Macedonian Corruption Stories

Numerous corruption and financial scandals involving millions of D-marks are rocking Macedonia as it struggles to quell an insurgency. The moral and other damage that these scandals are inflicting on the state has yet to be estimated.

AIM Skopje, April 30, 2001

Reality turned tragic in Macedonia at the beginning of spring 2001. This country, formerly known as an "oasis of peace" in the Balkans, can now freely be labeled "an oasis of corruption and crime." Citizens, who have had more than enough of the events of the last ten years, first, the reign of the SDSM, followed by the Coalition for Change led by VMRO-DPMNE leader Ljupco Georgijevski and DPA leader Arben Xhaferi, (not to mention the small fish around them), have started cracking jokes on their own account. One cynically says that there is a mafia in every southern European country, but only in Macedonia "does a mafia have its own country." Innumerable examples support this.

The country has been shaken for days by various abuse-of-power scandals, including the mindless sale of the remaining social capital "for peanuts," in exchange for fat provisions, and the nepotism of certain leading officials. Various examples of these scandals, such as the secret sale of hotels, construction companies and factories mostly to government officials, money laundering and the spending of state funds for public procurement, without tenders and aided by ad hoc firms founded by close relatives of officials' families, the duty-free import of sugar, meats, and oil, officially approved to traders close to the ruling parties, have daily been revealed to the public, unfortunately, to little avail. All of these brazen scandals, which came at the worst possible time, while the country struggles to cope with a rebellion, have not even brought a single resignation, no one has even been held responsible! War and crime, as bitter and powerless analysts say, "have murdered" Macedonia as a state where the law is respected and upheld, if that even existed in the past decade!

Instead of a market economy, which the ruling Macedonian oligarchy purports to support before the international community, the government has in fact established a "Cuban economic" model. The government meddles in everything. It began modestly by intervening in a law on privatization in which it unconstitutionally turned already privatized companies into state property and introduced the principle of selling social capital at private meetings. Today, two and half years later, it has perfected its methods and nose for acquiring profit for the party and individual interests of people in all areas of the economy.

Let us recall the first "blunders" that happened during the Macedonian secret privatization process, namely in the sale of the Bitolj sugar factory and the Skopje tobacco plant. The state agency for privatization first confiscated the sugar factory's shareholders' capital, allegedly because it failed to regularly pay purchased employees' shares, and then conspiratorially offered a control package to a client on the stock market. It turned out later that the client in question was the Bulgarian Multigroup. The same thing happened to the Skopje tobacco plant sold to Tobacna of Ljubljana. Experts in the dealings of domestic tobacco bosses claim that Macedonian government leaders placed DM1.7 million from the sale in an account in Liechtenstein!

After that, a series of scandals followed which continued to this day. According to economic observers, the apex of these scandals was the sale of the country's only refinery, OKTA, to a Cyprus firm, EL.P.ET. Balkanika. Namely, the refinery, worth more than US$180 million, was literally given to the Greek Hellenic Petroleum, a state firm. The firm had to pay US$90 million and from its profit! In the last three years, according to unofficial information from the finance ministry, because official data is impossible to come by, little more than US$5 million has been transferred to the Macedonian state account. Rumor has it that between US$5-15 million has already ended up in the private accounts of government officials from the sale of OKTA.

It will be a long time before people in the country stop guessing at how much was paid for the Bucim mine, which was sold to foreigners for DM3 million, though worth five times as much. The former Kavadarci metallurgical giant FENI was officially sold for US$2.7 million on the stock market, the Zletovo smelter was sold for DM7 million to the Swiss Glencore, that is, those who stand behind it, at a 99.9 percent discount, or a mere DM2,400!? There are enough similar examples to fill a book. All of them vaporized enormous amounts of capital in an already poor state, filling the pockets of the ruling "scandal masters" from the VMRO-DPMNE and DPA.

Another scandal involved the purchase of various factories and other businesses by the ruling parties, who also operated them to reap the profits. The constitutional court ruled that this was illegal, but everybody turned a deaf ear. The ruling VMRO-DPMNE is deliberately making property worthless and then acquiring it for nothing. It has acquired agricultural collectives, printing presses, hotels, attractive office space in almost all larger towns in the country, and one bank. To be truthful, VMRO shareholders who hold shares in profitable firms are selling their shares en masse, to entrepreneurs close to them. This is another scandal.

The current Macedonian government fears it could be ousted, and has decided to sell what little remains of social capital in its possession. In as little as fourth months, the agency for privatization and the fund for disability and pension insurance sold residue shares in 37 companies, at a considerable discount. They earned little more than DM11 million, the exact amount which Defense Minister Ljuben Paunovski personally deposited in the accounts of his relatives, at the peak of the Albanian insurgency! Control packages of 51 percent were sold in eight companies. The exceptionally profitable Skopje fairgrounds, were sold for a mere DM6 million, the well-standing and respected Ohrid Tourist was sold for DM288,000, though worth ten times more. Argoplod in Resen, which began making losses, and other firms were sold at 70 percent to 90 percent of what they are actually worth.

The most profitable business in Macedonia, however, which regularly fills the budgets of the ruling parties and the private accounts of their leaders, is undoubtedly the rigorously-controlled illegal trade in oil and cigarettes. Macedonia was unofficially proclaimed the most profitable transit route towards Kosovo and Europe for duty-free shipments, which, according to knowledgeable observers, brings in DM625,000 to DM1.5 million per shipment. The sale of foreign cigarettes, which are manufactured using stolen licenses in the Kumanovo cigarette factory, once used to bring in DM150-200,000 per truck, has now reached millions. It is a public secret that these profits are comfortably divided among individuals in the ruling coalition.

Fresh scandals are additional proof of the current government's hunger for profit. These men have surpassed even their predecessors and "teachers" in the SDSM. Foremost in theses affairs are, as far as it is known, Defense Minister Ljuben Paunovski, Economic Minister Besnik Fetai and Health Minister Dragan Danilovski. The minister of the economy was awarded the title of war profiteer. This man is famous for his method of distributing quotas for the import of food, chiefly sugar and meat, especially pork, to people close the government exclusively. He is also known for the speculative sale of money guzzler collectives to his friends. The Veles Brako, Kumanovo Kiro Fetaki and Skopje Gazela companies, once the pride of the Macedonian economy, were sold to "friends" for ten times less than they were worth. In February, for example, Besnik Fetai approved the import of 15,000 tons of white sugar, circumventing customs, allowing his cronies in 12 firms, with mostly one employee, to earn more than DM5 million on the difference. In the same manner, the "incredibly talented" Fetai handed out quotas for meat imports from Croatia, jeopardizing the implementation of an agreement on free trade with that country and the survival of that country's economic representatives in Macedonia. As Croatia and Macedonia are exchanging notes of protest, those who received the import licenses are making a pretty penny "lending" them to firms for a certain amount. The minister is denying all of the aforementioned, claiming that he acted to break old habits and in the interest of a market economy!?

The defense minister's scandal not only negatively affected a key element of the country's security, but also inflicted incalculable damage on the country's international reputation. Instead of being investigated, he is monitoring the development of the situation, awaiting his fate, under party suspension.

The health minister has his own share of scandals, more proof that politics has become an attractive and profitable business in Macedonia. The health minister has cause enormous damage to Macedonian health, two people have died, as a result of receiving improperly stored penicillin. Time will show how people being treated for cancer with "distilled water" -- cancer medication of dubious origin, will fare. Friends of the government collect ample foreign currency profits even from unregistered medicine; the minister himself, cynics claim, has purchased two new apartments and a luxurious automobile, and has plenty of cash in a foreign account. He is also known for the way in which he spent funds from the World Health Organization for reform, for stopping a Japanese medical humanitarian aid shipment worth US$7.5 million to discipline his insubordinate associates, private tenders, and especially for eagerly listening to his wife, a counselor for predicting the future in the prime minister's office!

So, Macedonian ministers have a fortune teller and spiritual guidance. Unfortunately, because of these unconscientious individuals, the state is dangerously losing ground and suffering damages that cannot be measured. Their influence on the country's reputation and survival will show in the days to come.

Branka Nanevska

(AIM)