Global Policy Forum

As EU, U.S. and World Bank officials prepare to meet tomorrow in Brussels at a donors' conference for the Republic of Macedonia, the International Crisis Group urges them to be vigilant on two key issues that threaten the fledgling peace effort: endemic corruption and economic reform. ICG calls for the joint appointment of an anti-corruption adviser to assist the Macedonian government and monitor spending of donor funds.

Macedonia's leaders deserve generous support to re-build their country and pay for the costly reforms that were the key to getting Albanian insurgents to lay down arms. However, ICG President Gareth Evans warned: "The target for the aid package is not small, a quarter of a billion dollars, and it should be met. But if donors commit this sum without demanding serious anti-corruption and reform efforts, they will put at risk the investment they have made in peace."

Corruption plagues all transition countries, but in Macedonia it threatens the viability of the state. Albanian minority participation in today's government rests on a simple principle: they get one third of the spoils enjoyed by the Macedonian leadership. At the same time both Macedonian and Albanian political leaders flirt cynically with ethnic extremism, deepening communal divisions and corroding the rule of law and public trust in institutions - as they connive at siphoning off national assets.

The corruption concerns include reports of kickbacks, customs and licensing rackets, cigarette smuggling and illegal privatisation deals that benefit government insiders. The stories are not – as some politicians claim – simply anecdotes. The Macedonian media is replete with detailed, credible allegations that are privately corroborated by diplomats. The Macedonian leadership is also seeking leniency on important IMF targets. The Prime Minister is reportedly balking at a follow-on IMF credit arrangement that would replace the current, voluntary set of spending criteria. With an election due this year, he seeks more relaxed terms. However delaying reform will only protract economic transition.

Where donors need to channel attention is on creating and sustaining jobs for both Macedonians and Albanians, especially in rural areas and regions that were affected by fighting. Applications for emigration by Macedonians have soared, while the unemployment rate for rural Albanians remains alarmingly high. The job base is shrinking as loss-making enterprises close their doors and otherwise profitable private firms lose their credit rating due to bank-perceived "risk".

More re-training is needed for laid-off workers, as well as credit incentives for Macedonia's banks to lend to private firms located in these crisis zones. Otherwise, Macedonia risks further ethnic division due to economic circumstances.

But these measures will mean little if the international community does not insist that Macedonia tackles corruption. Traditional prescriptions – regulatory reform, conferences, legislation – have had paltry results, as international officials concede. The knowledge that corruption is rampant has eviscerated trust in all levels of government and created cynicism toward "institution building" efforts. Civil society groups like Transparency International show promise, but they depend on a critical mass of citizens who believe their efforts will result in change – something utterly absent in Macedonia.

An outside catalyst is needed to demonstrate international seriousness and give ordinary Macedonians confidence that change is possible. ICG therefore recommends that the donors and the Macedonian government jointly ask the European Commission to send an anti-corruption adviser to Macedonia. The adviser's role would be to activate moribund checks against corruption, and stimulate the efforts of government and civil society to develop and implement an anti-corruption strategy. Stonewalling by the authorities should incur the suspension of EU funding. ICG believes that the government could be persuaded to accept such an adviser, if only the international community would insist. ICG also urges donors to fund fully watchdog and oversight mechanisms for the nation's heath fund.

Raising the profile and effectiveness of the fight against corruption, and insisting on economic reforms, could reorient politics away from a zero-sum tussle over resources and ethnic rights into a joint struggle against a common opponent.

ICG's Macedonia Project Director Edward Joseph said: "Ethnic Macedonians and Albanians alike are fed up with ‘the way the game is played' and are eager for the rule of law. But they can't achieve change on their own. As Macedonia seeks generous international support at this donor's conference, now is the ideal time to demand economic reform and serious measures to combat corruption."

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.