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The accession of North Macedonia to the European Union (EU) has been at an impasse for 27 years due to the political dispute with Greece. In 2018, its resolution fuelled hopes that North Macedonia would finally start negotiations with the EU. Unfortunately, there was a new obstacle, as Bulgaria vetoed the talks in December 2020. Implicit to the latest political backlog, the efforts for further EU integration should be focused on the available policy instruments. The Stabilisation and Association Agreement (SAA) is a legally binding document which has already enabled trade liberalisation between the parties, stipulates the national treatment of business entities on the basis of reciprocity, aims for full liberalisation of capital and financial flows, and also provides other opportunities for integration. Placing the SAA in the spotlight of the mutual relations between the parties, based on proactivity from North Macedonia, could provide the impetus for more substantial EU integration of the country, despite the political stagnation of the process.

This paper provides an outlook of the economic profiles of the manufacturing sectors in North Macedonia on NACE Rev.2 level, according to their contribution to the GDP, output and net value added, number of employees, share in the Macedonian export and trends of sectors' development. The manufacturing industry experienced significant structural changes in the past decade, largely attributable to the entrance of the FDI in North Macedonia. The FDI driven industries, in particular the automotive one, have created statistical disruption with regard to the traditional Macedonian industries, taking the lead in the total manufacturing output and export. In this perspective, the traditional Macedonian industries tend to look less important, which has also been reinforced with the lack of the active industrial policy and specific instruments for the domestic industries. Based on the available statistical data, this paper identifies the major Macedonian manufacturing sectors, such as metal, textile and food processing industry, as well as prospective industries - production of rubber, plastic and non-metallic mineral products, along with recommendations for tailored policy support of these sectors. [ABSTRACT FROM AUTHOR]

This paper provides an analysis of the macedonian foreign trade of agricultural products in the period 2005-2017. It aims to explore the specifics of macedonian agricultural trade on sector and product level. The methodology used for elaboration of this paper includes methods of analysis and synthesis, based on extensive review and processing of available data. The trade of agricultural products in the Republic of North Macedonia had share of about 10% in the total macedonian trade in 2017. The export of agricultural products rose from €266mil. in 2005 up to €504.5mil in 2017, while the import surged from €301.5mil. in 2005 up to €679.8mil in 2017. The import grew faster than the export, resulting in deepening of the macedonian agricultural trade deficit from €35.2 mil. in 2005 up to €175.3 mil. in 2017. The structure of the macedonian agricultural trade by sectors and products is characterized with high concentration in few sectors/products. The sector of "Fruits and vegetables" has been important on both sides - export and import. On the product level, only two products - unprocessed tobacco and wine had combined share of 34.1% in total macedonian agricultural export in 2017, while meat and sugar had combined share of 15% on the import side. Such intense concentration of sectors/products imposes high volatility of macedonian agricultural trade, in particular on the export side, which requires serious strategic planning for support of the propulsive agricultural branches and potentially competitive agro-processing industries. [ABSTRACT FROM AUTHOR]

This paper focuses on the impact of Foreign Direct Investment (FDI) on the Macedonian foreign trade. Over the period 2005-2015, the total FDI inflows in the Republic of Macedonia were about €3.3bn, while the total FDI stock amounted €4.4bn. Out of the total, 35.5% of FDI inflows were in manufacturing and 47.9% in services. In parallel, Macedonian foreign trade rose by 131.3%. Merchandise exports increased by 146.4% and merchandise import grew by 121.8%. Major findings of the paper confirm that FDI have contributed significantly to change of the volume, structure and routes of the Macedonian foreign trade. The sectors of chemicals and machinery and transport equipment had combined share of 47.5% in the total Macedonian exports in 2015, compared to 9.8% in 2005. Also, the share of products with higher value added in Macedonian export increased, while Germany's share in the total export rose from 17.8% in 2005 to 44.3% in 2015. These changes has been largely attributable to Johnson Matthey, an auto catalyst producer from UK, and several other FDI in the automotive and other related industries. On the other hand, the exports have been largely depending on import of raw materials and capital goods, which resulted in modest net trade effect for the country. In addition, the export has been predominantly concentrated in four industries, which, along with very limited number of trade partners indicate high volatility risk of the Macedonian exports. This is subject for concern of the policy makers, as FDI trade rise has not been related to substitution of domestic production. In this context, rising dependence of the Macedonian trade from FDI should be considered in the Macedonian trade and FDI policy, in purpose of prevention of serious disruption of trade flows in case of FDI withdrawal from the country. [ABSTRACT FROM AUTHOR]

This article reviews the brain drain trends from the Republic of Macedonia and its implications in the last two decades. Since 2008, the Republic of Macedonia is in a group of the ten countries with most intensive brain drain. As for the brain drain impact the following conclusions can be drawn: Direct "brain drain" effects are manifested in the reduction of the economic growth and innovation capacity of the country due to the human capital decrease; The long-term unfavorable brain drain implications on the research and development are evident, particularly in terms of the availability of scientists and engineers and quality of scientific research institutions; Feedback effects also are unfavorable because return of the highly educated emigrants is very small and occasional; Brain drain rise is not accompanied by an increase in remittances, and there isn't significant impact on the diaspora and technology transfer; Brain drain accelerate the population and labor force ageing and the reduction of the reproductive population because of its family character and longevity. The article concludes with proposals for policy approaches towards a more systematic treatment and integrated approach of the pre-emigration measures by placing the emphasis on the retention of the tertiary educated population though educational sector policies and economic development, and post-emigration measures, particularly creation of diaspora networks. [ABSTRACT FROM AUTHOR]

This paper aims to provide an overview of the programming and implementation of EU Instrument for Pre-accession Assistance (IPA) in the Republic of Macedonia, as well as discussion about challenges and opportunities with regards to introduction of sector-based approach under IPA II. The main hypothesis of the paper is that IPA II sector approach is not likely to provoke significant differences into the programming of the assistance, compared to IPA I, while implementation would be more challenging. This particularly refers to introduction of multi annual budget framework in the country and capacity building of the IPA Operational Structure for sound strategic planning and project implementation. The paper has been elaborated mostly by use of methods of analysis and synthesis, based on extensive processing of data and consultation of relevant literature. The paper provides an overview of the process of programming and implementation of IPA I (2007-2013) and IPA II (2014-2020). In this context, the IPA I has been analysed in the context of programming per Components, as well as introduction of sector classification in its latest programming period 2011-2013. Furthermore, there has been an overview of the available data for the implementation of the IPA I. The discussion has been related to the problems of implementation, largely attributable to the complexity and longevity of the procedures, insufficient absorption capacity of the IPA Operational Structure, IPA projects. Furthermore, the paper focus on programming process for IPA II, primarily on the criteria for introduction of sector approach and comparison to the programming process of IPA I. The major finding of the paper is that programming under sector approach under IPA II would not differ essentially compared to the programming of IPA I for the period 2011-2013. The genuine challenges could be located with regards to implementation of IPA II, which are rather similar to the problems identified for IPA I, with addition to the shift towards multi-annual budgeting. That is likely to be the most challenging for the Republic of Macedonia in the implementation of IPA II. [ABSTRACT FROM AUTHOR]

This paper aims to provide an overview of the position of the developing countries in the international trade system and discussion about perspectives of their trade development. The main hypothesis of the paper is that developing countries as a group have made a breakthrough in the world trade in the past two decades, but genuine improvement has been made and enjoyed by several large developing countries, primarily China. The paper elaborates mostly by use of methods of analysis and synthesis, based on the extensive processing of trade data, as well as relevant literature. In this context, the paper provides evidence about trade liberalisation of the developing countries since 1980s to the present time, intense export growth of the developing countries over the period, as well as change of the trade structure of the developing countries with developed countries, evident through rising share of the medium and high skills and technology based products. In purpose of provision of more realistic assessment of the position of the developing countries in the international trade system, special attention has been put on China's trade performances, given the rapid increase of China's share in the world trade from less than 1 per cent in 1980 to over 10 per cent in 2011. The major findings of the paper confirm that improvement of the overall position of the developing countries in the international trade system has mainly resulted from the improvement of the trade position of several countries, primarily China. The paper also provides overview on WTO simulations about international trade prospects up to 2035, which confirm further dependence on the trade position of the developing countries as a group from China's trade accomplishments. In this perspective, the paper argues that there is a need for differentiated treatment and provision of extra flexibilities for the other developing countries in purpose of achieving as genuine improvement in their trade position. [ABSTRACT FROM AUTHOR]

This paper deals with the business climate reforms in the Republic of Macedonia, from the perspective of the achieved progress and importance of regulatory reforms in investment decisions. The main methods used for elaboration of the paper include methods of analysis and synthesis, based on extensive review and processing of available data, as well as consultation of relevant literature. The paper focuses on the measurement of the business climate by the World Bank "Doing Business Report" comparison of the achievement of Republic of Macedonia and other Western Balkan countries, as well as views of Macedonian firms about different elements of the business climate presented into the Enterprise Survey by the World Bank. In addition, the paper provides data on investment in the Republic of Macedonia and other Western Balkan countries (for comparison purposes), in particular, data on gross fixed investment and FDI, followed by overview of the importance of the regulatory reforms for the actual investment results. The major findings of the paper confirm that regulatory reforms in the Republic of Macedonia have contributed a lot towards improvement of the business climate in the country, but investment decisions have been primarily determined by other factors, which implies the need for the country to tailor the investment policy making process towards overcoming of constraints. [ABSTRACT FROM AUTHOR]

This paper addresses the issue of foreign trade of the Republic of Macedonia, focusing on foreign trade policy and performance. Macedonia's foreign trade policy is liberal, with few elements of rigidity and trade restriction. Its trade performance is poor, evident from its huge trade deficit; scarce and limited export structure; high import dependence and small number of strategic partners. These problems have to be addressed in a systematic way, i.e. foreign trade policy should be related to other economic policies in an optimal policy-mix. The policy-mix should be comprehensive, focused on building competitiveness and based on realistic objectives within a reasonable time frame. [ABSTRACT FROM AUTHOR]