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Foreign Direct Investment
Macedonia has done an admirable job in maintaining internal tranquility, both socially and economically, during the last decade's series of cataclysms stemming from the breakup of former Yugoslavia. At the beginning of a new millennium, Macedonia has achieved macroeconomic stabilization and positive economic growth. Nonetheless, heavy foreign direct investment inflows are not materializing.
Macedonia has many factors working in its favor: it is situated at the junction of two major transportation corridors, has an educated and productive workforce, good physical infrastructure, a relatively non-corrupt and comprehensive legal system.
A recent FIAS report noted that changes in GOM policies and laws could only marginally affect foreign investment levels. It noted that foreign investors were staying away because of the perception of the southern Balkan region as being dangerous and because Macedonia lacks a significant, wealthy internal consumer market. Nonetheless, FIAS concluded that there were significant actions that the Government of Macedonia could take in order to make the investment climate more attractive.
Total foreign direct investment is estimated at about U.S. $205 million, compared to over $2 billion in Bulgaria. Even in per capita terms, Macedonia has among the lowest levels of foreign investment of the former socialist countries of Southeastern Europe.
One very striking positive factor in Macedonia is the sea change in enthusiasm for privatization of major socialist-owned firms. With the election of a new government in 1998, and a new President from the same political party in 1999, several such firms either have been or are being put on the auction block. Already sold are the petroleum refinery and Macedonia's major commercial bank (Stopanska Banka, Skopje). Still to come is the sale of Macedonia's telecommunications company. Even more surprising is that Greek interests are snapping up these companies.
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