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Macedonia (06/09)


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For the most current version of this Note, see Background Notes A-Z.

Flag of Macedonia is a yellow sun with eight broadening rays extending to the edges of the red field.

PROFILE

OFFICIAL NAME:
Republic of Macedonia

Geography
Area: 25,713 square km. (slightly larger than Vermont).
Cities (2001 est.): Capital--Skopje 600,000; Tetovo, Kumanovo, Gostivar and Bitola 100,000+.
Geography: Situated in the southern region of the Balkan Peninsula, Macedonia is landlocked and mountainous.
Climate: Three climatic types overlap--Mediterranean; moderately continental; and mountainous, producing hot, dry summers and cold, snowy winters.

People
Population (2006 est.): 2,042,894.
Growth rate (2006 est.): 0.2%.
Ethnic groups (2002): Macedonian 64.18%, Albanian 25.17%, Turkish 3.85%, Roma 2.66%, Serb 1.78%.
Religions: Eastern Orthodox 65%, Muslim 29%, Catholic 4% and others 2%.
Languages: Macedonian 70%, Albanian 21%, Turkish 3%, Serbian 3%, and others 3%.
Education: Years compulsory--8. Literacy--94.6%.
Health (2006 est.): Infant mortality rate--11.1 deaths/per 1,000 live births. Life expectancy--males 71.79 years; females 76.43 years.
Labor force (2006): 903,576; employed 578,810: services--37.5%; industry and commerce--44.9%; agriculture--17.6%.

Government
Type: Parliamentary democracy.
Constitution: Adopted November 17, 1991; effective November 20, 1991. Amended January 6, 1992.
Independence: September 8, 1991 (from Yugoslavia).
Branches: Executive--prime minister (head of government), council of ministers (cabinet), president (head of state). Legislative--unicameral parliament or Sobranie (120 members elected by popular vote to 4-year terms from party lists based on the percentage parties gain of the overall vote in each of six election units, with 20 seat per unit). Judicial--Supreme Court, State Judicial Council, Constitutional Court, Public Prosecutor's Office, Public Attorney. Legal system is based on civil law; judicial review of legislative acts.
Subdivisions: 84 opstini (municipalities) plus the city of Skopje.
Suffrage: Universal at age 18.
Main political parties: Internal Macedonian Revolutionary Organization-Democratic Party for Macedonian National Unity (VMRO-DPMNE); Social-Democratic Union of Macedonia (SDSM); Democratic Union for Integration (DUI); Democratic Party of Albanians (DPA); New Democracy (ND); New Social Democratic Party (NSDP); Party for Democratic Prosperity (PDP); Albanian Democratic Union (DUA); Democratic Renewal of Macedonia (DOM); National Democratic Party (NDP); Liberal-Democratic Party (LDP); Socialist Party of Macedonia (SPM); Liberal Party (LP); Democratic Union (DU); Democratic Party of the Turks in Macedonia (DPTM); Democratic League of Bosniaks; Democratic Party of Serbs in Macedonia, United Party of Romas in Macedonia; Democratic Union of Vlachs from Macedonia; Labor-Agricultural Party of Macedonia, Socialist-Christian Party of Macedonia.

Economy
GDP (2008 est.): $9.624 billion.
Per capita GDP (2008 est.): $9,200.
Real GDP growth (2008 est.): 4.8%.
Annualized inflation rate (2008 est.): 8.4%.
Unemployment rate (2008 est.): 34.5%.
Trade: Significant exports--steel, textile products, chromium, lead, zinc, nickel, tobacco, lamb, and wine.
Official exchange rate (2008 avg.): 41.9 Macedonian denars = U.S. $1; (2007 avg.): 44.7 Macedonian denars = U.S.$1.

GEOGRAPHY
Macedonia is located in the heart of south central Europe. It shares a border with Greece to the south, Bulgaria to the east, Serbia and Kosovo to the north, and Albania to the west. The country is 80% mountainous, rising to its highest point at Mt. Korab (peak 2,764 m).

PEOPLE
Since the end of the Second World War, Macedonia's population has grown steadily, with the greatest increases occurring in the ethnic Albanian community. From 1953 through the time of the latest official census in 2002 (initial official results were released December 2003), the percentage of ethnic Albanians living in Macedonia rose threefold. The western part of the country, where most ethnic Albanians live, is the most heavily populated, with approximately 40% of the total population. As in many countries, people have moved into the cities in search of employment. Macedonia has also experienced sustained high rates of permanent or seasonal emigration.

HISTORY
Throughout its history, the present-day territory of Macedonia has been a crossroads for both traders and conquerors moving between the European continent and Asia Minor. Each of these transiting powers left its mark upon the region, giving rise to a rich and varied cultural and historical tradition.

After the fall of the Western Roman Empire, the territory of Macedonia fell under the control of the Byzantine Empire in the 6th and 7th centuries. It was during this period that large groups of Slavic people migrated to the Balkan region. The Ottoman Turks conquered the territory in the 15th century; it remained under Ottoman Turkish rule until 1912.

After more than four centuries of rule, Ottoman power in the region began to wane, and by the middle of the 19th century, Greece, Bulgaria, and Serbia were competing for influence in the territory. During this time, a nationalist movement emerged and grew in Macedonia. The latter half of the 19th century, and continuing into the early part of the 20th century, was marked by sporadic nationalist uprisings, culminating in the Ilinden Uprising of August 2, 1903. Macedonian revolutionaries liberated the town of Krushevo and established the short-lived Republic of Krushevo, which was put down by Ottoman forces after 10 days. Following Ottoman Turkey's defeat by the allied Balkan countries--Bulgaria, Serbia, Montenegro, and Greece--during the First Balkan War in autumn 1912, the same allies fought the Second Balkan War over the division of Macedonia. The August 1913 Treaty of Bucharest ended this conflict by dividing the territory between Bulgaria, Greece, and Serbia. The 1919 Treaty of Versailles sanctioned partitioning Macedonia between The Kingdom of Serbs, Croats and Slovenes, Bulgaria, and Greece. In the wake of the First World War, Vardar Macedonia (the present day area of the Republic of Macedonia) was incorporated into the newly formed Kingdom of Serbs, Croats, and Slovenes.

Throughout much of the Second World War, Bulgaria and Italy occupied Macedonia. Many citizens joined partisan movements during this time and succeeded in liberating the region in late 1944. Following the war, Macedonia became one of the constituent republics of the new Socialist Federal Republic of Yugoslavia under Marshall Tito. During this period, Macedonian culture and language flourished.

As communism fell throughout Eastern Europe in the late 20th century, Macedonia followed its other federation partners and declared its independence from Yugoslavia in late 1991. Macedonia was the only republic of the former Yugoslavia whose secession in 1991 was not clouded by ethnic or other armed conflict, although the ethnic Albanian population declined to participate in the referendum on independence. The new Macedonian constitution took effect November 20, 1991 and called for a system of government based on a parliamentary democracy. The first democratically elected coalition government was led by Prime Minister Branko Crvenkovski of the Social Democratic Union of Macedonia (SDSM) and included the ethnic Albanian Party for Democratic Prosperity (PDP). Kiro Gligorov became the first President of an independent Macedonia.

President Gligorov was the first president of a former Yugoslav republic to relinquish office. In accordance with the terms of the Macedonian constitution, his presidency ended in November 1999 after 8 years in office, which included surviving a car bombing assassination attempt on October 3 in 1995. He was succeeded by former Deputy Foreign Minister Boris Trajkovski (VMRO-DPMNE), who defeated Tito Petkovski (SDSM) in a second-round run-off election for the presidency on November 14, 1999. Trajkovski's election was confirmed by a December 5, 1999 partial re-vote in 230 polling stations, which the Macedonian Supreme Court mandated due to election irregularities.

In November 1998 parliamentary elections, the SDSM lost its majority. A new coalition government emerged under the leadership of Prime Minister Ljubco Georgievski of the Internal Macedonian Revolutionary Organization-Democratic Party for Macedonian National Unity (VMRO-DPMNE). The initial coalition included the ethnic Albanian Democratic Party of Albanians (DPA).

During the Yugoslav period, most of Macedonia's Slavic population identified themselves as Macedonians, while several minority groups, in particular ethnic Albanians, retained their own distinct political culture and language. Although interethnic tensions simmered under Yugoslav authority and during the first decade of its independence, the country avoided ethnically motivated conflict until several years after independence. Ethnic minority grievances, which had erupted on occasion (1995 and 1997), rapidly began to gain political currency in late 2000, leading many in the ethnic Albanian community in Macedonia to question their minority protection under, and participation in, the government. Tensions erupted into open hostilities in Macedonia in February 2001, when a group of ethnic Albanians near the Kosovo border carried out armed provocations that soon escalated into an insurgency. Purporting to fight for greater civil rights for ethnic Albanians in Macedonia, the group seized territory and launched attacks against government forces. Many observers ascribed other motives to the so-called National Liberation Army (NLA), including support for criminality and the assertion of political control over affected areas. The insurgency spread through northern and western Macedonia during the first half of 2001. Under international mediation, a cease-fire was brokered in July 2001, and the government coalition was expanded in July 2001 to form a grand coalition which included the major opposition parties.

The expanded coalition of ruling ethnic Macedonian and ethnic Albanian political leaders, with facilitation by U.S. and European Union (EU) diplomats, negotiated and then signed the Ohrid Framework Agreement in August 2001, which brought an end to the fighting. The agreement called for implementation of constitutional and legislative changes, which laid the foundation for improved civil rights for minority groups. The Macedonian parliament adopted the constitutional changes outlined in the accord in November 2001. The grand coalition disbanded following the signing of the Ohrid Framework Agreement and the passage of new constitutional amendments. A coalition led by Prime Minister Georgievski, including DPA and several smaller parties, completed its parliamentary term.

In September 2002 elections, an SDSM-led pre-election coalition won half of the 120 seats in parliament. Branko Crvenkovski was elected Prime Minister in coalition with the ethnic Albanian Democratic Union for Integration (DUI) party and the Liberal-Democratic Party (LDP).

On February 26, 2004 President Trajkovski died in a plane crash in Bosnia. Presidential elections were held April 14 and 28, 2004. Then-Prime Minister Branko Crvenkovski won the second round and was inaugurated President on May 12, 2004. The parliament confirmed Hari Kostov, former Interior Minister, as Prime Minister June 2, 2004, but Kostov resigned on November 15 of the same year. On December 17, 2004, former Defense Minister Vlado Buckovski was confirmed by parliament as Prime Minister, maintaining the coalition with the ethnic Albanian Democratic Union for Integration (DUI) and the Liberal-Democratic (LDP) parties.

With international assistance, the SDSM-DUI-LDP governing coalition completed the legislative implementation of the Ohrid Framework Agreement, which is a precondition for Macedonia's integration into Euro-Atlantic institutions. A November 7, 2004 referendum opposing completion of this process failed, freeing the way for the government to complete Framework Agreement implementation.

Local elections were held in March-April 2005 under a new territorial reorganization plan that consolidated the overall number of Macedonia's municipalities and created a number of ethnically-mixed municipalities in which ethnic Albanian populations were dominant. The process of decentralization began in the new municipalities in July 2005 and is continuing.

The July 2006 parliamentary elections resulted in a VMRO-DPMNE-led government under Prime Minister Nikola Gruevski assuming power, in coalition with DPA, NSDP, and several smaller parties. The new government, which was confirmed in office by a parliamentary vote on August 26, 2006, stated its commitment to completing Framework Agreement implementation and reaffirmed its commitment to pursuing NATO and EU membership.

At NATO's Bucharest Summit in April 2008, all 26 NATO Allies agreed Macedonia had met the criteria for membership. Consensus on extending a NATO membership invitation could not be reached, due to the unresolved dispute with Greece over Macedonia's name.

Following the Bucharest Summit, the opposition DUI party, in collaboration with the governing VMRO-DPMNE and DPA parties, called for the dissolution of parliament and for early parliamentary elections, which were held in June 2008. On July 26, Prime Minister Gruevski was reconfirmed in office with a new coalition along with the DUI party and one smaller party. Next regular parliamentary elections should be in 2012.

In 2009, Macedonia held presidential and local elections in March (first round) and April (second round). In the presidential race, VMRO-DPMNE candidate Gjorge Ivanov won with 64% of the vote.

GOVERNMENT AND POLITICAL CONDITIONS
The unicameral assembly (Sobranie) consists of 120 seats. Members are elected by popular vote from party lists, based on the percentage parties gain of the overall vote in each of six election districts of 20 seats each. Members of parliament have a 4-year mandate.

The Prime Minister is the head of government and is selected by the party or coalition that gains a majority of seats in parliament. The Prime Minister and other ministers must not be members of parliament.

The President represents Macedonia at home and abroad. He is the commander in chief of the armed forces of Macedonia and heads its Security Council. He also appoints the Chief of the Defense Staff (CHOD). The President is elected by general, direct ballot and has a term of 5 years, with the right to one re-election.

The court system consists of a Supreme Court, Constitutional Court, and local and appeals courts. The State Judicial Council monitors the ethical conduct of judges and recommends to parliament the election of judges. The Supreme Court is the highest court in the country and is responsible for the equal administration of laws by all courts. Its judges are appointed by parliament without time limit. The Constitutional Court is responsible for the protection of constitutional and legal rights and for resolving conflicts of power between the three branches of government. Its 9 judges are appointed by parliament with a mandate of 9 years, without the possibility of re-election. An independent Public Prosecutor is appointed by parliament with a 6-year mandate.

Principal Government Officials
President--Gjorge Ivanov
Prime Minister--Nikola Gruevski
Deputy Prime Minister (Economic Affairs)--Zoran Stavreski
Deputy Prime Minister (Framework Agreement Implementation)--Abdulaqim Ademi
Foreign Minister--Antonio Milososki
Education Minister--Pero Stojanovski
Information Society Minister--Ivo Ivanovski
Defense Minister--Zoran Konjanovski
Economy Minister--Fatmir Besimi
Finance Minister--Trajko Slaveski
Interior Minister--Gordana Jankuloska
Agriculture, Forestry and Water Minister--Aco Spasenovski
Justice Minister--Mihajlo Manevski
Ambassador to the United States--Zoran Jolevski
Ambassador to the United Nations--Slobodan Tasovski

The country maintains an embassy in the United States at 2129 Wyoming Ave, NW, Washington, DC 20008 (tel: (202) 667-0501; fax: (202) 667-2131). It maintains a Consulate General in Detroit: 2000 Town Center, Suite 1130, Southfield, MI 48075 (tel: (248) 354-5537; fax: (248) 354-5538); and a Consulate General in Chicago: 121 West Wackor Drive, Suite 2036, Chicago, IL 60601 (tel: (312) 419-8020; fax: (312) 419-8040).

ECONOMY
Macedonia is a small economy with a gross domestic product (GDP) of about $9.6 billion, representing about 0.01% of the total world output. It is an open economy, highly integrated into international trade, with a total trade-to-GDP ratio of 106.8% at the end of 2007. Agriculture and industry have been the two most important sectors of the economy in the past, but the services sector has gained prominence in recent years. Economic problems persist, even as Macedonia undertakes structural reforms to finish the transition to a market-oriented economy. A largely obsolete industrial infrastructure has not seen much investment during the transition period. Labor force education and skills are competitive in some technical areas and industries but significantly lacking in others. Without adequate job opportunities, many with the best skills seek employment abroad. A low standard of living, high unemployment rate, and relatively modest economic growth rate are the central economic problems.

Five years of continuous economic expansion in Macedonia was interrupted by the 2001 conflict, which led to a contraction of 4.5% in 2001. Growth started to pick up in 2003 (2.8%) and continued in 2004 (4.1%), 2005 (4.1%), 2006 (4.0%), and 2007 (5.0%). Living standards still lag behind those enjoyed before independence. Real growth was 4.8% in 2008, with inflation of up to 8.4%. The United States is supporting Macedonia's transition to a democratic, secure, market-oriented society with substantial amounts of assistance.

Background
After the breakup of Yugoslavia in 1991, Macedonia, the former Yugoslavia's poorest republic, faced formidable economic challenges posed by both the transition to a market economy and a difficult regional situation. The breakup deprived Macedonia of key protected markets and large transfer payments from the central Yugoslav government. The war in Bosnia, international sanctions on Serbia, and the 1999 crisis in neighboring Kosovo delivered successive shocks to Macedonia's trade-dependent economy. The government's painful but necessary structural reforms and macroeconomic stabilization program generated additional economic dislocation. Macedonia's economy was hurt especially by a trade embargo imposed by Greece in February 1994 in a dispute over the country's name, flag, and constitution, and by international trade sanctions against Serbia that were not suspended until a month after conclusion of the Dayton Accords. The impact of the 2001 ethnic Albanian insurgency in Macedonia, decreased international demand for Macedonian products, canceled contracts in the textile and iron and steel industry, and poor restructuring of the private sector affected Macedonia's growth and foreign trade prospects through 2004.

Macedonia's political and security situation is stable. This has allowed the government to refocus energies on domestic reforms, boosting economic growth, and attracting increased levels of foreign investment. In 2004, the government passed a progressive Trade Companies Law aimed at easing impediments to foreign investment, providing tax and investment incentives, and guaranteeing shareholder rights. In 2007, the government finished implementing a one-stop procedure for business registration that considerably shortened the time required to register a new business. The government's fiscal policy, aligned with International Monetary Fund (IMF) and World Bank policies, helped maintain a stable macroeconomic environment. Legislation that would further liberalize the telecommunications market, and completion of the first phase of privatization of the electricity sector, sent promising signals to investors. However, economic growth remained sub-par in 2005 and 2006, due in part to poor government results in combating corruption, weak judiciary, poor contract enforcement, and high domestic finance costs. The new Government of Macedonia that took office in August 2006 put the fight against corruption and attracting foreign investors at the very top of its priority list. In 2007, it launched an expensive marketing campaign promoting the country as a good investment destination. It provided business incentives by cutting rates on profit tax and personal income tax, while implementing a "regulatory guillotine"--an activity which aims to significantly reduce procedures and legislative requirements for doing business.

Macroeconomy
Real GDP growth continued in 2008 at approximately the same tempo as in 2007. After growing by 4.1%, 4%, and 5% respectively in 2005, 2006, and 2007, it reached 5.2% in the first quarter of 2008. The growth was broad-based as value added increased in all sectors. Wholesale and retail trade sectors led the growth with a 10.2% annual increase, and construction followed with 9.7%. Agriculture turned from a 3% dip in 2007 to a 4.2% rise in the first quarter of 2008. Industrial output in the first five months of 2008 was 8.3% higher than in same period of 2007. Inflation unexpectedly surpassed projections, with the year-on-year consumer price index (CPI) rising by 6.1%. Growing food and energy prices pushed inflation up to 10.1% in the first half of 2008. The official unemployment rate came down a bit to 34.9% in 2007. Strong collection of revenues throughout 2007 resulted in a budget surplus of 0.3% of GDP, despite the projected deficit of 1% of GDP. Tax collection continued the upward trend in the first half of 2008, surpassing last year's first half performance by more than 20%. Expansionary monetary policy continued in 2008 as well, providing for total credit to the private sector at the end of May to grow by 43.4%. This alerted the Central Bank to raise interest rates on Central Bank bills, and put a ceiling on credit to households, but interest rates spreads continued to narrow. Import growth doubled while export-led growth remained stagnant, thus presenting a large trade deficit. At the end of May 2008, it amounted to 13.3% of GDP. As a result, the current account deficit widened to over 5% of GDP, already breaching the end-year target. Private transfers are stagnant compared to last year, and foreign direct investment (FDI), although higher than the same period of last year, is not enough to cover it. Foreign currency reserves dropped down to levels that barely cover three months of imports; further loss would seriously undermine the stability of the domestic currency. Public debt remained low at 29.3% of GDP at the end of April 2008, due to pre-paying debts to international financial institutions in 2007.

In late 2005, Macedonian authorities concluded a three-year Stand-By Arrangement (SBA) with the IMF and a Programmatic Development Policy Loan (PDPL) with the World Bank. In 2007 both financial institutions positively assessed the enforcement of the programs, allowing the Government of Macedonia to withdraw a tranche of the PDPL 2 agreement worth $30 million. Since the first withdrawal of $15.4 million in 2006, the SBA has been only precautionary as balance-of-payment support was no longer needed. In April 2008, the IMF Board approved the third positive review of the SBA, and the fourth and final review was to take place in September together with Article IV consultations. As of the end of August 2008, when the previous SBA expired, the Government of Macedonia had not initiated negotiations for a new arrangement with the IMF. In March 2007, the World Bank Board adopted a new four-year Country Partnership Strategy for Macedonia, which could potentially bring to the country total lending of up to $280 million.

Trade
Macedonia remains committed to pursuing membership in the European Union and global economic structures. It became a full World Trade Organization (WTO) member in April 2003. Following a 1997 cooperation agreement with the European Union (EU), Macedonia signed a Stabilization and Association Agreement with the EU in April 2001, giving Macedonia duty-free access to European markets. In December 2005, it moved a step forward, obtaining candidate country status for EU accession. Macedonia has had a foreign trade deficit since 1994, which reached a record high of $1.871 billion in 2007, or 23.3% of GDP. Total trade at the end of May 2008 (imports plus exports of goods and services) was $4.515 billion, and the trade deficit already amounted to $1.150 billion, or 13.3% of GDP. A significant 51.5% of Macedonia's total trade was with EU 27 countries. By separate countries, Macedonia's major trading partners are Serbia, Russia, Germany, and Greece. In the first five months of 2008, total trade between Macedonia and the United States was $37.6 million. U.S. exports accounted for 1.2% of Macedonia's total imports. U.S. meat, mainly poultry, and electrical machinery have been particularly attractive to Macedonian importers. Principal Macedonian exports to the United States are tobacco, apparel, footwear, and iron and steel.

Macedonia has free trade agreements with Ukraine, Turkey, and the European Free Trade Association countries. Bilateral agreements with Albania, Bosnia and Herzegovina, Croatia, Serbia, Montenegro, UN Mission in Kosovo (UNMIK), and Moldova were replaced with the membership in the Central European Free Trade Agreement (CEFTA), which the other countries joined in December 2006.

DEFENSE
Macedonia established its armed forces following independence and the complete withdrawal of the Yugoslav National Army (JNA) in March 1992. The Macedonian Armed Forces consist of an army, navy, air and air defense force, and a police force (under the Ministry of Interior). Under its North Atlantic Treaty Organization (NATO) Membership Action Plan, Macedonia has made strong strides on major reforms and reconstruction of its armed forces toward the goal of building and sustaining a modern, professional defense force of about 12,000 troops.

Successive Macedonian governments have viewed integration into Euro-Atlantic political, economic, and security institutions as the country's primary foreign policy goal. In pursuit of these goals, Macedonia is restructuring its military to be smaller, more affordable, defensively oriented, and interoperable with NATO. The Macedonian Government has welcomed close cooperation with the U.S. military and seeks to deepen this relationship as it restructures its forces.

Macedonia continues to play an indispensable role as the Kosovo Force's (KFOR) rear area, hosting the logistical supply line for KFOR troops in Kosovo. As part of these efforts, Macedonia hosts NATO troops, including U.S. troops, in support of NATO operations in Kosovo and to assist Macedonia's efforts to reform its military to meet NATO standards. Close U.S.-Macedonian bilateral defense cooperation continues. Macedonia has contributed troops to international coalition operations in Iraq, and continues to have troops in Afghanistan and in the EU peace support operation in Bosnia and Herzegovina.

FOREIGN RELATIONS
In February 1994, Greece imposed a trade embargo on Macedonia due to disputes over the use of the name "Macedonia" and other issues. Greece and Macedonia signed an interim accord in October 1995 ending the embargo and opening the way to diplomatic recognition and increased trade. After signing the agreement with Greece, Macedonia joined the Council of Europe, the Organization for Security and Cooperation in Europe (OSCE), and NATO's Partnership for Peace (PfP). Athens and Skopje began talks on the name issue in New York under UN auspices in December 1995, opening liaison offices in respective capitals January 1996. These talks continue.

The stability of the young state was gravely tested during the 1999 Kosovo crisis, when Macedonia temporarily hosted about 360,000 refugees from the violence and ethnic cleansing in Kosovo. The refugee influx put significant stress on Macedonia's weak social infrastructure. With the help of NATO and the international community, Macedonia ultimately was able to accommodate the influx. Following the resolution of the conflict, the overwhelming majority of refugees returned to Kosovo. A small number of Roma refugees from Kosovo remains in Macedonia, most of them housed in the predominantly Roma municipality of Suto Orizari in the Skopje suburbs, and supported by the UN High Commissioner for Refugees (UNHCR).

Macedonia enjoys good relations with its neighbors. It has strong trade and tourism ties with Greece, and has developed similarly robust political and trade ties with Albania and Bulgaria. Relations between Belgrade and Skopje are good overall, although a dispute between the Macedonian Orthodox Church and the Serb Orthodox Church has strained ties over the past two years. Relations with Kosovo are good, with Macedonia having signed an Interim Free Trade Agreement with UNMIK in 2005 and with regular bilateral political contacts occurring between Pristina and Skopje since 2005. Under the auspices of the International Civilian Office, which is supervising independent Kosovo's implementation of the Ahtisaari Plan, the Government of Macedonia and Government of Kosovo are in discussions with the aim to complete the demarcation of their common border.

Macedonia has made important strides toward Euro-Atlantic integration. Macedonia is an active participant in NATO's Partnership for Peace and Membership Action Plan, the OSCE, and United Nations, and was accepted as a member of the World Trade Organization (WTO) in October 2002. In May 2003, Macedonia, Albania, Croatia, and the U.S. created the Adriatic Charter, modeled on the Baltic Charter, as a mechanism for promoting regional cooperation to advance each country's NATO candidacy. Since then, the Adriatic Charter countries have cooperated closely in regional military exercises, and have deployed a joint medical team to support international coalition operations in Afghanistan. The Adriatic Charter expanded to include Bosnia-Herzegovina and Montenegro as members in December 2008. At the NATO Bucharest Summit in April 2008, Albania and Croatia received invitations to join the Alliance. NATO Allies noted that Macedonia met NATO membership criteria, but could not reach consensus on issuing an invitation for membership, in the absence of a solution to Macedonia's dispute with NATO member Greece over Macedonia's name. The United States believes Macedonia has met the performance-based standards for membership. At the April 2009 Strasbourg-Kehl Summit, Allies re-confirmed the commitment to invite Macedonia to join NATO as soon as the name issue is resolved.

In 1999, the EU agreed to pursue a Stabilization and Association Agreement (SAA) with Macedonia; negotiations with Macedonia were launched April 5, 2000. The SAA was signed April 2001 and came into force in April 2004. Its trade and trade-related provisions have been in force since June 2001. In December 2005, the European Council granted candidate country status to Macedonia, taking into account the "substantial progress made in completing the legislative framework related to the Ohrid Framework Agreement, as well as its track record in implementing the Stabilization and Association Agreement (including its trade-related provisions) since 2001." It recommended beginning formal accession negotiations after Macedonia had made further progress on a number of reform fronts, including combating corruption; enacting judicial, administrative, and economic reforms; and conducting free and fair parliamentary elections, in accordance with European standards, in 2006. The Council also noted the need to consider further steps toward membership in light of the debate on the enlargement strategy, and the need for Macedonia to continue strong progress toward meeting the Copenhagen political criteria, as well as Stabilization and Association Agreement requirements. In March 2008, the Council provided the Government of Macedonia a list of benchmarks to guide Macedonia's preparations to open formal accession negotiations.

U.S.-MACEDONIAN RELATIONS
The United States and Macedonia have enjoyed good bilateral relations since Macedonia gained its independence in 1991. The United States formally recognized Macedonia on February 8, 1994, and the two countries established full diplomatic relations on September 13, 1995. The U.S. Liaison Office was upgraded to an Embassy in February 1996, and the first U.S. Ambassador to Skopje arrived in July 1996. The development of political relations between the United States and Macedonia has ushered in a whole host of other contacts between the two states.

The United States, together with its European allies, strongly condemned the initiators of the 2001 insurgency in Macedonia and closely supported the government and major parties' successful efforts to forge a peaceful, political solution to the crisis through the Ohrid Framework Agreement. In partnership with the EU and other international organizations active in Macedonia, the United States is facilitating the Macedonian Government's implementation of the Framework Agreement and fostering long-term peace and stability in the country. Macedonia continues to make an important contribution to regional stability by facilitating the logistical supply of NATO (including U.S.) peacekeepers in Kosovo.

The United States strongly supports Macedonia's aspirations for full integration into Euro-Atlantic institutions. Today, Macedonia and the United States enjoy a cooperative relationship across a broad range of political, economic, cultural, military, and social issues. The United States has supported Macedonia's progress in building a democratic, secure, and market-oriented multiethnic society with large amounts of foreign assistance for democracy and economic reforms, defense reforms, and projects to strengthen rule of law and improve education. Bilateral assistance budgeted to Macedonia under the Support for East European Democracy (SEED) Act totaled over $440 million from 1990 to 2008. Macedonia received approximately $28 million in SEED Act assistance in 2007 and was receiving approximately $22 million in 2008.

U.S. Agency for International Development (USAID) programs in Macedonia promote accelerated growth, support stronger democratic institutions, and help educate Macedonians for a modern economy. A focus of U.S. assistance has been to assist Macedonia in implementing the August 2001 Framework Agreement. Successful completion of the decentralization process is a remaining priority for framework implementation. USAID is targeting capacity building for local government officials, who will have more authority and responsibility devolved from the central government, as well as providing grants to fund small-scale infrastructure projects.

A further priority of U.S. assistance is to facilitate Macedonia's transition to a market economy and increase employment and growth levels. USAID economic assistance is focused on two levels. At the macro-level, programs target improvements in the business-enabling environment by helping to bring legislative and regulatory frameworks in line with EU standards and improving the transparency and efficiency of government services through technology. At the micro-level, assistance is given to firms and agribusinesses to increase their competitiveness and productivity, coupled with initiatives to attract foreign investment and stimulate local investment. Training programs that provide career-enhancing education to prepare youth and adults for growth sectors are also supported. A resident U.S. Department of Treasury advisor, who was to be phased out in 2008, has assisted the Ministry of Finance in improving strategy, planning and execution, and public expenditure management.

USAID is also focused on helping the Macedonian Government and civil society combat corruption, enhancing democratic political competition, supporting government decentralization and promoting the rule of law. USAID also supported the Government of Macedonia in developing a comprehensive State Program for the Prevention of Corruption with a detailed performance management system in 2007. A U.S. Department of Justice Resident Legal Advisor and a Senior Law Enforcement Advisor focus on strengthening the independence of the judiciary, efficacy of public prosecution, reform of criminal codes, increasing police capacity, and abating trafficking in persons and organized crime.

Complementing its assistance in Macedonia's political and economic transition, USAID programs improve education and human capacity in Macedonia through projects on the primary, secondary, and post-secondary levels. Targets include improving teaching techniques, modernizing vocational education, introducing information and communication technology (ICT) as a learning tool in the classroom, and providing broadband Internet service throughout the country using primary and secondary schools as a platform. Other programs address crosscutting issues, including interethnic cooperation, assistance to the Roma minority, performance improvement of key institutions, and corruption.

On May 7, 2008, Secretary of State Condoleezza Rice and Foreign Minister Antonio Milososki signed a joint Declaration of Strategic Partnership and Cooperation affirming the determination of our governments to further expand and deepen the partnership between our two countries based upon common goals, interests, and values. The full text of the declaration is available at http://2001-2009.state.gov/p/eur/rls/or/104441.htm.

Principal U.S. Officials
Ambassador--Philip T. Reeker
Deputy Chief of Mission--Tom Navratil
Political and Economic Affairs--David Burger
Economic/Commercial Affairs--Darren Hultman
Consul--Lauren May
Management Affairs--Bruce Wilson
Public Affairs--Ryan Rowlands
Defense Attaché--Col. Chris Benya

The U.S. Embassy in Macedonia is located at Str. “Samoilova” Nr. 21. 1000 Skopje (tel: [389] (2) 310-2000; fax: [389] (2) 310-2299).



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