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Macedonia 2004: Our Predictions

After two years of procrastination, lethargy and ambivalence, Macedonia is set to finally make headway in 2004. Either that, or it will come under renewed threat. There is potential for both scenarios to play out in a year of converging external and internal influences, but the odds are weighed more heavily in favor of the former, optimistic prognosis.

The following 3,700-word forecast for Macedonia in 2004 discusses in turn the prevailing political, economic and security considerations that will shape the year- and, the future- of this little Balkan state.Political outlook

There are two major interconnected political issues this year: decentralization, and the related local government elections, and the presidential elections slated for October.

Decentralization and local self-government

Decentralization means, essentially, the granting of increased powers and responsibilities to local communities, to the detriment of the Skopje elite. One might suggest that the contentious concept is one of those things that looks better on paper- except that it doesn’t look particularly good there, either. While the concept is fundamentally flawed philosophically, its truly fatal nature may be revealed with implementation. (Funny thing how those Western negotiators who swept into the country just 30 months ago will not have to live under the rules they helped to create.)

Decentralization of power within a political entity is flawed because it is prone to infinite dissolution. The very idea of states right’s doomed the American Confederacy as much as anything else. The actual final result of any decentralization scheme will, as the entire Ohrid Agreement has, not make anyone involved particularly happy. Decentralization based on the local claim to power could conceivably be extended from the municipality right down to the city, the village, the neighborhood and finally the individual. It is completely relative, and that is why its implementation is so shamelessly political- and nothing else.

Indeed, the debate now gripping Macedonia is one over electoral power. The current number of municipalities in the country is 123. The Ohrid Accord, which sought to increase the powers of local self-government, also mandated that the number of municipalities be decreased. In other words, power would be taken from the state and given to small local governments, which in turn would be made bigger. A Zen-like paradox, no?

The political ramifications of this are enormous, as Western negotiators surely knew back in June 2001. The SDSM suggestion is that the new redistricting plans should create 78-84 municipalities, while the Albanians are eager to decrease the number of municipalities by almost a third, to 34. VMRO is opposed to these reductions. The Albanian parties like the idea of swallowing up isolated Macedonian-populated areas, sometimes geographically large (like Mavrovo), into municipalities dominated by one or two large Albanian population centers. In other words, the same people who expected the West to back them in 2001 under the banner of “minority rights” are now pushing for democratic majority rule- where it will benefit them. Macedonians (such as in the Struga-area village of Vevchani, which once declared itself independent because it was besieged by Albanian villages on all sides) are fearful of the perceived effects of the redistricting.

As usual, some sort of compromise will have to be reached, but the Albanians are likely to benefit most. Some predict the final number as being 71 municipalities. The effects of local self-government are not merely limited to language rights, schooling and laws. By creating ever-larger statelets by combining small municipalities, the federalization process in Macedonia is beginning.

The government has stated that a new law on the redistricting should be accomplished by May, to be enforced during the local self-government elections. Without this law there can be no elections, so both the government and its Western minders will push hard for its speedy passage.

Despite an apparent increase in local power, however, election-winning municipal leaders will still have to ask Skopje for money, because the law for decentralization which gives them more money is bunched together with the issues of the number and borders of the municipalities.

Electing a president

As for the presidential elections, campaigning season has yet to begin, but we’re already picking up some signals. The incumbent, Boris Trajkovski, has been described as a figurehead, traveling salesman, and American lackey. Skopje cartoons depict him wearing red-white-and-blue boxer shorts and taking order from Dubya over the phone.

Although Trajkovski was elected in 1999 by VMRO, with a helping (and, many believe, corrupted) hand from the Albanian DPA, he ostracized himself from the party during the war of 2001. Since then, his bland demeanor and lack of thrilling leadership have made Macedonians decidedly lukewarm to him.

Since the president apparently wants to run again, the appropriate question arose as to what party would want to support him. Certainly neither VMRO nor SDSM. An Albanian party? After all, one would think that Trajkovski was wooing the Albanians when he pointedly spoke in their language- and not Macedonian- at a recent photo-op. And he can forget about the smaller parties- after all, the fact that they even exist is because their individual founders believe, however erroneously, that they themselves are so very presidential.

However, as the underwhelming year 2003 came to a close, one new development did occur, which may be very meaningful in this context: the announcement that VMRO’s Marjan Gorcev and former VMRO National Security Advisor Dosta Dimovska are joining forces.

Really, what is it about VMRO that makes it so prone to splintering? Unlike when Boris Stoymenov founded his VMRO Makedonska, however, the defector was probably not pushed out by the party leaders (as is often said about Georgievski’s treatment of Stoymenov). Rather, the new party would be led by two career politicians who feel actively disgruntled. Gorcev, representing the party’s agrarian heartland, made it clear that he wanted the party’s presidency last May. However, former Finance Minister Nikola Gruevski had not only Georgievski’s blessings but those of most party members (and, one would assume, of the voters as well). And so the former minister of agriculture was thwarted.

Dimovska’s ouster in January 2002, however, was rumored to be due to problems with the then-Prime Minister. A former interior minister herself, Dimovska grew increasingly close with Trajkovski’s circle, which included one-time SDSM interior minister and controversial pundit Ljubomir Frchkovski. Trajkovski’s patronage became clear during the summer of 2003, when he pardoned Dimovska for any wrongdoing in the wiretapping scandal that immediately preceded the 2001 war.

The implications of all this is that the Gorcev-Dimovska splinter party may well have been set up just to give Trajkovski a party to run with, since he hasn’t a chance with any others. However, this unlikely pairing will probably fail, and a new president will be elected.

The most presidential member of VMRO is undoubtedly Gruevski, but as party president he will likely not be running. It is probable that they will offer some new blood, but at this point no frontrunners emerge.

As for the ruling SDSM, they also have few options for a real charismatic leader. Indeed, Macedonian politics in general is really bereft of anyone with leadership capability- which probably explains why a character like Ali Ahmeti, the dashing war hero, could have captured the hearts of Albanians last year. SDSM’s best chance is probably current Foreign Minister Ilinka Mitreva, someone untainted by corruption, diplomatic and more appealing than not to most Macedonians. Further, appointing Mitreva would involve minimal sacrifice, as the president’s duties are roughly the same as those of the foreign minister, just on a larger scale.

The situation is, however, in the hands of the Albanian parties. Since they know that an Albanian candidate will not win, they instead exert influence through extracting promises from the candidate they support- a bit like the immigrant voting blocs in 19^th century America. This is why it is often said that the Albanians, not Macedonians, elect the president. Massive irregularities in Albanian vote totals in 1999 helped bring Trajkovski to power. This year, the result will be decided even more by the Albanians, because only one Macedonian party is strong (SDSM) and a much depleted VMRO will have to make deals with whoever it can to win.

Of course, there are potentially popular candidates from somewhat obscure parties. LDP, in coalition with SDSM, is likely to nevertheless put forward its president (and mayor of Skopje) Risto Penov. And the Kometal owner and Utrinski Vesnik partial owner Trifan Kostovski is contemplating a run as an independent (but with potential SDSM backing).

Proving that Macedonian politics is capable of its own surprises, former VMRO interior minister Ljube Boskovski announced in December his own plans to run. While currently holding a seat in parliament, Boskovski does not seem the kind of candidate that the “new VMRO” of Nikola Gruevski would like to put forward. Whether rightly or wrongly, Boskovski has been constantly attacked by the West and, especially, by the Hague’s Carla Del Ponte, who alleges that he is a war criminal. In his own defense, Boskovski recently went on TV to accept all responsibility for Ljuboten- so certain was he of his innocence- and then charged Ali Ahmeti with knowing all about the fate of 12 kidnapped civilians during the 2001 war. This provocative question at very least raises old doubts about Ahmeti’s moral authority as a representative of Macedonia’s government.

Nevertheless, it is hard to imagine Western diplomats lining up to shake hands with “President Boskovski.” Most fundamentally, VMRO cannot back him because he will not bring in enough Albanian votes.

In all likelihood, therefore, Macedonia’s new president will probably be an SDSM candidate, perhaps Ilinka Mitreva, or an SDSM-affiliated candidate, perhaps Trifun Kostovski. In any case, no matter who is president, the only changes will be of style rather than substance.

Economic prognosis

Faced with criticism over a poor economy and the very real concerns of workers eliminated by privatization, the government has pledged to act, recently promising a new strategy for dealing with unemployment scheme. To what extent this provides any real solutions remains to be seen. But we should not hold our breath. Economic stimulus will come not from the state, but from outside.

This is where Macedonia’s economic outlook in 2004 should finally see some improvement- while, admittedly this will probably not be immediately reflected by the common man’s financial prosperity (or lack thereof). Rather, this is a year for the long-term: the fruition or partial culmination of long-awaited events (the dawn of the post-privatization era, the apparent optimism about finally building international Corridor 8 projects and the AMBO pipeline), as well as the beginning of a long-term foreign investment base. Greek investment now covers many sectors, Russian interest exists, the US continues to push hard in the air carrier sector, and very promising signs have come in the past month from Turkey. Turkish pledges to build a shopping mall, and the simultaneous announcement of slashed customs duties on Turkish products both point to better future partnership between these two already friendly nations.

Another recent investor is Germany’s WAZ, which bought up the country’s three leading papers- Dnevnik, Utrinski Vesnik and Vest. Yet despite this impressive sweep, WAZ is soon going to find the Macedonia operation more difficult than first expected. Why?

An exciting year for the media

Perhaps more than anything else, 2004 will be remembered as the year when the media imploded in Macedonia. New acquisitions, mergers, liquidations and resurrections will make Macedonian print media a radically different creature than it is now by the end of 2004.

To be sure, change has been brewing for some time now. However, it’s not only being driven by the resolution of Nova Makedonija’s problems. Other developing media are set to change the balance of power in Macedonia’s publishing world.

To start off, Nova Makedonija. The state-owned and historic publishing house was finally liquidated at the end of 2003, ending the long period of limbo that began in September 2002, when the company’s controversial privatization failed. Rather than sell a company that no one wanted, the government decided to sell the “brand names” of the papers involved, with certain stipulations attached. Thus long time CEO of Nova Makedonija Pande Kolemisevski bought the paper’s brand name- for a mere 5,000 euros. The Vecer franchise was meanwhile purchased by a Greek-owned marketing agency, Idea Plus, for 25,000 euros. The real estate and tangible assets of the former Nova Makedonija publishing house will be sold on separate tenders. While the new owners are not obliged to retain any of the 1,200 current workers, they are obliged to keep the two papers in circulation. They, and especially Vecer, are expected to start a strong promotion campaign in January aimed at challenging WAZ.

Even worse for the Germans, at least one new newspaper- with outside funding and major television alliances- is set to start challenging them within weeks. The German company will enjoy its very costly monopoly for less then half a year.

WAZ has reportedly taken the new developments stoically, despite that one of its acquisitions was gutted by defectors. In the summer, when the acquisitions were announced, the German company boasted about its plans to modernize and Westernize Macedonian print media. Despite these laudable goals, WAZ will not be the only corporation capable of performing them. Real competition is set to finally arrive in Macedonia.

One upshot of this will be a driving up of advertising rates across the board. The media implosion has also shaken up the old guard and operating principles- in some cases, it has resembled a purge- and this means that less and less advertising denars will be less and less dependent on favorable coverage of advertised corporations.

The new developments are also going to internationalize Macedonia’s media approach. A greater focus on European and world affairs will both increase the sophistication of newspapers and that of the country in general. The shake-ups will hopefully result in an increase in writing quality and creative coverage. The media implosion has resulted in many unemployed journalists and other personnel, leaving employers spoiled for choice. And, another result of these improvements, by the way, is that Macedonian politicians will have to become more professional in their statements and actions, under a fresh and fearless scrutiny from a revitalized industry.

In addition, Macedonian new media and public-sector internet coverage are also set to improve, for two reasons. First of all, Microsoft is here, and despite what this may mean for monopolization, it will result in a greater influx of IT know-how and tangible hardware. Second of all, Macedonian businessmen will begin to warm to the idea of internet advertising, and- as always in a capitalist economy- quality will start to dictate results.

As for internet news, 2004 also promises to be the year of the little guy. The mass media has virtually given up on the country, as it is apparently not warlike enough; who will fill the void, save for the locals? Further, relatively inexpensive improvements in coverage and technology will result from various partnerships and pooling of resources in 2004. All in all, 2004 is set to be the most interesting year for Macedonian media yet.

An additional possibility for investment is tobacco. Very successful 2003 tenders in Italy, Serbia and Turkey provide reason for optimism as big multi-nationals target the Balkans as the last refuge of the smoker, amidst flagging sales in the West.

One of the biggest frustrations in the economy remains Macedonia’s under-realized tourism industry. Government inactivity and sluggish prior planning, combined with poor foreign marketing efforts from the private sector mean that Macedonia will not capitalize nearly as much as it should have from the 2004 Olympics in neighboring Greece. This was exacerbated in 2003 by the foreign ministry’s failure to effectively counter Greek-American lobbying, which resulted in the passage of “Macedonia is Greek” resolutions in a raft of state legislatures.

On the very last day of 2003, the creation of an official government “Athens2004″ website was announced. But will it be too little to late? The website’s success will be dictated by the government’s ability to direct people to it. However, since it seems they could have done a better job with the written English on the site, we are left to wonder just how seriously they are taking the task.

Relative to this, perhaps the most important economic development for Macedonia is the imminent arrival of DSL. Despite its overt greed and frequent blunders, MK Telecom is to be applauded for the decision to bring first-world standards of internet access, finally, to Macedonia. The service is set to start within weeks and offer 24-hour high-speed internet access for a fee of 3,000 MKD (50 euros) per month. While many impoverished Macedonians scoff at paying such a rate, businessmen and online media outlets such as this one are delighted. Communications, work productivity rates and actual cash savings are all coming soon. More than anything else, the arrival of DSL should go a long way towards making Macedonia a normal country- and one that can compete on a more equal footing with business abroad.

Security

Macedonia’s main security problem in 2004 continues to be the unresolved, agitated state of affairs in Kosovo. Until there is some final solution to that particular mess, tensions will continue to simmer. Unfortunately, all of the likely solutions are detrimental to Macedonian security.

KFOR has proven to be less than stellar in policing the border, though in 2003 it improved considerably. Nevertheless, it remains highly probable that the 2001 war could not have occurred if Serbia’s police had been guarding the border from within Kosovo. The removal of Serbian security forces opened the floodgates, and now (with the West coming under increasing threats and violent attacks from the “friendly” Albanians) only their return could close them.

Serbia’s return to the province (as envisioned in Resolution 1244) would of course mean a bloodbath. Yet should Kosovo become independent, and ethnic cleansing of minorities accelerate, would anyone stop them? And, if Kosovo were to be independent, would the Albanian secessionist movement in Macedonia not increase? Indeed, while no one wants a war, there is a residual fear and feeling from all sides that things are not over yet. As one Skopje man told us the other day, “I kept my gun just in case.” Apparently a majority of the population thinks as he does, if the pathetic “harvest” of the November-December weapons collection is anything to judge by.

In the bigger picture, Macedonia and its Balkan neighbors will all alike be affected by greater world events. First of all is the continuing morass in Iraq, which keeps the US bogged down in continuing death and destruction, even as Washington’s war hawks press on for war with other Middle Eastern countries. And, considering that it’s an election year in America as well, the Balkans is likely to receive scant attention. Had Milosevic or Seselj polled big two or three years ago, the US might have started bombing again (or at least gone the sanctions route). Now, despite the media fretting from the usual folks, no one really has the time to care.

Related to that is the Greek Olympics, which will feature more security than any in history. The Balkans- and particularly Bosnia- have already been fingered as posing a threat. The Greeks (and the hundreds of American agents secretly helping to prepare for the Games) believe that al Qaeda sympathizers may be lurking in Muslim-populated areas of the Balkans, and lying in wait to make mischief this August. That said, troublemaking of any kind is likely to be frowned upon by Europe. Again, this does not seem to be the year for a successful Albanian “liberation” war. In the case that Islamic terrorists with links to the Albanian paramilitaries are discovered, foreign support for the cause will sink even further.

This does not mean, however, that Macedonia will be completely free from violence. The same low-level attacks will probably continue, though more sporadically. And, the growing resentment Albanians in Kosovo have for their UNMIK overlords may make the Westerners- for the first time- more of a target than Macedonians.

As mentioned above, Microsoft’s new “strategic partnership” with the government is sure to have benefits, but it also involves some amount of risk. Frequently in 2003, bugs in Windows were discovered and increasingly hackers targeted the American company. In the US, lawmakers have voiced concerns over national security threats posed by an over-reliance on Microsoft software. Similar threats could apply anywhere that a state depends on the software of one country. Macedonia, which has less safeguards and alternative forms of protection as America, is conceivably more vulnerable to crippling bugs, viruses and hacker attacks.

In 2004, the Ministry of Defense will continue its cooperation with NATO, though we should not expect to see any ground-making initiatives to be unveiled at May’s NATO summit in Istanbul. In all likelihood, the alliance’s existing goals- decreasing troop sizes across Europe and focusing more and more on terrorism- will be the topic. Macedonian NATO accession will remain at least two years away. If the current EU Proxima police mission goes successfully, as it should, Macedonia will have one more notch in its belt to show the internationals. Even now, police and military forces have been professionalized considerably and are able to spend less time on immediate threats, and more on anti-terrorism, guarding against arms smuggling, etc.

Conclusions

Macedonia on January 1, 2005, will be considerably than it is today. The trajectory of world events will carry it along and, in the case of Kosovo, even present a threat. Security concerns will continue to irk the government.

However, the fact that more and more foreign companies are choosing to put their money here implies a certain commitment to the country’s stability. Much-needed changes in the media will revitalize the industry, increase advertising potentials and encourage real competition and Western standards. The difference now is that the money will no longer come from “goodwill” donors in the West but from Western businessmen with a real interest in the quality of their product. In other words, the Western gravy train has sputtered to a halt, and it’s make-or-break time for those sham artists made fat and happy by years of foreign largesse. About time!

For the first time, in 2004 the Macedonian media is going to be interesting- and this more than anything, perhaps, will jolt the country out of its political and economic torpor. And not only media but government and business will benefit from the arrival of high-speed and affordable DSL internet- thus ending a long dark age in Macedonian history.