MILS: News from the FYROM, 97-08-05

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

CONTENTS

[01] SITUATION OF THE ALBANIANS TO BE ANALYZED IN GENEVA

[02] CANADIAN AMBASSADOR VISITS PRESIDENT GLIGOROV

[03] RECONCILIATION OF ALL CLIENTS' LEADERS ANNOUNCED

[04] FUNDS ARE FILLING AT A QUICK PACE

[05] SMALLER EFFECTS FROM ADMINISTRATIVE DEFECTS

[06] `SPILLED' MILK

[07] PHARE TO INVEST IN SKOPJE DAIRY

[08] RECONSTRUCTION ON PART OF `PARTIZANSKI ODREDI'

[09] INTERNATIONAL TRADE AND PAYMENT BALANCE - PART 2 (G.Bishev)

MILS NEWS

Skopje, 05 August, 1997

[01] SITUATION OF THE ALBANIANS TO BE ANALYZED IN GENEVA

[02] CANADIAN AMBASSADOR VISITS PRESIDENT GLIGOROV

[03] RECONCILIATION OF ALL CLIENTS' LEADERS ANNOUNCED

The Clients' Council of the `TAT' two evenings ago was deciding on what day this week to have the demonstration in front of the Bitola Court building, and they also plan blockage of the Palace of Justice. `We are aware that the paying of 600 denars court taxes is legal, yet the clients demand not to pay it because the state has already `taken' their money. We will protest for the authorized to pass a special decision allowing us not to pay those court taxes', stated Kire Kovachev. The Council will most probably have another demonstration on the Bitola square next Thursday.

[04] FUNDS ARE FILLING AT A QUICK PACE

As they comment in the Institute for Payment Flow this indicates that the legal and physical subjects conduct the provisions of the Bill and are interested to pay the remaining obligations on the grounds of salaries, reports `Vecher'. Out of the total of collected 2,6 billion denars or approximately 86 million DM of income in the social funds in July this year 1,714 billion denars are taxes for June 1997. Out of which the largest sum of income are paid as taxes in the Fund for Pensioning Insurance amounting up to 1,103 billion denars, about 531 million denars go into the fund for health care and 80 million denars go for payment of employment taxes. It should be underlined that about two thirds of the legal subjects have themselves issued directives for payment of taxes for June amounting up to 1,6 billion denars.

The Institute for Payment Flow for the remaining subjects has accounted the taxes for June in a total of 354,3 million denars, out of which 32%, i.e. 113,6 million denars were collected during that month, while the rest are recorded in the files for waiting due to insolvency of the subjects. During July taxes were collected for the remnant months amounting up to 836 million denars. According to information from the IPF the discount of 70% has been used by 484 legal subjects who have paid taxes amounting to 80,6 million denars. Larger effects are expected during this month because the subjects should assess whether they can supply the necessary means for payment of all remaining taxes at once by using the 70% discount or accept the other alternative - payment in installments, reports `Vecher'.

[05] SMALLER EFFECTS FROM ADMINISTRATIVE DEFECTS

Specified in particular taxes the collected means come mostly from luxury goods taxes - 6,3 billion denars out of the 11,2 billions for the whole year, which presents 56% realization. Out of the planned personal income tax of 9,2 billion denars, 4,8 billion have been collected by now. The sales tax has been realized for 1% lower, and the decrease is mostly expressed in the profit tax. In the budget this presents 2,3 billion denars out of which only 847 millions have been covered. In general, we are satisfied with the tax realization, says the Boshko Stefanovski, manager of the Administration for Public Income.

Taking into consideration the fact that the end of July is the dead line for delivering the half-year accounts, a more definite picture regarding the tax bonds will be gained after the analysis of those accounts are completed. Stefanovski explains that this accounting is the basis for establishing and paying of the tax by a rate of 155 which should be an incentive for the tax payers to more realistically present their bases. Even without official comments it is clear that additional head aches to the tax collectors were caused by the recent decrease of the oil derivatives taxes.

In the mutual analysis of this cut's effect done by the finance and economy government section it is said that by the end of this year the planned budget deficit would move around 600 million denars. The tax administration thinks of filling up the 'hole' by `overflowing' the increased income on the grounds of coffee and cigarettes taxes, but hopes are also directed towards the neighbours. Stefanovski, explains that if the neighbouring states realize the announced increase in the oil derivatives prices the prognosis are that our consumption will be increased as well. Although there is optimism in this statement regarding the pace of the income taxes realization, MMF experts who expressed many reprimands to our ability to gather what we have planned ( which is far from reality) say that the optimism is ungrounded.

Yet, according to our financial experts the clearly established solution - re- balance of the budget is too early to be discussed because not all measures and Government instruments for strengthening the income have been used up. The annual `thin' budget harvest regardless of any objective economical circumstances leads to the often underlined experts' conclusion in this sphere that from regulation `fine-tuning' one should turn to `fine- tuning' of the tax administration. In the favour of this one may use the reform on the tax management which is indicated as one of the reforms covered by the World Bank the realization of which is expected soon, reports `Vecher'.

[06] `SPILLED' MILK

Most widely spread dairies in the private section, although the owners ` complain' that they hardly make ends meet with the low price of this product for which from the beginning of May this year and dropped the simulations - the premium of 20 denars for every delivered kilo of milk at the purchase stands. But besides this they are tough and survive and even function well , above all because they are not responsible for their incorrect business practice.

It is knows that over 40 private dairy farms in Macedonia. And let them be, if necessary! Yet, do they fulfill the conditions to practice because it is known that they have no expert personnel and pasteurization technology. The milk is simply boiled in ordinary caldrons and because it is easily spoiled instead of fresh it is usually sold turned sour mainly in private stores. The milk in private dairy farms is produced out of 50 to 60% milk powder. Of course, in this dishonest earning are included some dairy farms from the national sector.

[07] PHARE TO INVEST IN SKOPJE DAIRY

[08] RECONSTRUCTION ON PART OF `PARTIZANSKI ODREDI'

[09] INTERNATIONAL TRADE AND PAYMENT BALANCE - PART 2 (G.Bishev)

Most of the developed industrial countries - whose markets are the prime targets of Macedonian exporters - consider the non- fulfillment of these quality standards an indirect import ban. In most cases Macedonian goods do not meet ISO 9000 standards, which is above all due to outdated production technology and to the lack of institutionalizing the regulation and standardization of goods production. The neutralizing of these deficiencies in the future would require the abolishing of the `dual product quality' concept. Ergo producers would have to focus on producing top-quality, high-standard goods regardless of the market they are intended for.

Such a change of attitude could be brought about in a relatively short period of time. The introducing of new production equipment and technology ensuring quality and high standards, however, would require more means and time - and this is a particular problem due to the low accumulation capacity of the business sector. In addition to these measures, the metamorphosis of the Republic of Macedonia into an export-expansive country is to be brought about by the following institutional options and economic policy measures: the establishing of a bank concerned with crediting export activities and issuing securities; the complementing of an institutional network prerequisite to reviving export (establishing an institution for measurement standardization and precious metals, for protecting industrial and intellectual property, for issuing quality certificates, etc.); the improving of market competitiveness approaches by creating information centers; the integration into international development programmes and projects; the compiling of an organized strategy for the promoting of export and emergence on international markets; the developing of telecommunications and the infrastructure network, etc.

The acceleration of export activity implies the maintenance and increasing of cost competitiveness compared to other countries. The improving of the export sector's competitiveness potential is expected to primarily occur on the micro level, i.e. through the speedy rise of labour productivity in correlation to pay growth. This would result in a reduction of labour force costs per item. On a macro-economic level, it is being considered that the Republic of Macedonia will continue to occupy the post of a disadvantageous monetary zone with respect to EU member-states. This leaves open the possibility to utilize hard currency exchange rates as an instrument of shaping cost competitiveness and payment balance adaptations with regards to the international market. The implementation of hard currency exchange rates to the purpose of maintaining cost competitiveness however, will be restricted in this period as they will continue to function as the fundamental nominal anchor within the economy.

In terms of regional categorization, the Republic of Macedonia appears to direct the main bulk of its export activities towards developed countries (with an export share of 43% and an import rate of 50.7%). In this group the top notch is being occupied by EU member-states, since 34% of all Macedonian exports are designated to these countries and 39.6% of all imports originate from the same. In terms of individual ratings within this group Germany has proven the most significant trade partner of the Republic of Macedonia. This is being followed by the relevant trade rate with Italy, and quite recently with Greece.

At the same time economic crises and political instability within East European countries have generated the trend to re-direct Macedonia's trade endeavours from these countries to the markets of the former Yugoslav constituents. Thus in 1996 the share of trade activities involving former Yugoslav Republics amounted to 41% (in terms of export) i.e. 21.4% (import). In this context, the trade with FR Yugoslavia has acquired particular importance. Accordingly FR Yugoslavia has grown into Macedonia's most relevant trade partner in 1996, constituting 27.2% of its overall exports and 10.3% of its total goods import. This makes FR Yugoslavia one of the few countries i.e. trading partners with which Macedonia managed o generate a surplus. In contrast to this the trade level with CEE countries has been reduced considerably in 1996, thus amounting to 14% of the overall exports and 21.9% of all imports of Macedonia.

(To be continued...)

mils news 05 August, 1997

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