MACEDONIA

Former Yugoslav Republic of Macedonia

Republika Makedonija

COUNTRY OVERVIEW

LOCATION AND SIZE.

Located in southeastern Europe, the Former Yugoslav Republic of Macedonia (generally referred to as Macedonia) is a completely landlocked country, covering an area of 25,333 square kilometers (9,781 square miles). It is bounded on the north by Serbia and Montenegro (collectively the Federal Republic of Yugoslavia)—mostly by the province of Kosovo—on the east by Bulgaria, on the south by Greece, and on the west by Albania. Comparatively, the country is slightly larger than the state of Vermont. The capital, Skopje, is situated in the north-central part of the country; other cities of importance include Bitola, Kumanovo, and Tetovo.

POPULATION.

According to the 1994 census, the population was 1,945,932, or 88,000 fewer than the previous census recorded in 1991. This decline resulted from the emigration of ethnic Serbs after the breakup of Yugoslavia, and by a boycott of the census by ethnic Albanians. By July 2000, the population had risen to 2,041,467. Its birth rate is 13.73 per 1,000 population, and the death rate is 7.69 per 1,000 population, resulting in one of the highest rates of population growth in Europe. The population is expected to reach 2.2 million by 2010. The population density is nearly 79 persons per square kilometer (205 per square mile).

Macedonian Slavs constitute two-thirds of the population, with ethnic Albanians the second largest group, accounting for 22.7 percent. Turks make up 4 percent, Roma (Gypsies) 2.2 percent, and Serbs 2.1 percent. Several other small groups round out the total. Albanians dispute census results, claiming to represent one-third of the population. While Macedonia received many Kosovar Albanian refugees during the Kosovo war of 1999, most of them have since returned to their country. The population is young, with 23.8 percent below the age of 14 and 10 percent older than 65. Over 60 percent of the population live in urban areas, 23 percent of them in the capital city Skopje, and 5 percent in its suburbs.

SERVICES

The growing services sector of the Macedonian economy accounted for 55 percent of the country's GDP in 1998 and was expected to continue to grow in importance in the coming decades.

FINANCE.

As in the rest of the former Yugoslavia, most banks in Macedonia were not controlled directly by the government during the communist era but by the state enterprises, their largest customers. Large firms could force banks to lend them money even when they were not credit-worthy, an ineffective and risky system. The banking sector was badly hurt in the early 1990s when many firms defaulted on their loans. To make things worse, in the wake of the Yugoslav crisis, the cash-stripped National Bank of Yugoslavia in Belgrade refused to return the Macedonian foreign exchange deposits it was holding, thereby depriving the republic of hard currency . Because of the high inflation of the denar, most people in Macedonia used to save in foreign currency and this move severely undermined confidence in the banking system. Although the Macedonian government assumed the debts, all foreign-currency deposits had to be frozen and were paid out only over time. Confidence in banks was further shaken in 1997 with the collapse of TAT, a pyramid savings firm. The authorities have since tightened regulation of the sector and have initiated projects to rebuild confidence.

TOURISM.

Tourism was an important factor when the republic was part of Yugoslavia. There are several major tourist destinations—resorts and beautiful historical towns situated mainly along the Ohrid lake and in the mountains. The wars reduced tourist trade in the early 1990s, but the industry subsequently began a recovery, with income from tourism totaling $27 million in 1997. NATO troops and international staff stationed in Macedonia and Kosovo often spend their leave in Macedonia, and the number of foreign visitors to the country averaged 18,485 per month in the first half of 2000, compared with 12,060 during the same period in 1999.

RETAIL.

Retail in Macedonia is predominantly private and comparatively well developed, although foreign investment is still limited. Informal retail is sizeable, and small stores prevail. Figures in 2000 showed a massive yearly increase in real terms of 57.1 percent in retail revenue. This is partly explained by the Kosovo effect (the presence of NATO and international staff), and partly by a rise in consumer spending, driven by government's payments to pensioners , the unfreezing of foreign-currency accounts, and payments to TAT depositors.

DEPENDENCIES

Macedonia has no territories or colonies.

BIBLIOGRAPHY

The Economist Intelligence Unit. "Macedonia." <http://www.eiu.com> . Accessed December 2000.

Roudometof, Victor, editor. The Macedonian Question . New York: Columbia University Press, 2000.

U.S. Department of State. FY 2000 Country Commercial Guide: Macedonia. <http://www.state.gov/www/about_state/business/com_guides/index.html> . Accessed December 2000.

—Valentin Hadjiyski

CAPITAL:

Skopje.

MONETARY UNIT:

Macedonian Denar (MKD). One denar equals 100 deni. There are coins of 1, 2, and 3 denars and 50 denies; there are bills of 10, 50, 100, 500, 1,000, and 5,000 denars.

CHIEF EXPORTS:

Food, beverages, tobacco, miscellaneous manufactures, iron, steel.

CHIEF IMPORTS:

Machinery and equipment, chemicals, fuels, food products.

GROSS DOMESTIC PRODUCT:

US$7.6 billion (1999 estimate).

BALANCE OF TRADE:

Exports: US$1.317 billion (1998). Imports: US$1.715 billion (1998).

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