Poor agricultural country knocking on the EU door

Following FYR Macedonia’s peaceful independence in 1991, the country’s economy immediately suffered from negative growth and hyperinflation. The economy has since improved, but has still not reached pre-1991 levels.

Ethnic conflicts are common in the country, which in 2001 also experienced an armed conflict. Following mediation from NATO and the EU, the conflict was suppressed and the Ohrid Agreement states that FYR Macedonia is to be a multi-ethnic, unified state, and will implement large-scale decentralization. There is some way to go to achieve that.

The ethnic tensions remain and are characterized by antagonism between the Slavic Macedonian inhabitants, who make up about 64 per cent of the population, and ethnic Albanians, who account for about 25 per cent, as well as other groups, of which Roma are the most discriminated against.

FYR Macedonia applied for EU membership in 2004 and became a candidate country in 2005, though no negotiation date has been set. Corruption, a weak constitutional state and an agricultural sector in need of major reform are some of the challenges that the country must deal with before EU membership becomes a possibility.

Agriculture is the country’s dominant industry, and FYR Macedonia would have major potential if the sector was modernized. Work is underway to do that, but it is a large-scale process and will take time to complete.

Working towards EU membership influences development assistance

Bringing the country into line with the EU requirements has changed the level and focus of development assistance remarkably in recent years. Fewer and fewer countries are providing bilateral support, and the support that is given is focused on making FYR Macedonia ready for EU membership.

The United States is the most noticeable among the remaining bilateral donors in FYR Macedonia. And through Sida, Sweden contributes five per cent of the overall development assistance contributions. You can read about Sida’s contributions in FYR Macedonia here (LINK to article).

There is great poverty in FYR Macedonia. According to the World Bank, one fifth of the population cannot satisfy their most basic needs – they are living in absolute poverty.

However, even more, about half, are living in some degree of poverty and according to the United Nations Development Programme (UNDP), the country will not be able to achieve Millennium Development Goal 1 – eradicating extreme poverty and hunger by 2015. High unemployment is largely to blame.

Democracy and human rights

During 2008, FYR Macedonia held parliamentary elections but these were characterized by violence and electoral rigging. The EU issued a warning that the 2009 elections must go better if the country is to fulfil the EU’s demands on membership.

In March 2009, Macedonians went to the polls again and, according to election observers’ reports, the voting went much better and fulfilled most of the international demands on democratic elections.

FYR Macedonia’s economic and social development is moving in the right direction, but major challenges remain. Corruption is undermining the democratic institutions and the judicial system, and there are major tensions between ethnic groups. The way in which a country handles minorities’ rights is a key issue for the EU.

Sweden’s focus areas in FYR Macedonia are: 

• Agricultural sector
• Environment and climate
• Human rights.

You can read more about how Sida is investing to improve these sectors here. 

• Demands that the EU has placed on FYR Macedonia in the annually revised partnership agreement.
• The EC’s 2008 Progress Report contains the EU’s view on developments in FYR Macedonia.
• How is the EU working to improve conditions in the Balkans? The strategy document entitled Regional cooperation in the Western Balkans contains a description.