MACEDONIA

Flag Description: 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.

 

 

 

Country profile

Location
Macedonia is a landlocked state in the heart of the Balkans. It is a mountainous country with small basins of agricultural land. The Vardar is the largest and most important river.

Area:

total: 25,713 sq km
country comparison to the world: 150
land: 25,433 sq km
water: 280 sq km

Land boundaries:

total: 766 km
border countries: Albania 151 km, Bulgaria 148 km, Greece 246 km, Kosovo 159 km, Serbia 62 km

Coastline: 0 km (landlocked)

Maritime claims: none (landlocked)

Climate: warm, dry summers and autumns; relatively cold winters with heavy snowfall

Terrain: mountainous territory covered with deep basins and valleys; three large lakes, each divided by a frontier line; country bisected by the Vardar River

Ethnic groups: Macedonian 64.2%, Albanian 25.2%, Turkish 3.9%, Roma (Gypsy) 2.7%, Serb 1.8%, other 2.2% (2002 census)

Languages: Macedonian (official) 66.5%, Albanian (official) 25.1%, Turkish 3.5%, Roma 1.9%, Serbian 1.2%, other 1.8% (2002 census)

Religions: Macedonian Orthodox 64.7%, Muslim 33.3%, other Christian 0.37%, other and unspecified 1.63% (2002 census)

Population:

2,091,719 (July 2014 est.)
country comparison to the world: 147

Age structure:

0-14 years: 17.7% (male 191,682/female 178,510)
15-24 years: 14.1% (male 151,901/female 142,679)
25-54 years: 43.8% (male 464,392/female 451,038)
55-64 years: 12.1% (male 123,272/female 129,081)
65 years and over: 12.1% (male 111,090/female 148,074) (2014 est.)

The Republic of Macedonia gained its independence from the former Yugoslavia in 1991 and has achieved a considerable degree of political and economic stability in recent years. The Social Democrats called for early parliamentary elections in June 2011, and Prime Minister Nikola Gruevski maintained control in a coalition with the Democratic Union for Integration. Macedonia has fulfilled NATO’s Membership Action Plan, but Greece has unilaterally blocked its accession to the alliance because it objects to Macedonia’s constitutional name. This dispute is expected to delay Macedonia’s accession to the European Union as well.
Macedonia - financial assistance from the European Union
The Instrument of Pre-Accession Funds, called IPA, is a funding mechanism of the EU, which includes candidate and potential candidate countries like Macedonia.
• Funding allocation for 2013: €113.2 million
• The former Yugoslav Republic of Macedonia currently has access to:
   - IPA Component I (Transition Assistance and Institution Building)
   - IPA Component II (Cross-Border Cooperation)
   - IPA Component III (Regional Development)
   - IPA Component IV (Human Resources Development)
   - IPA Component V (Rural Development).
• Assistance under Components I, III, IV and V is managed by the national authorities.

 

National authorities are in charge of procurement and contracting for IPA projects, with prior appraisal by the Commission (EU Delegation in Skopje). All funding proposals must be submitted in the first instance to the national authorities.
• Assistance under Component II is managed by the EU Delegation.
• EU assistance focuses on:
   - Public administration reform
   - Justice, home affairs and fundamental rights
   - Private sector development
   - Agriculture and rural development
   - Transport
   - Environment and climate change
   - Social development
Since its independence in 1991, Macedonia has made significant progress in liberalizing its economy and improving its business environment, but has lagged the Balkan region in attracting foreign investment. Unemployment has remained consistently high at more than 30% since 2008, but may be overstated based on the existence of an extensive gray market, estimated to be between 20% and 45% of GDP, that is not captured by official statistics. 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. Macedonia maintained macroeconomic stability through the global financial crisis by conducting prudent monetary policy, which keeps the domestic currency pegged against the euro, and by limiting fiscal deficits. The government has been loosening fiscal policy, however, and the budget deficit expanded to 4.2% of GDP in 2013. Macedonia achieved modest GDP growth in 2013 after a small contraction in 2012; inflation is under control.

 

GDP (purchasing power parity):

$22.57 billion (2013 est.)
country comparison to the world: 127
$21.89 billion (2012 est.)
$21.98 billion (2011 est.)
note: data are in 2013 US dollars; Macedonia has a large informal sector that may not be reflected in these data

GDP (official exchange rate):

$10.65 billion (2013 est.)

GDP - real growth rate:

3.1% (2013 est.)
country comparison to the world: 113
-0.4% (2012 est.)
2.9% (2011 est.)

GDP - per capita (PPP):

$10,800 (2013 est.)
country comparison to the world: 113
$10,600 (2012 est.)
$10,700 (2011 est.)
note: data are in 2013 US dollars

Gross national saving:

23.2% of GDP (2013 est.)
country comparison to the world: 62
24.7% of GDP (2012 est.)
23.2% of GDP (2011 est.)

GDP - composition, by end use:

household consumption: 77.5%
government consumption: 15.3%
investment in fixed capital: 22.5%
investment in inventories: 3.1%
exports of goods and services: 47.7%
imports of goods and services: -66.1%
(2013 est.)

GDP - composition, by sector of origin:

agriculture: 10.2%
industry: 27.5%
services: 62.3% (2013 est.)

Agriculture - products:

grapes, tobacco, vegetables, fruits; milk, eggs

Industries:

food processing, beverages, textiles, chemicals, iron, steel, cement, energy, pharmaceuticals

Industrial production growth rate:

3.2% (2013 est.)
country comparison to the world: 92

Labor force:

960,700 (2013 est.)
country comparison to the world: 145

Labor force - by occupation:

agriculture: 18.8%
industry: 27.5%
services: 53.7% (31 September 2013)

Unemployment rate:

28.6% (2013 est.)
country comparison to the world: 179
31% (2012 est.)

Population below poverty line:

30.4% (2011)

Household income or consumption by percentage share:

lowest 10%: 2.2%
highest 10%: 34.5% (2009 est.)

Distribution of family income - Gini index:

39.2 (2011)
country comparison to the world: 65
43.2 (2009)

Budget:

revenues: $3.023 billion
expenditures: $3.438 billion (2013 est.)

Taxes and other revenues:

30.6% of GDP (2013 est.)
country comparison to the world: 89

Budget surplus (+) or deficit (-):

-4.1% of GDP (2013 est.)
country comparison to the world: 149

Public debt:

34.3% of GDP (2013 est.)
country comparison to the world: 108
34.1% of GDP (2012 est.)
note: official data from Ministry of Finance; data cover central government debt; this data excludes debt instruments issued (or owned) by government entities other than the treasury; includes treasury debt held by foreign entitites; excludes debt issued by sub-national entities, as well as intra-governmental debt; there are no debt instruments sold for social funds

Fiscal year:

calendar year
Types of business entities in Macedonia
• A.D./А.Д. (Акционерско друштво): ≈ plc (UK) or Joint-stock company
• D.O.O./Д.О.О. (Друштво со ограничена одговорност): ≈ Ltd. (UK)
• D.O.O.E.L./Д.О.О.Е.Л. (Друштво со ограничена одговорност основано од едно лице): type of DOO with a single member
• K.D./К.Д. (Командитно друштво): ≈ limited partnership
• K.D.A./К.Д.А. (Командитно друштво со акции): ≈ limited partnership with shares
• J.T.D./Ј.Т.Д. (Јавно трговско друштво): ≈ General partnership

Business Reforms in Macedonia

2014:
Dealing with Construction Permits:
FYR Macedonia made dealing with construction permits easier by reducing the time required to register a new building and by authorizing the municipality to register the building on behalf of the owner.

Registering Property:
FYR Macedonia made property registration faster and less costly by digitizing the real estate cadastre and eliminating the requirement for an encumbrance certificate.

Getting Credit:
FYR Macedonia strengthened its secured transactions system by providing more flexibility on the description of assets in a collateral agreement and on the types of debts and obligations that can be secured.

Protecting Investors:
FYR Macedonia strengthened investor protections by allowing shareholders to request the rescission of unfair related-party transactions and the appointment of an auditor to investigate alleged irregularities in the company’s activities.

Paying Taxes:
FYR Macedonia made paying taxes easier for companies by encouraging the use of electronic filing and payment systems for corporate income and value added taxes.

Getting Electricity:
FYR Macedonia made getting electricity easier by reducing the time required to obtain a new connection and by setting fixed connection fees per kilowatt (kW) for connections requiring a capacity below 400 kW.

2013:
Starting a Business:
FYR Macedonia made starting a business easier by simplifying the process for obtaining a company seal.

2012:
Dealing with Construction Permits:
FYR Macedonia made dealing with construction permits easier by transferring oversight processes to the private sector and streamlining procedures.

Registering Property:
FYR Macedonia made registering property easier by reducing notary fees and enforcing time limits.

Getting Credit:
FYR Macedonia improved its credit information system by establishing a private credit bureau.

Resolving Insolvency:
FYR Macedonia increased the transparency of bankruptcy proceedings through amendments to its company and bankruptcy laws.

2011:
Starting a Business:
FYR Macedonia made it easier to start a business by further improving its one-stop shop.

Paying Taxes:
FYR Macedonia lowered tax costs for businesses by requiring that corporate income tax be paid only on distributed profits.

2010:
Starting a Business:
Macedonia simplified business start up by integrating procedures at a one stop shop

Dealing with Construction Permits:
FYR Macedonia has been reforming the dealing with construction permit process resulting in time reduction.

Employing Workers:
FYR Macedonia allowed the use of fixed-term contracts for permanent tasks and reduced mandatory paid annual leave. In addition, it repealed the retraining or reassignment obligations and priority rules for reemployment that apply in cases of redundancy dismissals.

Registering Property:
FYR Macedonia eased the process of property registration with new time limits at the Real Estate Cadastre decreasing the average time to register a title deed by 8 days, while non-encumbrance certificate can now be obtained from the Real Estate Registry instead of through court.

Getting Credit:
The Public Credit Bureau in FYR Macedonia increased its coverage due to an improved database, inclusion of more information, and a lower minimum loan threshold.

Protecting Investors:
FYR Macedonia increased investors’ protection by regulating the approval of transactions between interested parties, increasing disclosure requirements in the annual report and making it easier to sue directors in cases of prejudicial transactions between interested parties.

Paying Taxes:
FYR Macedonia has clarified social security payments according to five types, and has reduced social security rates.

2009:
Starting a Business:
The one-stop shop system was updated to carry out full range of business start-up processes reducing the number of procedures and days.

Registering Property:
The new Law on Cadastre reduced the time needed to register property by increasing the staff in the Cadastre office. As a result of this increased processing capacity, the time to obtain a copy from the cadastre sheet and the time to obtain the new title deed went down, bringing the total time to register a propeerty from 98 to 66.

Getting Credit:
In Macedonia, FYR, the new law on Personal Data protection guarantees that borrowers can review the data stored in the public credit registry. Borrowers can now check their credit information, improving the quality and accurateness of the information in the registry.

Paying Taxes:
Effective 1 January 2008, the corporate income tax has been reduced from 155 to 10%.

Trading Across Borders:
Rationalization of the customs fee schedule, permit structure, improved risk based inspections, simplification of a customs procedure, and abolishment of a document led to a decrease in export and import time, as well as 1 document.

Enforcing Contracts:
Macedonia continued to equip courts systematically with electronic case management systems. The commercial court in Skopje began operating, improving Macedonia’s ranking by 12 places.

2008:
Starting a Business:
The country eliminated the paid-in minimum capital requirement and is working on online registration system for business start-up.

Dealing with Construction Permits:
FYR Macedonia made obtaining contruction permits faster by reducing the time to issue land ownership certificate.

Paying Taxes:
Macedonia reduced the tax burden for companies by reducing CIT and made it easier to pay taxes for companies by introducing electronic facilities for tax filing and payment

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