Nations in Transit - Macedonia (2005)

Capital: Skopje
Population: 2,000,000
Status: Partly Free
PPP: $1,710
Private Sector as % of GNI: na
Life Expectancy: 73
Religious Groups: Macedonian Orthodox (70 percent), Muslim (29 percent), other (1 percent)
Ethnic Groups: Macedonian (64 percent), Albanian (25 percent), Turkish (4 percent), Roma (3 percent), Serb (2 percent), other (2 percent)

Executive Summary

Macedonia is a former republic of Yugoslavia that gained independence in 1991. Unlike other areas of the former Yugoslavia, the country did not become engulfed in large-scale ethnic wars in the 1990s. However, open hostilities between the majority ethnic Slav population and ethnic Albanians (roughly a third of the country's population) broke out in 2000-2001. Peace was restored with the Ohrid Framework Agreement of August 2001, which was brokered with active international involvement. The agreement called for greater integration of the Albanian minority into Macedonian society by means of a series of political and institutional reforms in the areas of local and national governance, education, and health care. The settlement also stipulated a general framework in which to accomplish these goals to preserve the territorial integrity and sovereignty of the Macedonian state.

The most important event of 2004 was the passing of local government reform, which redrew municipal borders and sought to provide for more equitable political representation of minorities at the local level. The World Macedonian Congress, a diaspora nationalist group, challenged the law and gathered enough signatures in Macedonia to force a national referendum on the issue. The referendum, held in November 2004, failed to garner enough support to restore the previous municipal law, thus ensuring continuity of the reform process outlined in the Ohrid Agreement. Prior to the referendum, Prime Minister Hari Kostov of the ruling Social Democratic Alliance of Macedonia (SDSM) threatened to resign if voters rolled back the decentralization plans. Despite the failure of the referendum, Kostov quit, citing an inability to work with the ethnic Albanian political parties in the ruling coalition. Overall, the government found itself in a delicate situation, needing to strike a fine balance between keeping ethnic Macedonians happy, granting ethnic Albanians more rights, and sticking to the Ohrid Agreement agenda – key to the success of Macedonia's bid to join the European Union (EU) and to maintaining good relations with the United States.

A few days before the referendum was held on November 7, the U.S. State Department announced that Washington would start to recognize the constitutional name of the country, Republic of Macedonia, thus dropping the controversial "Former Yugoslav" precursor still used by a number of international bodies. The name is the subject of a long-running dispute with Greece, which refuses to recognize Macedonia under its constitutional name, insisting that it represents a territorial claim on the northern Greece province bearing the same name. While the announcement might have overshadowed the referendum with mass celebrations continuing into the weekend (the referendum was held on Sunday), early opinion polls in Greece showed that close to 90 percent of the population supported the government's threats to veto Macedonia's potential entry into the EU. Brussels has indicated that it does not intend to follow the U.S. lead as Dutch prime minister Jan Peter Balkenende (holding the EU presidency) announced that the EU will still use the "Former Yugoslav Republic of Macedonia" for the time being.

Domestically, the security situation has continued to improve, with the implementation of the reforms aimed at integrating the ethnic Albanian community and at further easing the secessionist tensions that led to the 2001 conflict. Additional progress has been made in incorporating the National Liberation Army (NLA), the force behind the insurgency, into the Macedonian political system. The NLA's successor, the Democratic Union for Integration (DUI), is not only represented in the Parliament, but is also a partner in the ruling coalition. Albanian leaders participate fully in the political process, and recent reports suggest that the activity of Albanian militant groups decreased significantly in 2004 compared with the previous two years.

Nevertheless, the reform efforts of the government, especially regarding local government reform and providing Albanians with greater political representation, have sparked communal violence in several parts of the country. From roadblocks and street riots targeting the local headquarters of the ruling party to Molotov cocktails thrown at mosques, social tensions in Macedonian society still ran high in 2004. Many of these violent acts, however, were political in nature (involving local party officials), and in only a few cases did they threaten the fragile ethnic peace in the country.

National Democratic Governance. In March 2004, Macedonia formally applied to join the EU as then prime minister Branko Crvenkovski presented the country's application to EU Council president Bertie Ahern in Dublin. Macedonia's commitment to conduct political and economic reforms that would facilitate the country's integration into Europe is expected to accelerate the current reform process and further increase its scope. The government has enjoyed a year of political stability and public support for its reform agenda. Macedonia's new rating for national democratic governance is set at 4.00 owing to the adequate functioning of state institutions but the absence of an effective system of checks and balances among the branches of government.

Electoral Process. Following the tragic death of President Boris Trajkovski in February 2004, Macedonia held early presidential elections in the spring, won by Branko Crvenkovski of the ruling SDSM. Observers from the Organization for Security and Cooperation in Europe (OSCE) found the elections generally consistent with international standards. The results left the SDSM in control of both branches of the executive (president and cabinet), in addition to its majority in the legislature. Official results from the November referendum on the decentralization reform indicated that the turnout was significantly below the 50 percent required by law. While the opposition claimed serious irregularities and fraud, international monitors concluded that the vote was conducted fairly. Because the referendum was scheduled for the fall of 2004, the local elections, originally meant to be held at the same time, were postponed to March 2005. The further consolidation of the SDSM's power as a result of recent electoral results, as well as the public support received at the time of the referendum, indicate that the government is in a better position to pursue its reform agenda. Macedonia's electoral process rating improves from 3.50 to 3.00 given the successful implementation of the 2004 elections and favorable assessments by the OSCE, which considered them fair, with a limited number of irregularities.

Civil Society. While the general development of the nongovernmental organization (NGO) sector in Macedonia has been positive, no significant changes took place over the past year. It is still difficult to talk about a strong civil society, especially in light of continuing communal and political violence in several parts of the country. The process of increasing NGO organizational capabilities and institutional development, which registered significant progress in 2002 and 2003, has met challenges as external support has been declining and the government has not created an appropriate legal framework for NGOs to get funding domestically. Macedonia's rating for civil society remains at 3.25.

Independent Media. Attacks on journalists and interference with editorial policies have remained at 2003 levels, with several incidents reported. Despite serious public criticism, the government has not made any attempts to amend the 2003 changes to the criminal code, which expanded the criminal character of libel. Soon after these changes, three Macedonian journalists were tried in court in accordance with these provisions. While the government has made efforts to be more transparent in its relations with the media and the public in general, a much awaited law on access to public information has not been adopted. Local media organizations in Macedonia not only remain divided along ethnic lines, but several of them were found to be violating coverage regulations during the presidential campaign. Macedonia's rating for independent media remains at 4.25 owing to the lack of progress in decriminalizing libel and the lack of a legal framework for access to public information.

Local Democratic Governance. With the government initiating the process of transferring power from the central government to the units of local self-government (municipalities), the postconflict reforms in Macedonia started in earnest in 2004. Amendments to several key laws regulating territorial division and local finances have been adopted, and the failure of the November referendum signified broad public support for governmental policies. Macedonia's new rating for local democratic governance is set at 4.00 owing to the launch of a significant local government reform effort, which, however, remains constrained by ambiguities in the division of competences between central and local authorities.

Judicial Framework and Independence. Unlike in 2003, over the past year political and security factors did not complicate the reform of the judiciary. Improvements have been made to citizenship law and in the legal protection of citizens' rights in relation to state institutions. The Parliament also passed major legislation guaranteeing the representation of national minorities and the use of minority languages. Nevertheless, much more needs to be done in the area of implementation, as stated in the European Commission's annual review. Macedonia's rating for judicial framework and independence improves from 4.00 to 3.75 owing to the introduction of new legislation in line with EU standards, although the changes have yet to notably improve the performance of the judiciary.

Corruption. The fight against corruption in 2004 lost much of the momentum gained the previous year. Still, the perception of corruption, as measured by Transparency International, improved slightly, and the country moved up in the index. The first year of the Anticorruption Commission was successful – an indication that such a body was badly needed in Macedonia. But infighting and institutional rivalries prevented both the government and the commission from effectively pursuing their anticorruption programs and shifted public attention away from the issues of the day. As a result of these obstacles, and the fact that no progress has been made in several high-profile corruption cases, Macedonia's rating for corruption remains at 5.00.

Outlook for 2005. The reform process is expected to continue throughout 2005 and be completed at least in the areas of local government reform and integration of the Albanian minority. Well positioned to capitalize on its recent electoral gains and increased public support for its reforms, the ruling SDSM coalition should be able to push through with overhauling the judiciary and further harmonizing Macedonian legislation with EU law. The local elections scheduled for the spring will be a crucial test for the future success of the government's reform agenda. The EU accession process is expected to further contain ethnic tensions and consolidate political stability, although a permanent solution to the Kosovo question (regarding its administrative status) would definitely help the country overcome some of its present challenges.

National Governance (Score: 4.00)

Macedonia has a multiparty, parliamentary political system based on the 1991 Constitution, adopted right after the country gained independence from Yugoslavia. The constitutional amendments of November 2001, mandated by the Ohrid Framework Agreement, reconfirmed this institutional setup and provided for greater democratization of politics at the local level and increased participation of minority groups in the political process.

A key feature of Macedonia's parliamentary system is the separation of powers among the three branches of government: the Parliament (Sobranie), the executive (Council of Ministers and president), and the judiciary (Supreme Court, Constitutional Court, and public prosecutor). The Parliament has a leading position within this system of government with its power to adopt legislation and decide on public finances, including the state budget. It also has the power to appoint members of the executive, judiciary, and public institutions. The Parliament is a unicameral body with 120 seats filled during general elections using the method of proportional representation.

The executive branch of the government in Macedonia is dual, comprising the president and his administration and a cabinet of ministers, known formally as the government. The cabinet initiates draft legislation, provides for the day-to-day operation of state institutions, and executes laws and regulations adopted by the Parliament. As in other parliamentary democracies, the cabinet is typically formed by the political party or coalition controlling the majority of votes in the assembly following a parliamentary election. While the Parliament appoints the prime minister, he or she must be nominated by the president.

The president is elected in a separate poll by a popular majority vote. Aside from certain powers of appointment in the judiciary, the president is entitled to veto legislation adopted by the Parliament with a simple majority. His veto power is quite limited, however, since it does not apply to legislative acts adopted by a qualified majority vote and can be overridden by a simple majority.

An important institution in Macedonia's system of checks and balances is the Constitutional Court. Providing constitutional oversight of major acts of the Parliament and the cabinet, the court has the power to annul legislation or decrees that are found to violate the Constitution. The Republican Judiciary Council similarly provides oversight of the court system and judges. The Parliament appoints council members as well as Constitutional Court judges and the public prosecutor.

Macedonia's Constitution firmly states the principle of separation of powers, and the country's leaders applied that principle in the establishment of national political institutions. Yet it remains difficult to determine, as in many other countries in transition, to what extent the system of checks and balances is effective in reality. Often the lines of separation among the executive, legislative, and judicial bodies become blurred as one political party gains control (after elections) of both the legislature and the executive, which in turn provides an opportunity for partisan changes in the judiciary. Some members of the opposition Internal Macedonian Revolutionary Organization-Democratic Party for Macedonian National Unity (VMRO-DPMNE) voiced such concerns after the extraordinary presidential elections in early 2004, when the ruling Social Democratic Alliance of Macedonia (SDSM) also secured the presidency. Those fears, however, have so far been unfounded. For one thing, the SDSM leads a 10-member coalition that won the parliamentary elections back in 2002, and decision making in the Parliament in the past few years has been based on political maneuvering and compromise with the main coalition partner, the Democratic Union for Integration (DUI), and other junior coalition partners.

Another factor in keeping the separation of powers and democratic principles of governance key priorities for Macedonian politicians and policy makers has been the need to comply with European Union (EU) and NATO accession criteria. In March 2004, Macedonia formally applied to join the EU when Prime Minister Branko Crvenkovski presented the country's application to EU Council president Bertie Ahern in Dublin. Macedonia's commitment to conduct political and economic reforms that would facilitate the country's integration in Europe dates back to 2001, when it became the first western Balkan state to sign a Stabilization and Association Agreement with the EU. The formal application is likely to accelerate the reform process and further increase its scope. The magnitude and range of required reforms will be known as soon as the European Commission announces its opinion on Macedonia's bid, expected as early as 2005. The latest commission report on Macedonia, released in April 2004, marked the progress made in 2003 in harmonizing national legislation with EU law and stressed the need for greater implementation and to improve good governance, the rule of law, and the fight against corruption and organized crime. While the EU has set no specific timetable for negotiations or an entry date, future accession is expected to provide a powerful stimulus for continued reforms in the areas of political democratization and economic liberalization.

Macedonia's bid to join NATO has similarly spurred reforms in the security forces. The country has been an active member of NATO's Partnership for Peace program and other initiatives as a way of preparing for full membership in the future. Closer cooperation with NATO has helped the country's armed forces, established in 1995, to strengthen civilian control of the military and defense structures and to streamline military planning and resource management. According to the Constitution, the commander in chief of the armed forces is the president, while a civilian minister of defense oversees all security- and defense-related activities. Both the Macedonian Ministry of Defense and the general staff of the armed forces were restructured according to NATO standards back in September 2000.

Electoral Process (Score: 3.00)

After President Boris Trajkovski was killed in a plane crash on February 26,2004, Macedonia held extraordinary presidential elections in April. Since the electoral law at the time did not contain any provisions for the unexpected termination of the mandate of an incumbent president, the Parliament passed an amendment to the Law on Presidential Elections. The change provided for a vote in accordance with the Constitution (which mandates an election within 41 days of a vacancy).

The elections were held in two rounds on April 14 and 28, since none of the candidates gathered a majority of all registered voters in the first round. The two leading candidates – Prime Minister Branko Crvenkovski of the SDSM and Sasko Kedev of the VMRO-DPMNE – met in the second round, and Crvenkovski secured the presidency with a clear 60.5 percent of the vote against 36.2 percent for Kedev. The Albanian parties nominated the other two main candidates in the first round: Gezim Ostreni of the DUI (14.79 percent) and Zudi Xhelini of the Democratic Party of Albanians (8.67 percent).

The final report issued by the Organization for Security and Cooperation in Europe (OSCE) on the elections found that their conduct generally complied with international standards, with a relatively small number of election irregularities (proxy voting, political violence, the presence of unauthorized personnel at polling stations, and voter intimidation). However, the OSCE observers noted several disconcerting developments in the election process. Among these were the failure of the State Election Commission (SEC) to correct legislative inconsistencies arising from the electoral law, the presence of excess names on the voter list, and a relatively high incidence of ballot stuffing in the second round. In addition, the OSCE final report criticized the manner in which the SEC dealt with complaints during both election rounds. According to the OSCE report, although the Constitution guarantees public process before the court for election- and referendum- related appeals, court decisions were not published and were returned to the submitter of the appeal.

As Crvenkovski took over the presidency, the Parliament initiated procedures for electing a new cabinet. The ruling coalition designated Interior Minister Hari Kostov as the new prime minister, and on June 2 the Parliament elected him with a vote of 68 for and 12 against. Kostov retained all of Crvenkovski's ministers, and Siljan Avramovski took over the Ministry of the Interior. In his inaugural address to the Parliament, Prime Minister Kostov outlined as key priorities of his cabinet improving living standards, reforming the judiciary, and advancing the country's integration into the EU and NATO.

After the November referendum, Kostov suddenly resigned, citing policy differences and indirectly blaming the ethnic Albanian DUI for putting ethnic and personal interests above policy goals, particularly economic ones. The Parliament accepted Kostov's resignation and, on November 19, voted then defense minister Vlado Buchkovski as the country's new prime minister. Buchkovski succeeded interim prime minister Radmila Secerinska.

Kostov's government had a turbulent tenure despite being in office for only six months. The cabinet successfully mediated many difficult negotiations between the SDSM and the DUI regarding different aspects of the reform process. As an example of the tense relationship with the coalition partner, Early in Kostov's term, the Parliament passed two amendments to the Law on Local Elections. In May, the Parliament adopted a supplement (which is technically different from an amendment) that mandated local elections every four years in the third week of October, with a preceding 20-day campaign period. The delays in adopting the complete package of decentralization reform envisioned in the Ohrid Framework Agreement (finally passed in August) mandated an additional change in the Law on Local Elections that set a new date for the election. The poll had to be postponed (from November 2004 to March 2005) to avoid a conflict with the date set for the referendum vote.

Preliminary results from the referendum indicated that voter turnout was between 25 and 27 percent, way below the constitutional requirement of 50 percent for it to be legally valid. A few days after the referendum, the OSCE released a statement affirming that the conduct of the referendum was consistent with OSCE principles. However, the opposition and the World Macedonian Congress, which initiated the referendum petition, claimed that there were significant irregularities. The final official results and an OSCE report found no grounds for those complaints.

The Parliament did not adopt any new amendments to the legislation on parliamentary elections, which had already been significantly revised in 2002. As required by the Ohrid Framework Agreement, before the 2002 parliamentary elections, Macedonia's legislators had enacted several amendments and supplements to the Law on Election of Members of Parliament, the Law on the Voters List, and the Law on Election Districts. The changes created a proportional electoral system, with all 120 seats allocated according to a vote on closed party lists in six multimember constituencies (electoral districts). The districts are of similar size (roughly 280,000 registered voters) and do not follow ethnic or religious boundaries. In addition, the amended legislation eliminated altogether the 5 percent electoral threshold, an element of the old system, allowing for greater political representation.

Civil Society (Score: 3.25)

One of the main challenges to Macedonia's reform efforts since gaining independence in 1991 has been the dual nature of its transition. Along with the process of political democratization and economic liberalization, the goal of building a civil society has also depended on the integration of the country's ethnic and religious communities. Nongovernmental organizations (NGOs), a key building block of a functioning civil society, are a relatively new concept in Macedonian society. During the time the country was part of Yugoslavia, only a few NGOs existed, almost all with a focus on environmental issues. In the past 10 years, both the number and scope of such organizations in Macedonia have risen exponentially, and their role in dealing with pertinent societal, political, and economic issues has increased in recent times.

There are no recent official estimates of the size of the NGO sector, although previous accounts, such as the World Bank 2003 Macedonian NGO Outreach project, have put the number at 3,000. As in previous years, the main factors behind the boom in the sector are the availability of (mostly external) funds; the government's policy of seeking NGO advice on its reform plans; and the myriad issues that require NGO involvement, especially at the local level.

Traditionally, the major donors to Macedonian NGOs have been the United States and the EU, which have supported organizations and projects in the areas of decentralization, private sector reform, and the development of small- and medium-size enterprises, as well as reforms in the judiciary and education. Through the European Agency for Reconstruction, the EU has provided funds supporting projects that deal with good governance, institution building, the rule of law, infrastructure, and social development. Most of this funding supported government projects and reforms, with only a small part directed to civil society organizations. In addition to the EU, several European governments have been active donors in specific areas, such as for nurturing the growth of civil society, increasing respect for human rights, and improving interethnic relations. A reduction in international funding is likely to put financial pressures on the NGO sector, and locating a continuation of external funding will be a significant challenge in a situation where local sources remain inadequate.

Current Macedonian law does not have special provisions for registering NGOs. Nonprofit entities are registered under the same regime as trade and professional organizations, employer and employee unions, interest groups, foundations and others. The operative law is called the Law on Citizen Associations and Foundations and it was enacted by the parliament in June 1998. The law prohibits all of the above-mentioned entities to be involved in direct economic activities.

Independent Media (Score: 4.25)

Article 16 of the Constitution guarantees freedom of speech and access to information, and 2004 showed a mixed record of the government's commitment to both. Continuing the trend of the past few years, the government did not interfere openly in the editorial policies of either the private or the public media. Yet officials did nothing to remove the criminalization of libel, which has remained in the criminal code after its 2003 amendment despite criticism from local and international press rights organizations. In its latest annual report on Macedonia, Reporters Without Borders described the defamation law as "harsh, not up to international standards, and allowing politicians and the government to sue journalists more easily." That conclusion stemmed from three court cases against journalists at the end of 2003. Zoran Markozanov of the weekly Zum received a three-month suspended prison sentence and a year's probation for defaming the leader of the Liberal Party, Stojan Andonov. A Skopje court handed Sonja Kramarska of Utrinski Vestnik a fine for defaming the same individual. Dragan Antonoski of the private TV station A1 received a fine for describing Jovan Andreevski, chief of the general staff, as a traitor in reference to his conduct during the Albanian insurgency in 2001.

Reporters Without Borders also reported several acts of violence against journalists. Four Macedonian journalists were attacked in 2004 – all members of TV crews reporting from ethnic Albanian areas. Ivona Talevska and her cameraman from TV Sietel were threatened at gunpoint and kicked, then had their equipment destroyed. Locals in an Albanian village beat up Vanja Stefkovska and a crew member with MTV while they were covering a local demonstration.

The main institution in the media regulatory framework in Macedonia is the Broadcasting Council. The council grants licenses to electronic media and provides oversight of compliance to media regulations and established standards. During the presidential elections in the spring of 2004, the council monitored the following electronic media to make sure they provided equal access to all candidates and informed the public about the election campaign in a fair and just manner: the 3 channels of the public broadcaster Makedonska Radio Televizija (MRT), the leading private stations A1 and Sietel, 54 other (mostly local) TV stations, and some 67 radio stations. The OSCE observation of the election determined that the media situation was generally good and that most media organizations had complied with the rules and laws for election coverage. Similarly, in the opinion of this analyst the Broadcasting Council acted properly and did not curb media independence. Only several local public broadcasters committed serious violations of biased reporting, political influence, and media independence. The council reported that most violations had to do with the duration of paid political programming but no action had been taken owing to the council's lack of enforcement authority, which remained a problem at year's end.

The draft of new legislation on access to public information remained in the works in 2004, although other countries in the region have successfully adopted similar forms of legislation.

Local Governance (Score: 4.00)

Local self-government reform and the process of decentralization in Macedonia are prominent parts of the Ohrid Framework Agreement. For more than two years, government officials, NGOs, and local government representatives have been involved in drafting plans, assessing reform options, and participating in heated public debates in three principal areas: redrawing municipal borders, transferring powers from the central to the local level, and identifying sustainable financing solutions for local government entities. In addition, discussions about the likely provisions of a new Law on the City of Skopje have stirred public sentiment, especially among ethnic Macedonians, who fear the possibility of a bilingual national capital.

In June 2004, the government approved a package of six draft laws on the transfer of power from the central government to local entities. At the time, the government spokesman, Saso Golakovski, announced that 10 other pieces of legislation were under review. The government's proposal for a new territorial division law included reducing the number of municipalities from 123 to 80 (and to 76 by 2008) and adding the ethnic Albanian-dominated Saraj and Kondovo municipalities to that of Skopje, which would effectively make Albanian the second official language in the capital city. When announcing the plan, Prime Minister Hari Kostov stated that the proposed local reorganization met the main goals of decentralization reform: achieving economic sustainability, providing for efficient services to citizens, and increasing citizen participation. The Parliament passed the bill in August.

In September, the Parliament adopted a crucial piece of legislation – the Law on the Financing of Local Self-Government Units – that some view as the most important law for local government reform. The new law outlines a process of fiscal decentralization that will be conducted in two stages, beginning in January 2005. During the first stage, the central government is expected to transfer funds to municipalities, retaining the size of the current subsidies but disbursing them among a fewer number of entities. The funds should support education, health care, and social protection activities carried out at the local level. Later on, municipalities will be allowed to collect and manage a portion of tax proceeds. Until now, municipalities have participated in pilot projects for managing property taxes, but their main source of revenue has been proceeds from administrative and communal tax collection and granting local licenses. In addition, municipal governments will have the right to retain 0.5 percent of income taxes as well as 2.5 percent of value-added tax proceeds. The greater fiscal autonomy of local governments is especially important at this stage of the local government reform process, since it will increase substantially the share of local governments' own revenue, currently at only around 20 percent. The central government provides the rest through intergovernmental transfers.

As many municipalities have run fiscal deficits in the past, this new fiscal autonomy would provide an opportunity to put local finances in order and to raise money for funding educational, cultural, and other functions that have already been transferred to the local level. The new law also allows municipalities to borrow additional funds in the capital markets – under the condition that the Ministry of Finance approve all international issues.

The passing of the municipal financing bill is indeed a turning point in Macedonia's local government reform. Aside from providing an adequate foundation for sustainable local government, the law sets limits on the central government's authority vis-à-vis these local entities, provides for greater civic participation, and outlines new possibilities for the free association of municipalities. The deliberations on the draft, as well as on other major local government reform bills, included open political dialogue among ruling coalition partners, on the one hand, and between government and the Parliament on the other. NGOs and local government associations were similarly included in the process, making it more transparent and democratic.

Despite the progress registered in formulating and passing key local government legislation in line with the reform agenda set out in the Ohrid Framework Agreement, the government's efforts have stirred up significant resistance, especially among local ethnic Macedonian communities. In some cases, popular discontent took the form of roadblocks, as in Obleshevo in June, and in demonstrations and street riots in Skopje and Struga. The World Macedonian Congress, a nongovernmental diaspora organization, initiated a campaign for collecting signatures to hold a national referendum on the new administrative division of the country. After the campaign collected approximately 180,000 voter signatures, the Parliament was forced to pass a bill in September authorizing a national referendum on the new municipal borders. As discussed in the previous section, the referendum took place on November 7 but failed to reverse the course of local government reforms.

Judicial Framework and Independence (Score: 3.75)

Improving the work of the judiciary has been at the forefront of reform efforts in Macedonia for the past few years. Along with domestic critics pointing out the inefficiencies and slow pace of the judicial process, the European Commission has also had this area on its radar screen given Macedonia's accession aspirations. Following the country's formal application to join the EU in March 2004, the member states asked the commission to prepare an opinion of the country's prospects. The opinion will be based on a detailed questionnaire with sections on political institutions, market conditions, and the judiciary, which the Macedonian government has to complete and return for assessment. Within the current review of the stabilization and association process, the commission advised the government to take further steps in the areas of rule of law and strengthening administrative capacity. The commission report, while praising the general progress in reform efforts, stated firmly that the government must initiate a comprehensive overhaul of the judiciary. This process, in the commission's opinion, should be combined with greater efforts regarding the implementation of harmonized legislation (laws approximating EU law, many of which have already been adopted).

The Macedonian government has recognized the need for substantial change and initiated several reform measures in 2004. Minister of Justice Ixhet Memeti acknowledged publicly that the judicial system required thorough restructuring. In April, he announced that his team was working on a package of legal amendments that would provide a framework essential for the successful reform of the system. Among the proposed changes were restricting the existing practice of delaying – sometimes substantially – trials, redefining certain provisions of the criminal code, and amending the entire judicial process. In addition, the Ministry of Justice plans to propose constitutional amendments that would redefine the position of judicial power within the country's political system. More specifically, these amendments would address the issue of appointing and dismissing judges, determining judges' immunities, and reinforcing the independence of the judiciary by setting up a separate judiciary budget. Memeti also announced plans to abandon the current practice of appointing judges through judiciary exams and to further strengthen the administrative capacity of the judiciary by introducing a new system of recruiting, training, evaluating, and promoting judges.

The current efforts to reform the Macedonian judiciary have been possible in part because of the significant legislative and constitutional reforms introduced in the aftermath of the 2001 Ohrid Framework Agreement. While these changes introduced a new political system at both national and local levels, they also provided for an equitable legal representation of ethnic minorities and the use of minority languages, as did constitutional amendments. A key reform in 2003 was the introduction of the institution of the ombudsman in Macedonia, an essential guarantee for the functioning of the new system and for stimulating civic participation across ethnic and religious lines.

The Parliament approved important amendments to the Law on Citizenship in January 2004, establishing new requirements for Macedonian citizenship. The required period of permanent residency in the country was reduced from 15 to 8 years, thus annulling Article 11 of the previous law, which had provided for a faster procedure if the applicant was an ethnic Macedonian. The two other conditions for citizenship set out in the law were proficiency in the Macedonian language and evidence that the applicant does not pose a threat to national security. One of the most bitterly debated draft laws, the Law on Citizenship was initially vetoed by the late president Boris Trajkovski, but the Parliament subsequently adopted it with a simple majority of 61 votes.

The Parliament managed to adopt two other reform-oriented laws that are crucial not only for meeting the goals of the Ohrid Framework Agreement, but also for fulfilling EU accession targets. In March, the deputies passed much anticipated amendments to the Law on Internal Affairs, effectively putting border control under the auspices of the Ministry of the Interior instead of the Ministry of Defense. Controlling the flow of people and goods across the country's borders has been a serious issue in past years, especially in light of the Albanian insurgencies in the region. Taken together, these amendments provide an important restructuring of the Ministry of the Interior in line with Article 75 of the Stabilization and Association Agreement with the EU.

In July, parliamentary deputies successfully passed the new Law on Prevention of Money Laundering, building on several legislative initiatives from 2003. The most important provision of the law is the requirement to establish the identity of any counterparty involved in a transaction of €15,000 ($18,000) or more. At the same time, savings bank depositors wanting to transfer in or out of an existing account €2,500 or more must be identified by the bank and placed into a special register. During the parliamentary deliberations, Minister of Finance Nikola Popovski said that the major goal of the law was to reduce the number of cash transactions and introduce new controls on money laundering.

In general, the constitutional and legislative reform process in Macedonia over the past year has proceeded well, partially as a result of the political stability and calm security situation so lacking in previous years. Important steps have been taken in the area of citizenship law and in the legal protection of citizens' rights in relation to state institutions. Nevertheless, more needs to be done with respect to implementation, as the European Commission stated in its annual review of the country's progress.

Corruption (Score: 5.00)

The fight against corruption in Macedonia gained momentum in 2003, a stellar year in terms of fighting corruption, with the enaction of a series of laws and regulations and the creation of an independent Anticorruption Commission. In addition, authorities launched several high-profile corruption cases (most notably against former interior minister Ljube Boskovski and former defense minister Ljuben Paunovski), as prosecutors investigated the deeds of members of the previous government. Not surprisingly, corruption surveys, including Transparency International's Corruption Perception Index (CPI), which measures public perception of corruption, reflected these accomplishments. The 2004 CPI score for Macedonia was 2.7 on a scale of 0-10, with 10 representing the lowest level of perceived corruption. That was a slight improvement from the 2003 score of 2.3 in that year's CPI survey.

In the second half of 2004, however, the momentum in the fight against corruption was lost. Much anticipated developments in the aforementioned court cases failed to take place as trials bogged down in the slow judicial process. The Anticorruption Commission blamed the government several times for a general lack of coordination among government institutions, necessary to fully implement the anticorruption initiatives of 2003 and the work of the commission itself. At a press conference held in August, the head of the commission, Jovan Trpenovski, told journalists that the government had given up the fight against corruption. He complained about the refusal of the Ministries of Finance and Transport to support the commission in the investigation of the two high-profile cases of suspected corruption: the privatizations of the OKTA oil refinery and the Ferspred forwarding/freight company. The previous VMRO-DPMNE government oversaw both of these privatizations, yet according to the commission, the current coalition had taken no action to reopen the deals despite the suggestion that corruption had taken place. The case of OKTA, in particular, has drawn enormous publicity. A Greek concern bought the company, Macedonia's sole oil refinery, in 1999 under conditions that granted the new owner a full monopoly over the import of petroleum and guarantees by the government to buy 500,000 tons of oil for a period of 20 years.

A controversial amendment to the Law on Anticorruption passed in July reignited the infighting between the government and the commission. The new measures state that the body must undergo "professionalization," receive a five-year mandate, and make use of a budget that the government would determine and approve. Commission officials said that the changes altered the independent nature of the institution and threatened to turn it into a bureaucratic department of the government. The friction between the government and the commission dates back to 2003, when commission officials opposed the government's anticorruption program, stating that under the Law on Anticorruption they were entitled to develop and approve such a program and should have an upper hand in corruption investigations.

The commission's discontent with the lack of support from the government was aired one more time before the aforementioned amendments to the Law on Anticorruption were passed. In its annual report before the Parliamentary Committee on the Political System and Interethnic Relations in February 2004, the former head of the commission, Sladjana Taseva, remarked on the lack of government cooperation and stated that further legislative and constitutional reforms were needed to increase the effectiveness of the commission. According to the report, the commission held 55 sessions in 2003, cited 650 cases involving alleged irregularities in privatization deals and public acquisitions/procurement, and met with 1,200 citizens. Lacking the power to investigate cases and enforce punishments, however, the commission can only point to instances of corruption; it cannot act upon them.

In an effort to improve relations with the corruption watchdog, in the fall of 2004 Prime Minister Kostov met with Jovan Trpenovski, the current head, to discuss the commission's work and its cooperation with the cabinet. After the meeting, the prime minister announced that the government would adopt a special policy for meeting commission requests. Officials will make their best efforts to address such requests within 15 days after submission, but in no case should answers take longer than 30 days. In addition, each ministry will appoint a special liaison to facilitate the processing of appeals from the commission.

The controversy involving the executive and the Anticorruption Commission in 2003 is a shortcoming in the generally positive developments in the fight against corruption in Macedonia over the past two years. Recent legislative changes should help to reduce graft, although institutional rivalries have considerably slowed down reform efforts. Also proving a disappointment are delays in initiating the broad constitutional reforms necessary to amend the immunity status of magistrates and provide an overhaul of the judiciary – even though Branko Crvenkovski, when still prime minister, pledged these changes years ago. The plans to improve the transparency and accountability of the executive have similarly not been fulfilled. As noted previously in the section on media, the Parliament has yet to pass a law on access to public information.

Author

Dr.Georgi Tsekov is a New York-based country and political risk analyst specializing in Eastern Europe and Latin America and a fellow at the Center for Global Change and Governance at Rutgers University.