Wednesday, March 4, 2009

The Macedonian Economic Situation

I spend an inordinate amount of time online, reading about all the terrible things that are happening to the economy back in the United States, and also in the UK, Ireland, Greece, the rest of the EU, Asia. . . etc. Banks collapse, loans are defaulted on, and all sorts of rotten domino-effects are knocking down innocent bystanders. Several people have asked me how the Macedonian economy is weathering this long-term storm, so I'll attempt to sum it up here. Please keep in mind that an attempt at economic analysis on my part is like a blind man writing a novel with alphabet magnets on a refrigerator.

It's really difficult to get an overall sense of the Macedonian economy. Accurate statistics are very, very hard to come by because a good deal of trade and employment is done in a less-than-legal fashion. Officially, there is 30% unemployment, and there has been for quite awhile, but a good chunk of those 'unemployed' are just skirting around tax laws. Macedonia has always been relatively poor, which probably helps a bit in this particular crisis, because Stopanska Bank wasn't playing the international market on sub-prime mortgages. The Government has thrown out a stimulus package, mostly of infrastructure spending, of 8 billion euro. I haven't heard any chatter about banks defaulting, and all the news stories about "Eastern Europe going bankrupt" or the EU denying emergency loans to 'Eastern Europe' pertain mostly to places like Hungary or Poland. Aside from the riots in Greece (and smaller-scale unrest in Sofia, Bulgaria) there hasn't been much trouble in the Balkans so far.

That being said, there are problems on the horizon. Most of Macedonia's exports are meant for the construction sector - metals, minerals, rock, etc. As the European economy slows, construction slows, and therefore orders for Macedonian exports dwindle. The Macedonian denar is pegged to the Euro, so if the Euro currency runs into trouble, it could take the denar with it. Finally, a great deal of income here consists of remittances from abroad - Macedonians working elsewhere and sending money home - so as Western European economies suffer, so will Macedonia.

That's my best shot at short-term economic analysis, using all my training as a part-time mechanic and Classical Studies major. Take it for what you will.


CWest said...

I'm really impressed. Whenever I read online about the current economic situations in other countries I often wonder about Albania's economy but there's no way I could ever explain anything to anyone...

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