MILS: News from the FYROM, 97-08-29

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

CONTENTS

[01] FREDERICO MAYOR'S VISIT - ACT II...OR: THE SIGNING OF THE COOPERATION MEMORANDUM

[02] GLIGOROV TOO INFLEXIBLE ON NAME-ISSUE

[03] ELISABETH REHN: `POLICE USED EXCESSIVE FORCE'

[04] SEVERE CRITICISM BY ALBANIAN MPS CONTINUES

[05] MEETING INTERNATIONAL FINANCIAL INSTITUTIONS IN THE US

[06] WILL THE LAMBS REMAIN SILENT(LY) IN MACEDONIA?

[07] BIDS FOR DEVELOPMENT PROPERTY

[08] `TRUCKIES' THREATEN TO BLOCK ALL BORDER CHECKPOINTS

[09] NEW BUSSES

[10] THREE UNITS OF VELES SMELTING WORKS CLOSED DUE TO POLLUTION

[11] IMRO-DPMNE: `BROADCASTING FEES UNDERMINING DEMOCRACY'

MILS SUPPLEMENT

[12] `International Social Institutions Also Possible' (`Vecher' - 28th August 1997)

[13] `Shylock's Interest Rates vs. Starved and Insolvent Banks' (`Dnevnik' - 28th August 1997)

MILS NEWS

Skopje, 29 August, 1997

[01] FREDERICO MAYOR'S VISIT - ACT II...OR: THE SIGNING OF THE COOPERATION MEMORANDUM

SCENE I: during his meeting with President Gligorov at Ohrid, Mayor gave a favourable assessment of alterations and achievements reached in Macedonia. The UNESCO Secretary- General expressed the readiness of this Agency to support several projects and initiatives in Macedonia. On this occasion Mayor presented Gligorov with a golden UNESCO medal (issued to mark their 50th anniversary) for his contribution to education, science and culture.

SCENE II: The willingness to advance cooperation between UNESCO and Macedonia was again the leading motif during the meeting between Mayor and PM Crvenkovski and talks with the Rector of the Skopje University and the Chairman of the Macedonian Academy of Science and Art.

[02] GLIGOROV TOO INFLEXIBLE ON NAME-ISSUE

[03] ELISABETH REHN: `POLICE USED EXCESSIVE FORCE'

In addition to this Rehn has met President Gligorov, Foreign Secretary Blagoj Handzhiski, as well as Ministers Sofija Todorova (Education), Tomislav Chokrevski (Interior), and Gjorgji Spasov (Justice) during her travelling between Skopje, Gostivar and Ohrid. The key issues of discussion were: the implementation of human rights (particularly with respect to ethnicities in Macedonia), the most recent solutions offered in connection with the flag-issue and the impact of their effectuation as regards the Criminal Investigation Procedures Act.

On these occasions the UN Special Rapporteur was also briefed in on past events at Gostivar and Tetovo - against the backdrop of the use of flags by minorities to express their identity and national features. Ms. Rehn also received an update on the forming of a working group by the Govt. which would be concerned with investigating possible instances of authority abuse by the police.

[04] SEVERE CRITICISM BY ALBANIAN MPS CONTINUES

Another repeated request was the resignation of Interior Minister Tomislav Chokrevski. MPs of the SDSM and the SP claimed that coexistence is the only acceptable option for Macedonia while events at Gostivar were the outcome of the policy conducted by incompetent politicians. The DP stated that the police had merely been upholding the Constitution, while accusing Albanians of undermining the same by advocating a Greater Albania and disrespecting the country they lived in.

Besides this, the session at the half-empty assembly hall has been abundant in verbal show-downs between the speakers and the `benchers' - especially during the almost two-hour- long speech by Sefedin Haruni. Parliamentary Chairman Tito Petkovski made it clear yesterday that the late arrival of MPs would no longer be tolerated in the future. Thus sessions would be cancelled after a 15-minute delay. The next sequel to this session has been scheduled for next Wednesday.

[05] MEETING INTERNATIONAL FINANCIAL INSTITUTIONS IN THE US

[06] WILL THE LAMBS REMAIN SILENT(LY) IN MACEDONIA?

Macedonian veterinary services denoted this a superfluous measure and so far many initiatives have been launched (in vain) to change this. Ergo Macedonian livestock breeders were left without the 1 750 t export quota for lamb into EU member-states. Some of the meat was exported to Jordan - but the main bulk remained at home.

Imminent analyses constitute of the examination of app. 7 500 heads of sheep and cattle in the country, i.e. 22 heads of each village and farm. As the analyses are to be conducted in Denmark the EU has allocated 95 000 ECU for this two-month project.

[07] BIDS FOR DEVELOPMENT PROPERTY

The initial value of this development property has been set down at 15 million DM, while a minimum yield of 20 to 30% is expected from the bidding. According to the Ministry of Civil Engineering, Urbanism and Environmental Protection so far the interest has been tremendous. At least 50% of the property on offer is expected to go under the hammer. Yields are to end up in the national budget, while official results are to be disclosed upon completion of the official bidding on 29th September.

[08] `TRUCKIES' THREATEN TO BLOCK ALL BORDER CHECKPOINTS

[09] NEW BUSSES

[10] THREE UNITS OF VELES SMELTING WORKS CLOSED DUE TO POLLUTION

[11] IMRO-DPMNE: `BROADCASTING FEES UNDERMINING DEMOCRACY'

`Dnevnik' however reports that not only did the IMRO-DPMNE accuse the incumbent party of exercising state control over the media, but that it was using the same methods as Slobodan Miloshevikj up north. Due to this the IMRO-DPMNE asked all privately-owned radio and TV stations to consolidate and jointly oppose this Govt. initiative by staging panels and airing broadcasts on this subject. It had to be made clear that once democracy had been resuscitated, it could no longer be slaughtered `just to save the hide of the SDSM.'

MILS SUPPLEMENT

[12] `International Social Institutions Also Possible'

(`Vecher' - 28th August 1997)

Concordant to the draft-version of the Social Protection Act, it will be possible for a domestic or international physical or legal entity to establish a private social institution - while international partners may function as (co-)founders within such organisations. The latter are to work alongside the Centre for Social Work, after having received the Govt.'s seal of approval, since the Govt. is to monitor these private institutions... One of the Parliamentary sessions next month is to concentrate on the draft-version of the Social Protection Act, whose provisions have recently been analyzed by the Govt. There latter gave this version a `thumbs-up' in terms of effectuation and implementation.

So what exactly is about to hit us? Generally speaking, this act of law covers the social sphere without poviding or offering any concrete solution for any existing object or facility within this sector. Thus in stage 2 (stage 1 being completed with the Govt. adopting the motion to enact such a law) the rights to specific types of social services are being codified. Should the Social Protection Act be passed without any major alterations to it, social support should become available to people who are not in the position of finding a job for various reasons - or who require support - but are capable of working per se, in addition to the known categories of those unable to engage in an employment relation or those without any means of support. to cut a long story short: social support will be available to those in need of the same - regardless of their categorization and any presently division.

The main agent of this social protection scheme, concordant to this Act, is once again the state - while priority will be given to the containing of social deterioration among the population through a series of social policy measures. In compliance to the Social Protection Act, it will become possible for both Macedonian nationals and foreigners with a temporary permit of residence to apply for social support. Usually public social institutions are to be established by the Govt. - but local self-govt. units will be entitled to do the same, with the exception that they will not be allowed to form their own social work centers.

The law itself is also characterized by the following novelty: in the future domestic and international physical/legal entities will be in the position to establish a private social institution (except for a social work centre). In this context the aforesaid categories may function as (co- )founders - but only if the Govt. of the Republic of Macedonia has approved the project. As far as funding is concerned, means are to be allocated from the national budget i.e. the local self-govt. budgets. Should the institution, however, be funded by the private sector a warranty/security from the Govt. itself needs to be procured, since the latter will also monitor the performance of these institutions.

[13] `Shylock's Interest Rates vs. Starved and Insolvent Banks'

(`Dnevnik' - 28th August 1997)

`For over four years companies have been trying to raise the issue on high interest rates accompanying bank loans, since its draining their capital. Thus the miraculous 22% annual interest rate - while the inflation rate totals 3%. The business sector advocates the lowering of the interest rate. But how is one to achieve that in conditions when the NBM is imposing a 12 to 13% interest rate for funds loaned to banks, who then `swallow the fly, spider, etc.' i.e. lend those means to companies and individuals? The basic NBM interest rate, however, amounts to between 8.5 and 8.7%... Where does all the money generated by this difference go?' asks Economic Chairman Dushan Petrevski.

Similar reactions are being aired at `Komercijalna Banka', Makedonska Banka' and `Almako Banka.' `If I for example took up a 100 000 DM loan at one of our business banks, I would be forced to return 22 000 DM in interest rates in addition to the funds borrowed. This is incredible - interest rates that high cannot be conducive to investments and ergo no sign of development emerges. Our businesses remain permanently insolvent, while I keep asking myself where the root of all evil lies... Such interest rates - worthy of a usurer - have dulled the Macedonian economy. Thus banks will continue to add up interest rates on paper without ever getting a glimpse of the money', says one Macedonian businessman. So where is the root of all evil? Why are interest rates accrued by banks with respect to the business sector so high?

The Chairman of the Macedonian Chamber of Economy, Dushan Petrevski, attributes this state of affairs to a restrictive credit and monetary policy conducted by the NBM. The guilt is not to be sought with business banks at all. Entreprenurs and stakeholders claim that `Pandora's Box' is buried within the obscure relation and ambiguous interaction between the NBM and commercial banks throughout the country. It remains even more obscure where all the money goes...

`Each morning up to 7 o'clock we submit our bids at the NBM for funds subsequently comprising our credit lines. Of course the latter are obtained at an interest rate, whose value should be 8.9% (equal to the basic rate) so that we can set ours at 16 or 17%. The total 22% is reached due to fierce competition among banks at these NBM auctions. Each one strives to outdo the rest, thus we have a interest rate of 14% which is indeed too high', says `Komercijalna Banka' CEO Hari Kostov. `The climax occurred after the denar-devaluation on 9th July. The auction was a quite usual and normal event, its rules are known to everybody: the bank with the highest interest gets the credit', says `Almako' Bank CEO Liljana Bozhinovska.

Similar views have been expressed by the CEO of `Makedonska Banka' Zoran Trpevski. He stated that banks were aware of how expensive these credits are, and that they were not of use to the final beneficiaries - businesses or individuals - due to these `whopping' interest rates. Companies, however, permanently depended on these loans due to the lack of liquid assets for their daily transactions. `...Something must be done at once', claims Trpevski.

One financial expert from the US sees a problem in the fact that virtually every bank is attending the NBM bids. This was not a good omen as it indicated the insolvency of Macedonian banks. `If I am not mistaken the Govt. has initiated the sanation process of the banking system, right? So what has been sanated so far?' he wondered. Their necessity to participate in these auctions exhibited the lack of discipline among business banks. Gligor Bishev, the NBM Vice-Governor, attributes this to the competitiveness among banks and their permanent `hunger' for capital. This resulted in the growth of the interest rate. At the NBM we were told that the difference between the basic interest rate of 8.9% and the total achieved at the auctions (14 to 15%) is being written off as NBM yields, which are being forwarded to the national budget by the end of year.

(end.)

mils news 29 August, 1997

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