ECNVM: Press Conference – What do we predict for year 2017 ?

ECNVM: Press Conference – What do we predict for year 2017 ?

30 December 2016 – Economic Chamber of North – West Macedonia (ECNWM) with this press conference is returned again in 2016 to reflect on that how this year was for Macedonia.

This year would qualify better but due to prolonged political crisis did not mark any significant economic development, but always trying in a short-term way to find solutions. In most cases the government had no constructive approach and was not opened to hear business proposals.

Macedonia’s government continued to emphasize the notion of economic development, budget development, project development, etc., but for us as ECNVM, this notion was not very hopeful, knowing the real situation and the actual situation of the private sector.

This year was a challenging year for Macedonia, because throughout the year the country is in a deep political crisis, with the country’s economic growth target of 3.7%, this year it will probably revolves around 2,2% and is not commensurate in all sectors of the economy, but at the expense of policies selectively favoring certain activities from which this growth stems, ” hitting ” other sectors.

Areas where Macedonia is flawed and were stated in the EC Progress Report are:

  • Public debt – the budget deficit
  • ” Holes ” in the pension fund – the debts of public companies
  • The selective policy of foreign investment
  • Improvement of legislation
  • Simplification of administrative procedures
  • Neighborly Relations and

Public debt and holes in the Pension Fund – therefore the budget deficit of the country is covered by borrowing from abroad by not having a long-term strategy to cover these debts. Although the deficit is within the Maastricht principles, certainly it must be seen  Macedonia’s economic strength, production capacity, exports etc. Budget deficits are created and grow from year to year as a result of the government’s populist measures, such as wage continued growth in the administration, which is also warned in early 2017.

This increase can not be based in funds that are not generated internally, but borrowed from outside and covered with internal and external funds, wich create distress to the private sector, as delays in VAT return, or bank tools that go to the state funding.As well to political marketing expenses.

Regarding the foreign investment, Macedonia has established an agency that should address or find foreign investment by promoting Macedonia as a destination favorable with benefits provided by the state, but they are not channeled properly so consequently we don’t have genuine investments, without analyzing the workforce and the needs of Macedonia. Government constantly emphasizes the number of free economic zones across the country, but abroad is made selective policy in promoting these areas. We have over 20 free zones with over 15,000 jobs, but we have zero (0) in the north-western region of the country, despite the favorable geostrategic position. Unemployment in Polog from year to year increase. This fact speaks for exclusion and unequal regional development. Minimum wages that foreign companies pay create poverty in our population, poverty which can be seen by the strength of purchasing power.

Here are Chambers of Commerce wich can play this role in the best way , knowing that essentially they can recognize local capacities and channel foreign investment in the right place.

If the chambers of commerce would guide a strategy for absorbing foreign investment they would  create contractual conditions that at least raw materials necessarily were supplied from the local market or the so-called chain of supply because in this way the local businesses is damaged and as a result we don’t  have positive impact on the local economy by foreign investors.

The issue of Legislation – The year we are leaving behind for our good fortune did not have too frequent law changes as a result of the political crisis but also those changes made were not in consultation adequate and proper with the business community as one of the main actors affecting the country’s economic development.

This also brings problems for proper implementation of this legislation and adopting the same. This bad practice will hopefully change in 2017 and in this regard ECNVM will have concrete proposals in all those laws which can damage business.

Neighborly relations – Macedonia during this year continues to hold hostage the name issue with Greece, the country left behind in the European integration processes and NATO membership, which reflects the economic development of the country.

Infrastructure – In 2016 continues the construction of the road section Demir Kapija – Smokvice, Kercove – Oher, but this year the project that was not completed is Skopje-Blace, it lags behind the east-west road link which will significantly reduce transport costs and enhance the competitive position of domestic companies at home and abroad. ECNVM estimates that the  targets set for 2017 related to the planned gasification, are overestimated.

The trend decline of trade exchange in period  in January-October with Kosovo continues, where for the same period compared with last year we have commercial rate reduction of 40%. We are more than sure that at the end of this year this reduction will be even deeper. This shows clearly that our companies are losing a very important market.

What we expect for 2017?

Despite forecasts of a more stable world economy, Macedonia has some internal problems and external difficults that can hinder her positive scenario.

We are in the year in which we will have again elections (local), with numerous economic problems and many other state problems that need solution very fast in order to welfare of the people and state stability.

The warnings of local institutions and foreign markets,also send us signals that businesses are not optimistic self and leave no space to say that 2017 will be a easy year and fruitful. According to our forecasts, growth this year will will not be more than 2.5%.

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