Thursday, 14 December 2017 | News today: 14

Vice PM Peshevski: We expect criticism, not just populism

Middle class returns by creating new jobs. Administrative measures are just a small portion of the equation. That is exactly what we do. Opposition replies should not be just populism, they have to be substantiated, Vice Prime Minister Vladimir Peshevski points out.

Industrial zones will be linked to new highways, foreign investments are announced, industrial production increases, trade deficiency decreases. In regards to these, what are your expectations, is significant increase of the growth rate possible?

Peshevski: It could be, as both the Prime Minister and my direct contacts inform me, we expect many companies to decide positively this year. Trade deficiency decrease and industrial production growth is mostly a result to our efforts to attract foreign direct investments in the past couple of years in or outside the free economic zones, which significantly increases export and trade deficiency decrease. However, our end goal is creating new jobs, because that is what leads to indirect resolving  of economy issues and higher growth rates. To the question whether I expect economy growth, I would reply we have always been careful optimists and only step forward with facts we are certain to accomplish, and honestly, we work very hard for those facts to be bigger. My unofficial prognosis is 3,5% growth rate this year, which would be (among) the highest in the region. Macedonia and this Government, unlike other countries in the region, have showed we can cope with serious problems and create economic growth policy even in tough economic times.

IMF, or IMF Executive Director Menno Snel, assessed Macedonia as most ambitious to attract foreign investors by tax and macro-economic stability. How important are these assessments to you?

Peshevski: It is always nice to hear approval from a global authority. However, we do not do any of this for for them or their institution, but for foreign investors to get a good insight into Macedonia as investment destination and to come here. That is the assessment that matters to us, when an investor decides to invest here. Assessments from such authorities are not rare – almost every international finance institution: World Bank, IMF, EBRD, continually repeat these assessments for Macedonia. What the IMF representative cannot see is what is in the base of these results, the positions of the Government and of the people working on attracting investments. Favorable macro-economic conditions, good fiscal packages, intensive promotion campaign, promoters network, intensive roadshows, and the general Government position towards investors who reinforce our development, are the key factors that make all the difference. That is why we continually negotiate with all investors, both domestic and foreign. We use every single chance to improve the business climate in order to attract foreign investments, to create new jobs and raise our citizens’ living standard, that is our goal.

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You have mentioned new job openings. The Government has introduced a new employment measure releasing companies from paying benefits if they employ persons aged under 29. What is the effect you expect from this measure and why does it only include this age group?

Peshevski: The population is the measure target group because of the highest unemployment rate. An not just in Macedonia, but in whole Europe unemployment rate with the youth population is higher. This is the reason we decided to introduce this measure. Others have also tried or suggested similar measures, but we specially designed this measure by direct discussions with Government Commissions, considering statistics and budget possibilities. The target group contains 45.000 people aged under 29 and unemployed, 25.000 of which are passive, and 20.000 active job seekers. Of course, noting stops the passive job seekers to start looking for a job. This should be observed as a small piece of a bigger mosaic of new job opening activities. The Employment Service Agency of the Republic of Macedonia offers various benefits, such as financial aids to companies that employ young people or to those looking to start their own business, The Ministry of Economy has special business start-up programs, that may be improved in the future. That is exactly what we will continue to do to show our youth we are ready to move forward, that we will not stop here. Of course, a single measure cannot solve the problem. If such existed, everyone would been using it and the problem would not exist. More things should be done, this is just a step forward into that direction to simply assist employers by releasing them of paying benefits if they hire a young person, which makes this age group more attractive to employers.

Among else, a benefit to the young people would also be the work experience. After investments and employment, a question about a different measure is in order: the Law on Redundant Workers has entered into force, that stipulates MKD 7.000 a month for 3.000 state companies redundant workers until they retire. Part of the private companies redundant workers are requesting the same treatment. 

Peshevski: It is completely natural for someone in difficult position to look for a solution and when people who they worked in similar companies get such benefit from the state, those who had worked for private companies are looking for the same benefit. However, the company ownership is of crucial difference here. We are the first Government to show responsibility and understanding the workers are not to be blamed, but the state, the government has certain responsibility for the liquidation of these companies. The state, as a dominant owner, was supposed to appoint mangers, directors, managerial team that would have fought for the company not to be liquidated. Since a moral responsibility emerges, we introduced this measure, but it should not be forgotten it solves a problem that was not created by this Government. Those state-owned companies liquidation problem is from previous governments, but even if we did not cause that problem it is a matter if legal continuance, because we carry certain responsibility as a Government. This is why we introduced this reimbursement measure to the former employees of liquidated state-owned companies.

An immediate system distortion would happen if the same measure goes to the privately-held liquidated companies. This can be misused from people who intentionally have or will liquidate their companies to avoid market risks, and the whole burden would fall to the state. It will cause financial collapse of the system. However, I understand the problem of the people who worked for the state-owned companies for years. Some of those companies were bought by private owners since 2000, who liquidated them. Such workers claim they worked for a state-dominated company for 20, 25, 30 years and that it is not their fault the private owner liquidated it. It is not excluded that we search for a solution for this cases in future, but I would not like to prejudice. Legally, those companies were liquidated as private companies and the private owners are responsible for their destiny.

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This concerns domestic politics matters. The opposition continuously criticizes the Government economy policy.

Peshevski: That is what opposition parties do in their fight for government. We would like to recommend them to be a bit more specific in their analysis, because the few measures they have occasionally been suggesting seem cute and attractive at first sight, but after a deeper analysis they turn out to be illogical or seriously harm the budget with no reversible solution. The opposition replies cannot be pure populism, it should all be substantiated. It is good they make suggestions and criticize us, it makes us more cautious eventually when creating these measures, but it seems much better solution of the get a deeper insight in the analysis and all side effects their suggested measures might cause.

As far as criticizing our measures goes, the results are the proof. This Government measures attract investments and salary and income increase, which are still not ideal, but more and more foreign experts, including the aforementioned IMF, assess our policies as positive, and we are pretty certain we are going the right direction.

Critics and analysis seems to be the only program opposition has to offer to citizens for the return of the middle class. To what extend is it a real competition to the Government economy policies?

Peshevski: First of all, we still have not formally seen the program which the opposition constantly announces. The keep trying to determine a target group to attract as electorate, trying to create some perception their measures are beneficial for creating a middle class. Middle class returns by new jobs. And that is all we really need, but if that only rests on administrative measures, than it is just a minor part of the equation. Middle class will return by new investments, by big infrastructural projects with many new job openings, by stimulation of tourism and agriculture. Everything we actually already do. If it could have been solved by a few administrative measures that could increase or decrease some tax, everyone would have done it. Our goal, however, is the return of middle class. I would say it is not completely lost and slowly returns again, but almost disappeared when SDSM ruled this country, but what we do as government is what leads us to the return of the middle class, as well as society income and standard increase. That is our goal. It is only legit for them to make suggestions, and the people to choose on elections whom they trust, who keeps their promises, what gives evident results. I believe this Government, led by Prime Minister Gruevski, is incomparably better than any other.

You have mentioned subsidies in agriculture and tourism. Do you have any comment on opposition accusations that subsidies are just mass bribe of voters?

Peshevski: The opposition’s problem is that during their government they had no such measures, and now they regret this Government has created such policies that stimulates agricultural producers, tourism workers and other workers.What we have done is not only pre-election, those are regular yearlong government programs. Paying subsidies is a regular activity, announced years ago. We have made publish the subsidies program and its intensity since 2011. Open VMRO-DPMNE’s program, I know exactly where it is written because I was one of the program coordinators, what stands there is exactly what is happening today. Every year. Meaning, we do what we wrote. We fulfill what we promised. That is what disturbs the opposition, because they are still somehow led by the matrix: “let’s make promises before the elections, and we will later if it comes true”. We, on the other hand, keep our promises and fulfill them.

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By: Naum Stoilkovski

Photo: Gjorgji Lichovski