Creative Industries North Macedonia
Population: 2,118,945 (July 2018 est.)
Internet country code: .mk
a yellow sun (the Sun of Liberty) with eight broadening rays extending to the edges of the red field; the red and yellow colors have long been associated with Macedonia
Republic of North Macedonia / Република Северна Македонија (Macedonian) / Republika e Maqedonisë së Veriut (Albanian)
North Macedonia gained its independence peacefully from Yugoslavia in 1991 under the name of “Macedonia.” Greek objection to the new country’s name, insisting it implied territorial pretensions to the northern Greek province of Macedonia, and democratic backsliding for several years stalled the country’s movement toward Euro-Atlantic integration. Immediately after Macedonia declared independence, Greece sought to block Macedonian efforts to gain UN membership if the name “Macedonia” was used. The country was eventually admitted to the UN in 1993 as “The former Yugoslav Republic of Macedonia,” and at the same time it agreed to UN-sponsored negotiations on the name dispute. In 1995, Greece lifted a 20-month trade embargo and the two countries agreed to normalize relations, but the issue of the name remained unresolved and negotiations for a solution continued. Over time, the US and over 130 other nations recognized Macedonia by its constitutional name, Republic of Macedonia. Ethnic Albanian grievances over perceived political and economic inequities escalated into a conflict in 2001 that eventually led to the internationally brokered Ohrid Framework Agreement, which ended the fighting and established guidelines for constitutional amendments and the creation of new laws that enhanced the rights of minorities. In January 2018, the government adopted a new law on languages, which elevated the Albanian language to an official language at the national level, with the Macedonian language remaining the sole official language in international relations. Relations between ethnic Macedonians and ethnic Albanians remain complicated, however.
North Macedonia’s pro-Western government has used its time in office since 2017 to sign a historic deal with Greece in June 2018 to end the name dispute and revive Skopje’s NATO and EU membership prospects. This followed a nearly three-year political crisis that engulfed the country but ended in June 2017 following a six-month-long government formation period after a closely contested election in December 2016. The crisis began after the 2014 legislative and presidential election, and escalated in 2015 when the opposition party began releasing wiretapped material that revealed alleged widespread government corruption and abuse. Although an EU candidate since 2005, North Macedonia has yet to open EU accession negotiations. The country still faces challenges, including fully implementing reforms to overcome years of democratic backsliding and stimulating economic growth and development. In June 2018, Macedonia and Greece signed the Prespa Accord whereby the Republic of Macedonia agreed to change its name to the Republic of North Macedonia. Following ratification by both countries, the agreement went in to force on 12 February 2019. North Macedonia signed an accession protocol to become a NATO member state in February 2019.
Economy of Macedonia
Since its independence in 1991, Macedonia has made progress in liberalizing its economy and improving its business environment. Its low tax rates and free economic zones have helped to attract foreign investment, which is still low relative to the rest of Europe. Corruption and weak rule of law remain significant problems. Some businesses complain of opaque regulations and unequal enforcement of the law.
Macedonia’s economy is closely linked to Europe as a customer for exports and source of investment, and has suffered as a result of prolonged weakness in the euro zone. Unemployment has remained consistently high at about 23%, but may be overstated based on the existence of an extensive gray market, estimated to be between 20% and 45% of GDP, which is not captured by official statistics.
Macedonia is working to build a country-wide natural gas pipeline and distribution network. Currently, Macedonia receives its small natural gas supplies from Russia via Bulgaria. In 2016, Macedonia signed a memorandum of understanding with Greece to build an interconnector that could connect to the Trans Adriatic Pipeline that will traverse the region once complete, or to an LNG import terminal in Greece.
Macedonia maintained macroeconomic stability through the global financial crisis by conducting prudent monetary policy, which keeps the domestic currency pegged to the euro, and inflation at a low level. However, in the last two years, the internal political crisis has hampered economic performance, with GDP growth slowing in 2016 and 2017, and both domestic private and public investments declining. Fiscal policies were lax, with unproductive public expenditures, including subsidies and pension increases, and rising guarantees for the debt of state owned enterprises, and fiscal targets were consistently missed. In 2017, public debt stabilized at about 47% of GDP, still relatively low compared to its Western Balkan neighbors and the rest of Europe.