MAK-NEWS 03/08/95 (M.I.L.S.)

From: MILS - Skopje <mils@ITL.MK>

Macedonian Information Liaison Service Directory

CONTENTS

MILS NEWS

Skopje, 3 August 1995

[01] NIMITZ MEETS GLIGOROV AND CRVENKOVSKI

Talks between Matthew Nimitz, US Special Envoy in the Greek- Macedonian dispute, ambassador Okun of the UN mediator Syrus Vance's office, and Macedonian Foreign Minister Stevo Crvenkovski, ended in Ohrid yesterday. They discussed suggestions to resume the negotiations and primarily issues concerning a possibility to normalize the overall relations between Macedonia and Greece and securing equal positions for the two sides to lead to direct talks. Crvenkovski reiterated Macedonia's readiness to enter negotiations which would result in efficient and practical normalization of relations between the two sides in the dispute.

The meetings and consultation with the international mediators are to continue.

Nimitz was also received by President Kiro Gligorov, who pointed out that the already complex situation in the region could easily be worsened by the consequences of the Greek embargo and the delay in resuming talks. All this clearly points out the need for urgent and efficient negotiations on equal basis, the Foreign Ministry said in an official statement.

Before leaving the country, Nimitz told a A1 Television reporter that his optimism before even meeting the Macedonian leaders proved justified, as they discussed all aspects of the fundamental problems and as the Macedonian side has expressed readiness to reach a real progress in the negotiations. Stating no details from the talks in Ohrid, Nimitz said the meetings focused on the same issues discussed with the Greek authorities in Athens.

Meantime, the Greek pro-government paper Ta Nea writes that Athens and Skopje have agreed on the so-called 'small package', which remains only to be signed. Daily Kathimerini, however, claims that the meeting in Ohrid brought no progress, while the opposition newspaper Eleftheros Tipos says that Andreas Papandreou will probably turn the 'Skopje issue' into a new Cyprus question by refusing to have the name 'Macedonia' included in the package, fearing a reaction on the domestic political scene.

[02] MACEDONIA OWES A TOTAL OF $1.4 BILLION

The total amount of Macedonia's debt toward foreign creditors is $1.4 billion. $1.1 billion of this is a debt toward foreign banks, and the remaining $300 million are owed to the Paris Club, Minister of Finance Jane Miljovski said in an interview with the economic magazine Dollar. The minister announced that the cabinet will prepare new draft- measures at the beginning of September, to introduce serious changes in the techniques of collecting profit taxes and taxes on oil imports, as well as customs tariffs.

[03] DIPLOMATIC BRIEFS

- Macedonian Parliament President Stojan Andov received Georgio Blais, Deputy Head of the OSCE Mission in Macedonia, to exchange ideas on the current political situation in the country and the wider region.

- Macedonian Minister of Defense Blagoj Handziski received Mrs. Sarah Sewal, US Deputy Assistant Secretary of Defense for Peacekeeping and Peace Enforcement Policy, to discuss the security situation in the country and the region, as well as Macedonia's efforts to preserve inner stability. It was said that Macedonia is a positive example of a country with mechanisms for building trust and resolving all problems through political dialogue.

[04] ILINDEN APPROPRIATELY CELEBRATED

The biggest national holiday of the Macedonian people, Ilinden, was celebrated in the country and all over the world where Macedonians live.

At the celebration in the village of Bitusha the present were addressed by President Gligorov; Parliament President Andov gave a speech at Meckin Kamen near Krushevo, and Prime Minister Branko Crvenkovski and president's delegations paid respects to the tomb of Nikola Karev, leader of the Ilinden uprising.

The Macedonian Cultural Association of Immigrants organized the 24th traditional gathering of immigrant in the village of Trnovo, near Bitola, at which Defense Minister Blagoj Handziski gave a speech.

Appropriate secular and church manifestations were organized throughout almost all cities in the country.

On the occasion of the national holiday, President Gligorov received numerous telegrams from foreign statesmen, citizens, domestic companies and individuals.

[05] BULGARIAN POLICE PREVENTS OMO 'ILINDEN' MANIFESTATION

The Bulgarian police this year also prevented a manifestation at the place Samoilova Krepost near Petric, organized by 'Ilinden', the organization of Macedonians living in Bulgaria, to mark the 92nd anniversary of the Ilinden Uprising, 51st anniversary of the establishment of the Macedonian state and the 600th anniversary of the state of Krali Marko. Local authorities banned the manifestation, explaining no celebrations which have nothing in common with Bulgaria are allowed on Bulgarian territory. 20 members of 'Ilinden' were taken into custody for carrying signs announcing the manifestation.

At the same time, certain Bulgarian papers wrote that the organization is attempting to legalize itself through the Bulgarian-Macedonian Friendship Association, presided by the Bulgarian professor Ivan Kalachev, founded 3 months ago and registered with the Sofia City Court a month ago. The founders of the association are accused by the papers of 'Macedonianism' and attempts to grant legitimacy to the non-registered 'Ilinden'. Professor Kalachev denies all accusations, underlining the association will continue its work to improve cooperation between Macedonia and Bulgaria.

[06] MACEDONIAN MATHEMATICIANS SUCCEED IN CANADA

At the recently ended Mathematics Olympiad in Toronto, Canada, a team of six mathematicians from Macedonia won a silver and three bronze medals, competing against 400 participants from 37 countries. The Macedonia team ranked 31st.

[07] ATALANTA DID EXIST

The scientific dilemma about the existence of the ancient settlement of Gortinia or Atalanta, situated at Vardar Rid near Gevgelija, Macedonia, has been resolved. In July, a team of Macedonian and American archeologists revealed ruins of three ancient cities built on upon another between the fifth and second century BC.

[08] MILS SPECIAL SUPPLEMENT: HOLES IN THE BUDGET - PART I

(Puls, 28 July 1995) It seems that there are analysts who would say that the state, having the thin budget that it does, could easily take its place at the end of the line of 25 largest loss- producing companies in Macedonia, thus radically presenting the financial sterility in the net of which the Macedonian economy has been caught up in the past several months. Such an outcome had timely been predicted by economic analysts in the country. And for more than one reason. Firstly, the Macedonian economy was additionally exhausted in the first half of the year. Being almost unable to secure payment of taxes by companies, the administration restlessly repeated that a daily budget income of 4 million Deutsche marks is needed, if the budget is to function as it should. This is a figure which simply leaves no room for any hopes for increased savings appetites of citizens or serious investment by companies in the next few years. On the other hand, this is to be understood as a result of the ongoing parallel slalom of the gray and regular economy and, under such circumstances, the maximally limited maneuver space of the cabinet of Prime Minister Crvenkovski in carrying out the economic policy.

The order in which moves were drawn over the last 30 days only supports these two thesis. A month ago, the prime minister announced at a Chamber of Commerce meeting a 'ruthless war' against the gray economy (many were quick to say that this was a proof that the transition has started swallowing up its own children), enriching the 'menu' some ten days ago by opening a front against corruption and abuse of position by employees in the administration. All this is supposed, 'at the end of the tunnel', to secure an adequately strengthened budget and deal away with the nervousness exhibited in the cabinet whenever it is decided on who will be granted what from the budget. This too optimistically drafted budget construction - with a third of the budget planned beforehand for the current reforms - inevitably imposed an option of a strict selection in financing projects of the second part of budget priorities under conditions of an obvious discrepancy between budget projections and their realization in the practice, thus enormously increasing the financial frustration of the 'large budget spenders' (education, health and culture) and the constant dissatisfaction of the administration with the fact that their wages have been frozen for several years now.

This diagnosed segments of the evident insufficiency of the budget, normally, led to an appropriate government therapy for budget recovery. The main guilty parties pointed out were low 'profits' made by customs authorities and oil and profit taxes. Income from customs tariffs are expected to increase and exceed last years' figures by some 40 per cent.

The current weak results are explained by the delay in the implementation of last years' Constitutional Court's suspension of the government's decision to have import transactions worth up to $50,000 taxed on the very border.

As the largest portion of the import deals in the country hardly even reach this amount, the budget income based on customs tariffs was expected to jump high. This even more so because such deals are frequently concluded by companies which later on are likely to purposefully go into receivership or simply posses no sufficient assets to meet their liabilities toward the state. Crvenkovski's administration offers two countermeasures for this. Firstly, expanding the scope of the decision to secure payment for the described import deals before the goods even enter the country. And, secondly, bigger precision in setting the function of the ministry of finance in its control over the work of customs authorities. Or, as Minister of Finance Jane Miljovski put it himself, 'To deal away with the current, artificially created, status of the Customs Department as a separate administration unit.' This considerably tied up the hands of the minister of finance in the customs tariffs segment.

Increased taxes on oil derivatives were expected to pour some 2-2.5 billion Denars into the budget. Yet, the money somehow got lost somewhere in the bad communication between the ministry of finance and the one of economy. Their discord, manifested through distribution of oil obtained through the PHARE program (relieved of all taxes, by the way), additionally shook the financial construction of the state funds which, in principle, were the ones expecting the largest gain from this government measure. On the other hand, realistic analyses (most probably provoked by the increased traffic on the small and narrow Macedonian roads) lead to a conclusion that the too high taxes on oil only intensified the already existing attempts to avoid paying taxes. Again, even more so because it seems that the countermeasure usually expected in such a situation - lowering of taxes - can be expected in Macedonia only after a continuity in the macroeconomics has been secured and after all reform measures have been successfully implemented. Such analyses, however, cannot be presented to the public as an explanation of the so small budget income, as Macedonia is very low ranked against other countries in Europe with its 30 per cent profit tax. The truth is that the accountancy legislative is only too problematically determined; any experienced accountant is given the opportunity to present profits in any way the customer wants. Therefore, it is no surprise that the financial establishment in the country has already announced changes in the accounting legislative.

(to be continued)

(end)

mils-news 3 August '95