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How Do Analysts View Impact of Macedonian Aid Package? - 2002-03-14

Aid donors mostly from Western Europe, North America, and Japan meet Tuesday in Brussels to approve an aid package valued at more than $200 million for Macedonia, the poorest republic in the Former Yugoslavia. While the donors' intent is ethnic reconciliation several analysts remain skeptical.

Macedonia's aid package is long overdue. Politicians in Skopje wanted the cash early in 2001. But last year's insurgency and fighting between Albanians and Macedonians made their wish untenable. The government greatly boosted its military outlays, worsening an already large budget deficit and causing the International Monetary Fund to refuse new lending. Aid donors then conditioned assistance on parliamentary approval of increased powers to the Albanian minority.

Despite the delay, the cash distribution is twice as big as what was contemplated a year ago. The over $200 million in aid will be used for budgetary support, housing and other war related reconstruction, and implementing the autonomy measures promised in the August peace agreement.

Brenda Pearson, Macedonian specialist at the U.S. Institute for Peace, worries that the aid money may not be productively used. "The difficulty of course is going to be monitoring this aid, to make sure that one, it doesn't line the pockets of corrupt politicians, and two, to make sure the aid is equitably distributed among the different ethnic groups in the country," she says. Ms. Pearson is not convinced that the ethnic Albanians will get their fair share of the aid.

Christiaan Poortman, the World Bank Macedonia expert speaking from Brussels, says aid monitoring mechanisms have been put in place. He denies that policy conditionality has been reduced and he expects Macedonia to conclude a new lending accord with the IMF within three months.

"We will hear a commitment Tuesday from the authorities that they will convert this so-called staff monitored arrangement with the IMF into a regular stand-by agreement at the end of June," Mr. Poortman says.

Another Macedonia specialist, Kristof Bender of the Berlin-based European Stability Initiative, doubts that the aid will promote ethnic reconciliation. He advocates rural development projects that would bring down the high unemployment rate in rural areas.

"We have young guys sitting in villages and ethnic Albanians are much more represented in rural areas having no job and no prospects. And they can't do what their fathers or their uncles have done 20 or 30 years ago. Namely going to Germany or Switzerland, stay 10 or 15 years, save some money and come back, buy a house and set up some business," he says. Both Ms. Pearson and Mr. Bender say renewed fighting is a real possibility. Mr. Bender says fighting could break up even though a large majority of Macedonians and Albanians oppose it. "To put it very simply, 50 or 70 people are enough to create a lot of trouble. Especially in a very delicate situation like Macedonia finds itself today this could provide for the risk of greater escalation," Mr. Bender says.

Some 700 NATO peacekeepers under German leadership remain in Macedonia and their mission is likely to be extended. Parliamentary elections are to be held later this year.