Macedonia

By Vanessa Krstevski

Overall Score 67.1 World Rank 53

Macedonia Quick Facts

  • The Population: 2.1 million
  • GDP (PPP): $22.6 billion
  • GDP Growth: 3.1%
  • Per Capita: $10,904
  • Unemployment: 29.7%
  • Inflation (CPI): 2.8%
  • FDI Inflow: $333.9 million
  • Economic freedom score is 67.1
  • Recently: Poverty reduction
  • Taxes: Flat tax rate
  • Prime Minister: Nikola Gruevski

1. Legal System

In Macedonia the Property Rights are 35.0 which means it is difficult to have property rights and get land rights. The property is not well protected. The judiciary is influenced by others and the court system in not efficient. The Freedom of Corruption 44.0 and there is an increased cost for business. There are some stolen cars, drugs, and human trafficking.

2. Competitive Markets

Macedonia has more of a market-based economy. There is not a lot of flexibility in the labor markets. This means that there will probably be more job growth soon. There are low tariffs on exported or imported goods. Macedonia's tariff rate is 1.9%.

3. Limits on Government Regulation

The Business Freedom is high and it takes about 2 days to create a business and there is no minimum capital required. The Labor Freedom is also high indicates that it is challenging to get a job and for your job to grow. The Monetary Freedom is high and spending on agricultural subsidies increased.

4. An Efficient Capital Market

Macedonia has been breaking down trade barriers since it joined the WTO. Their non-tariff barriers are low and the financial system has been reconstructed. They are open to foreign bank sectors. Macedonia came out of the bad economy pretty well. Their capital market is growing.

5. Monetary Stability

In Macedonia the monetary freedom is 79. This indicates that the government is very free since 100 is the highest and Macedonia is at 79. Macedonia is currently trying to get itself into the euro-zone. Their spending a lot of money on agriculture and it is holding them back as country. The World Bank's Doing Business is the company that ranks all the countries.

6. Low Tax Rates

Government spending is 65.6 and the Fiscal Freedom is 91.4. The individual and corporate taxes is a flat 10%. Government spending is 33.8% of the domestic economy. The public debt is 36% of the gross domestic product. The tax revenue is 25.6% of the of the domestic income. Fiscal freedom is a measure of the taxes by the government on the people. These numbers come by combining overall taxes, direct taxes, and indirect taxes of the people.

7. Free Trade

The trade freedom in Macedonia is at a high 86.2. Macedonia has been working hard to minimize the trading barriers that still remain. The banking center is very open to foreign markets and investors. There is not a lot of government issues involved with the trade markets. The government just helps prevent fraudulent trades.
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Results in agriculture sector in Macedonia.flv

Video Summary

This video talks about Macedonia's economy and how it is based on agriculture. The World Bank is trying to help out Macedonia work through the weather changes. The economy will keep decreasing if Macedonia can not produce their food. This video interviews a few farmers who talk about their farms and how they care affected when they do not have good crops.

Extra Credit

Macedonia is ranked in 2009, by the World Bank, as the fourth 'best reformatory state' out of the 178 countries ranked. The reason for the flat tax rate is to make the country more attractive to foreign investors. Tourism is a very important part of Macedonia. It has about 700,000 tourists each year.