Interview with Pravda - Macedonia, Now and Then

Christopher Deliso Interviews Sam Vaknin, Ph.D.

Excerpted in Pravda on August 14, 2001

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Q: What duties did you have as economic advisor? When was this post created? By whom?

A: The post was created in autumn 1999, immediately after the elections. Two outside consultants were hired: Mr. Ante Markovik, Yugoslavia's last Prime Minister, and myself. My job consisted of gathering economic data, analyzing it, proposing policy alternatives, drafting laws and international tender documents and reviewing decisions made by various economic Ministries. The post was created by the Prime Minister of Macedonia, Mr. Ljubco Georgievski and by the then Deputy Prime Minister, Mr. Vasil Tupurkovski. I left the position last month.

Q: How significantly did the forced influx of Kosovar Albanians from Spring '99 affect Macedonia economically?

A: Politically, Kosovo was and is a threat to Macedonia's very existence as a unitary, unified, sovereign, and autonomous homeland to the Macedonians (by the way, I am an Israeli, not a Macedonian). Economically, though, it was a mixed blessing. On the one hand the burden of accepting, harbouring, feeding, and accommodating c. 300,000 refugees (equal to 15% of the population) was crushing. Macedonia's infrastructure nearly collapsed under this sudden onslaught and due to the heavy use by NATO/KFOR. Macedonia was never fully compensated for these outlays. The West has honoured less than 25% (!) of pledges it made in donor conferences. Moreover, the imminent threat to the very social fabric of Macedonia caused Western firms (mainly Germans and American - less so Greek) to cancel manufacturing orders and sub-contracting of textile production. Agriculture has suffered badly due to the effective blockade imposed by NATO's siege of Kosovo, the devastation of the Danube bridges and the throngs of refugees. The wine and tobacco industries were virtually demolished. Still, NATO has spent hundreds of millions of DM's in Macedonia since 1999. An influx of 10,000 well-earning foreigners (mainly employed in more than 60 branches of NGO's established here) also offset some of the damage by revitalizing the services sector. And Macedonia was rewarded by being integrated into pan-European structures (e.g., its stabilization and association agreement with the EU) or southeast European ones (e.g. the Stability Pact).

Q: George Soros' organizations pumped a lot of money into Macedonia in the 90's. Some have alleged that this was a case of "Greeks bearing gifts" and that he was trying to buy the country's future policy direction. Is this a legitimate criticism?

A: No, it is not. Soros invested close to nothing here. He did encourage a series of modest cultural efforts and did provide free internet ISP services to NGOs, the media, and academic institutions but that was just about it. Perhaps Macedonia - with 3.5 billion US dollars in GDP - is simply too marginal and inconsequential...:o))

Q: Is Macedonia now in better or worse shape economically than it was in '99? Why?

A: In some ways it is better off, in others much worse off. The young and dynamic Minister of Finance of Macedonia, Mr. Nikola Gruevski, has succeeded to pass through parliaments dozens of modern economic laws, thus equipping Macedonia with an advanced economic legal infrastructure. The state sold or shut down most of the loss making industrial behemoths, thus considerably reducing budgetary strain. Foreign direct investment (mainly Greek, but also German and Slovenian) has qauntupled. Privatization made great (and highly controversial) strides. The local telecom was just sold to MATAV. Macedonia's biggest bank, Stopanska Bank, was sold to the Greek National Bank. At the beginning of the year, the introduction of VAT caused the budget to be in surplus and allowed the state to accelerate the repayment of its obligations to its citizens. GDP has increased by 5% and things looked rosy. The country was even contemplating obtaining a sovereign credit rating and issuing international bonds. The only blight was an ever growing trade deficit which may have been the outcome of an overvalued currency. But the eruption of the insurgency by the NLA has changed all this painfully. With the exception of some deals with the Greeks already in the pipeline, all FDI ceased. Trade collapsed by 20%. Industrial production plummeted by almost 9% (from an already dilapidated base). Manufacturing orders and production contracts were called off. Airlines cancelled their routes to Skopje. Most foreigners left the scene. The IMF did not renew the arrangement with Macedonia and the EU has suspended credit and aid facilities in an effort to exert pressure over Macedonian decision makers to show more transigence in the negotiations with the Albanians. The damage to the country's image as an investment destination is irreparable and irreversible. As taxes collected diminished and the need to finance what became a civil war became more pressing, the budget swung to deficit.

Q: Northern Macedonia, along with Kosovo, is the lawless European crossroads for drug, weapons and sex trafficking. Albanians have been largely linked with this. Are there only Albanian gangs, or are there also Macedonian ones? Is organized crime permitted in Macedonia (i.e., corrupt politicians)? And is suppressing the black market in Macedonia's best interest, anyway?

A: Drug trafficking is only one of a series of criminal economic activities typical of the region. Cigarette smuggling, white slavery, illegal immigration, cross border trading in light weapons, piracy of intellectual software and much more besides. Macedonian and Albanian gangs collaborate in these activities under the protection (and profit sharing) of corrupt politicians and officials in the kleptocracies that pass for governments in these countries. The informal economy is comprised of both criminal activities and tax evasion. I think that the informal sector is the most vibrant, entrepreneurial and employment-creating one in Macedonia and should be left to its own beneficial devices until the state sorts out its own act. In the absence of impartial and functioning institutions - courts, banks, tax administration, customs - Macedonia is blessed to have a black economy.

Q: It is well-known that the ethnic Albanian rebels in Macedonia are financed from abroad, particularly by groups in Switzerland and the U.S. Is there any evidence that advocacy groups, such as Joe DiGuardi's Albanian-American Civic League, are involved in this? And, is it known what percentage of their weapons-buying funds are garnered from criminal profits?

A: The NLA is not a monolithic entity. It is more like an umbrella organization with serious and fracturing differences of opinion regarding the ultimate goals the insurrection and the means to obtain these goals. Roughly, it is made up of one third veteran Kosovo fighters, some of them professional soldiers, who also fought in Croatia, or in the Foreign Legion. These people are bitter and disgruntled by what they see as the betrayal of the West in refusing to guarantee an independent Kosovo and the failure of the current Kosovar leadership to integrate them economically into the emerging polity there. Their motives are part emotional and part pecuniary. Another third is made of unemployed, young Albanians, mainly from Macedonia itself. Their fighting is self-interested. They get a monthly salary and perks and, lacking education and skills, they don't have much of a choice outside the killing fields. The rest are diehard, hardcore, idealists who either fervently espouse a Great Albania, or would like to take over Western Macedonian in a "constitutional coup" which will grant them their own police force, municipalities, institutions, universities, budgets, and semi-political structures. The NLA itself is not directly involved in criminal activities, though a few of its members are. But the money that finances it (from the Czech Republic, Switzerland, Germany, and the USA) is tainted by drug dealing, white slavery, illegal immigration, and the smuggling of everything illicit, from cigarettes to stolen cars, to weapons. In this they collaborate with politicians and criminals in Macedonia - both Albanian and Macedonian. Lobby groups, such as the one you mentioned, are not known to be involved in crime, though.

Q: A couple months ago, Albanian terrorists threatened that the northern Greek province of Epiros would be their next target. Should this threat be taken seriously? And if so, do you foresee attempts by Albanian terrorists to disrupt the Athens Olympics of 2004?

A: I think that Montenegro is next in line, followed by Greece. Both have restless Albanian minorities. Albanian terrorists, in both Kosovo and Macedonia, have hitherto never acted in the manner of Palestinian terrorists (hijacking planes, disrupting international events, etc.). They clung to their "constituencies", recruited from the rural population, obtained logistical supplies (food, medicines) from the hinterland via short supply lines and attacked, largely, only the military and the police.

Q: In 1999, could you have been able to predict that this current crisis in Macedonia would be taking place now?

A: I have. In many of my articles. Visit my web site.

Q: Looking five years in the future, what will become of Macedonia? Will there be a "Greater Albania", and will other Balkans countries' borders be redrawn?

A: Look five years into the past and you will see that Balkan borders HAVE been redrawn. Kosovo has been separated from Serbia. Bosnia is divided to three. The border between Slovenia and Croatia has changed. The only long term permanent and stable solution to the Eastern Question involves changing borders and exchanging populations. The great tragedy of the Balkan is the ignorant and self-interested involvement of the Western Big Powers and their agents, the multilateral organizations (such as the IMF) and the NGO's. But then, Big Powers involvement has always been the Balkan's misfortune.

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