As of May 1994, the EBRD established a $10 million facility to guarantee Komercijalna Banka's designated correspondent banks against non-payment under confirmed letters of credit. By securing credit facilities, the bank's clients are able to stimulate production and increase exports. In 1995, net resource flows from international financial institutions consisted of $43 million from the World Bank, $37 million from the International Monetary Fund (IMF), and $16 million from other institutions.
In 1995, the government began privatizing its largest state-owned industries. A total of 1,200 enterprises were to be privatized, 65% of them classified as small (fewer than 50 employees). The portion of a company's share capital which is community-owned is known as social capital, which forms the basis of the privatization process. In theory, social capital is owned by the company's employees. However, there are severe restrictions which make it nontransferable and hence valueless to the individual.
The Kosovo crisis of 1999 placed severe burdens on Macedonia's already strained economy as an influx of Kosovar refugees flooded across the border and trade routes were disrupted. Fighting between government forces and ethnic Albanian rebels that began in February 2001 further disrupted the economy. Real GDP declined by 4.5% in 2001, and government spending mushroomed. Spending on security raised the general government deficit to 7.2% of GDP, compared with a surplus of 1.8% in 2000.
In 2003, the IMF approved a $28 million Stand-By Arrangement for Macedonia, which was to expire in June 2004. The loan was geared to support the government's economic program for fiscal stability following the 2001 crisis, to promote growth, improve the business climate, and improve living standards for Macedonians.