Business priorities for faster development conference
Here in front of us is a strategic policy framework for better business environment for sustainable enterprises in Macedonia, which we titled it as a “Business priorities for faster growth,
The document was established of the survey that the OEM and BCM have done it with the support of the International Labour Organization, with expert help of the Macedonian Center for international cooperation and M-prospect.
Today I would like to thank to Mr. Dragan Radic, Mr.Emil Krstanovski, Mr.Sasho Klekovski, Mrs. Nikica Mojsovska Blazevski and I like to thank to their coworkers for the successful cooperation.
The purpose of this project was to identify and to search the key areas that are constraining the business environment in Macedonia and to give recommendations for improving the competition of the Macedonian economy. We are aware that the competition of certain economy, realized as a list of measures, policies and factors that select the level of productivity of one country, which is very important for the small economy.
On the other hand, the capability of one country depends from the high productivity for realization of more incomes and it is main determinant for the investments contribution. These two factors, are crucial for the growth of certain economy that at the same time is our strategic goal.
In the survey authenticable data have been used from the World Bank, the Global economic forum, International monetary fund, International labour organization and other institutions, and last but not least data from the questionnaires from the management board of 170 companies. Moreover, it is about combination of subjective information that reflects personal opinions of the economic conditions of the executive directors that were questioned.
We are aware that the competition improving of our economy should be a result of overall efforts not only for the Government, but for all stakeholders (the business sector and the civil society). In that way, I hope that the reviving of the National Council for competition and entrepreneurship to give good results, where we can coordinate our recommendations and ideas that will be very significant for the Government of the motivation process, support and development of the current economy.
The influence of the geographic size with the competition of certain economy through the “scope of economy” is not disputable. However, many small countries have found a way to improve their economy and to make it competitive. Macedonia should work on its comparative advantages, to confirm its priorities and to strengthen its export potentials, thus, the risks will be decreased with the deficit on the current account of the balance sheet and higher rates of economic growth will be also realized.
Macedonia in the last period has achieved significant efforts for better conditions of doing business, and the last affirmation of that success is from the Global Competition Report 2013-2014 of the Global Economic Forum, where Macedonia has improved its rang compared to the rang in the period of 2012-2013, even for seven places. Besides this success it is very important for us to continue with improvement of the business climate because the conditions for economy of global level are changing all the time. The only one that remains unchanged on the market are those that invest all the time and try to improve their own competitive abilities.
The results of the survey have shown that the constant law amending is a problem for the employers because a lot of time for adjustment is going to be wasted and the working expenses are going to be increased. The amendments and the laws supplements shouldn’t be adopted in haste in the future. There should be enough time for consultation with the business community, whereby, we need to strengthen the role of the Economic and Social Council as a tripartite body that can play very important role in the just mentioned process.
The employers have also responded about the high penalties and consider that the penalties should respond to the economic power of the companies and the surveillance of the offence. Thus, it will be lesson for changing the behavior in the future and it is not going to be threat for the company’s existence.
The employers consider that further flexibility enlargement is going to be needed and they suggest that a seven annual plan of flexibility for the Labour code, regarding the termination of the employment contracts, working during holidays, overtime working, repartition of workers, gaining rights for annual leave, training period, and other provisions that are reducing their competition and their market position becomes weaker.
Although, the government of the R.M has made significant reforms in the area of tax system- flat tax, the reform gross wage, tax release of certain gains, there still should be further adjustments of the tax of unrecognized revenues and minimal rate of pay regarding the social contributions of increasing the sensitivity of taxes and the realized turnover as well as the contributions with the minimal wage.
In the next period the rule of law, the secure property rights, and the functioning of the judicial system should be strengthened.
Regarding the global financial crisis, the internal banking system was pretty stable so far, however, the companies complain about the finances, the rate of interest, and the rate of mortgages, and other issues that restrict the right of plausible loans.
Although the questionnaire of the employers has shown that working with monopoly and, monopolistic working is rarely found, according to the report of global competition, Macedonia is still low ranged on the list of local competition, effectiveness of the anti-monopolistic policy and the degree of orientation towards the consumers.
The innovations are drivers for bigger growth of the economy and for the increasing of the living standard. Therefore, the government of the Republic of Macedonia adopted the National innovation strategy 2012-2016, National program for scientific research and development 2012-2015, Incenting and helping the technologic development program 2012-2015 etc., but except these programs the investment level in research and development is very low – 0,2 % of the GDP. On the other hand, the data show that 50% of the incomes of the researching institutions comes from governmental sources, and only 0, 2 % of the private enterprises. Global economic forum data have shown that Macedonia in this area is one of the worst ranged countries according to the global competition report. We hope that with the foundation of the Technology and Innovation Agency improvement of this area is going to be achieved.
I consider that the Government has achieved significant results regarding the taxation and focalization, but on the other hand, the percentage of participation of the informal sector in the total economy is pretty high. The data of the questionnaire on the work force from the Statistics Office shows that 25% of the workers in 2011 have worked moonlighting i.e. with no contract for working. The informal economic activity and the informal working form the disloyal competition. Therefore, we need to cooperate against this. The Organization of employers of Macedonia as a member of the Economic and Social Council will look for regular reports of the State Labour Inspectorate for the performed controls and the achieved results in the field.
Besides the few projects about the analysis of the labour markert, the training of unemployed persons for the employers’ needs in which have participated the Organization of Employers of Macedonia the Employment Service agency of the Republic of Macedonia, VET and the Ministry of education and science. Still there is a problem with the offer of skilled work force. Also we must not forget the problem with the economy as well. We, the employers should understand that the educational system cannot deliver educated and trained workers for each type of profession that is needed. Therefore, together, we must build a system of trainings and requalification that will help the unemployed persons to get job more easily and we will get a worker that will be easy and fast involved in the production process.
According to the last reports of “Doing business” of the World Bank, Macedonia is one of the leading countries which offer the best conditions of business starting. Besides the positive opinions the number of business starters is decreasing. According to the Global economic forum report 2012-13, the main constraints for doing a business in Macedonia are: accession to finance – 17.1%, skills mismatched work force – 12.5 %, corruption – 11.5 %, ineffective public administration – 11.4 % and inadequate infrastructure – 9.3%. The financial support of the Government for entrepreneurship and development is still humble, and the finance for starting your own business of the active employment program are not enough to meet the requirements of all young people who want to start their own business. Of course that the fear of failure is present and in conditions of the world economic crisis it is even stronger.
After all that I wanted to point out, I hope that you are going to agree with me, the factors for doing business are in large number and they are complicated. Some of them for example the market size are almost unchangeable, and some of them as the infrastructure need enormous finances , for the rest we need a mutual effort of all of the stakeholders to build strong and concurrent economy that will be basis for faster growth and improving the standard of the population. I truly hope that the recommendations in the report will be used of the policy makers for realization of this goal. We, the Organization of employers of Macedonia will lobby all the time in the governmental institutions and we will be active factors in this process.