NEW MEASURES IN EMPLOYMENT POLICY OF MACEDONIA

Employers Exempted from Tax for the Unemployed

AIM Skopje, 3 December, 1997

    In the next two years, employers will be exempted from

taxes for pension and social insurance for every newly employed worker, regardless of whether it is a privatised, half-privatised, foreign, domestic or an enterprise with mixed ownership. Until the year 2000 these dues will be paid from the state budget. Resources amounting to 60 million German marks have already been allocated for this purpose.

Prime Minister Branko Crvenkovski stated this decision on Monday, and the minister of labour and social policy confirmed that new 50 thousand jobs will be created in this manner. At the same time the minister of finance Taki Fiti demanded that at its next session the assembly adopt the law on the budget in a summary procedure in order to enable this provision come into force immediately.

At the same session, the proposal of the opposition Liberal Democratic Party on scheduling early elections for March next year should also be discussed.

Analysts believe that these two items on the agenda are closely related and that the latter has actually imposed the former.

This piece of news which was not preceded by any journalistic speculations nor hints to be read between lines in pro-regime media, has arrived at the moment when Macedonia is sinking deep into a social crisis and stratification of the society into a fabulously rich minority and an army of poor citizens. This was scientifically proved at the recent gathering of intellectuals on the topic "Transition and Social Stratification".

The fact that only 0.1 per cent of the population of Macedonia can be classified in the category of middle class was stated in the discussion. The official statistics says that about 220 thousand of the working age population are unemployed, among whom the majority are between the age of 23 and 34. This is almost 32 per cent of the employable population in Macedonia. The data of the institute for sociological and politicological investigations say that 62 per cent of the population in the country are supported by others, and the average salary amounts to 280 German marks.

Prime Minister Crvenkovski admitted that unemployment was an acute problem in Macedonia, with social, economic, and even political dimensions.

The opposition believes that "exemption of employers from dues" is just another in a "series of bluffs" in not very short prime minister's career of Branko Crvenkovski (this is his third mandate). The young prime minister announced that he would square accounts with the mobsters in the authorities, with corruption, in the similar manner.

Prof. Dr Natalija Nikolovska, the harshest critic of the government economic measures, says that the origin of 60 million marks of budgetary surplus is not clear. Especially because it was necessary to rebalance the budget because Macedonian economy cannot bear the burden even of the previous dues. "Budgetary subsidizing of employment at the expense of the economy is doomed", she says and concludes that it was a "step backward" in the so-called market economy.

Petar Gosev, leader of the Liberal Democratic Party, shares this opinion, saying that this measure is just a matter of political marketing. "The problem of unemployment cannot be resolved by this measure", he believes. "This is the third or the fourth time that Mister prime minister is theatrically discovering the wheel in the sense: 'follow me, I have the solution'", says Gosev.

Nevertheless, Crvenkovski's speech held on Monday was not completely psychologically ineffective when exhausted people are concerned whose weakened economic power can be felt simply by taking a walk through numerous Skopje shopping centres and luxurious boutiques which are almost completely deserted. Even shops of the once popular Zuteks and Eco-shop, where cheap smuggled Turkish goods and substitutes of famous manufacturers from local tailors' shops are sold. The ordinary people hope that it would be easier for them to find jobs, and illegal workers hope that their employers will finally have them registered.

It is quite certain that this populist decision will immediately raise the shaken rating of prime minister Branko Crvenkovski and the ruling Social Democratic Alliance, regardless of whether it is just a cheap marketing move on the eve of the elections. Crvenkovski has shown again that he was a player worthy of respect and a political rival who does not give up easily, a middleman who is capable of pulling a solution out of a hat.

Connoisseurs of circumstances believe that many "renegade" businessmen who did not look favourably upon high taxes and frequent visits of inspection services to their enterprises will now return into the camp of the Social Democratic Alliance. At these pre-election times, they had hurried to find new political patrons among the increasingly aggressive opposition Liberal Democratic Party of the former ally of Branko Crvenkovski, Stojan Andov and his former chief and member of the same party, Petar Gosev.

With this move, Branko Crvenkovski has overshadowed even the political supremacy of President Gligorov, who had been asked by the "constructive" opposition - the Liberal Democrats - to help and intervene because of haughtiness of prime minister Crvenkovski. After this move, criticism concerning great unemployment and utter inefficiency of Crvenkovski's cabinet goes up in smoke.

This overshadowed also the evening receptions at president Gligorov's attended by leaders of all relevant political parties, which had been pictured by pro-regime media as the ultimate political accomplishment in the past two years.

It was at these gatherings that a consensus was reached that Macedonia should become a member of the NATO and the EU, which had indeed never been questioned by any political party in Macedonia. Nevertheless, rumour leaked from these gatherings that Crvenkovski, who had no sympathy for the initiative of president Gligorov to finally initiate talks with all the political parties in the state, arrogantly threatened the opposition that in the forthcoming elections he would crush them like a "trailer which runs over a frog".

Simultaneously with the announcement of this tax relief, the governor of the National Bank, Ljube Trpevski, announced lifting of financial restrictions. The National Bank will increase primary money issue in the course of this month. This will increase credit and financial capabilities of commercial banks. There will be a surplus of money on the money market, which will increase the amount of loans and investments. This will affect liquidity of the economy, especially of enterprises close to the regime. Demand will also increase on the market.

Along with the tax relief, fresh capital in the market creates a very big advantage for the ruling coalition which has unanimously hurried to support the package of new measures. The Socialists of Ljubisav Ivanov-Zingo, Macedonian "daddy" (counterpart to Fikret Abdic of Cazin in B&H), claim that this is exactly what they asked for. The Albanian Party of Democratic Prosperity (PDP) member of which is the mentioned minister of labour and social policy, claims that this is a historical change for the better.

The elitist Liberal Democratic Party has in this manner been deprived of its central election topic. Crvenkovski has by doing this reduced his opponents in the forthcoming elections to the rightist VMRO-DPMNE, or to the known ideological differences between the left and the right, which are more of an ethnic nature.

VMRO-DPMNE is aware of this. For them, the move of the prime minister is pure propaganda which the citizens of Macedonia will have to pay for. Because the budget is increased from taxes, and taxes are paid by all the citizens. This is like sowing the sand, says Boris Stojmenov, member of the leadership of VMRO-DPMNE, occasioned because of the elections. "True employment is provided by increased investments and increased export, and not by obsolete measures. This is just an attempt of the government to justify its greatest defeat in the past six years - the highest unemployment rate ever", says Stojmenov.

It is clear that the ruling Alliance has already begun to work in order to win the elections next year. Regardless of whether they will be temporary or not. Skilfully done, one must admit. The main benefit from these measures which will in the long run be paid by the ordinary citizens, is for the time being booked among the assets of the former communists.

AIM Skopje

SLOBODAN CASULE