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January 13, 2004

Our Predictions
by CDeliso

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 19th 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.