratifi cation of the Partnership for Peace SOFA.

12 June 1996 – Th e Republic of Macedonia Individual Program under the Partner-ship for Peace, covering the 1996-1998 period, was mutually accepted at the formal session of the North Atlantic Council in Brussels.

26 November 1997 – Th e Mission of the Republic of Macedonia to NATO was offi cially established in Brussels.

1 December 1997 – Th e Government of the Republic of Macedonia decided to form a Committee for Euro-Atlantic Integration tasked with coordination of the activities related to the preparations of the Republic of Macedonia for membership of the EU and NATO.

8 December 1997 – Th e Government of the Republic of Macedonia decided to form a Working Committee for Integration into the Collective Defense Systems.

22 April 1998 – Th e Parliament of the Republic of Macedonia established the Committee for European and Euro-Atlantic Integration as a permanent work-ing body.

24 December 1998 – Th e Basic Agreement was concluded between the Republic of Macedonia and NATO for operation of NATO missions in the Republic of Macedonia.

23 April 1999 – At the NATO Summit in Washington, the Republic of Macedonia offi cially became a candidate for membership of the Alliance and started partici-pating in the NATO Membership Action Plan, designed to help aspiring partner countries meet NATO standards and prepare for possible future membership.

19 May 2000 – Macedonia became one of the founders of the Vilnius Group, together with Albania, Bulgaria, Romania, Slovenia, Slovakia, Latvia, Estonia, and Lithuania. Croatia joined the Group in 2002.

2 May 2003 – Macedonia, Albania, and Croatia, together with the United States, signed the Partnership Charter (or the Adriatic Charter). Th is initiative, which was informally labeled the Ohrid-Adriatic initiative, was launched by President Boris Trajkovski at the fringe of the NATO Summit in Prague.

11 August 2003 – NATO took over the command and control over the ISAF mis-sion in Afghanistan. Macedonia’s participation in this mission continues under NATO’s fl ag.

15 January 2005 – With the aim of enhancing and coordinating its activities, the Government of the Republic of Macedonia appointed a National Coordinator for preparation of the country for NATO membership.

10 September 2006 – Th e coordination of the activities for Euro-Atlantic integra-tion of the Republic of Macedonia was raised to the highest level and placed under the direct auspices of the Prime Minister. A Committee for Accession of the Republic of Macedonia to NATO was also formed. Th e Prime Minister chairs this Committee, while the Minister of Foreign Aff airs and the Minister of Defense are the Prime Minister’s Deputies at the Committee.

NATO missions and operations in the Republic of Macedonia– Operation Essential Harvest –

– Operation Amber Fox –– Operation Allied Harmony –

A Meeting of the Committee for Accession

of the Republic of Macedonia to NATO.

NATO missions and operations in the Republic of Macedonia– Operation Essential Harvest –

– Operation Amber Fox –– Operation Allied Harmony –

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On the Foreign Policy of the Republic of Macedonia- origins, main objectives, commitments and achievements -

he foreign policy of the Republic of Macedo-nia since its independence has been shaped by the core values and principles, as well as

by the commitment to realizing the country’s strategic goals – full membership of the European and Euro-Atlantic institutions. Th e Republic of Macedonia, as a comparatively small country, builds its foreign policy through continuous advancement and promotion of the relations with its partners, development of good neigh-bor relations, encouragement of regional cooperation, and extending support for and taking active part in the

promotion of all multilateral activities aiming to create a safe, just, prosperous and humane world, respecting human dignity and rights. Th e Republic of Macedonia backs the European idea and sees its future as an EU member state. At the same, the Republic of Macedonia is strongly committed to joining NATO, as an oppor-tunity for making an active contribution to building the collective security system. Full integration with the community of democracies within the European Union and the Atlantic Alliance is the lasting commitment of Macedonia’s foreign policy.

Macedonia in the World

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THE FIRST ILINDEN

Th e basic postulates of the foreign policy of the Republic of Macedonia, primarily its commitment to peace and cooperation and its aspirations to join the EU and NATO, are a logical consequence of the overall historical develop-ment of the Macedonian nation and state. Th e principles of the foreign policy refl ect also the inner structure of the society as a functional multiethnic democracy.

Th e roots of the Macedonian foreign policy can be traced back to the period of the struggle for creation of the nation and a free and independent Macedonian

CHRONOLOGY OF THE MAIN EVENTS IN THE FOREIGN POLICY

19912 December – Th e President of the Republic of Macedo-nia, Mr. Kiro Gligorov, sent a letter to the heads of the state and government all over the world calling for recognition of the Republic of Macedonia.19 December – The Parliament of the Republic of Macedonia adopted the Declaration for international recognition of the Republic of Macedonia as a sovereign and independent state.

199215 January – Th e Arbitration Commission of the Euro-pean Community, headed by Mr. Robert Badinter, an-nounced that Macedonia had fulfi lled conditions necessary for its recognition. On the same day the Government of Bulgaria was the fi rst to recognize the Republic of Mace-donia as a sovereign and independent state.1 March – Th e fi rst diplomatic mission of the Republic of Macedonia was opened in Tirana, the Republic of Albania.17 March – On the occasion of the arrival of Mr. Milan Kucan, President of the Republic of Slovenia, for the fi rst time the Macedonian state ceremonial honors were promoted.28 June – Th e Macedonian Government rejected the part of the EU Lisbon Declaration (from the previous day) that refers to its name. On 3 July, the Parliament of the Republic of Macedonia also rejected this part of the Declaration.12 December – Upon the request of the Republic of Macedonia, the UN Security Council adopted the Resolu-tion for commencement of UNPROFOR mission in the Republic of Macedonia - the fi rst preventive mission in the history of the UN - along the Macedonian-Yugoslav border.

19938 April – Th e UN General Assembly adopted a decision to accept the Republic of Macedonia in the UN as its 181st member state. 20 April – Th e fi rst extraordinary and plenipotentiary ambassador of the Republic of Macedonia was accredited to another country (Slovenia).17 July – Th e Republic of Macedonia became a full-fl edged member state of the Central European Initiative (CEI).19 July – Th e Republic of Macedonia became the 175th member state of UNESCO.

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Macedonian Foreign Minister Antonio Milososki in front of the European Parliament Foreign Aff airs Committee, Brussels, June 2007.

state. Th e uprising against the Ottoman Empire in 1903 helped establish, even if for about ten days alone, the fi rst republic in the Balkans – the Krusevo Republic – named after the picturesque town of Krusevo, the center of the uprising. In the course of its ten days of existence, the Krusevo Republic manifested genuine maturity in the initial implementation of democracy. Th e leadership of the Republic refl ected the ethnic diversity and the civic spirit of this progressive idea for the Region. “Come, dear neighbors! [...] Macedonia is the Homeland of everyone living on its territory […] regardless of nationality, religion, origin and gender” – were the words from the Macedonian revolutionaries to their compatriots of diff erent origins and traditions which made this democratic revolution to off er new, humane alternative to the Balkans’ environment, before the region and Europe came to the boil from 1912 to 1918. Ilinden 1903 and its short-lived Republic were avant-garde of modern democracy for those ‘forsaken and forgotten’ between Empires and Civilizations. Neverthe-less, the rights, aspirations and eff orts of the people of

this part of Europe, and of the Macedonians in particular, would be neglected for the competing interests of the great powers – interests that led to the Great War and to the subsequent perils and catastrophes for the European democracy for several decades. Th e Balkans would be their specifi c battlefi eld.

It had been obvious to the people of Macedonia that their liberation had to be their own deed; in the expecta-tion of historical opportunity and preparing for it, those ideas of the fi rst Republic on the Balkans, which were far ahead of the times in 1903, survived in Macedonia throughout the delicate environment of ever growing extremism and intolerance in Europe and in the Balkans until the Second World War. Immediately after the occu-pation in 1941, the anti-fascist movement of Macedonia, former Yugoslavia and some of the neighboring countries began almost instantly with resistance. Th ey took decisive part in the liberation Army in the great anti-fascist war on the side of the Allies.

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THE SECOND ILINDEN

Th e ideas of the fi rst Ilinden in 1903 had been historically reaffi rmed in the Second Ilinden and in the establishment of the Macedonian Republic in 1944. Th e Antifascist As-sembly of the National Liberation of Macedonia (ASNOM) consisted of prominent delegates from all ethnicities and walks of life, progressive citizens respected in society. Th e new Republic was the fulfi llment of the deepest desires of the Macedonian people, which were profoundly democratic in their essence and ‘democratically internationalist’ in their expectations. Th e nation, taught by its own historical experience, was ready and eager to live on terms of equality with others. Th us, the introductory articles of the ASNOM Resolution, just like the announcements in the First Ilinden, had been ahead of their time in certain aspects. By that document, the modern Macedonian Republic would be founded on civil rights and parliamentarism providing, as common objective, ‘national and social liberation for all’. With the establishment of the state that was national for the Macedonians, ASNOM and the Constitution granted equal rights to the minorities and promoted the human development of the Macedonian citizens of other ethnici-ties within the same specifi c multicultural environment. So, with the very incipience of the free dissemination of the Macedonian word, the other ethnicities in the Macedonian Republic had the constitutional and practical opportunities to educate and express themselves in their native languages.

Before the two Ilindens, the history of the people of the Republic of Macedonia was frequently written and presented by others, for others, over and without them. Th erefore, the main Macedonian objectives in 1903 and 1944 de facto were the same: to achieve recognition of the Macedonians and the other ethnic groups as equal among the Balkan and European peoples; to help the Macedo-nian Republic take its proper place in the international society and to secure dignifying conditions for free and prosperous life for all of the citizens in this part of Europe. Ilinden 1944, consequently, has always been regarded as the succession and conclusion of Ilinden 1903.

SINCE THEN

But in the course of the modern history of the Republic of Macedonia – which inevitably depended on specifi c Balkan and broader European and global processes, with

21 September – Th e Republic of Macedonia participated for the fi rst time in the work of the UN General Assembly, at its 48th Session. Th e Republic of Macedonia actively participated in the adoption of the Resolutions for main-tenance of international security, good neghbour relations, stability and development in South-Eastern Europe. 12 October – Th e Republic of Macedonia and the People’s Republic of China established diplomatic relations at ambassadorial level. 6 November – Th e Republic of Macedonia joined FAO.3 December – The USA opened its liaison office in Skopje.16 December – Six EU member states, Great Britain, Germany, France, Italy, Holland and Denmark, established diplomatic relations with the Republic of Macedonia at ambassadorial level.

199431 January – Th e Republic of Macedonia and the Russian Federation established diplomatic relations at ambassado-rial level. 16 February – Greece imposed trade embargo upon Macedonia.27 February – At the Ministerial Meeting of the EU in Ioannina, Greece, the Greek trade embargo against Mace-donia was declared illegal.

199531 March – Th e forces of the UNPROFOR Mission were replaced by the mission of UNPREDEP.13 September – Th e Republic of Macedonia and the USA established diplomatic relations at ambassadorial level. 12 October – Th e Republic of Macedonia was admitted as a full-fl edged member to the Organization for Security and Cooperation in Europe (OSCE).15 October – Th e Republic of Greece lifted the embargo imposed on the Republic of Macedonia.31 October – Macedonia joined the PHARE Program.9 November – Th e Republic of Macedonia become of-fi cially the 38th member of the Council of Europe.9 November – Th e Republic of Macedonia signed the European Convention on Human Rights and Funda-mental Freedoms.15 November – Th e Republic of Macedonia was admitted as a member of the Partnership for Peace (PfP).29 December – Th e European Union and the Republic of Macedonia established diplomatic relations at ambas-sadorial level.

1996 17 January – Liaison offi ces of the Republic of Macedonia and the Republic of Greece were opened in Athens and Skopje, respectively.23 March – Th e US Embassy was opened in the Republic of Macedonia.

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Th e Republic of Macedonia is working hard to complete the required reforms and stands a great chance of receiving

an invitation for NATO membership in 2008.Photo: Macedonian Foreign Minister Antonio Milososki

meets NATO Secretary General Jaap de Hoop Scheff er.

Th e Republic of Macedonia backs the European idea and sees its future as an EU member state.

Photo: A press conference of Foreign Minister Milososki and EU Enlargement Commissioner Olli Rehn, Brussels,

November 2006.

a strong impact on the following ideological war between the two competing ‘social systems’ and being situated as a part of the peculiar ‘third in between’ – these Ilinden objectives were only partially achieved during the Mace-donian participation in the former federal Yugoslavia. During the 45 years of common life in it, the Macedonian nation and its institutions were consolidated, together with those of the compatriots with diff erent origins and traditions.

For the fi rst time in its existence, this year Macedonian diplomacy celebrated its day – 29 April. Th is date marks nearly 50 years of continuity in the diplomatic service of the Republic of Macedonia and its institutional transfor-mation from Bureau for Foreign Relations to its present form – Ministry of Foreign Aff airs.

Th e Republic of Macedonia refused to participate in the emerging war in 1991. Disgusted with the sub-stitution of politics with violence and stunned at the atrocities and sheer destruction, the citizens reclaimed the Macedonian sovereignty in a referendum in September 1991. Th e Republic of Macedonia declared independence and managed to do it in a peaceful way. Th at civilized manner of trying to resolve the hardest problems, fi rst and foremost through dialogue within a political process that respects the will of the concerned would become a hallmark of the Republic of Macedonia. Th is manner of dealing with the situations inside the country and beyond , atypical for the Balkans, is rooted in the Macedonian historical experience.

Th e end of the 20th century confi rmed that the pro-gressive ideas of the two Ilindens were and still are among the original principles in the transformations of the Macedonian society. Consequently, they are the solid foundation of the Macedonian foreign policy on its way to the European and Euro-Atlantic integration, as the ultimate, true realization of these historical aspirations.

EXAMPLE OF FUNCTIONAL MULTIETHNIC DEMOCRACY

In the years after independence, various cultural tradi-tions in the country, notwithstanding the obstacles, are in the complex process of their mutual democratic and civic improvement. Th e eff orts for realizing the demo-cratic gains, with occasional support and assistance of the international community, are being successful with the outcomes produced by full implementation of the Ohrid

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Framework Agreement (FA) in the Constitution and in the legislation, as well as by its unobstructed eff ectua-tion, as part of an ongoing political process. As fruit of political wisdom out of the necessity in the crisis 2001, the Agreement has shown itself as the most stabilizing at home and the most promising abroad of all possible options. Diff erent to the Balkans’ traditions, the Republic of Macedonia succeeded in extraction and employment of the substance of the political: converting violence into productive social relations, and the enmity of uncom-promising fi ghters into a structured dialogue and shared governance and responsibility by the competent actors. Being the main internal geopolitical determinant, the implementation of that unique political act is regarded by the international community as a required precondi-tion and qualifi er for the European and Euro-Atlantic integration of the Republic of Macedonia.

Th e story of the FA is perceived as successful and as a rare fact in this and other parts of the World. Respon-sible actors willfully claim suitable emulations of the FA - pattern and process as recommendable approach for the resolution of interethnic problems in the ever-globalizing World. On this Macedonian Government adds caveat: situations in the World are diff erent and each one of them needs a specifi c approach to the problem. Th e only prerequisite is for the approach to be democratic and nation- or state-building synergetic with creating a society of free citizens bound only by the rule of law based on human rights.

Th e implementation of the FA in Macedonia is a re-markable contribution that cannot be ignored especially where there are diff erent communities and traditions. Th e Macedonian example is encouraging for the unavoidable communication that has to be established between dif-ferent cultures bound to live together in the World. Th is example is built upon the centuries-long living together of the Macedonian ethnic community with other ethnic communities in the territory of the present Republic of Macedonia and the intertwining of civilization infl u-ences taking place in the country that instead of taking away the authenticity of the original cultures, adds to their communication. Such an experience is normal in the Republic of Macedonia. People used to live and still do with and through a synthesis of diff erent cultural elements, without major clashes together, which makes its impossible to separate the other, the diff erent. Hence, it was possible to make such a political decision as the Framework Agreement.

8 April – Th e Republic of Macedonia and FR Yugoslavia established diplomatic relations at ambassadorial level.

199710 April – Th e Republic of Macedonia ratifi ed the Eu-ropean Convention on Human Rights and Fundamental Freedoms.

19981 January – Th e Cooperation Agreement and Agreement in the Field of Transport between the EU and the Republic of Macedonia entered into force.4 February – Th e Parliament of the Republic of Mace-donia adopted the Declaration for development of the relations between the Republic of Macedonia and the European Union.19 March – Th e fi rst Resident Envoy of the European Union to the Republic of Macedonia was nominated.

19991 March – Th e mandate of the UNPREDEP Mission in the Republic of Macedonia was over.From March to the end of the year, the Republic of Macedonia dealt with various eff ects from the NATO campaign on Kosovo. April-July – Th e Stability Pact for Southeastern Europe was established and promoted – the Republic of Macedonia was among its founding members.1 September – Th e Republic of Macedonia became an associative member of the International Organization of La Francophonie.

200024 January – Th e EU Ministerial Council adopted a decision approving directives for the conclusion of the Stabilization and Association Agreement between the Republic of Macedonia and the European Union.4 February – Th e Parliament of the Republic of Mace-donia adopted the Resolution for the relations and role of the Republic of Macedonia in the Stability Pact for South East Europe.12 February – Th e Republic of Macedonia signed the Charter for good neighbourly relations, stability, security and cooperation in Southeastern Europe.5 April – Th e fi rst round of negotiations for the conclusion of the Stabilization and AssociationAgreement between the Republic of Macedonia and the European Union was held in Brussels.19 May – Th e Republic of Macedonia signed the Vilnius Statement, together with the nine aspirant countries for NATO membership.

20019 April – Th e Stabilization and Association Agreement between the Republic of Macedonia and the European Union was signed in Luxemburg.

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H.E. Dr. Srgjan Kerim, President-elect of the 62nd Session of the United Nations General Assembly, addresses the Assembly, May 2007.

REPUBLIC OF MACEDONIA PRESIDENT OF THE 62ND SESSION OF THE UN GENERAL ASSEMBLY

Th e inner profi le of the country capable of resolving even its gravest problems through agreement and dialogue, taking into full consideration the interests of all, and through constant promotion of democracy, multiculturalism and human rights, raises the country’s credibility on a global scale as a responsible and respectable member of the international community.

Th e best, yet not the only example of the high credibility of the Republic of Macedonia in the international com-munity, is the election of its representative, Dr. Srgjan Kerim, as President of the 62nd Session of the General Assembly of the United Nations. Backed by the Eastern-European Regional Group and elected by acclamation at the General Assembly of the UN, Dr. Kerim will play a highly responsible role in directing processes at the UN, promoting eff ective multiculturalism, and seeking out solutions to global problems. Th is is also a great acknowledgment for the Republic of Macedonia, its policy and capacity to make a prominent contribution to building global policies.

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EU INTEGRATION

On 17 December 2005, the Republic of Macedonia was granted the status of an EU candidate member state, thus entering the critical stage of its EU integration process. Th e European Council’s decision to grant the country the candidate status was a political recognition of the progress the Republic of Macedonia had made in conducting its reforms and building an open and a democratic society. Since the establishment of its diplomatic relations with the EU in December 1995, the Republic of Macedonia has grown into a trustworthy partner and true ally of the European Union, going through all the institutional stages of the process of coming closer to the Union: from the Cooperation Agreement, to the Stabilization and Associa-tion Agreement, to the reception of its candidate status.

Th e next stage is receiving a date for starting accession talks. Th e accent in the eff orts for full integration with the EU is put on the quality completion of the reforms and fulfi llment of all the other required criteria. To achieve the European integration, the Republic of Macedonia, as already a stable and functional European democracy, takes the last and decisive steps in achieving comprehensive European standardization of the social, economic and political life that shall make the country a complete and mature democracy with a functional market economy which is socially responsible for the future fl ow of changes.

Th ese transformations have to go along with further development of the culture of enterprise and hard work ethics that facilitate a business-friendly environment. Above all, reforms have to complete the rule of law, and to safeguard freedom with democratically established institutions that would act in compliance with the rules accepted by the citizens and provide the legal and civic security of the system as a whole and of the citizens as participants.

Th e objective of the Republic of Macedonia is to fully meet the European standards for functional democracy and prosperous market economy, capable of taking over the EU membership responsibilities, by the end of 2010. Th e agenda for Macedonia’s accession to the EU is re-fl ected in the National Program for the Adoption of the Acquis (legislative modifi cations and short- and mid-term measures for institutional capacity building), the Pre-Accession Economic Program (measures for meeting the Copenhagen economic criteria) and the National Development Plan (investment priorities to accomplish the country’s development goals).

11 May – Fifty-fi ve members of the OSCE Permanent Council adopted the Declaration by which they condemned the violence and terrorist activities of the Albanian extrem-ists in the northern parts of the Republic of Macedonia.27 September – Th e Government of the Republic of Macedonia adopted the decision by which it gave consent for deployment of the NATO Operation “Amber Fox” on the territory of the Republic of Macedonia.

200225 February – Th e UN Security Council fully supported the Agreement on Delineation and Demarcation of the borderline between the Republic of Macedonia and FR Yugoslavia (concluded in 2001).15 December – Th e new 6-month NATO Mission in the Republic of Macedonia, Operation Allied Harmony started (replacing OperationAmber Fox).In 2002, the Army of the Republic of Macedonia began its participation in the international mission in Afghanistan (ISAF) as part of the anti-terrorist coalition.

200331 March – Th e EU Military Operation Concordia re-placed NATO Operation Allied Harmony.4 April – Th e Republic of Macedonia became a full-fl edged member of the World Trade Organization (WTO).2 May – Th e Ministers of Foreign Aff airs of Macedonia, Croatia and Albania and the State Secretary of the USA signed the Charter of Partnership – the Adriatic Charter - in Tirana.22 May – Th e Republic of Macedonia hosted the Regional Conference on Border Management and Security .6 June – A contingent of the Army of the Republic of Macedonia began the fi rst mission to Iraq.28 August – Th e Republic of Macedonia hosted the Re-gional Forum on Dialogue Among Civilizations.15 December – Th e EU Concordia Military Mission was brought to an end; there were no more foreign missions in the Republic of Macedonia. Th e technical and advisory mission of the EU police forces Proxima began.

200413 February – Th e Parliament of the Republic of Macedo-nia adopted the Declaration for submitting application for membership of Macedonia of the European Union.22 March – Th e application of the Republic of Macedonia for membership of the European Union was handed over in Dublin. 1 April – Th e Stabilization and Association Agreement between the Republic of Macedonia and the European Union entered into force.28 June – At the NATO Summit in Istanbul, Turkey, the achievement of the Republic of Macedonia was commended and its accession to the Alliance was anticipated at the next NATO Summit.

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Undoubtedly, a complex and even a formidable process with many challenges lies in front of the country and its citizens. At the same time, that process is the strongest motive for getting the best possible results in the further transformation of the society. Whatever the challenges in this cardinal endeavor by and for the whole society, the Republic of Macedonia and its citizens shall succeed because they are going to make the changes in their society and within themselves, fi rst and foremost, for them and for their own future

NEIGHBORING AND REGIONAL COOPERATION

Th e Republic of Macedonia is decisively commit-ted to the inauguration of principles of mutual respect among all nations and states in SEE, this being the most important criteria for confi dence building on a bilateral and regional level. Th e relations and cooperation between the Republic of Macedonia and its immediate neighbors are characterized by a good neighbor communication and friendship, as well as willingness for comprehensive cooperation in a number of areas of shared interest, as in fact evidenced by the intensive bilateral, regional and multilateral contacts on all levels, including the highest. Th e fact that the Republic of Macedonia and the countries of its immediate neighborhood have common strategic foreign policy goals strengthens their cooperation also as far as their process of integration with the European and Euro-Atlantic organizations is concerned, irrespective of the fact that the extent to which their aspirations have been realized diff ers.

Th e Republic of Macedonia supports the process of integration of all the countries of the region with the EU and NATO, in keeping with their individual achievements, aware that this is the only way to lasting stability and prosperity of the region and its full integration with the European and Trans-Atlantic families of shared values.

Th e Republic of Macedonia is involved and remarkably active in regional initiatives, primarily in the South-East European Cooperation Process, the Central European Initiative, and the Stability Pact for South-East Europe, taking part at the same time in some initiatives belonging to diff erent European regions. Th e Republic of Macedonia at the beginning of 2006 became a member of the Cen-tral European Free Trade Agreement. Good-neighborly relations and regional cooperation are some of the basic

International solidarity is necessary in these extremely important times for Iraq. Th e Ministerial Conference on

Iraq, a meeting of U.S. Secretary of State Condoleezza Rice and Macedonian Foreign Minister Antonio Milososki, Sharm el-Sheikh, Egypt, May 2007.

Munich Security Conference. Macedonian Foreign Minister Milososki shakes hands with Russian

President Vladimir Putin and U.S. Secretary of Defense Robert Gates.

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30 June – Th e Central European Free Trade Agreement (CEFTA) accepted the membership application of the Republic of Macedonia at the Sofi a Conference. 14 September – Th e fi rst Meeting of the Stabilization and Association Council between the European Union and the Republic of Macedonia.

200517 December – Th e European Council granted the can-didate country status to the Republic of Macedonia

2006 September – Th e National Programme for NATO Mem-bership was adopted by the Government of the Republic of Macedonia 17 November- Macedonia hosted a crucial summit on social aspects of the South East European Energy Com-munity23/24 November - Th e Republic of Macedonia hosted the Migration, Asylum and Refugee Regional Center Initiative – MARRI 28/29 November – At the NATO Summit in Riga, the Republic of Macedonia submitted its achievements, hoping to join the Alliance in 2008

2007 04 June – Th e Minister of Foreign Aff airs presented to the European Parliament’s Committee on Foreign Aff airs in Brussels the Government’s achievements in fi ghting corruption and organized crime, and implementing economic reforms28/29 June – Th e Republic of Macedonia will host the II Euro-Atlantic Partnership Council (EAPC) Security Forum.

criteria on the way to European and Euro-Atlantic inte-gration. Friendship, cooperation and solidarity are also the genuine needs of Southeastern Europe. Th e Mace-donian foreign policy promotes the principle of respect of human and minority rights according to international standards. Th e Republic of Macedonia stands that the process of accelerated integration of the region in the EU and NATO will undermine existing threats on national and regional level.

Th e countries from the region in the recent years have achieved a considerable progress, both on a domestic level and in developing mutual relations. However, despite the considerable progress on the level of stabilization and improved security in the region, all sources of potential instability have not been eliminated. Th e Republic of Macedonia is a constructive factor in the process of seek-ing out a solution to Kosovo’s fi nal status, harmonizing its own views with those of its EU and NATO partners and gives full support to the UN policy.

REPUBLIC OF MACEDONIA IN THE NATO ALLIANCE

Th e commitment to NATO membership is clearly stated in the resolution for accession of the Republic of Macedonia to NATO that the Macedonian Parliament adopted on 23 December 1993.

Th e Republic of Macedonia expects to be extended an invitation for NATO membership at the NATO Summit in Bucharest in 2008. Th e Republic of Macedonia is a stable and reliable partner who is now providing support to both the Alliance operations in Afghanistan and the US-led coalition in Iraq. In order to prepare for the European and Euro-Atlantic integration, there is currently a wide-range of reform activities being undertaken, covering all areas of government – security, defense, economy, judiciary and fi nance. In that demanding work Macedonia has the invaluable assistance from its NATO partners. Th e reforms in the security and defense sectors are in an advanced stage and the reform of the public administration is also underway. Th e Republic of Macedonia has demonstrated that it fully shares the core values of the Alliance It has also shown readiness and capability to protect these ideals at home, in Europe and worldwide. Participating in the peace missions in Afghanistan and, shoulder to shoulder with some members, in Iraq, the Republic of Macedonia has established itself as a serious and reliable partner of

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Macedonian Foreign Minister Antonio Milososki and U.S. Ambassador to NATO Victoria Nuland, May 2007.

the Alliance, having transformed itself from a benefi ciary into a contributor of security on a global level.

Th e Republic of Macedonia in the process of inte-gration into NATO has achieved much during the past year, both individually and collectively under the aegis of the Adriatic Charter. Th e Republic of Macedonia will continue to consistently and persistently meet all obliga-tions under the Membership Action Plan; it is already a leading country in this area with the quality of the Annual National Program and the Strategic Defense Review. In

sum, the Republic of Macedonia is ready to move from being a stable and reliable partner to becoming a stable and reliable member of the Alliance.

Following all the eff orts and cumulated aspirations, the full integration of the Republic of Macedonia within the community of democracies now stands a real chance of starting with NATO. Th us, one of the main objectives of the Macedonian foreign policy is probably to be fulfi lled soon, making the fundamental commitment, originated in the previous century, fi nally achieved.

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Embassy of the Republic of Macedonia in Tirana, Republic of AlbaniaRr. Kavajes, Nr. 116, TiranaTel: 355 4 230 909

Embassy of the Republic of Macedonia in Vienna, Republic of AustriaMaderstrasse 1/10, A- 1040, Vienna Tel: 431 524 87 56(also covering Republic of Slovakia, Czech Republic, Japan)

- Consular Section Maderstrasse 1/4, 1040 Vienna Tel: 43 (0) 1 524 87 57

Embassy of the Republic of Macedonia in Canbera, Republic of Australia74 Banks Street, Yarralumla, Canberra, ACT 2600Tel: 612 6282 6220

Embassy of the Republic of Macedonia in Brussels, Kingdom of Belgium Avenue Louise 209A, 1050 BrusselsTel: 32 2 734 56 87(also covering Grand Duchy of Luxembourg)

Embassy of the Republic of Macedonia in Sarajevo, Bosnia and HerzegovinaSplitska 57, Sarajevo Tel: 387 33 206 004

Embassy of the Republic of Macedonia in Sofi a, Republic of BulgariaFrederic Joliot-Curie 17block 2, fl oor 1, suite 1, Sofi a 1113Tel: 359 2 870 15 60(also covering Republic of Moldova)

- Cultural Center Oboriste 7, Sofi a 1113 Tel: 359 2 946 14 92

Embassy of the Republic of Macedonia in Ottawa, Canada130 Albert St. Suite 1006 - Ottawa, ONK1P 5G4, CanadaTel: 1 613 234 38 82

Embassy of the Republic of Macedonia in Beijing, People's Republic of China 3-2-21, Sun Li Tun Diplomatic CompoundPost code 100600, Beijing - PR ChinaTel: 86 10 6532 7846(also covering Democratic People’s Republic of Korea; Mongolia and Socialist Republic of Vietnam)

Embassy of the Republic of Macedonia in Zagreb, Republic of CroatiaKralja Zvonimira 6/1, 10 000 Zagreb Tel: 385 1 45 72 812

Embassy of the Republic of Macedonia in Copenhagen, Kingdom of Denmark Skindergade 28, A, 1.th. 1159 CopenhagenTel: 45 39 76 69 20

Embassy of the Republic of Macedonia in the Cairo, Arab Republic of Egypt St. 214, B.6/1, Degla, Maadi, CairoTel: 202 51 72 100

Embassy of the Republic of Macedonia in Paris, Republic of France5, rue de la Faisanderie, 75116 ParisTel. 331 45 77 10 50(also covering Portugese Republic and UNESCO)

Embassy of the Republic of Macedonia in Berlin, Federal Republic of GermanyKoenigsallee 2, 14193 BerlinTel: 49 30 890 69 521

- Consular Department in BerlinHubertusalee 5, 14193 BerlinTel: 49 30 890 69 511

- Embassy of the Republic of Macedonia in Berlin, Department in Bonn, GermanyStraesschensweg 6, 53113 BonnTel: 49 228 92 36 90

- Consular Department in BonnTel: 49 228 23 79 86

Liaison Offi ce of the Republic of Macedonia in Athens, Hellenic Republic Papadiamanti 4, P. Psychico 154 52 AthensTel: 30 210 67 49 585

Embassy of the Republic of Macedonia in the Holy See (Vatican) Via di Porta Cavalleggeri, 14300165 RomeTel: 39 06 635 878

Embassy of the Republic of Macedonia in Budapest, Republic of Hungary Tapolcsanyi utca 18, 1022 BudapestTel: 36 1 33 60 510

Embassy of the Republic of Macedonia in Rome, Italian Republic Via Bruxelles 73/75, 00198 RomaTel. 39 06 84 24 11 09(also covering Th e Souvereign Military Order of Malta)

Embassy of the Republic of Macedonia in Th e Hague, Kingdom of the Netherlands Laan van Meerdevoort 50 - C2517 AM Den Haag Tel. 31 70 427 44 64(also covering Th e Organization for the Prohibition of Chemical Weapons OPCW)

Embassy of the Republic of Macedonia in Warsaw, Republic of PolandKrólowej Marysieñki 4002-954 WarszawaTel. 48 22 651 72 91(also covering Republic of Latvia; Republic of Lithuania)

Embassy of the Republic of Macedonia in Bucharest, Romania 144, Mihail Eminescu, Sector 2, BucharestTel. 40 1 210 08 80

Embassy of the Republic of Macedonia in Moscow, Russian FederationDmitrija Uljanova 16, corpus 2, entrance 8, fl oor 1 - Suite 509&510117292 MoscowTel: 70 95 124 33 57(also covering Republic of Belarus)

Embassy of the Republic of Macedonia in Belgrade, Republic of SerbiaGospodar Jevremova 3411 000 Belgrade Tel. 381 11 328 49 24(also covering State of Israel)

Embassy of the Republic of Macedonia in Ljubljana, Republic of SloveniaPrešernova Cesta 2,1000 LjubljanaTel: 386 1 421 00 21

Embassy of the Republic of Macedonia in Madrid, Kingdom of SpainCalle Don Ramón de la Cruz, 107 2B28006 Madrid Tel: 34 91 571 72 98

DIPLOMATIC AND CONSULAR OFFICES OF THE REPUBLIC OF MACEDONIA

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Embassy of the Republic of Macedonia in Stockholm, Kingdom of SwedenRiddargatan 35, P.O. Box 10128, 100 55 Stockholm Tel. 46 8 661 18 30(also covering Kingdom of Norway, Republic of Finland and Republic of Estonia)

Embassy of the Republic of Macedonia in Bern, Swiss ConfederationKirchenfeldstrasse., 30, CH - 3005 BernTel: 41 31 352 00 02(also covering Principality of Liechtenstein)

Embassy of the Republic of Macedonia in Ankara, Republic of Turkey Filistin sokak 30-2/3Gaziosman Pasha, AnkaraTel: 903 12 446 92 04

(also covering Kingdom of Saudi Arabia, United Arab Emirates, Republic of Kazakhstan, Kyrgyz Republic, Azerbaijani Republic and Republic of Uzbekistan)

Embassy of the Republic of Macedonia in Kiev, Ukraine Ivan Fedorov 12, Kiev, 03150Tel: 380 44 238 66 16

Embassy of the Republic of Macedonia in London, United Kingdom Suite 2.1 & 2.2, Bucking Court 75-83 Buckingham GateLondon SW1E 6PETel: 44 207 976 0535(also covering Republic of Ireland and Republic of Iceland)

Embassy of the Republic of Macedonia in Washington, D. C., USA2129 Wyoming Ave. NWWashington D.C. 20008Tel: 1 202 667 0501

Embassy of the Republic of Macedonia in Doha, State of QatarAl-Ithar Street Villa N0.28Dafna – Diplomatic AreaPo BOX: 24262, DohaTel: 974 49 31 374

Embassy of the Republic of Macedonia in Podgorica, Republic of MontenegroHercegovacka 49/381000 PodgoricaTel: 381 81 667 415

Offi ce for Consular, Economic and Commercial Aff airs of the Republic of Macedonia in Th essaloniki, Hellenic RepublicTsimiski 43, Th essalonikiTel: 30 2310 277 347

Liaison Offi ce of the Republic of Macedonia in Pristina, KosovoStr. “24 Maj” no.121, PristinaTel: 381 38 247 462

Liaison Offi ce of the Republic of Macedonia in Tallinn, Republic of Estonia“Kentmanni” 18/4810116 TallinnTel/fax: 372 644 04 94

Th e Old Macedonian Photographs exhibition opened in the European Parliament in Brussels, December 2006.

At the invitation of the Macedonian Ministry of Foreign Aff airs, representatives of the diplomatic community in Macedonia visit the beautiful Sveto Preobrazenie monastery in Zrze, June 2007.

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Consulates General of the

Republic of Macedonia

Consulate General of the Republic of Macedonia in Toronto, Canada 90 Eglington Ave. East, Suite 210 Toronto ONT, M4P-2Y3Tel. 1 416 322 21 96

Consulate General of the Republic of Macedonia in Istanbul, Republic of TurkeyInönü Cad. Ücler apt.20/5Gümüşsuyu/Taksim - IstanbulTel: 90 212 251 22 33

Consulate General of the Republic of Macedonia in Detroit, USA2000 Town Center, Suite 1130Southfi eld, MI 48075 Tel. 1 248 354 5537

Permanent Missions of the

Republic of Macedonia

Permanent Mission of the Republic of Macedonia to the International Organizations in Vienna, Republic of Austria Engelsberggasse 5/7A - 1030 ViennaTel. 431 524 87 02

Permanent Mission of the Republic of Macedonia to the EU, Brussels, Kingdom of Belgium Avenue Louise 209 A , 1050 Brussels Tel. 32 2 732 91 08

Permanent Mission of the Republic of Macedonia to the NATO, Brussels, Kingdom of Belgium NATO HQ - VA Building, Blvd. Léopold III, 1110 BrusselsTel: 32 2 707 27 62

Permanent Mission of the Republic of Macedonia to the UNESCO in Paris, Republic of France5, rue de la Faisanderie, 75116 ParisTel. 331 45 77 10 50

Permanent Mission of the Republic of Macedonia to the Council of Europe in Strasbourg, Republic of France13, rue André Jung 13, 67000 Strasbourg, FranceTel: 33 388 37 17 00

Permanent Mission of the Republic of Macedonia to the United Nations Food and Agricultural Organization (FAO) in Rome, Italian RepublicPiazza F.M. Lante 53/2-8, RomeTel/fax: 39 06 635 878

Permanent Mission of the Republic of Macedonia to the UN in Geneva, Swiss Confederation143, rue de Lausanne, CH - 1202 GenevaTel. 41 22 731 29 30

Permanent Mission of the Republic of Macedonia to the United Nations, New York, USA866 United Nations Plaza, Suite 517New York, N.Y. 10017Tel. 1 212 308-8504

Th e tragically perished President Boris Trajkovski and former Minister of Foreign Aff airs Slobodan Casule in Washington, February 2002.

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THE REPUBLIC OF MACEDONIA - FACTS & FIGURES, June 2007Publisher: MACEDONIAN INFORMATION CENTRE Address: Naum Naumovski Borce 73, 1000 Skopje, Republic of MacedoniaTel./Fax: (+389 2) 311-78-76; 311-78-34, 322-18-42e-mail: contact@micnews.com.mk mic@mt.net.mk

www.micnews.com.mk