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Macedonia - Country economic memorandum tackling unemployment (English)

Reducing the high rates of unemployment from which the Macedonian economy suffers is a leading priority of the Government. The large share of working age population who are inactive or occupying themselves with low productivity, occasional work represents output foregone and income lost. Moreover, the important goal of sharing the benefits of growth more equitably between groups and regions proves increasingly elusive when many citizens are trapped in long-term unemployment, a state closely linked to household poverty. It seems that the formal job market in the former Yugoslav Republic of Macedonia (FYR Macedonia) has failed. What actions can and should the Government take t o get more people into work? As the authorities strive to solidify peace and stability, accelerate remaining structural reforms, and move policies and institutions towards European norms, the problem of high unemployment cannot be ignored. Very high levels of unemployment discourage the authorities from imposing further s hocks on the economy and may add to the delay of needed structural reforms. But reform of labor market institutions and policies is only one part of the solution, and not the most important. The Government has limited ability to raise labor demand directly. Overall growth and job creation by the private sector will be the only long-term solution. The first chapter of this report sets out a preliminary strategy for long-term growth. It argues that high unemployment is primarily an inheritance from the pre-transition era. Growth has been limited since independence by low investment levels, and to remove this constraint, the Government should be focused on ways t o improve education, create a supportive investment climate (especially for foreign investment and small and medium enterprises), and accelerate free trade as part o f integration into European markets.


  • Document Date


  • Document Type

    Country Economic Memorandum

  • Report Number


  • Volume No


  • Total Volume(s)


  • Country

    North Macedonia,

  • Region

    Europe and Central Asia,

  • Disclosure Date


  • Doc Name

    Macedonia - Country economic memorandum tackling unemployment

  • Keywords

    small and medium enterprise;total factor productivity;foreign direct investment;investment climate;Business Environment and Enterprise Performance Survey;Privatization;Transition economies;transition economy;small and medium size enterprise;Stabilization and Association Process;Poverty Reduction & Economic Management;Job Creation;public sector management reform;active labor market program;membership in the wto;Active Labor Market Policies;real gross domestic product;level of employment;foreign investment advisory service;Stabilization and Association Agreement;active labor market policy;total factor productivity growth;Fiscal and Debt Sustainability;current account deficit;unemployment rate;Macroeconomic Management;employment growth;labor demand;factor accumulation;stable exchange rate;formal labor market;flexible labor market;high growth rate;fiscal balance;capital stock;investment rate;bank staff;supply side;human capital;high unemployment;movement of labor;share of capital;incidence of unemployment;external debt sustainability;long term growth;per capita income;rate of employment;fixed exchange rate;high unemployment rate;foreign investment flow;quality of education;trade and investment;labor market demand;employment and unemployment;Rule of Law;social security contribution;policy and institution;employment protection legislation;large scale privatization;fight against corruption;tax and regulation;early warning system;representatives from business;Civil Service Reform;labor market performance;labor market regulation;foreign exchange system;worsening income distribution;macroeconomic development;investment level;macroeconomic performance;enterprise restructuring;transition countries;foreign investor;government action;transition country;recent years;Exchange Rates;international standard;real gdp;output decline;market access;long-term growth;state enterprises;factor inputs;income convergence;income gap;corporate sector;monetary policy;social contribution;fiscal deficit;export demand;job market;labor-intensive growth;stabilization program;labor productivity;export performance;unemployment problem;industrial sector;foreign demand;casual employment;private ownership;macedonian denar;inflation;



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Macedonia - Country economic memorandum tackling unemployment (English). Washington, DC: World Bank