Skopje, 3 January 2022 (MIA) – After almost two years since the Covid-19 pandemic broke out, the economy in North Macedonia is slowly recovering. The six stimulus packages adopted to support the economy and the citizens, according to some experts, have had positive effect contributing to job security, which has been confirmed by the IMF. The developmental component, according to experts, is of exceptional importance when it comes to supporting the recovery, and the government has announced to focus more on investments and digitization in the upcoming period. The energy crisis remains a challenge in the new year, which will show whether or not there is enough electricity, how much it will cost, and how much the crisis will reflect on the companies’ work. Some experts recommend conserving energy and to be disciplined.

Professor Marjan Petreski of the University American College Skopje says that, as an overall contingent, the impact of the stimulus packages has been significantly positive, preventing a significantly larger drop in income.

“The recent revision of the GDP growth in the third quarter of 2020, from -3.3% to -5.9% shows that the impact of these measures was probably smaller than what we initially thought, but that drop was going to be deeper than -9% without these measures. According to the calculations, the key measure for job preservation – the MKD 14,500 subsidy per worker in affected companies contributed to the preservation of around 60000 jobs out of 75000 that were on the brink of being lost. Of course, some people did lose their jobs. Social measures saved the income in poorer stratums in a range of 30-50 per cent with the looser criteria for giving out welfare and one-time payments of MKD 3000 to 9000,” Petreski said in a statement MIA.

According to his calculations, the values of the economic and packages of social measures meant to deal with Covid-19 is around EUR 600 million, about half of their programmed value or near 6% of the GDP. Petreski includes the percentages for the measures for relieving or delaying certain payments for certain tax obligations.

“The key issue is whether their developmental component is working, which is very important for the recovery we’re moving towards, much slower than our initial estimates. Some measures, such as the reduction of customs costs for key materials, export funds, Development Bank guarantees etc. are being implemented, which should be faster so that we can say it helped the recovery when it was needed the most. I expect that 2022, in the context of anti-Covid measures, will go like that,” Petreski says.

He emphasizes that the 4% growth expected for 2022 is relatively solid given the circumstances, but he assumes this support stipulated with measures the state has already announced publicly, as well as with stipulated capital investments in the budget which are susceptible to subinfeudation.

“This recovery support is exceptionally important because, let’s remind ourselves, the state got a loan of an additional EUR 1 billion to deal with the economic consequence of the coronavirus crisis, and it will take smart fiscal consolidation to service this loan, which will enable the rebuilding of the fiscal space necessary to respond to future crises, and it won’t harm the recovery,” Petreski told MIA.

Deputy Prime Minister for Economic Affairs Fatmir Bytyqi says that the measures were brought during a time when both the citizens and the economy were hit by the pandemic, and the best confirmation for their justifiability is the grade by the IMF.

“The overall estimation of the measures was EUR 1.1 billion, and the latest projections state that the return investments amount to approximately EUR 1 billion. I don’t usually say what we’ve accomplished, but the IMF’s latest report proves that all of the government’s measure packages had a positive influence on reducing unemployment and the country’s overall economic drop. It’s encouraging that the IMF has given us this recognition,” Bytyqi said in a recent interview with MIA.

He believes that, now that the economy is recovering, the focus should be put on development measures that will help companies improve their technologies and have added value.

“I don’t think we should talk about intervention measures, and instead we should focus on development measures. That’s why we’re continuing the government’s regular programs to support investments and we’re improving conditions in order to better support the companies attempting to enter the investment cycles, as well as generate new programs,” Bytyqi said

He added that everything is being monitored and that there are EUR 100 million in the 2022 budget allocated to aid programs that will be used for the energy crisis and to help the economy and citizens if this has a big economic impact on them.

According to former finance minister Xhevdet Hajredini, this country mitigated the consequences of the crisis caused by the pandemic, but now it’s facing an energy crisis, and the consequences of it can be enormous. He recommends that an end should be put to populist measures.

“I think the new government should end populist measures. The announcements that the cost of electricity won’t increase by much harm the citizens because the losses of supplier companies will be paid from the budget, which the citizens pay for. Everything is paid for in different forms,” Hajredini said in a statement for MIA.

Energy independence is not something that can be solved with only a small amount of money due to the numerous shortcomings over the past 30 years. Power plants have been amortized, and their maintenance investments will be huge. Our production is also expensive because we have to obtain coal from Kosovo, and transport costs are high, Hajredini pointed out.

“It takes saving, discipline, conserving energy in order to reduce energy costs. This problem won’t be solved quickly and we need to face the reality,” Hajredini said.

Small investments in electricity over the past 30 years have been singled out as one of the culprits behind the increased cost of electricity. Over the past 30 years, the bigger capacities that the state built were the Kozjak plant with a capacity of 80 MW, Sveta Petka with 35 MW and the wind-powered plant in Bogdanci with 36.8 MW. The TE-TO plant, a private investment with a capacity of 220-230 MW, was also built. All other investments have gone to renewable energy sources, such as small plants, photovoltaics and biogas plants with an overall capacity of 200 MW.

“It’s a known fact that we’ve been riding on our old glory from the golden era of electricity when the three blocks of MEC Bitola, MEC Oslomej and TEC Negotino were built, as well as some hydro-electric power plants. MEC Bitola was supposed to work until 2020, but it’s still operational, using lower-quality coal which affects their current work adversely. We’re in a situation in which we’re forced to import coal because we don’t have our own in order to secure the production of electricity, but the costs of important coal are higher than the costs of mining our own,” according to Marko Bislimovski, president of the Energy Regulatory Commission, in a recent interview with MIA.

Bislimovski said that base energy through co-generative plants or gas plants should be obtained. Fast investments are needed short-term, as well as for photovoltaics to be built as soon as possible.

Valentin Jankovski

Biljana Anastasova-Kostikj

Translated by Dragana Knezhevikj