MILS NEWS 11/03/96

From: "M.I.L.S." <mils@MILS.SPIC.ORG.MK>

Macedonian Information Liaison Service Directory

CONTENTS

MILS NEWS

Skopje, 11 March 1996

[01] VANCE HAS NOT SUGGESTED A NEW NAME

According to Toshevski, the only item agreed on, during the last Macedonian-Greek talks in New York, was that they should be continued in the second half of April. He said the 'discussions have not reached a point when Vance could make a proposal like that'. Macedonian UN Ambassador added that what has been happening during the last week in Athens is not in accordance with the agreed method of dealing with this issue.

The variant 'New Macedonia' was suggested by Cyrus Vance in 1993, and was included in a draft Agreement, more popularly called the 'May Document', which was never signed, explained Toshevski.

[02] PHARE FINANCES COOPERATION IN BORDER REGIONS

Jan Trestur stressed that, besides being important for the improving of the cooperation between Macedonia and Greece, this programme is also very important for the cooperation of Macedonia with the EU. Macedonia will be given around 10 million ECU annually for this program.

In the discussions the projects of a great significance for both countries were pointed out, such as: the preserving of the Doiran Lake and of the Vardar River, the construction of a customs terminal in Gevgelija and of a road between the border crossings of Bogorodica and Doiran, the reactivating of the border crossing Puljevac (township of Kavadarci), the construction of two reservoirs on the Crna River, the reconstruction of the border crossing Mejitlija, the ecological programs on REK 'Bitola', connecting the Greek border villages with the water pipeline of Bitola, reopening of the border crossing Markova Noga near Resen, preserving of the Prespa Lake, construction of the motorway section Gevgelija - Negotino, as well as other ecological programs and joint production of health food.

PHARE delegation, also had meetings last Friday with the Macedonian Premiere Branko Crvenkovski, the Minister of Education Sofia Todorova and with the Development Minister Abdulmenaf Bejetti. The guests were especially interested in the way the privatisation is carried out, in the transformation of the banking system and in all other sectors where the PHARE programme can help.

Today, the elegation will visit Thessaloniki and will discuss the joint projects with the representatives of the Greek bordering townships.

[03] PROTOCOLS ON COOPERATION WITH ROMANIA SIGNED

Minister Maleshkanu expressed his positive opinion about the Constitution of Macedonia which respects the rights of the minorities. He said Romania was very interested in and connected with the Vlach minority in Macedonia, which, as he stressed, had been given all rights.

[04] INCREASED PRESENCE OF MACEDONIAN CULTURE IN EUROPE

Ambassador Bogh previously had met with the Macedonian Education Minister Sofia Todorova, when they had discussed the current issues regarding the education in Macedonia.

[05] MORE INTENSIVE ECONOMY COOPERATION WITH GERMANY

[06] US STATE DEPARTMENT CRITICAL ON BULGARIA

[07] REPUBLIC OF MACEDONIA WITHIN THE FRAMES OF FRY!

Dragisha Miletic was re-elected a president of the Party.

The main subjects of discussion on the congress was the 'bad situation of Serbs in Macedonia'. In this regard a severe protest was expressed for the fact that Serbs are not included in the Macedonian Constitution, that they do not have their theatre financed by the government, their newspaper, their music festival, a right to their church, as well as that they do not participate in ruling bodies of the country.

Therefore, the program activities fixed for the following period will be to gain participation in the government, to form religious communities and to 'internationalise to threats to the Serbian nationality'. Or, as president of the Party, Miletic, stressed, Serbs in Macedona are to gain 'nothing more and nothing less that what other nationalities in Macedonia have'.

[08] DIALOGUE BETWEEN FRY AND ALBANIANS IN KOSOVO?

[09] TWO DAYS OF LONG CELEBRATION

On this occasion, an exhibition was opened and a tribune was held, all attended by guests from Albania and from Kosovo.

The decorations and the speeches were in Albanian, without Macedonian flag to be posted. The vice Minister of Education of Macedonia Hasan Jashari spoke about the importance of the holiday. The meeting was attended by: Macedonian Development Minister Abdulmenaf Bejetti, vice Minister of Health, Ilir Liuma, part of the Albanian members of the Macedonian Parliament and many Albanian township officials.

Democratic Party of Macedonia protested against marking the holidays of neighbouring Albania and against the fact that it all happens without being approved by the competent Ministries. 'This only confirms the bitter truth about a parallel government in this part of the country, a government which threatens to become the only one in this region,' was said in the announcement of this Party.

[10] SOLDIER SHOT IN THE PETROVEC BARRACKS - PASSED AWAY

According to the investigation of the Macedonian Defense Ministry, Zareski was hit by a bullet shot fired by soldier Isuf Bislimi. The bullet went through the window of the guards bedroom, hit in a stand of a bed, turned right and hit the soldier. The investigation continues.

[11] DOUBLE MURDER IN ABANDONED VILLAGE

According to 'Nova Makedonija', the cottage had been robbed previously, and the victims went to check it, when they were murdered by the burglars. 'Nova Makedonija' informed that the murders were done by several individuals in the early evening of March 7. Internal Affairs Ministry has not informed about the possible murderers and the investigation continues. The village Lazaropole consists of about 500 houses, but nobody lives there from October till the end of March.

MILS SUPPLEMENT:

[12] 'Total Eclipse Flags New Era' (Part 3)

('Central European', February 1996)

German car manufacturer Audi is conducting a feasibility study for a manufacturing plant. Audis sell well in Macedonia where ministers, ambassadors and business men use them as official cars. Institutional investors will arrive in Macedonia in April when a o35m ($54.6m) regional investment fund kicks off. The fund, which is till to be named, is co-sponsored by Eurofin, a European Corporate finance practice. It will be managed by Jupiter Asset Management, a subsidiary of Commerzbank.

New legislation now before parliament aims to encourage foreign investors. A law on restitution and denationalisation and a revamped commercial code are receiving their first readings. Both laws are likely to be passed. If they are not, the second tranche of the World Bank's Fesac loan will not be forthcoming. The fact that the rapprochement with Greece will unlock the EU's PHARE resources, which Macedonia will need if it is to cover a projected $40m financing gap for 1996, is also encouraging.

Aid from the EU had been blocked by Greece until Macedonia agreed to remove the sun of Vergina from its flag.

Macedonia's economic survival, however , depends on more than just foreign investment. The country's industrial base dates from the Tito era. It comprises 25 large, hopelessly inefficient metallurgical, textile and manufacturing companies, for whom entering the market economy was like looking down the barrel of a gun. These companies employed 60 000 workers and accounted for 80% of the total losses of all Macedonian enterprises in 1990.

These companies are now nearing the end of a year-long special restructuring programme, financed by the World Bank.

'The aim of the programme is to restructure the companies so they can be privatised,' says Petar Georgiev, director of the programme. 'All companies, with the exception of Elektrostopanstvo na Makedonija, the electricity utility, and Makedonski Zeleznici, the state railway, will be privatised. This should lead to more responsible management, create a new incentive structure, and reduce costs further.'

The government and World Bank have set up an innovative labour redeployment programme which has allowed the companies to shed 15 000 excess jobs. 'The purpose is to help laid-off workers and employees by a variety of means including retraining for market orientated activities, and legal and financial advice to start up new enterprises,' says Eguren of the World Bank.

Under the programme, a government trustee has taken charge of the managing board of each of the 25 loss-making companies. These trustees have initiated a restructuring programme which has subdivided the entities into 115 smaller units. The loss makers, which were given the choice: privatise or liquidate, have presented plans to the privatisation ministry which will decide on their future.

Some of the companies still face severe difficulties. Skopje Steel, one of the biggest loss makers, has now been broken up into 13 limited liability and joint stock companies, and 50 of the company's creditors, including banks and public companies, are swapping debts for equity. But the company still has quarterly financing requirements of $15m to $17m - an amount well beyond the resources of any Macedonian bank.

The agricultural sector faces less intractable problems.

Macedonia was the bread basket of Yugoslavia and the country's fresh fruit and vegetables find ready markets in western Europe during the winter months. But Macedonia's private farmers have not learnt to benefit fully from the quality of their produce. Wine is sent in bladders to Slovenia, where it is bottled and sold to the west at a much higher price. Diary products are sent to outside processors and packagers abroad who reap the value-added benefits.

Foreign aid is being used to help small agricultural producers develop the food processing equipment and marketing networks they need to improve profits. 'Under the Yugoslav economy they never had to process anything,' says Dr Michael Peden, head of agribusiness at Crimson Capital, a consulting firm contracted by USAID to help small Macedonian businesses. 'They just grew it and put it in a train.'

Stench Radevski, an orchard farmer from Resen, near Bitola, in the southwest of Macedonia, is one of the producers Crimson Capital is advising. Radevski grows more apples per hectare, per year than any other Macedonian producer. Annual expenditure is $15 000 and revenue is $60 000. Profits are reinvested. 'The quality of the product is very good,' says Peden. 'But 90% of sales go to the Skopje region. We are working to develop regional and export markets. We will also advise him on producing a management, marketing, and business plan which will help him attract investment.'

Crimson's most remarkable project concerns DMV, a Negotina- based company established in 1989 with $7 000 of private capital. DMV is Macedonia's only tractor dealer. It sells tractors, lawn-mowers, digging machines, crop sprayers and spares, all of which it imports from Slovenia, Croatia and Italy. DMV has invested $70 000 in an aluminium foundry for an irrigation pipe production line, which can produce 30 000 pieces of pipe a year. 'Last year, only 4 000 pieces were sold, and profits fell to $15 000,' says Peden. 'If we can work with DMV to achieve some market penetration we will be helping it enormously.'

(end)

mils news 11 March 1996