Business Environment Improves in Former Yugoslav Republic of Macedonia

The former Yugoslav Republic of Macedonia (FYROM) has made significant strides in improving its business environment and investor protection, making it a more attractive destination for foreign direct investment (FDI).

Investor Protection and Reform Efforts

According to a recent report, the cost of registering property has decreased from 3.4% of property value in 2001 to 3.2% in 2010. Similarly, investor protection has improved, with an investor protection index score of 6.7 out of 10 in 2009, up from 5.3 in 2008.

Time and Cost Savings

The report notes that the time it takes to start a business has decreased significantly, from 21.6 days in 2001 to just 18.0 days in 2010. The cost of enforcing contracts has also fallen, from 34.5% of claim in 2001 to 23.8% in 2010.

Trade Facilitation

Trade facilitation has also improved, with the time it takes to export goods decreasing from 19.0 days in 2001 to 15.7 days in 2010. Import procedures have become faster and more efficient, with a reduction in processing time from 18.0 days to 15.0 days over the same period.

Economic Growth and Development

The FYROM has made significant progress in recent years, with GDP growth averaging 2.5% per annum between 2001 and 2010. The country’s population has also grown, reaching 2.3 million people in 2010.

Challenges and Outlook

While the FYROM still faces challenges, including high unemployment rates and relatively low levels of FDI inflows compared to other countries in the region, the country’s commitment to reform and economic growth provides a positive outlook for future investment and development.

Investment Policy Review

The former Yugoslav Republic of Macedonia has made significant progress in improving its business environment and investor protection since gaining independence in 1991. The country’s small size and lack of FDI inflows during the 1990s posed significant challenges to economic growth.

Path to Reform

Since 2001, the political situation has stabilized, bringing about economic growth and higher FDI inflows, mostly through privatizations. The country’s integration into the European Union (EU) is also underway, with the aim of joining the EU by 2025.

Government Reforms

The Government has embarked on a wide-ranging reform programme aimed at modernizing the country, increasing welfare, and advancing EU integration. The report highlights the importance of FDI in stabilizing small and vulnerable economies like the FYROM.

Conclusion

Overall, the report concludes that the FYROM’s business environment has improved significantly over the past decade, making it a more attractive destination for foreign investors. However, further reforms are needed to unlock the country’s full economic potential and drive growth and development.