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EBRD revises strategy for FYR Macedonia
FYR Macedonia is making steady progress in its transition towards a market
economy, but political uncertainty, slow structural reforms, bureaucracy and
corruption are preventing stronger growth potential, the EBRD says in its
latest strategy for FYR
Macedonia.
The report, issued today, says some of the main transition challenges facing
FYR Macedonia include improving the business environment to attract
much-needed domestic and foreign investment, reforming the judiciary system
and tackling corruption. Other challenges include further regulatory reform
and commercialisation in utilities to attract strong investments to help
modernise infrastructure, as well as consolidation and increased competition
in the banking sector.
Despite key challenges, the report praises the country’s achievements,
including low inflation, a tight fiscal policy which has helped reduce the
country’s budget deficit, and substantial progress in the closure of
loss-making companies. FYR Macedonia has also played a pivotal role in
promoting regional cooperation in south-eastern Europe through political
dialogue, intra-regional trade agreements and regional infrastructure
interconnections. Furthermore, just three years after a security crisis
threatened the country’s stability and growth prospects, the economy is
continuing to recover, with growth in 2003 at 3.2 per cent.
To help address the country’s challenges, the EBRD says it remains strongly
committed to promoting FYR Macedonia’s continuing transition process by
promoting investments, improving private-sector growth, especially small and
medium-sized enterprises (SMEs), engaging in policy dialogue with authorities
to help improve the business climate, and by implementing existing projects
and exploring new ones across the country.
In particular, the EBRD will increase support in the following areas:
Corporate Sector – towards foreign investors and local
export-oriented companies by providing loans, guarantees or making equity
investments.
Financial Sector – for more SMEs through local banks and
micro-lending institutions, strengthening and helping promote the
consolidation of the banking sector, promoting foreign investors in the
banking sector and supporting local banks in mortgage lending, consumer
finance and leasing.
Infrastructure – for the implementation and disbursement of
existing projects, developing transport and energy projects, with a focus on
regional linkages, as well as municipal and environmental infrastructure
projects. The Bank will also support the restructuring and privatisation of
the electricity utility, energy projects that fit the regional energy market
development, such as regional electricity and gas interconnections, and
promote road rehabilitation.
The EBRD is the largest investor in FYR Macedonia, having provided more than
€327 million in 24 projects. Working with its many partners, including the
private sector, it has mobilised more than €800 million for projects across
the country.
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