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National Development Strategy for Macedonia NATIONAL DEVELOPMENT STRATEGY FOR MACEDONIA DEVELOPMENT AND MODERNIZATION Editorial Board Academician Ksente Bogoev (President) Academician Nikola Uzunov Academician Nikola Kljusev * English translation Snezana Nccevska, Joco Sami Rajna Koska-Hot, Silvija Misic Biljana Davceva, Ljubica Arsovska * Profreading by Graham Read * Computer editing Violeta Jovanovska Roberta Nikolovska * Cover design Aleksandar Sotirovski * Printed by “Magnat” - Skopje * a 700 copy printing This study has been prepared by the Macedonian Academy of Sciences and Arts. The opinions, figures and estimates set forth in this publication are the responsibility of authors, and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations or of the Government. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the United Nations Development Programme or the Secreteriat of the United Nations concerning the legal status of any country, territory, city or area, or of its boundaries. Mention of firm names and commercial products does not imply the endorsement of the United Nations. This publication was edited in the Macedonian Academy of Sciences and Arts. MACEDONIAN ACADEMY OF SCIENCES AND ARTS UNITED NATIONS DEVELOPMENT PROGRAMME UNITED NATIONS DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS NATIONAL DEVELOPMENT STRATEGY FOR MACEDONIA DEVELOPMENT AND MODERNIZATION SKOPJE, December 1997 PROJECT TECHNICAL COMMITTEE: Acad. Ksente BOGOEV Acad. Nikola UZUNOV Acad. Nikola KLJUSEV Dr. Gligor BISEV Ministry of Development representative: Boris BLAZEVSKI, M. A. UNDDSMS-UNDESA representatives: Peter GUDGEON Rio HADA UNDP Chief Technical Advisor: Dr. Raynal HAMMELTON The Vienna Institute for Comparative Studies (WIIW) consultants: Michael A. LANDESMAN Leon PODKAMINER Vladimir GLIGOROV Ingrid GAZZARI Gabor HUNYA Hemiine VIDOVIC Zdenek LUKAS Josef POSCHL Project Secretaries: Saso KOSEV Pece NEDANOVSKI, M. A. Vladimir FILIPOVSKI, M. A. Participating Institutions: ♦ Macedonian Academy of Sciences and Arts ♦ United Nations Department for Development Support and Management Services (UNDDSMS) / Department of Economic and Social Affairs (UNDES A) ♦ The Vienna Institute for Comparative Economic Studies (WIIW) PARTICIPANTS AND THEMATIC FIELDS 1. Dr.TakiFITI Dr. Metodija STOJKOV Global Issues for Economic Development 2. Acad. Evgeni DIMITROV Global Issues for Social Development and Modernization 3. Dr. Miroljub SUKAROV Verica HADZI VASILEVA MARKOVSKA, M.A. Completion of the Privatization and Restructuring of Enterprises 4. Dr. Mihail PETKOVSKI Dr. Gligor BISEV Tome NENOVSKI, M. A. Creation of Financial Markets and Institutions 5. Acad. Ksente BOGOEV Fiscal System and Policy 6. Dr. Ariton ZIKOV Dr. Vladimir KANDIKJAN National Strategy for Foreign Economic Relations 7. Ljubomir KEKENOVSKI, M.A. Development and Modernization of the Public Sector 8. Dr. Jorde JAKIMOVSKI Trajko SLAVESKI, M.A. Social Aspects of the Development Strategy of the Republic of Macedonia 9. Dr. Sofija TODOROVA Dr. Trajan GOCEVSKI Dr. Aleksandar PETROVSKI Dr. Violeta MALINSKA Dr. Mitko KAMCEVSKI Social (Public) Sector V 10. Dr. Angel GEORGIEV Dr. Natalija NIKOLOVSKA Pece NEDANOVSKI, M. A. Regional Development and Spatial Organization 11. Dr. Aleksandar KJURCIEV Dr. Gjorgji CEPUJNOSKI National Strategy for Human Resources 12. Dr. Slave RISTESKI Trajko SLAVESKI, M. A. Long-term Strategy for Labor Force 13. Dr. Metodija NESTOROVSKI Spase LAZAREVSKI Strategy for Capital and Investments 14. Dr. Zlatka POPOVSKA Dr. Danco DAVCEV Strategy for Technological Modernization 15. Boris BLAZEVSKI, M.A. Done VLASKI, Basic Economic Structure 16. Boris BLAZEVSKI, M.A. Jorgo KUKA Kiro DOKUZOVSKI, M.A. Antonie EFREMOV Ilija ANDONOV Tahir SHAKIRI Jovan PEJKOVSKI, M. A. Industrial and Agro-industrial Sector 17. Academician Risto LOZANOVSKI Dr. Todor GALEV Dr. Boris ANAKIEV Agriculture 18. Dr. Dimitar KRSTEVSKI Dr. Stanojko ANGELOV Forestry and the Timber Industry VI 19. Dr. Ljiljana MISKOVSKA-KAJEVSKA Olga MIHAJLOVA-TIKVAROVSKA, M.A. Dr. Golab CINGOSKI Dr. Damjan ZERNOVSKI Dr. Vladimir SIMOVSKI Services Sector 20. Dr. Ljiljana MISKOVSKA-KAJEVSKA Dr. Hristo KUSAKATOV Tatjana PETKOVSKA, M.A. Development of Trade and Commercial Sector 21. Dr. Damjan ZERNOVSKI Transport and Communications Sector 22. Acad. Jordan POP-JORDANOV Acad.Tome BOSEVSKI Dr. Dimitar HADZI-MISEV Sector of Energetics 23. Aleksandar RADEVSKI Development Strategies in Water Supply Industry 24. Dr. Angel LAZAREVSKI Nikola SRBINOVSKI, M.A. Environment Protection 25. Dr. Gligor BISEV Dr. Vladimir KANDIKJAN Dr. Evgeni ZOGRAVSKI Slobodanka MATAKOVA, M.A. Zoran STAVREVSKI, M. A. Quantitative Scenarios (1997-2002) PREFACE This Project, MCD/951001 “Preparation of a National Development Strategy for the Republic of Macedonia”, was initiated by the Government of the Republic of Macedonia and the United Nations Development Pro­ gramme (UNDP) in 1995. The Project was financed by UNDP and the Re­ public of Austria, and implemented by the Macedonian Academy of Sci­ ences and Arts and the United Nations Department of Economic and Social Affairs (formerly Department of Development Support and Management Services, DDSMS). Technical support was also provided by the Vienna In­ stitute for Comparative Economic Studies (WIfW). The basic aims of the Project were to prepare a document of strate­ gic relevance to the existing economic and social situation in the Republic of Macedonia, and to achieve a transition to permanent and sustainable economic growth and modernisation. The task was assigned to the Mace­ donian Academy of Sciences and Arts. The Academy formed 26 working groups, each for a different domain relevant to the strategy. These teams included 70 scientific and scholarly researchers from the Academy, from several faculties and institutes, and experts in the field of the economy. Each group prepared a report on a particular field. The first version of the study on this Strategy was the subject of a joint review carried out together with experts from the Vienna Institute for Comparative Economic Studies at a working meeting held in Ohrid. The comments and suggestions made at this meeting have been taken into ac­ count in finalizing the Strategy. The Project management team prepared the basic concept of the Project and was in constant contact with the working groups and the experts from the Vienna Institute, analysing and coordinating the findings, attitudes and proposals on each topic. It also held several working meetings in which all the associates participated and then separately with the Vienna Institute. Finally, the management team carried out a complete and thorough revision and editing of the entire material and prepared this comprehensive study on the Strategy as a consistent conceptual and structural whole. IX National Development Strategy The basic features of the Strategy are the following: First, it is a comprehensive and complex document which indicates the basic developmental orientations and strategic priorities for the Repub­ lic of Macedonia, as well as the means for their realisation. Second, the Strategy starts with a real and objective evaluation of the current situation, the development potentials and the domestic and ex­ ternal constraints, both within the country and in its broader external sur­ roundings. Third, the Strategy takes into account the possible and optimal combinations of the various factors of development, above all, investment capital, labor, and technology, and, on the other hand, the need for reform of the macro-economic environment, so that it corresponds with and makes possible the achievement of sustainable long term economic development. Fourth, the Strategy points to the basic sector priorities and the de­ velopmental orientations of each particular sector. Fifth, it also analyses certain basic short-and medium-term quanti­ tative relations and indicators, such as: the growth of the gross social prod­ uct, the investment levels, the employment and unemployment levels, the balance of payments and the external debt, the level of public consumption , macro-economic stability, etc. However, detailed macro-economic models and input-output analyses will have to be the subject of a separate, new, project. The Project has been prepared to formulate a Strategy and not a plan or a programme. It is a strategy embracing the reforms necessary for economic transition, for the macro-economic and developmental policies of the Government and for the business ventures of enterprises. The projected long-term period to the year 2020 is not a strictly de­ termined span of time - nor can it be such. It is in effect a vision. However, the Strategy is not only a global vision, but also a determination in favour of certain fundamental and specific solutions to particular questions. The Strategy is not and cannot be an exact mathematical extrapola­ tion of statistical series or a quantitative establishment of inter-dependen­ cies, either. This would, in any event, be impossible with the conditions of totally disturbed trends, that faced the Republic of Macedonia in the nine­ ties. Therefore, the mathematical variables and assumed development rates which have been adopted should not be viewed as strict and precise aims (targets) of macro-economic and development policy. In effect, this project only creates a model necessary for the comprehension of its components X Preface and for achieving achieving economic equilibrium
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