7. State-Owned Enterprises
There are about 120 State Owned Enterprises (SOEs) in North Macedonia, the majority of which are public utilities in which the central government is the majority shareholder. The 81 local governments also own local public utility enterprises. In March 2018, the government estimated that about 8,600 people are employed in SOEs. SOEs operate in several sectors of the economy including energy, transportation, and media. There are also industries such as arms production and narcotics in which private enterprises may not operate without government approval. SOEs are governed by boards of directors consisting of members appointed by the government. All SOEs are subject to the same tax policies as private sector companies. SOEs are allowed to purchase or supply goods or services from the private sector and are not given non-market based advantages, such as preferential access to land and raw materials.
There is no published registry with complete information on all SOEs in the country.
A 2016 report by Transparency International-Macedonia commented that “policy decisions related to SOEs often comply with the political needs of the ruling political establishment, such as needs for employment…rather than with the actual needs of the SOEs.” When it took office in June 2017, the new government declared it would change that practice. Following reports in 2018 and 2019 that party members and family were being hired in SOEs, the government announced it would review SOE hiring decisions. As a result of the review, several individuals have already resigned. North Macedonia is not a signatory to the OECD Guidelines on Corporate Governance for SOEs. In February 2018 the government sent its bid to the World Trade Organization to upgrade its status from observer to a fully-fledged member of the Government Procurement Agreement (GPA). The process is ongoing.
North Macedonia’s privatization process is almost complete, and private capital is dominant in the market. The government is trying to sell two remaining state-owned loss-making companies in a non-discriminatory process through international tenders. Foreign and domestic investors have equal opportunity to participate in the privatization of the remaining state-owned assets through an easily understandable, non-discriminatory, and transparent public bidding process. Neither the central government nor any local government has announced plans to fully or partially privatize any of the utility companies or SOEs in their ownership.