Prior to the pandemic, North Macedonia took a landmark decision to change its name, and in March 2020 began talks to accede to the European Union.
In the wake of a general election in mid July, which resulted in no clear majority for the ruling centre-left Social Democrats party, the country is measuring its coronavirus response.
Deputy minister of economy, Kiril Kolemisevski, tells fDi about a drive to promote domestic tourism and attract foreign investment.
Q: How has North Macedonia responded to coronavirus disruption?
With the Covid-19 pandemic our whole country, all our citizens, institutions, and the overall economy was and is put under its toughest test yet.
With our strategic framework, consisting of three sets of direct measures, we are already implementing direct assistance of at least €550m, direct transfers to citizens and the corporate sector. With existing subsidies, as well as capital investments in the public consumption, assistance to the economy and citizens in this period reaches €1.1bn or almost 10% of gross domestic product.
At the beginning of the Covid-19 crisis, we responded immediately with direct measures to support every job and disrupted businesses. With the first set of measures, we covered the most affected sectors by the coronavirus crisis: food services [HoReCa], tourism and transport.
We continued with the second set of measures with which we provided direct support for personal consumption, and by postponing and prolonging financial liabilities for the people and businesses. With the third package worth €355m, intended for 730,000 users we will cover and protect the mid-term goals of our economy.
Q: Are there economic reforms on the agenda?
The current crisis has shown that we can be resilient, scalable, flexible and build national capacity and a system for a functioning and growing economy. We will not stop with the legal amendments and reforms. As soon as the new government will be in power, we will amend our laws and bylaws to harmonise our legislation with the EU. This process will attract foreign investors.
Q: How else is the government promoting foreign investment?
In February the Parliament enacted the Law on Strategic Investments which will encourage foreign investors to bring their operations to our country.
We are planning to put our focus on gasification, construction of infrastructure, building a regional accelerator for startups, science and technological park and regional centre for medicinal R&D. A significant incentive for the entry of foreign investment funds will be the establishment of a special equity fund in 2020, as part of the Economic Growth Plan.
Furthermore, we will initiate and create conditions for the development of venture capital as a high-quality source of funding. We will pass a special law on business angels and amend the Law on Investment Funds, which will significantly reduce [current] restrictions.
Moreover, the new Law on the Control of Narcotic Drugs and Psychotropic Substances, which is planned to be enacted, will bring serious investors in the cannabis business.
Being a NATO member and the start of the EU accession talks, along with the ongoing reforms in the country, will surely put us on the global investment map.
Q: Is the government promoting domestic tourism?
We implemented several measures that will act as a buffer and protection against the severe decline in tourism revenues. The first one is a voucher for domestic tourism of 100 euro and domestic payment card in the amount of €50 for all employed citizens who receive a salary of less than €250 net per month and do not have other income. The VAT for restaurant and hospitality services will be lowered from 18% to 10%.
As for international arrivals, we are working hard to contain the virus outbreak and lower the number of cases in the country. We implemented mandatory protocols for hotels, restaurants, beaches and bars in order to keep people safe. If we all follow the protocols, keep a safe distance and take care of ourselves, tourism will be back on track and people will travel again.