Republic of Macedonia       Deputy Prime Minister         for Economic AffairsVladimir PeshevskiDeputy Prime Minister for ...
Republic of Macedonia  Basic Facts                                  Deputy Prime Minister                                 ...
Republic of Macedonia  Economic Strategy                                           Deputy Prime Minister                  ...
Republic of Macedonia       Stable Macroeconomic Indicators                                                               ...
Republic of Macedonia   Financial System                              Deputy Prime Minister                               ...
Republic of Macedonia   Improvements in the Business Climate                                      Deputy Prime Minister   ...
Republic of Macedonia    Doing Business in Macedonia                                                                      ...
Republic of Macedonia   Education and ICT                                 Deputy Prime Minister                           ...
Republic of Macedonia    ICT Structure                                                       Deputy Prime Minister        ...
Republic of Macedonia   Enhancements in Infrastructure               Deputy Prime Minister                                ...
Republic of Macedonia  Agribusiness Opportunities                   Deputy Prime Minister                                 ...
Republic of MacedoniaNew Investments in Energy Sector                        Deputy Prime Minister                        ...
Republic of Macedonia  ELEM – Macedonian Power Plants                                                         Deputy Prime...
Republic of Macedonia    Opportunities in Tourism                     Deputy Prime Minister                               ...
Republic of Macedonia   Opportunities in Tourism                   Deputy Prime Minister                                  ...
Republic of Macedonia    Opportunities in Tourism                      Deputy Prime Minister                              ...
Republic of Macedonia   Popova Shapka Ski Center                                                              Deputy Prime...
Republic of Macedonia    Popova Shapka Ski Center                                                          Deputy Prime Mi...
Republic of Macedonia   Amusement Park in Skopje                                                           Deputy Prime Mi...
Republic of Macedonia  Exploitation of Minerals                       Deputy Prime Minister                               ...
Republic of Macedonia   Why Macedonia?                             Deputy Prime Minister                                  ...
Republic of Macedonia                   Deputy Prime Minister                     for Economic AffairsThank you for your  ...
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Macedonian economic policies vladimir peshevski

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Finland – Macedonia Business Seminar, Wednesday, June 6, 2012
The Business Seminar was organized on the occasion of the visit to Finland of H.E. Mr. Nikola Gruevski, Prime Minister, President of the Government of the Republic of Macedonia. Presentation by Vladimir Peshevski.

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Macedonian economic policies vladimir peshevski

  1. 1. Republic of Macedonia Deputy Prime Minister for Economic AffairsVladimir PeshevskiDeputy Prime Minister for Economic Affairs Helsinki - 2012
  2. 2. Republic of Macedonia Basic Facts Deputy Prime Minister for Economic Affairs• Population – 2.06 million (41.5% under the age of 30)• Land area – 25,220 sq.km• GDP (2011) - $9,800 million• GDP per capita - $4,750• PPP GDP per capita - $10,400• Main trading partners: Germany, Greece, Serbia, Russia• Main export industries: metallurgy and metal processing, automotive, oil industry, mining, food and food processing• Political status – Parliamentary democracy• EU and NATO candidate country
  3. 3. Republic of Macedonia Economic Strategy Deputy Prime Minister for Economic AffairsCountry Challenges Country Potential• Small size and landlocked • Macroeconomic stability• Volatile global economy • Strategic location and infrastructure• Needs investments and technologies • Availability of natural resources• Low visibility and region perception • Availability of intellectual capitalPillars of the Strategy• FTAs and infrastructure• Create an outstanding climate for investors - Free Economic Zones• Develop a world class human capital• Invest in the energy sector• Rationally use the natural resources• Attract FDI and promote Macedonia
  4. 4. Republic of Macedonia Stable Macroeconomic Indicators Deputy Prime Minister for Economic Affairs REAL GDP GROWTH RATE (%) INFLATION Average inflation < 2% p.a. over the last 10y 2006: 3,2%; 2007: 2,3%; 2008: 8,3%; 2009: -0,8%; 2010: 1,6% 6,1 5,0 5,0 3,3 2,9 CURRENCY -0,9 2006 2007 2008 2009 2010 2011 Macedonian Denar pegged to the DM/€ for the last 10 years (€1= MKD 61.3) EXPORT BY YEAR (US$ bn) AVERAGE GROSS SALARY IN 2011 4,0 4,4 € 497 per month 3,4 3,3 2,4 2,7 0 2006 2007 2008 2009 2010 2011 CREDIT RATINGS 2011-2012 2011- No downgrading in the last two years GOVERNMENT DEBT AS % OF GDP 28,2 Standard & Poor’s: BB; Fitch: BB+ 24 23,9 24,6 20,6 BUDGET DEFICIT & STATE DEBT Budget Deficit: 2,5% of GDP 2007 2008 2009 2010 2011 State Debt: 28,2% of GDPSource: National Bank of the Republic of Macedonia
  5. 5. Republic of Macedonia Financial System Deputy Prime Minister for Economic Affairs• Sound and stable financial system with no spillover of the debt crisis• Loans are financed predominantly by local deposits (L/D ratio of 0,90)• Financial system consists of 17 banks, 9 saving houses, 13 insurance companies and 9 leasing companies• Interest rates for companies in range of 5,5% up to 12,0% (CB rate of 4%)• Foreign banks have 73% of the market• Recently the following international banks entered Macedonian market: − French Societe Generale Bank − Austrian Sparkasse Bank − Turkish Halkbank
  6. 6. Republic of Macedonia Improvements in the Business Climate Deputy Prime Minister for Economic AffairsRegulatory Reforms Rank of Macedonia on the Ease of Doing• 1-Stop-Shop: 4h Company Registration Business Indicator, World Bank "Doing Business" Reports 2006-2012 22• Regulatory Guillotine (“Silence is 32 34 Consent”, “Cutting Red Tape”) 69• Electronic One-Stop-Shop for Customs 75 Permits and Licenses 92 94• Simplification and reduction of taxes 2006 2007 2008 2009 2010 2011 2012 and custom proceduresCadastre and Real Estate Reforms Rank of Macedonia among the Best Countries for Business, Forbes Magazine• Digital Cadastre accessible on-line 35 covering 99% of the Real Estate• Foreigners free to purchase real 82 estate and construction land• Construction permit in just 3 steps 2007 2011• State land auctioned at 1 €/m2
  7. 7. Republic of Macedonia Doing Business in Macedonia Deputy Prime Minister for Economic Affairs 22nd BEST COUNTRY FOR 35th BEST COUNTRY FOR BUSINESS IN THE WORLD BUSINESS IN THE WORLD World Bank’s Doing Business 2012 Report Forbes Magazine Forbes 3rd BEST REFORMER 5th IN THE EASE OF PAYING IN THE WORLD TAXES World Bank’s Doing Business 2010 Report PwC and World Bank Group Study Ease of Dealing with Trading Doing Starting a Getting Registering Getting Protecting Paying Enforcing Resolving Construction Across Business Business Electricity Property Credit Investors Taxes Contracts Insolvency Permits Borders Rank Germany 19 98 15 2 77 24 97 89 12 8 36Macedonia 22 6 61 121 49 24 17 26 67 60 55 Austria 32 134 76 21 35 24 133 82 25 9 21
  8. 8. Republic of Macedonia Education and ICT Deputy Prime Minister for Economic AffairsInvestments in Education• Education Budget 5-6% of GDP• Textbooks from top 10 world universities• 5 state owned and 14 private universities (over 60,000 university students per year)• English introduced in the 1st grade el.sch.• Opened two new universities, over 50 new R&D laboratories, international scholarshipsInformation Technology• One Computer per Child policy• ICT Development Index – 51st out of 159• Internet penetration rate - EU average• Migration of government services on-line (taxes, health, customs, employment, etc.)
  9. 9. Republic of Macedonia ICT Structure Deputy Prime Minister for Economic AffairsWorkforce and Infrastructure Structure of the workforce• Rising supply of well-educated IT experts Programming/Software engineers 30%• Among the lowest labor costs in the Technical support - call centers 17% region Database design & development 12%• About 800 IT graduates are produced IT sales & marketing 12% annually in the Universities.• A software engineer with 1 to 2 years System analysis & integration 11% experience costs €400 to €500 per month Network design & administration 9%• The best telecommunication Digital media specialists 2% infrastructure in the region Other fields 6%
  10. 10. Republic of Macedonia Enhancements in Infrastructure Deputy Prime Minister for Economic AffairsCompletion of Coridor X and VIII• Corridor X is to be completed on full motor highway standard by 2016, with financing already secured• Concession model to be offered for three more sections on Corridor VIII• Preparations started for completion of railway connection to BulgariaNew Airports built in Skopje and Ohrid• Capacity 4 million passengers• Terminal building – 40.000 m2 and Cargo hangar with 40.000 t.• Successfully negotiated as a concession with Turkish concessionaire• In the first year, traffic is up by 30%
  11. 11. Republic of Macedonia Agribusiness Opportunities Deputy Prime Minister for Economic Affairs• Lease of land for agricultural (at the moment 4000 ha available)• Good climate and soil (280 sunny days)• Food processing opportunities with 28 locations for purchasing centers• Abudance of watter and irrigation• Financial subsidies for enhancing productivity and quality (3 year plan)• Foreign investors already present
  12. 12. Republic of MacedoniaNew Investments in Energy Sector Deputy Prime Minister for Economic Affairs • Construction of national gas transport system (value ≈ €350mn) • Opening of lignite mines for electricity production (value ≈ €200mn) • PPP with the National Power Producer “Elem” for the construction of a combined cycle heat and power plant (value ≈ €250mn) • An ongoing tender – under the auspices of the IFC advisory services for two large HPP “Cebren and Galiste” (value ≈ €600mn) • Rehabilitation of the existing hydropower plants (value ≈ €100mn) • HPP “Boskov Most” and “Lukovo Pole” (value ≈ €200mn) • Privatization of the minority share (up to 49%) of the state owned electricity generation company ELEM (book value ≈ €1.2bln) • Construction of three new 400 kV overhead lines (value ≈ €60mn) • New SCADA, (re)construction of more than 200 km of numerous 110 kV overhead lines (value ≈ €45mn)
  13. 13. Republic of Macedonia ELEM – Macedonian Power Plants Deputy Prime Minister for Economic AffairsOverview• ELEM is a 100 % state owned Joint Stock Company for electricity generation• It contributes to more than 90% of the entire domestic electricity production• The Government of Macedonia is preparing the company for a partial privatisation with a strategic investor• The strategic partner would provide additional capital to ELEM in a form of equity and acquire 25-49% of the ownership in the companyTechnical specs Some Financial Indicators (in US$ million)• 1.328 MW Installed Capacity Revenues Net Profit Investments• 6 TWh Annual Production 2009 312.3 4.0 48.0• 2 TPP- 800 MW / 60 % of total 2010 339.7 5.2 71.0 2011 345.3 1.0 79.8• 7 HPP- 528 MW / 40 % of total• 4.000 Employees Invest Macedonia - Agency for Foreign Investments
  14. 14. Republic of Macedonia Opportunities in Tourism Deputy Prime Minister for Economic AffairsGeneral Policies• Free Tourist Zones, with opportunities for hotel and resort development• Subsidies for tour operators of 25 Euros per tourist• Over 50 projects to improve the offer• In 2011, increase in overnight stays of tourists from EU of 38%Summer and Winter Destination• Over 50 tectonic and glacial lakes and 45 mountain peaks over 2.000m• Large Ohrid, Dojran and Prespa lakes• Country is 70% mountainous, many locations with over 100 days of snow• Wartersports, archeological, wine, eco and rural tourism
  15. 15. Republic of Macedonia Opportunities in Tourism Deputy Prime Minister for Economic AffairsHistorical and Culture Heritage• 4,293 archeological sites• 992 churches and monasteries• 23,000 icons (2nd most valuable collection in the world)• 228 mosques, inns, Turkish baths and old bazaars• Birthplace of Cyrillic alphabet• Home country of Mother TheresaSpa tourism• Territory rich with geothermal waters• More than 60 thermal springs• Identified locations for construction of new spa centers and hotels
  16. 16. Republic of Macedonia Opportunities in Tourism Deputy Prime Minister for Economic AffairsTourist Development Zones• Eight new tourist development zones are to be created• Each zone would have hotels, restaurants, spa center etc., per the design of the investor• Located nearby the natural lakes with opportunities for hotel and resort development• Exemption of personal income tax for a period of 10 years• Land purchase with at public auctions - starting price of 1 Euro per m2• Initial investment is a subject of VAT exemption on construction materials• Infrastructure the border of the property
  17. 17. Republic of Macedonia Popova Shapka Ski Center Deputy Prime Minister for Economic AffairsLocation• Popova Sapka is situated in the north-western part of Macedonia on 1,780 metres above the sea level, just 35 kilometres from the capital Skopje.Current Situation• Currently there are 10 lifts• Total piste length of 55km• Capacity of 2.900 skiers per day• Hotels – 600 beds• Private accommodation – 3000 beds• Parking space for 549 cars• Relatively dense and unstructured resort village• Pre-feasibility study is already completed and four phases were identified to complete this project Invest Macedonia - Agency for Foreign Investments
  18. 18. Republic of Macedonia Popova Shapka Ski Center Deputy Prime Minister for Economic AffairsKey Elements of the Project• Build six to eight new lifts and remove some of the old ones• Construct new parking areas, new mountain restaurants/skier services.• Creation of a new village with over 4.000 new beds• Capacity of 13.000 skiers per day• Total investment of around US$ 50-60 million, over four year period Invest Macedonia - Agency for Foreign Investments
  19. 19. Republic of Macedonia Amusement Park in Skopje Deputy Prime Minister for Economic AffairsProject background• The current amusement park is owned and operated by the City of Skopje,• Total area of 25,000 m2 with 20 attractions and other facilities such as restaurant, night club, etc.Project objectives• Design completely new and modern amusement park via PPP structure• 30 years concession – DBOT Model• Feasibility Study is available• The park would include: − 7 family rides − 4 teen rides − 6 rides for children − A Theatre• Total investment of US$ 15 million Invest Macedonia - Agency for Foreign Investments
  20. 20. Republic of Macedonia Exploitation of Minerals Deputy Prime Minister for Economic Affairs• Macedonia has deposits of lead, zinc, copper, silver, nickel, marble• Detailed Geo Research Concession is awarded for up to six years• Exploitation concession for mineral resources awarded for up to 30 years• For the metallic minerals, the fee is 2% of the market value (London Metals Exchange) of metal in the concentrate• For decoration stones, the concession fee depends on the type: - marble €15 per cubic meter; - granite €9 per cubic meter; - onyx, travertine €6,5 per cubic meter.• For minerals for construction industry, the fee is 0,15 EUR per tone
  21. 21. Republic of Macedonia Why Macedonia? Deputy Prime Minister for Economic Affairs• Free Trade Agreements with European countries with market of 660 mil+• Strategically located for light manufacturing and logistics companies• Macroeconomic Stability• Exceptional track record in reforms• Attractive Tax Policies• Incentives in Free Economic Zones• Available and competitive work force (41.5% of the population under 30)• Commitment to education• Excellent ICT infrastructure• Business friendly Government, willing to work hand-in-hand with you
  22. 22. Republic of Macedonia Deputy Prime Minister for Economic AffairsThank you for your attention!

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