Decades of Economic Instability

Transposing emblem by Sofija Krnceska

September 8, 1991 is Macedonian Independence Day. On that day, a referendum was held, and the vast majority of the people voted for a new, bold and better Macedonia. We separated from the former federal state, SFR Yugoslavia, and decided to bravely walk alone into the future, which, we assumed was destined to be bright. Much brighter than our socialist past. We didn’t know much about the new economic system that we were going to embrace, but we firmly believed that better and brighter things lay ahead of us.

September 8, 1991 is the day we moved into the house my parents built. Only the ground floor was ready, the first floor and the loft were not finished yet, but we had every intention of finishing them. We were extremely happy and looked forward to our lives in our new house. That night, we sat together in our new living room and watched the first President of independent Macedonia, Kiro Gligorov, on television, congratulating us on our new sovereign country. The man, God bless his soul, had a trembling voice, full of happiness and hope for a brighter future. A hope that we all shared at that very moment and in the weeks and months that followed.

Macedonia didn’t fare too well in the former Yugoslavia. (Yugoslavia, by the way, was a federal state consisting of 6 republics, listed here from north to south: Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro and Macedonia.) It was the least developed republic of all six. But, nevertheless, there were lots of factories, a few or more in every town. These are some of the factories that I remember from my town, but the situation was similar in all the other towns: Biljana, Politeks and Solidnost (textiles), Crn Bor (wood processing – furniture), 11 Oktomvri (electrical insulation materials), Partizan (thermal insulation materials), Mikron (electrical equipment), Vitaminka (food processing), etc. They employed thousands of workers. For a town that had around 60,000 people back in those days, that was more than enough. The rest of the population worked in agriculture (let me not forget the tobacco factory “Tutunski Kombinat”). Tobacco is the plant that my town and the surrounding area was (and still is) famous for producing.

All the factories had their own commuter buses. They collected their workers every morning before 7 o’clock at various bus stops around town and returned them after 3 o’clock in the afternoon. There was employment for everybody who wished to work. After high school, only a small percentage of students would continue their education and enroll in the university. The rest were quite happy getting employment in one of the factories. The income was steady and secure. There was a sense of стабилност (stability) in the job and in life in general that we, the “new” generations, have never had a chance to experience, but only heard stories about from our parents. Everybody had a chance at a good life and social differences between people were not as great or noticeable. Of course there were people who did better than others, but the wealth was never on display as it is nowadays. Or the need to display one’s wealth was not present as it is nowadays.

Some would say this is an idealized picture of the past. It is, but not because all was bright in the economy of former Yugoslavia, on the contrary, only because lots of things got much, much worse compared to the economic situation in those days. The bright future was replaced by a gloomy present. The gloominess that followed us for decades in a row and has refused to go away.

In the early days of its independence, Macedonia found itself a bit confused. The overall situation in the region was not bright: war, hatred, destruction, instability (нестабилност)… We were supposed to make a transition from public to private ownership, which was a long and painful process. The big Yugoslav market, where the factories used to sell their products, was lost. Lots of factories were closed or the number of employees was drastically reduced. Hundreds of thousands of people found themselves jobless, without any prospect of getting a new job simply because there was nowhere to work. The big factory buildings loomed empty. The term “bankruptcy workers (стечајни работници)”, which referred to the workers who were laid off and were supposed to live on state benefits, became one of the most commonly used economic terms in Macedonia in the following decades. Some people, again, did well in those confusing times. Some got rich, others hid their newly acquired wealth in foreign bank accounts. All was not black and white, and we even got to learn what a “gray economy” meant for the first time in our life.

The new system promoted small and medium-sized businesses, which required smaller investments and fewer employees. So, we were starting from zero again, which was also difficult to grasp since we had these huge, now empty, factory buildings to remind us of what we used to be and what we used to have. The new reality was hard to swallow. Now, every other house in the neighborhood opened its own private business, mostly shops. Basically, they would convert a room on the ground floor or build a small extension and start a small family business. Most would close after a few years, but new ones would open and that process kept on repeating itself, although it was proven ineffective in most cases. Some smaller factories were opened on the grounds of the old factories and some private companies, successors of the publicly-owned factories, tried to find new markets. Some succeeded in their efforts, but then again, many failed.

In the meantime, we now had the first floor of our house ready. It was bigger and brighter, so we moved up one floor. My father was smart enough to leave his work in the factory before its privatization and subsequent bankruptcy. He found work in a smaller, newly established private company. His salary, compared to what he earned before, was smaller as well and became even smaller in the years that followed. But we managed. Having a job in those times, when so many people didn’t, was a luxury.

So, this new, gloomy reality continued for more than a decade and a half, without any noticeable signs of improvement. It did not help that, besides the economic troubles, the overall situation in Macedonia in all the other areas was not bright either. Finding a light at the end of the tunnel was difficult. From where we stood, the tunnel seemed endless. And then, this last decade things shifted slightly. The government started an aggressive and successful campaign to attract foreign investors to the country. The new economic measures, put in place in order to attract foreign capital to our economy, resulted in the opening of several dozen factories, mostly new or “greenfield” investments. Thousands of people were employed. Some of the commuter buses were put in service again.

The salaries… Well, there are several reasons why foreign investors started to see Macedonia as an attractive place for investment. The first reason is the fact that it is well connected to the rest of Europe; the second reason is that the economic measures put in place by the government made the country one of the best in the world for starting a business; the third reason is the abundance of qualified labor, and the fourth and most important reason is the cheap workforce. Meaning, the salaries are low, but trending slightly upward. On the other hand, with the borders nowadays being more open than ever, some of the highly educated young people still decide to move abroad and work for a much higher income, since what they would get here is incomparable to what they would get abroad. But, at least, we caught a glimpse of some light in that tunnel for the first time in decades.

And as for our house, it is by now, like our country, 26 years old and, understandably, has started to show signs of decay on the ground floor. So, we decided to start fixing the ground floor up a bit and replace what needed improvement. Our attic is not done yet, but we will get there. It is just that things take time here in Macedonia.

Sofija Krnceska

References:

  1. http://www.oldprilep.com/
  2. https://en.wikipedia.org/wiki/Economy_of_the_Socialist_Federal_Republic_of_Yugoslavia
  3. https://en.wikipedia.org/wiki/Economy_of_the_Republic_of_Macedonia
  4. https://mk.wikipedia.org/wiki/%D0%9F%D1%80%D0%B8%D0%BB%D0%B5%D0%BF