Innovations for Foreign Investment and Economic Competitiveness in the Republic of Macedonia |
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| Mayor Soran Zaev, Mimi Makedonska, and business leaders in Sturmica discuss strategies to boost the municipality’s competitiveness in the European market. [Photo: Miodrag Miladinovic] |
Landlocked and struggling to diversify its agriculture-based economy, Macedonia remains the poorest former Yugoslav Republic. Today, 37% of the population lives below the poverty line, and real wages have been halved since 1989.
Among other obstacles to economic growth, state ownership of undeveloped land, impractical business licensing laws, and corruption render Macedonia unattractive to foreign investors. Nate Bowditch, an RTI Senior Economic Growth Specialist, explained, “At first glance, Macedonia’s surplus of land and well-educated youth are extremely appealing to investors. But when they realize it could take years to get a piece of land and the ability to operate, the attraction fades.”
To improve Macedonia’s position in the global marketplace and its chances for European Union (EU) membership by 2012, the government is beginning to act to boost economic competitiveness. Supporting this effort is the U.S. Agency for International Development-funded Macedonia Competitiveness Project. Led by CARANA Corporation, the project aims to improve Macedonia’s business environment and unemployment rate by identifying industries with growth potential, addressing cumbersome property laws, and stimulating domestic and foreign investment.
With CARANA, RTI is helping mayors and business leaders pinpoint existing industrial zones that could, if assisted, serve as investor-friendly sites for growth. Project staff recently visited industrial areas in seven municipalities. RTI’s field representative, Mimi Makedonska, sees significant opportunity in Bitola, a town 20 kilometers from the nearest EU country, Greece. “It’s clear to Bitola that moving forward means finding alternatives that minimize constraints to foreign investment. So, they have transformed 270 hectares of unused agricultural land [not controlled by the government] into construction land and made plans for an industrial zone. Now they can continue building infrastructure to start accommodating investors before year’s end,” said Makedonska.
Moving forward, RTI expects to help Bitola refine its plan for managing the industrial zone, address land and licensing issues, and attract foreign investors. Makedonska noted, “USAID’s Competitiveness Project focuses on attracting foreign investment but also on resolving hurdles so investors actually stick around. The project offers alternative approaches for attracting investments that can really help communities make a difference and enhance Macedonia’s ability to compete.”
More information: Nate Bowditch,
e-mail nbowditch@rti.org
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