Interview for "PULS", October 04, 2002

MACEDONIA - IMF, POSITIVE SIGNALS

In order to withdraw the tranches of the already signed arrangements with the World Bank, a new arrangement with the IMF is necessary. Although the signals sent from Washington are positive, the international monetarists clearly showed that they make no compromises regarding the tasks they assign. The latest developments with the employments in the public administration are not at all in favor of the already agreed.

At the IMF and the World Bank Annual Meetings in Washington D.C., the Macedonian delegation, under the leadership of the Governor of the NBRM, Mr. Ljube Trpeski met the directors of the World Bank and the International Monetary Fund for Europe, Mr. Christian Portman and Mr. Michael Deppler.

“It is necessary to conclude arrangement with the IMF as soon as possible, which will provide withdrawal of the funds from the credit arrangements with the World Bank and releasing the financial assistance from the Donors’ Conference held in Brussels. The funds are needed for accelerating the economic growth and maintaining the macroeconomic stability of the country” explained Trpeski.

Positive signals have been received from the both directors of the most powerful monetary institutions, expressing their readiness for renewing the arrangements immediately after the negotiations with the new Government.

The monetarists in their “cheap politics” conducted so far showed the entire strictness - the arrangements or tranches withdrawal have been deferred for months, till the Macedonian Government fulfils the assigned task. Actually, it is a function of the IMF and the World Bank - to teach the developing countries to operate in accordance with their principles and to assist them financially. Many people worldwide, in this particular recipe recognize the conspiracy of the large countries and protest against the globalization in which the strong support only the strong ones, at the expense of the weaker.

Doubtlessly, the entire concept contains much deeper philosophy, however, there is not a third option: either the state chooses to go along the road supported by the IMF and the World Bank, or it struggles in the global world by itself.

Macedonia chose the dialog with the international monetarists. Regardless of the governing structure, this dialogue continues. Certainly, regardless of whether we like it or not, each change either in the governing team or during the replacement of one government with another, so far has led to certain slowdown in the negotiations.

Although Portman announced his visit to Macedonia by the end of the year the purpose of which is to discuss the withdrawal of the funds from the FESAL II arrangement for reform of the enterprises and the public administration, it is already certain that it will not go smoothly. The World Bank representative for Macedonia, Marie-Helene Bricknell already scolded the departing Macedonian Government about the thousands of new rapid employments in the state administration during the vacuum period. It is true that is was said between lines, however, the message was clear. 

“At this friendly meeting we discussed that we should be careful when conducting the reforms in the public sector due to the usage of PSMAK arrangement, which is of extreme importance” said Bricknell after the last meeting with Mr. Nikola Gruevski.

The PSMAK arrangement should contribute to a reform of the public administration and its larger efficiency. Macedonia will withdraw US Dollar 45 million from this arrangement, while the first expected tranche should amount to US Dollar 15 million. This arrangement is regarded as part of the reforms of the administration advocated by the IMF - reducing the above 100-thousand administration to approximately 60 thousand employees. The reason for this request of the monetarists arises from the fact that a third of the budget is spent on the wages of the budget-relied administration.

Besides the tranche of the PSMAK arrangement, Macedonia is expecting the second tranche of the FESAL II arrangement in the amount of US Dollar 20 million. However, according to the procedure, first we should conclude a new arrangement with the IMF, and than meet the performance criteria of the World Bank. Here, regardless of whether we like it or not, we return to the public administration figure and to what was already presented to the public that 6,000 new persons have been employed since July! Although the new employment, given the enormous unemployment rate, should make us happy, however, if “installed” in this manner they can cause damage. We have seen many times so far that the monetarists are strict and almost uncompromising in their requests. What we have left is the persistence in our endeavors - to continue the communication with them, certainly finding formula for balancing the national and the global interest.