Sustainable economic development

The impact of the global financial and economic crisis is also being felt in Macedonia. While the country's economy grew by 5% in 2008, it shrank by 1% in both 2009 and 2010. Problems arose in particular in the export sector, especially in the metallurgy and textiles industries, as a result of the drop in demand from western economies. Remittances from those working abroad also fell. The Macedonian banking sector, however, proved stable.

Above-average efforts will be needed to bring down the rate of unemployment, which at 35% is very high even in a regional comparison, and to bring the population's low standard of living closer to that in the European Union. Functioning market-economy institutions and rule of law are prerequisites for EU accession and for an economy that can stand up to the competitive pressures on the European internal market.

GIZ promotes economic development and employment at national, regional and local level. It supports the autonomous implementation of policies for balanced regional development in Macedonia that conform to EU standards. As a result, regional development potentials can be tapped into and the competitiveness and attractiveness of the region increased. In the medium term this will reduce unemployment, increase incomes and reduce migration.

Amended commercial law is driving EU-relevant reforms forward in areas ranging from competition law to consumer protection. Harmonisation of Macedonian tax law with EU law also covers the reform of value added tax and procedural law. The integration of technical EU standards into Macedonian law poses another big challenge. Here GIZ is providing advisory services on the internal market, energy and the environment. The competitiveness of the Macedonian private sector is being strengthened in the textiles and clothing, automotive components and IT/software industries, thus promoting investments and exports.

Drinking water supply/wastewater disposal and environmental protection

Complementing investments from German financial cooperation effected by KfW Entwicklungsbank, GIZ experts support the transposition of the EU Water Framework Directive. Special attention is being paid to sustainability of resource consumption and involving the various stakeholders.