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CIAO DATE: 07/04

Macedonia Update: Challenges and Choices for the New Government

March 29, 1999

International Crisis Group

Abstract

The new Macedonian government marked its first hundred days in office in early March. Formed by the Macedonian Internal Revolutionary Organisation-Democratic Party for Macedonian National Unity (VMRO-DPMNE), the Democratic Alternative (DA), and the Democratic Party of Albanians (DPA) after the last parliamentary elections in October and November 1998, the government is headed by VMRO- DPMNE Chairman Ljubco Georgievski and has a comfortable majority of 73 out of 120 seats in the current parliament.

Prior to the elections, some of the parties now in government had made extensive promises, particularly in the realm of economic and social policy. Most promises have not been carried out thus far. The current government, whose capacity to act is limited by the general state of Macedonia's economy and by limited financial resources, has a particularly disappointing record in the economic sphere. Few new jobs have been created, pensions have been raised only insignificantly, and public sector employees even face pay cuts. The budget for the current year leaves the government virtually no room to manoeuvre. The only possible way forward is to create a climate that attracts foreign investment.

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