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News 31 Aug 17

Macedonia to Lift Lid on Subsidies for Investors

Macedonia's new government has pledged to reveal the secrets of the previous administration's spending on luring foreign investors.

Sinisa Jakov Marusic
Photo: MIA

In about a week's time, the public in Macedonia should learn important details about the millions of euros that the last government spent on assisting and subsidizing foreign investors, the new Social Democrat-led government said.

The public should also learn the total amount spent on such subsidies, the list of contracts – and who in the former VMRO DPMNE-led administration made them classified.

Government spokesperson Mile Bosnjakovski said it was a first step towards ensuring full transparency on public spending following the shift in power in May.

"Foreign investors will stay here and will be protected," Bosnjakovski assured reporters at Wednesday's press briefing.

"Declassification [of the contracts] is in the public interest because citizens have the right to know who received public funds – and how much," he added.

He said that declassification of this information, which was largely unavailable during the ten years of the previous VMRO DPMNE government, was part of the new government's new "3-6-9" plan.

This encompasses a list of some 70 rapid EU-backed reforms that should be completed by early next year.

The previsous administration classified contracts with foreign investors, insisting that revealing the details would jeopardise their private interests and might deter them from coming.

In absence of the official data, with few contracts made public, media and analysts over the past decade could only speculate about the amount of money being spent on convincing investors to come to Macedonia.

The financial inducements ranged from cash for marketing to subsidies for employment, building sites and the construction of factories, operational costs and discounts or exemption from taxes.

BIRN analysis published in February, based on a study of budgets, showed that over the last decade, Macedonia spent at least 150 million euros on attracting foreign investment - equal to over half the value of the investment that the country attracted.

The analysis revealed that most of the money was spent via two key institutions set up for this purpose, the Agency for Foreign Investments and Promotion of Exports and the Directorate for Technological Industrial Development Zones, DTIRZ.

BIRN's updated database, “Foreign Investments Uncovered,” has revealed a big gap between government announcements of investments and what actually happened on the ground.

It shows that, from 2007 to 2016, 43 investments were announced in the special industrial development zones alone with a total value of 1.16 billion euros – that would employ a total of 26,730 people.

However, to date, 13 factories have opened in the zones with total investment of 231.5 million euros, employing 6,862 people.

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