MILS: News from the FYROM, 97-08-08

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From: "Macedonian Information Liaison Service" <mils@mils.spic.org.mk>

CONTENTS

[01] UNFINISHED PEACE REMAINS

[02] THE LETTER EXISTS - ITS CONTENTS CONFIDENTIAL

[03] WORLD BANK APPROVES 25 000 DOLLARS LOAN

[04] `TAT' CLIENTS PROTESTING

[05] SDSM WITCH-HUNT

[06] DEBTS TOWARDS US, JAPAN AND ITALY TO BE REGULATED

[07] AMERICAN EXPRESS IN MACEDONIA

[08] 12 DAYS VACATION, 6 MONTHS MATERNITY LEAVE AND LOADS OF CUTS

[09] INTERNATIONAL TRADE AND PAYMENT BALANCE - PART 5 (G. Bishev)

MILS NEWS

Skopje, 08 August, 1997

[01] UNFINISHED PEACE REMAINS

According to this commission the achievement and maintenance of peace in former Yugoslavia remains uncertain. The development of democracy of the post-communistic political structures and civil society, according to the latest statement given by the Commission - have achieved some progress, while the southern Balkans - Macedonia and Albania and Kosovo have been encompassed by intermingled riots, reports `Nova Makedonija'. One year ago it was clear that the stability on Kosovo depends on the relative abstention of Albania and on the ethnic harmony between the Albanians and the Slavic majority in Macedonia. Both states are facing crisis at the moment. The Albanian state has been overcome by anarchy and a civil war this spring; a large quantity of arms fell into the hands of the rebelling gangs.. In western Macedonia fire arms conflicts occurred between the Albanian nationalists and the Macedonian police.

The three crisis encompassing Macedonia, Albania and Kosovo are separate, yet connected. If they remain unresolved this opens possibilities for a new greater regional conflict in the southern Balkans. According to this, the Commission again directs an appeal for conducting an urgent preventive action. The Commission considers that the integrity of the Macedonian state is of critical importance to the stability in the region. However, the survival of the state requires a particular degree of decentralizing, which will take into consideration the legitimate demands of the Albanian minority for cultural autonomy, including respect for the basic integrity of one Unitarian state. Besides this, the international military presence, such as the presence of UNPREDEP at the moment, for now will be necessary in Macedonia so as to prevent foreign interference.

[02] THE LETTER EXISTS - ITS CONTENTS CONFIDENTIAL

`AUDI' was buying time in a way, i.e. awaited to see how things were developing in the Balkans and decide afterwards on getting into such a deal. The events that were happening went in favour of this, primarily the events in Albania, Bulgaria, Romania and SR Yugoslavia. Hence one can draw the conclusion that the Germans have no interest in investing in Macedonia from the simple reason that our market is relatively small and does not pay off for a larger serial manufacturing. Maybe this was the reason for the unrealistic conditions that had been set down, such as: the Macedonian Government to point down how many cars it will buy and thus provide future placement of the `Folksvagen'. In this manner they wanted to show that the state is not interested in receiving `AUDI' in this region.

We do not believe that there is a state, particularly any going through a transition, that would not want to accept a collaboration with the automobile giant such as `Folksvagen', i.e. it's firm `AUDI'. Once there was the option for Germany to set a factory in Croatia in stead of Macedonia, but it fell through. Macedonia is surely interested into accepting foreign capital in its economy, and even more interested if it means investing from a renown foreign firm. But, our state is not willing to collide with the World Trade Organization ant the EU, while the conditions that were set would have probably lead to such problems, reports `Nova Makedonija'.

[03] WORLD BANK APPROVES 25 000 DOLLARS LOAN

This study , says the Kriva Palanka mayor, Ljupcho Petkovski, should precisely go through the region abilities and the possibilities to make use of the advantages and conditions that allow a quicker development of the municipalities and rehabilitation of the economy collapse and unenployment.The study should also include the natural resources, the existing capacities and population structure which will provide use of the comparative advantages and enliven he region. According to the first analysis, our attempts would be directed towards re-structuring and reactivating the existing firms and creating small- and medium-sized firms through examination of the market, finishing the manufacturing and producing attractive and demanded products. Or to be more precise, future investments should be directed towards production of healthy food, for which ideal conditions are provided here, as well as development of cattle breeding and making use of the grass areas, reports `Nova Makedonija'.

[04] `TAT' CLIENTS PROTESTING

The gathered clients kept by police officers directed towards the building of the Basic Court where they were protesting till their representatives Kiro Kovachev, Aleksandar Ilievski, Aleksandar Brajanovski and Trajche Sipkovski were received to talk with the president of the Court in Bitola, Aleksandar Prchevski. The Court president was handed a demand on release of court tax payment. The demand says that that the tax payment is unacceptable taking into consideration the clients' assets situation after the `TAT' bankruptcy. When the negotiations had ended, the clients returned to the town square where they were informed that it would be the best to deliver the demands for their deposits through the mail till the middle of next week when another talks is due in the Court and the Justice Ministry. The clients yesterday in the afternoon, were informed that representatives of the Clients' Association, had allegedly, also spoken in the court which was received by the clients with dissatisfaction, reports `Vecher'.

[05] SDSM WITCH-HUNT

[06] DEBTS TOWARDS US, JAPAN AND ITALY TO BE REGULATED

Besides the USA (to which Macedonia owes 93 million dollars), Japan (approximately 4 million $) and Italy (around 8 million), other states towards which the obligations are re-programmed are: Austria, Denmark, France, Germany, Sweden, Switzerland, Spain and Great Britain. At that time, besides the credits that had a known user, Macedonia accepted 5,4% of the alleged un-located debt owed by the SFRY. This record was the basis for further negotiations in each state separately. Out of the complete debt to the Paris Club, around 217 million dollars were re-programmed with a repayment dead line of 15,5 years, with a 4 years grace period, and the remaining part of 6,5 years with a grace period of 3 years. By the end of this year Macedonia will have to pay the foreign creditors 26,4 million dollars, obligations that come from the installments and accounted interests on the past used credits.

However this important foreign currency `portion' will not remain the only one, because it will entail the money owed to the European Investment bank amounting to additional 30 million ECU. The money will be supplied in a combined manner: partly by new debts intended for overcoming the financial gap in the payment balance, partly by foreign donations or, if necessary, by use of the foreign currency reserves. The total foreign debt of Macedonia by the end of June amounted up to 1,06 billion dollars and its pay off is precisely determined with annual foreign currency amounts. For example, in the first 5 months of this year about 40 million dollars have been paid, in the mean time some 15 million dollars have arrived to be paid as well. All this, as the finance experts underline, has been paid on time which confirms the achieved renown of Macedonia as a regular payer.

The other part of the means amounting to 15,9 million dollars is intended for the so-called multilateral creditors - the finance organizations of the type of the World Bank or the IMF. This category would cover the 30 million ECU debt towards the European Investment Bank the paying off of which is crucial for activating the finance protocol with the he EU worth 150 million ECU. These will mainly be used for investments in the infrastructure. As it is known, from 15th to 18th last month in our state stayed a mission of the EU as a finale to what had been decided at the donator's conference in Brussels during February this year. This loan will be received in 2 installments, and it is important that the first one will be quickly be redrawn because immediately afterwards the deadline of 3 months will be activated for gaining the second part of the credit that would cover the remaining payments.

The first part of the credit amounts up to 25 million ECU, while the second one - 15 million. The second installment is conditioned with the reform realization in our state, and as a `quid pro quo' for this are the arrangements with the IMF and the World Bank. The time term for repaying this credit is 15 years, with a grace period of 10 years. The interest rate is changeable and amounts half a the percentage over the interests determined by the London inter-banking market, and if Macedonia agrees the interest can be turned into a static one.This credit practically continues the tradition of those that had been granted in the past few years under more favourable conditions which decreases the total debt burden of the state, reports `Nova Makedonija'.

[07] AMERICAN EXPRESS IN MACEDONIA

Besides this, the subject must deliver data on the values and assets he possesses. Also his monthly income must not be lower than 700 DM which somehow presents a luxury for a greater part of the citizens. The deposit which is invested for gaining this card amounts to 1.000 DM (the same as in using other cards), and it is also necessary to pay 900 denars for `American Express' membership. The yearly membership fee for using the card amounts up to 1.800 denars.

[08] 12 DAYS VACATION, 6 MONTHS MATERNITY LEAVE AND LOADS OF CUTS

The Economy Chamber and the Syndicate Union of Macedonia were updated with the whole enterprise and have no reprimands referring to the suggested restrictive measures. The World bank and the IMF have packed the ESAF. In the preparation of this document participated representatives from the ministries for labor, social policy, health,finance and education. The Labor Ministry has accepted the suggestion of the foreign financiers that `18 days of vacation for all workers that have over one year length of service is to generous in comparison to the international standards'. The new minimum of yearly vacation will be 12 days. Accepted was also the recommendation that all paid absences - wedding, moving, and other private activities - to be reduced to from 7 down to 5 days. The Bill on work relations will wipe off the right to 2 days leave on grounds of blood donating. The ESAF considers this to be `an expensive manner of stimulating blood donation', reports `Dnevnik'.

[09] INTERNATIONAL TRADE AND PAYMENT BALANCE - PART 5 (G. Bishev)

The determining of hard currency exchange rates on grounds of the correlation between offer and demand embodies the most neutral approach to uphold financial competitiveness with respect to the international market. This is they basic prerequisite to the success of an export-oriented development strategy for the Republic of Macedonia. As regards the modes of international capital influx, so far the generating of debts has been the only shape of capital procurement employed by the Republic of Macedonia. The share of direct international investments is utterly insignificant, which is above all based on unstable regional conditions and the low appeal of Macedonia as an economic area to international investors.

(To be continued...)

mils news 08 August, 1997

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