Eurasia Press & News
The government of Macedonia proposed an ambitious plan to invest 8 billion euros in the country’s infrastructure through 2016.
Fresh off a commanding victory in the April 5th presidential and local runoff, the ruling VMRO-DPMNE-led coalition in Macedonia now has a chance to make good on its plan to invest 8 billion euros in the country’s infrastructure, which it announced in March. Energy, education, housing, transportation and the environment all stand to receive funds in the next seven years under the plan.
At the time, the opposition SDSM criticised the plan. SDSM head Zoran Zaev called it “political marketing”; his party blasted Prime Minister Nikola Gruevski for appearing at construction sites in an alleged effort to aid VMRO-DPMNE candidates.
The SDSM’s defeat in the April elections leaves the infrastructure strategy with no effective opposition. Finding 8 billion euros in seven years, though, may be a financial stretch for an economically strapped country whose GDP in 2008 was an estimated 7.2 billion euros.
Another indicator of the challenge before Macedonia is that in its 18 years of independence, it has attracted only 2 billion euros in Foreign Direct Investment.
Gruevski said in March the government would finance the numerous infrastructure projects through a combination of budget allocations, borrowing and revenues received from foreign companies that operate concessions. For example, the Turkish giant TAV will operate two Macedonian airports over the next 20 years and must invest 200m euros in modernising and expanding Macedonia’s aviation facilities.
In the energy sector, through the year 2016, the government plans to spend 3.85 billion euros. It would commission a study on building a nuclear power plant and invest in “strategic projects” such in mining and renewable energy sources.
The government also foresees building an IT university in Ohrid and opening 93 new schools nationwide.
To help the population at large, it pledged to build 1,100 new apartments by 2012 — money that Gruevski says the government already has allocated.
The sceptics are numerous. Marijan Nikolov of the Centre for Economic Analysis questioned whether the investment package is “financially sustainable and harmonised with the country’s strategy for managing the public debt”.
Economics Professor Sasho Asov of the Ss. Cyril and Methodius University of Skopje says the outcome will be uncertain, given the “poor institutional capacity to realise it and given the undefined sources of investment”. He also predicted the long-term programme would not “lessen the bite of the economic crisis” because the country currently needs economic measures that deliver “short-term results”.
Gruevski himself, while vowing to upgrade the country’s infrastructure, has openly mentioned the possibility of falling short. “I will be very satisfied if we realise two-thirds of [the plan],” he said. “Anything above that would be a huge success.”
