Monthly Archives: April 2021

Prime Minister Zoran Zaevs new cabinet is confronted with a number of economic challenges, exacerbated by the economic hit to the global economy caused by the pandemic In 2021, North Macedonia will take economic decisions that will shape the course of the countrys future.

Despite a modest population of 2-million, North Macedonia repeatedly makes headlines, often due to apparently intractable disputes with neighbouring countries. Athenss trade embargo imposed on North Macedonia in the 1990s marked the start of a 27 year deadlock between the two countries, which ultimately stalled North Macedonias accession to the EU. Only recently did Skopje resolve the dispute with neighbouring Greece over its official name which Greece had previously taken issue with due to the fact that Macedonia is also a region of Greece, and the use of this name was interpreted by Greece to be an assertion of territorial ambitions in the region.

This dispute affected the countrys other diplomatic ventures. In 1999, North Macedonia was one of the first post-Yugoslav signatories of the NATO membership action plan, only to have its accession vetoed by Greece in 2008. Ultimately, North Macedonias Stabilization and Association Agreement with the EU has not been the diplomatic catalyst that Skopje hoped would ease localised tensions and draw it into a closer relationship with Brussels.

Under the leadership of Nikola Gruveski (2006-2016), corruption and state capture were endemic in North Macedonia. Gruveksi was averse to opening negotiations with mainstream governments in Greece and it was not until the centre-left Social Democratic Union of Macedonia ousted Gruveski out of power, that there was a breakthrough. Gruveskis successor, Zoran Zaev, capitalised on Greek Prime Minister Tsiprass reformism to broker the controversial Prespa Agreement which settled the name dispute. Two years later, North Macedonia was finally admitted to NATO, demonstrating that Greece was the final hurdle to NATO membership.

A tamed economy

However, North Macedonia soon found that NATO membership was not a passport to joining the EU. Internal ethnic tensions have created friction with EU member states. Relations with Bulgaria soured during the election campaign for July 2020 during which the campaigns of both main political parties played on anti-Bulgarian sentiment..Zaev managed to gain power by agreeing to a coalition with the main part of the Albanian minority. The new cabinets economic hurdles, specifically fiscal redistribution, could be exacerbated by renewed ethnic tensions between the Slav majority and the Albanian minority. Should tensions reach the levels of the 2001 civil conflict, the deepening of this fracture would slow down reforms and deter investments.

The Balkan countries suffered greatly during the Great Recession due to their proximity to the Greek economy at a time when Athens navigated the worst slowdown of recent history. As Greeces second largest export partner, the RNM was particularly hard hit(Figure 3a). The region had barely entered recovery before lockdown measures crippled world economic growth. In addition, North Macedonias small internal market is heavily reliant on external demand which the crisis has depleted. In Q1-Q2 2020, exports fell by 22.3% and industrial production by 14.6% compared to the same period of the previous year. Thus, GDP fell by 14.9% in Q2 of 2020 and another 3.3% in Q3 contrary to the projected 3.2 percent growth (Figure 7). Whilst forecasts suggest growth of 5.5% in 2021, the unpredictability of the pandemics economic influence may yet compromise this figure.

Meanwhile, rating agencies downgraded North Macedonias national debt, in turn raising financing costs. the RNMs debt was downgraded by some rating agencies, raising financing costs. Fitch, the American credit rating agency, as well as Moodys, another US-based credit rating agency, both value North Macedonias debt as a non-recommended investment asset to be reserved for short-term gain. Since May 2020 the outlook has been negative, suggesting the situation will worsen. Yet, with one of the comparatively smallest debt-GDPs of the region, these ratings are still the best in South-Eastern Europe after Bulgaria meaning the RNM has a relatively solid economic base (Figure 4).

The countrys effective response to the pandemic is in part the reason that North Macedonia is economically stronger than some of its neighbours. The caretaker government introduced a furlough scheme, worth approximately 5.5 percent of GDP, as well as a helicopter money initiative. Going forward, the government is prioritising policies that will stimulate economic growth such as slashing parafiscal charges and cutting VAT. Yet, since North Macedonia lacks the economic resources to commit to long-term reform, recovery will be slow.

North Macedonia is contending with mass emigration in tandem with declining fertility rates (Figure 5) both of which reduce human capital. The official estimate of two-million residents is dubitable, with some experts hypothesising an actual figure of approximately 1.5 million. Inaccurate projections of a states total population jeopardises effective government decision making. In the RNM, where the resources are redistributed amongst ethnic groups pro quota, this makes fiscal management particularly difficult. If, for example, the proportion of Albanians of the total population was lower than estimated, then this group will be receiving more public resources that they are entitled to.

Given that the EU acts in a starkly-protectionist way by restricting trade with third countries, greater cooperation is in the RNMs interest. In fact, Brussels could reduce trade barriers in the context of a stronger association with Skopje even before the latter formally joins the Union.

There are steps the government can take to encourage citizens not to emigrate . The first and most crucial step would be to improve the education system. Overall, North Macedonia spends much less of its GDP than the average EU country on education. As a result, few people complete their secondary-level education, and therefore either end up in low-paying jobs or unemployed, andare forced to emigrate for work. Another step would be investment in the underfunded Research and Development (R&D) sector. In fact, North Macedonias budget allocates only 0.36% of GDP to R&D, compared to an EU average of 2.2% and neighbouring Bulgarias 0.77%. Research and development is essential to creating high-paying jobs, driving productivity, and boosting the economy through innovation and market competition.

The silver lining in North Macedonias economic strategy is infrastructure development. This especially true for roads and highways. Grueveskis administration was instrumental in the investment into road infrastructure, starting works for two new highways in 2014.

Still, roads can be rather useless if they do lead nowhere. Thus come trade infrastructures. In addition to new road, the building of new border checkpoints and crossing points with Greece and Bulgaria, will bolster the trade infrastructure that North Macedonia shares with the EU, thereby driving trade with a global economic powerhouse. These investments will also reduce the RNMs dependence on the Yugoslav-time north-south arteries, which currently present a barrier for the development of the functioning market economy that is a requirement for EU membership. To achieve this goal, the RNM needs to improve, road connections towards the west (with Albania) and the east (with Bulgaria, an important trading partner). Building better connections within the country and with non-Yugoslav neighbours will boost the countrys internal cohesion by making it easier to move from one part of the country to another proving supplemental infrastructures to foster international trade.

Figure 6 Highways represent a key segment of the RNMs investments.

A secondary and related benefit of improving connectedness with EU trade routes is reduced economic dependence on Russia. This should reduce Moscows potential diplomatic leverage in future disputes in the region. As a matter of fact, pulling out of Moscows orbit is almost a precondition to full membership in the EU which would bring in more funding opportunity and increase financial stability. Yet, Russias main asset is not trade tout court, but energy. In fact, the Balkans serve as a strategic crossroad for oil and gas coming from Moscow and Baku through Bucharest and Ankara. Thus, North Macedonia should also consider developing its energy infrastructure as a route to closer integration with the EU. In order to reduce the Western Balkans dependence on Russian fossil fuels, the region needs investments. For cash-strapped countries, like North Macedonia, the opportunity to make real progress in this field may come from green funds the EU has earmarked for energy projects in both current member states and candidate countries . In addition, Greece has established an LNG terminal on the Aegean to which links the RNM is planning to adjoin its grid. There are also talks of an electric-grid link to Albania, through which the RNM could import as much as needed and even export eventual surpluses.

Without radical reform, the extant corruption, bureaucracy and public-sector inefficiency will stymy growth in the coming years. Luckily, the EU might be the answer to Skopjes economic woes. The Union is expected to grant 3.3 billion to Western-Balkan countries to kickstart economic recovery following the pandemic. The package does however come with strings attached: the country will have to accelerate progress towards regulatory harmonisation with the EU. This is a notoriously difficult and resource-consuming task, which may hinder other reforms.

Furthermore, North Macedonia must confront pre-pandemic economic struggles. The government could revert to coalition infightings and therefore prolong the process of economic reform. For investors, a cautious approach is recommended, in preparation for positive economic developments.

Acknowledgments The Author thanks Charlotte Millington, parliamentary researcher at the UK House of Commons specialising in European politics and international security for her suggestions.

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Innovative ways to resume international travel - Modern Diplomacy

The Herald

Elliot Ziwira

Senior Reporter

Notwithstanding the deadly Covid-19 contagion which has played havoc on global economies, Zimbabweans will tomorrow virtually converge across the country to commemorate 41 years of Independence from colonial clutches of subjugation.

Riding on the crest of the Second Republics strides towards job creation, re-engagement, democracy, conflict resolution and agricultural productivity, among other deliverables aimed at fostering socio-economic development and peaceful co-existence to eradicate poverty, the nation will unite in celebration under the theme [emailprotected] Together, Growing our Economy for a Prosperous, Resilient and Inclusive Society.

As a first since Independence in 1980, 16 radio stations were resourced to broadcast the Presidents Speech on Independence Day (tomorrow) in the local language dominant in each community.

The Constitution of Zimbabwe recognises 16 official languages, inclusive of Sign Language.

Outlining the Independence Day programme at a post-Cabinet briefing on Tuesday, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said 50 learners were selected from primary and secondary schools countrywide to attend the Childrens Party at State House today.

The number is inclusive of Child Parliamentarians with each province providing five children who will be accompanied to State House by two teachers.

Marking the transition from the Childrens Party to Independence Day will be a Virtual Independence Gala and a 30-minute midnight fireworks display at the Rainbow Towers in Harare.

This years celebrations are coming at a time the country is basking in the glory of positives; from a bumper harvest in maize (estimated at 2,5 million to 2,8 million tonnes) and small grains (360 000 tonnes) as well as projected improved tobacco deliveries, to a relatively stable foreign currency exchange rate which has seen prices stabilising across product lines and growth in mining and industry sub-sectors.

In line with the national Vision 2030, the country targets to hit a 100-tonne gold production by 2023, and achieve its mission to have a stable and sustainableUS$12 billion mining industry by the same year.

Efforts have also been made towards the curbing of stigmatisation in the artisanal and small-scale mining sector, a major contributor (at 65 percent) to the countrys total gold output.

This years celebrations also come as the Government debunked the colonial legacy of barrenness through the provision of water, a universal right, to communities previously considered unimportant by successive settler governments.

Since 2019, the Second Republic has committed resources towards the construction of the Gwayi-Shangani Dam (at 40 percent completion), which has a holding capacity of 650 million cubic metres of water, with Treasury allocating $4,5 billion for the project in the 2021 National Budget, to ascertain sustainable livelihoods in the Matabeleland region, rendered perennially arid.

With 365 000 hectares of total arable land in Zimbabwe suitable for irrigation, the need arises to invest in irrigation schemes.

Cognisant that a modernised agriculture sector is key in bringing national Vision 2030 to citizens doorsteps, in March, 2020, President Mnangagwa commissioned the US$15 million Nyakomba Irrigation Scheme in Nyanga funded under the Japanese Grant Aid.

Mindful of the need to move away from over-reliance on rain-fed farming so as to ascertain food self-sustenance, the President commissioned the multi-million dollar Marovanyati Dam in Buhera on November 10, 2020.

The dam, which is on Mwerihari River, is expected to provide water for domestic, agricultural and industrial use.

Inroads have also been made towards beneficiation of horticultural products through Government support to companies in that sector, and the resuscitation of the national herd.

In May 2020, the President launched the Presidential Livestock Scheme at Cleveland Range in Harare to support livestock farmers.

In June 2018, President Mnangagwa launched the Command Livestock programme at Gwanda Showground, to cater mainly for Matabeleland, where he handed over 1 660 heifers to 151 beneficiaries from Matabeleland Souths seven districts with $10 million being channelled towards the scheme to empower communities in Matabeleland North and South by boosting their herds.

As envisaged, the horticulture recovery and growth plan will not just boost exports, but also drive rural incomes adding US$2 000 to the average household income for participating small-scale farmers by 2030.

The recovery plan would require US$1 billion from the private sector and partners while the Presidential Horticulture Scheme, would benefit 1,8 million rural households at a cost of US$186 million.

The Government has also set aside $34 billion for the Second Phase of the Emergency Roads Rehabilitation Programme which was officially launched by the President in Mount Darwin, Mashonaland Central Province on Thursday. The project is expected to create more than 20 000 jobs across the countrys 10 provinces.

Defying the illegal economic sanctions imposed on the country by some Western countries, the Second Republic crafted people-oriented five-year blueprints premised on national frameworks meant to better citizens livelihoods.

On November 16, 2020, the President launched the National Development Strategy 1 (NDS1); an economic master plan focusing on inclusive development from 2021 and 2025.

Pivoted on yet another strategic participatory governance plan earmarked at curtailing resource-based conflict areas; Devolution, NDS1 endeavours to streamline gender, youth women and other vulnerable groups, thus creating equal opportunities for all in an economically stable environment.

NDS1 is a successor step to the Transitional Stabilisation Programme (TSP) in the drive to achieve a middle income economy by 2030 as enshrined in national Vision 2030.

The TSP, a fiscal and monetary reform, which has brought the much needed economic stability the country enjoys and leverages its growth trajectories on, was launched in October 2018, and ran till the end of 2020.

Under President Mnangagwa, the Second Republic has taken a bold step towards addressing conflict through the signing of the National Peace and Reconciliation Commission Act on January 5, 2018.

This paved the way for dialogue towards sustainable peace and peaceful co-existence.

The NPRC has been playing its role as mandated by the Constitution, to unite Zimbabwe for sustainable peace by developing mechanisms for resolving violent conflicts of the past and present and preventing their recurrence.

Under the leadership of President Mnangagwa, the Second Republic had made re-engagement one of its key priorities and had established a platform for dialogue with political parties, churches and civil society organisations, to put closure to past conflicts, particularly the emotive Gukurahundi issue.

The Second Republic advocates engagement and re-engagement as a way of pushing for outcomes where the common good is the ultimate winner.

In 2018, Zimbabwes premier investment promotion body, Zimbabwe Investment Authority (ZIA), revealed that it received 165 business applications worth US$15,8 billion between January and June of the same year.

Another indicator that Zimbabwe was a destination of choice to investors was resplendent at the 60th edition of the Zimbabwe International Trade Fair (ZITF) which ran under the theme Propagating Industrial Growth through Trade and Investment, in 2019 when space was sold out for the first time since inception in 1959 forcing organisers to pitch up tents.

The space available for sale rose from 47 612 square metres in 2016 to 57 732 square metres in 2019.

Indeed, the essence of unity cannot be overemphasized in the drive for a prosperous nation where the common good is the ultimate winner under President Mnangagwas vision of one-nation, one-people.

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Zim@41: Nation rides on crest of collective achievement - The Herald

SAN FRANCISCO, April 16, 2021 (GLOBE NEWSWIRE) -- The RealReal (Nasdaq: REAL)the worlds largest online marketplace for authenticated, resale luxury goodsand its partners in the company's recent capital raise are coming together to give back to the community. The RealReal is donating $100,000 to the Asian American Legal Defense and Education Fund (AALDEF), which, along with an additional $105,000 contributed by its partners, will help the organization respond to its spike in requests for legal assistance resulting from the rise in violence toward the Asian American and Pacific Islander (AAPI) community.

We have to watch for and fight against racism. That starts with understanding the issues faced by Asian Americans and it continues with the work organizations like ours are doing to advocate for equity and justice, said Margaret Fung, executive director of AALDEF. Providing legal counsel and support for hate crimes is intensive work. This donation from The RealReal and its partners will help us add needed resources to our team so we can serve more people and more communities.

AALDEF is a New York-based national organization founded in 1974 that protects and promotes the civil rights of Asian Americans. AALDEF has provided legal representation and counseling to victims of anti-Asian violence for more than 40 years and has advocated for stronger hate crimes laws and victim assistance programs.

Joining The RealReal in its donation to AALDEF are Bank of America, Stifel, King & Spalding, KeyBanc Capital Markets, Cowen, Credit Suisse, UBS and Raymond James.

We are committed to supporting and advocating for diversity in our communities. Weve been working closely with our Asians + Pacific Americans Employee Resource Group to support our internal AAPI community and are now working together to extend our efforts to help support communities nationwide, said Julie Wainwright, founder and CEO of The RealReal. We appreciate our partners coming together in this collective effort to expand the essential work AALDEF is doing to advocate for the Asian American community.

To learn more about the important work AALDEF is doing, please visit http://www.aaldef.org.

About Asian American Legal Defense and Education Fund (AALDEF)AALDEF combines litigation, advocacy, education and organizing, working with Asian American communities across the country to secure human rights for all. AALDEF focuses on critical issues affecting Asian Americans through programs dedicated to social justice, immigrant rights, educational equity, environmental justice and democracy.

About The RealReal, Inc.The RealReal is the worlds largest online marketplace for authenticated, resale luxury goods, with more than 20 million members. With a rigorous authentication process overseen by experts, The RealReal provides a safe and reliable platform for consumers to buy and sell their luxury items. We have hundreds of in-house gemologists, horologists and brand authenticators who inspect thousands of items each day. As a sustainable company, we give new life to pieces by thousands of brands across numerous categoriesincluding women's and men's fashion, fine jewelry and watches, art and homein support of the circular economy. We make selling effortless with free virtual appointments, in-home pickup, drop-off and direct shipping. We do all of the work for consignors, including authenticating, using AI and machine learning to determine optimal pricing, photographing and listing their items, as well as handling shipping and customer service. At our 15 retail locations, including our 10 shoppable stores, customers can sell, meet with our experts and receive free valuations.

AALDEF Press Contact:Jennifer WengAssistant Directorjweng@aaldef.org

The RealReal Press Contact:Erin SantyHead of Communicationspr@therealreal.com

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The RealReal and Partners Support Asian American Legal Defense and Education Fund Expansion - GlobeNewswire

Experts are warning already that the controversial Colombo Port City would be a magnet for attracting unsavoury financial activities and shady economic deals, which would adversely affect Government revenue and real national economy. Would the esteemed Central Bank Governor Prof. W.D. Lakshman guarantee that this would not happen? If he cannot, it would only show that he too has succumbed to pressures from his political masters

The Governor of the Central Bank, Prof. W.D. Lakshman, a trained economist, respected academic and a proud colleague of mine at Peradeniya, stated sometime back that President NGRs promise of prosperity and splendour would be delivered through an alternative and novel path of development, without giving much details about it. However, from his subsequent interviews to the media and public speeches one could gather some sign posts of that heavenly path.

The Governors or more appropriately his master NGRs development model is based on a bundle of thought bubbles, which in economic parlance, would translate into guaranteeing adequate liquidity through printing money to facilitate market-based economic activities and transactions, low interest rates to encourage domestic investment, ad hoc import substitution measures, affirmative action to encourage domestic production especially in agriculture, and above all, not to seek assistance from IMF.

That strategy might have been the need of the time when the world economy was hit by COVID-19 and countries were desperately taking steps at least to maintain the pre-pandemic status quo. However, while the world economy seems to be on a slow recovery path, maintaining the same strategy at home, without introducing structural changes to the economy to favour the most productive sectors, may worsen rather than improve peoples lives.

Already, the alternate path has driven down the value of domestic currency, increased prices of consumer essentials, created supply constraints for local manufacturers, reduced government revenue, and brought down the level of foreign reserves to a historic low.

In the meantime, with debt obligations looming large during the current year, Prime Minister MR and his State Minister for Money, Capital, Market and Public Enterprise Reforms Ajith Nivard Cabraal (ANC), have flown to Bangladesh and Oman respectively, in search of credit assistance, either through currency swaps or loans.

There is nothing novel about this except the two countries they have approached now are Muslim. Bangladesh, until recently, was a textbook case of Third World poverty and misery, but has performed admirably well by the optimal utilisation of its cheapest resource, population. While the other, Oman, which was historically rural and agrarian, because of petroleum bonanza has emerged from a fishing village into a capital surplus economic megalith.

There is a lot to learn from the experience of Bangladesh in the utilisation of human resource. One cannot expect Sri Lanka to perform well economically when its human resources are used sub-optimally because of ethno-national politics,

While MR and ANC are looking for friendly Muslim nations for loans and currency swaps, back at home, President NGR, who is also the Minister of Defence, and Retired Admiral Sarath Weerasekera, the Minister of Public Security, are busy making the entrepreneurial Muslim community a scapegoat for the 2019 Easter Sunday massacre, while allowing those who masterminded, financed, enabled and executed that horror go unpunished.

When an entire community is suspected of extremism and kept under constant surveillance, its energy and enthusiasm to function freely and contribute to economic production is jeopardised. This is true of the Tamil minority also, which is constantly harassed and its economic resources are being plucked away under false pretences just to safeguard the regimes Sinhala Buddhist vote bank.

This is a political strategy at the expense of economic development and to win back the collapsing popularity of the NGR and his parliamentary retinue. It is also a diversionary tactic to hide the failure of the alternate model, which is leading to nowhere.

The controversial Colombo Port City (CPC) with all its fiscal and financial privileges and freedom seems to be another arm of this development model, just as Hambantota Port was under MR Presidency. Yet, CPC is of a different genre. It would, with all its privileges, emerge as a state within a state and an attractive destination for illicit offshore finance, whose economic and financial benefits to the country are highly questionable.

Experts are warning already that it would be a magnet for attracting unsavoury financial activities and shady economic deals, which would adversely affect Government revenue and real national economy. Would the esteemed Central Bank Governor and Professor guarantee that this would not happen? If he cannot, it would only show that he too has succumbed to pressures from his political masters.

Finally, the alternate model totally ignores the economic impact of oppressing the two minorities. Unfortunately, recent developments in economics have made it an objective science by detaching from it the significance and role of the human factor in economic development. After all, an economy exists for the people and is created by the people.

Without people there will be no capital, no technology and not even economic and development models. Therefore, when a section of the population is oppressed, threatened and kept under security surveillance its contribution to economic production will be sub-optimal at best and minimal if not none at worst. This is what happening in Sri Lanka now.

Public sector investment and development of regions where the minorities are concentrated are trivial and the most prominent activity in the name of development undertaken by the government seems to be land grabbing for colonisation yet by more Sinhalese. This ethnic rebalancing is economically disruptive and socially oppressive. It cannot be part of any development model, let alone the alternate path.

However, there is also another danger arising from this situation. Because of systemic discrimination against and oppression of minorities, a significant sector of the countrys skilled, entrepreneurial, intellectual and hardworking human resource has emigrated, settled abroad and contributing magnificently to other countries development.

Sri Lankas loss is foreigners gain. As a result, like the Jewish community before Second World War, the expatriates have now grown into a force to be reckoned with. Originally, it was largely Tamils, but now there is also a small but steadily swelling Muslim contingent. There is also a Sinhalese diaspora, which is also becoming increasingly critical of the alternate model.

It is no secret that the recent setback that Sri Lanka suffered at the UNHCR Council in Geneva bears a Tamil seal. That seal is destined to receive international recognition if oppression of Tamils continues unabated at home.

As noted earlier, MR and his State Minister recently ran to Muslim countries seeking financial assistance. If Sri Lanka continues with its alternate model without reconciliation with minorities, and if markets in the West become less receptive as a result to Sri Lankan exports in the future, those of Muslim countries would become crucially important. However, if Muslim community at home also continues to suffer oppression, that may impact economic relations between Sri Lanka and Muslim countries negatively.

It is therefore imperative for those who berate about the alternate and novel model to pay more attention to some of the non-economic factors that impinge on the economy. As it is, the model is taking the country nowhere.

(The writer is attached to the School of Business and Governance, Murdoch University, Western Australia)

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An 'alternative' path to nowhere - ft.lk