A Coherent Growth Policy for Macedonia

Abstract

Macedonia implemented a neoliberal economic model through the transition process. It is characterized by the reduction of workers’ rights, the destroyed power of trade unions, the existence of flat and low taxation, the glorification of the foreign direct investments (FDI), and the progressive replacement of the public health and educational system with a private system. This model failed to achieve productivity, growth and solutions for unemployment, while it increased the income inequality in the country. A wage-led growth strategy could be a solution for the economic development of Macedonia. It is opposite than the two dominant neoliberal strategies: export-led growth and debt-led growth. Moreover, there is a need for the introduction of fair taxation and the need to re-build the social safety net. The EU should start to promote elements of the famous European social market model through the country’s integration process. The European Commission in its latest report about Macedonia used the term: “captured state”. The first step towards the deconstruction of the abused institutions by the political elites is fiscal transparency. It should be accompanied by the liberation of the control mechanisms over the people in power: a strong parliament, a depoliticized police force, an independent judiciary, a free media and a powerful civil sector.