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Macedonia - Financial and Enterprise Sector Adjustment Credit Project (Inglês)

This is the Implementation Completion Report (ICR) for the Financial and Enterprise Sector Adjustment Credit (FESAC) in the former Yugoslav Republic of Macedonia. The FESAC supported the government's efforts to reduce the quasi-fiscal deficit by stemming the flow of enterprise losses. This complimented the macroeconomic program supported by the International Monetary Fund (IMF) Stand-by Arrangement. Specifically, the FESAC addressed four major issues: (a) the slow pace of privatization; (b) the losses incurred by 25 politically sensitive enterprises; (c) the adverse social impact of labor shedding in those 25 enterprises; and (d) the illiquidity of 80 percent of the banking system. Bank's performance was satisfactory. Borrower's performance was satisfactory. The key lessons learned were as folows: (a) the design weakness of the ERL, leaving implementation of agreed reforms to a "follow-up operation", the FESAC, made preparation of the FESAC more difficult than it otherwise might have been; (b) when dealing with a new member state, the Bank needs to be very careful about the signals it gives; (c) when a country is committed to reforms, it will implement them with or without conditionality; (d) difficult and painful reforms can be implemented only with strong political support; (e) where institutions are weak, adjustment operations have to be accompanied by technical assistance to ensure that the country has the required expertise to implement agreed reforms; (f) in spite of a government's best intentions, some measures prove to be too politically difricult to implement; and (g) to avoid misunderstandings concerning the necessary actions prior to tranche release, it is extremely important to have consistency in wording among the body of the President's report, the policy matrix and the Loan Agreement.


  • Data do documento


  • TIpo de documento

    Conclusão da Implementação e Relatórios sobre Resultados

  • No. do relatório


  • Nº do volume


  • Total Volume(s)


  • País

    North Macedonia,

  • Região

    Europa e Ásia Central,

  • Data de divulgação


  • Disclosure Status


  • Nome do documento

    Macedonia - Financial and Enterprise Sector Adjustment Credit Project

  • Palavras-chave

    Finance & Private Sector Development;freely floating exchange rate;adjustment operation;banking sector;law;loss-making enterprise;policy and institution;foreign strategic investors;implementation of reform;social assistance payments;foreign exchange deposit;pace of privatization;legal framework;industrial enterprise;collective bargaining right;motor vehicle insurance;consumer price index;access to fund;improvement in governance;termination of employment;lack of commitment;price of milk;parcel of land;civil service salary;process of privatization;share in enterprise;enterprise sector reform;lack of time;technology and markets;public sector wage;international financial institution;privatization of enterprise;case of privatization;economic reform program;drops in output;current account deficit;adverse social impact;deposits of household;transfer of ownership;bankruptcy and liquidation;current account surplus;social protection program;black market premium;social service program;quality of health;competitive labor market;financial sector reform;number of workers;economically active population;social sector reform;electric utilities;foreign bank;tranche release;banking system;labor shedding;severance payment;international community;external environment;fiscal cost;surplus worker;private hand;political stability;political constraint;default rate;trading system;international standing;price control;business premise;diagnostic study;political power;stabilization program;private owner;private investor;financial intermediation;privatization plan;privatization program;measure of support;macedonian denar;financial discipline;borrower's performance;institutional framework;tariff increase;stabilization measure;urban agricultural policy;voluntary basis;diplomatic recognition;mountainous country;land reform;large bank;social cost;



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