Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). Find Out

Overview

  • COUNTRY CONTEXT

     

    2019

    Population, million

    2.1

    GDP, current US$ billion

    12.7

    GDP per capita, current US$

    6,102

    Life Expectancy at Birth, years (2018)

    76

     

     

    After the resolution of the name issue, North Macedonia and the European Union (EU) finally opened accession negotiations on March 26, 2020. The country has had candidate status since December 2005.

    On March 27, North Macedonia became NATO’s newest member state, depositing its instrument of accession to the security organization.

    Due to the COVID-19 outbreak, the country’s parliamentary parties have agreed to postpone the general elections. The president of North Macedonia declared a state of emergency on March 18 for a period of 30 days.

    Since then, the Government and the National Bank have adopted several health-related, security, social, financial, and economic measures to deal with the crisis.

    Last Updated: Apr 05, 2019

  • Number of Active Projects

    11
    Lending$310.4 million

    IBRD 

    $561.7 million
    EU IPA $17.2 million

    The strategic objective of the new Country Partnership Framework (CPF) for FY2019–23 is to support North Macedonia’s ability to achieve faster, inclusive, and sustainable growth and provide its citizens with greater opportunities for a better life. 

    KEY ENGAGEMENT

    The World Bank is mobilizing several instruments, both financial and technical assistance, to support North Macedonia’s efforts to manage and mitigate the impact of the COVID-19 pandemic.

    In terms of financial assistance, the Bank is helping North Macedonia to access the emergency fast-track facility created to support countries’ response to the COVID-19 emergency.

    These funds, which should be available at the end of the month, will be used to address urgent health sector priorities and protect household income, in particular that of the most vulnerable.

    Together with the Ministry of Finance, the World Bank is also analyzing the overall portfolio of approved projects in the county to identify funds still unallocated that could be redirected to crisis-management and post-crisis economic recovery.

    As part of this effort, the Bank is exploring the activation of a special window for emergencies that is embedded in one of the recently approved operations (the Local Roads Project). The goal is to mobilize the rapid disbursement of funds in support of small and medium enterprises (SMEs) that have been negatively impacted by the public health measures and by depressed demand, both domestically and from abroad. Collectively, these programs are expected to mobilize roughly €140 million.

    The CPF aims to improve the environment for a competitive private sector by boosting connectivity and improving access to markets, helping businesses become more innovative, productive, and competitive, and creating more and better jobs.

    The Western Balkan Trade and Transport Facilitation Project, approved in 2019, will improve connectivity and integration with regional and EU markets, reduce trade costs, and increase transport efficiency. In addition, the new Agriculture Modernization Project will improve access to modern agricultural services, thus benefiting 1,000 farmers, including by establishing collection and conditioning centers for fruits and vegetables.

    The CPF is also designed to support investments in human capital, with a focus on improving education and skills training, providing better access to social services for the most vulnerable, and encouraging more inclusive participation in labor markets. Some of these goals are being achieved with a contribution from the active portfolio, e.g., the Skills Development and Innovation Support Project, through which secondary technical and vocational education students benefit from practical training in SMEs and large firms.

    A new education project currently under preparation will improve conditions for acquiring key skills in primary education. The emphasis is on improving the teaching and learning environments in order to enhance what students learn in the classroom. The most vulnerable households will be protected by a contribution from the Social Services Improvement Project, which will support the creation and expansion of preventive and nonresidential social services.

    The sustainability of pensions in an aging society will be guaranteed by the Social Insurance Administration Project, which will help to modernize pension administration. Finally, the CPF is reinforcing fiscal and environmental sustainability by strengthening public financial management and accelerating the country’s transition to a more sustainable energy mix. For example, the new Organic Budget Law and public financial management reforms will prevent the reemergence of arrears accumulation and strengthen the monitoring of fiscal risks.

    Furthermore, the Public Sector Energy Efficiency Project will directly contribute to the reduction of CO2 emissions by retrofitting public buildings to improve energy efficiency, including municipal and central government buildings as well as public lighting. 

     

     

    Last Updated: Apr 05, 2019

  • Growth in 2019, at 3.6 percent, surprised on the upside, and unemployment declined to another historical low as employment increased. Yet, the near-term outlook – similarly to other countries in the region – is dim due to the COVID-19 crisis, with the economy going into recession in 2020.

    The pandemic and containment measures will affect the economy, through both the demand and supply side. Consequently, this will also affect the services sectors with close ties to manufacturing. If the outbreak and restrictive measures on national and global economies persist beyond the second quarter, the recession will be more severe and will erase labor market improvements and deepen fiscal vulnerability.

  • Active Projects

    PROJECT SPOTLIGHT

    Local and Regional Competitiveness Project

    The Local and Regional Competitiveness Project, funded by the EU, administered by the World Bank, and implemented by the Government of the Republic of North Macedonia, provides a mix of resources and integrated interventions, including investment in infrastructure, services, and linkages at destinations, as well as capacity building, to support tourism growth and facilitate destination management. The project aims to develop tourism that is inclusive and sustainable in the long term. It is working directly with public, not-for-profit, and private entities in order to deliver financial, economic, and social benefits to local communities and the private sector.

    The Local and Regional Competitiveness Project takes an all-inclusive approach to tourism development and destination management. Multiple interventions that tackle the needs of a particular destination are most effective when they are delivered in an integrated way, linked to market demand, and able to address issues ranging from policy to planning, access, infrastructure, and marketing. The Tourism Development Plans that guide the project’s activities in each of the 10 supported destinations incorporate this integrated approach, informed by a strong analysis of demand within the tourist market and of ways the country can best position itself to be competitive.  

    The Local and Regional Competitiveness Project contributes to the World Bank Group’s twin goals of reducing poverty and promoting shared prosperity by helping communities to upgrade their tourism assets and related infrastructure, develop skills, stimulate tourism-related jobs and enterprises, and increase value chain linkages at or around destinations. 

    The project is also aligned with Bank’s engagement in the country by complementing lending and technical assistance activities aimed at supporting growth and competitiveness. 

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