FYR Macedonia - Reforms Toward Stronger Economy

Buses are a booming business for Van Hool, the Belgian-owned company which produces them in the Former Yugoslav Republic of Macedonia. 

The enterprise is based in a newly-created special economic zone on the outskirts of the nation’s capital, Skopje. It already exports hundreds of the coaches a year to the USA, and is expanding.

“Our capacity at the moment is, let’s say, 75 percent,” says Avram Stojchevski, Plant Manager, for Van Hool Macedonia.

“So let’s say we still have enough capacity to grow. Our plan is this year to start with the European model at the end of the year. That means our employee headcount will grow to 550-600 people,” he says.

Encouraging such high value manufacturing - which creates jobs at home through exports abroad - is among several objectives behind reforms undertaken recently by the government.  

The sector-specific reforms are supported by World Bank Development Policy Loans on Competitiveness which can facilitate medium-term economic growth as well as address the country’s challenges with poverty, unemployment and shared prosperity.

“We need to bring money for our families in our home that is very important. I am a father of two children and it is very important for me to have a job, for them to grow up and to have knowledge and everything in life,” says Goran Ciunov, who got a job working as a technician at Van Hool Macedonia.

In addition to developing high value-added manufacturing through attracting investment and scaling-up export promotion, the sector-specific reforms are helping to restructure the FYR Macedonia’s agriculture sector through improving agricultural land management, and better targeting of incentives for agriculture producers.

Farmer Slavche Atanasovski used a government grant to purchase a new tractor which he says allows him to produce more. “We have to be equal to other countries, and produce more so that prices will be competitive with other markets.  A basic way of achieving this is through better machines and equipment,” he says.

Improving the efficiency of trade logistics through facilitating the transport of goods at border crossings and increasing export-readiness of the transport industry are also a focus of the reforms, supported under the Development Policy Loans on Competitiveness. 

In addition, the new reforms aim at establishing better conditions for innovation and skills development by way of incentives for entrepreneurship, and cooperation between schools and the private sector, such as a start-up center at Skopje’s Faculty of Mechanical Engineering where students are technically and financially assisted in coming up with creative ideas for industry.

“All the start-up programs that they are offering to the students are innovative and most of those programs are compatible with study programs not only in Europe but also with the study programs in the United States,” says the faculty’s dean, Atanas Kochov.

Better conditions for innovation, more efficient trade logistics, an improved labor market, restructuring of the agriculture sector and developing high value-added manufacturing are all ways the Former Yugoslav Republic of Macedonia can successfully strengthen its economy for the benefit of all.