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The former Yugoslav Republic of Macedonia


Socio-economic profile

The former Yugoslav Republic of Macedonia is a country in transition. While the government is establishing a more stable economic environment and inflation is relatively low the country was not alone in being hard hit by the economic crises which swept across global financial markets. Since it is still working towards a functioning economy, the turbulence had a particularly fierce impact.

Economic activity has slowed down rapidly, partly because of decreasing demand in the EU for products from the country.  Bearing in mind the EU is the former Yugoslav Republic of Macedonia’s main trading partner this is a particularly worrying trend and one which may cause growth, which is already slowing down, to fall. This means that the number of jobs will also slow down or fall: the difficult international environment makes a turn-around even harder.

To tackle the problem of an under-qualified work force, public investment in education has risen from 3% of GDP in 2006 to 4.7% in 2011. However, recent figures indicate that when it comes to the number of 30-34 year olds with higher education qualifications, the country has less than half of the EU average and 34.7% of Roma women receive no education beyond primary school.

With recent statistics showing 30.9% of the population live below the poverty line and an unemployment rate one of the highest in Europe, EU support to employment and social policies in the country is crucial.

Targeting support in the former Yugoslav Republic of Macedonia

To help countries on their way to joining the EU, a fund called the Instrument for Pre-accession Assistance, or IPA has been created by the European Commission.

One of IPA’s key goals is to prepare countries to run the programmes which, when they join the EU, will receive support from funds such as the European Social Fund (ESF). The IPA-financed projects dealing with the development of human resources, have three main priorities: getting and keeping people in work; improving the education and training systems to ensure the country has a flexible and adaptable workforce, and including disadvantaged groups in the labour force.

The Human Resources Development Operational Programme (HRDOP) for 2007-2013, identified the need to overcome the following challenges with help from IPA.

Matching skills to the job market

A lack of qualified workforce is holding back the country’s businesses. Recent surveys show that firms consider the constraint put upon them due to a shortage of skills is becoming ever more significant. This will continue to hamper the modernisation and productivity of the economy if not dealt with.

Harnessing everyone’s capacity

Inclusion is another problem. Members of the Roma population, women, people from the Polog region, the long-term unemployed, older workers and the under-qualified are all at a disadvantage in the job market. With a large swathe of the population falling by the wayside and the second highest unemployment rate in Europe (31.6%), the country is not maximising its potential.

IPA – support where it is needed

The Instrument for Pre-Accession Assistance (IPA) supports the candidate and potential candidate countriesto develop in a way that tackles social challenges and benefits the entire society.  It is based on the strong sense of solidarity that exists between the EU and the countries at its borders - countries with which the EU shares enduring commercial, historical and cultural ties. IPA is directed towards countries that are on the pathway towards joining the EU.

From 2007-2011 IPA in the former Yugoslav Republic of Macedonia  devoted €39 million to the development of human resources in the country (€33.5 million of which came from the EU).

  • 41% went into boosting employment, supporting: the Employment Service Agency in its running of a national action plan; measures aimed at helping young people, women and the long-term unemployed find work, and actions to get people out of undeclared work and into mainstream work.
  • 30% was committed to improving the education system, supporting: general and adult education; lifelong learning and access to education for ethnic communities.
  • 23% of the funding focused on promoting inclusion both socially and on the job market.
  • 7% went to technical support to help people run the human resources development programmes.

Financial Plan

The government of the former Yugoslav Republic of Macedonia puts forward 15% of the funding for IPA projects, the Commission provides 85%. When the two percentages are taken into account, the following annual figures amount to a total allocation € 64.8 million over the 2007-2013 period.

Of the overall IPA allocation to the former Yugoslav Republic of Macedonia, the social development strand received 10% of the budget between 2007-2013.

IPA Human Resources Development allocation from the Commission, in million euros: