The following is a continuation of the Telegraf.mk mega interview with Nikola Gruevski. In the last part of the interview, he expresses his views on the economy, the influence of the crisis on economic activities, as well as on future activities in terms of development of economic relations and attracting investments.
T: Three new investments started realizing last week alone. In general, how is the investment business going during this period of political crisis? How has it affected the economy?
“Yes, 3 new investments started with realization in just 7-8 days and they will open 2,000 direct work positions. They will also open 500-600 indirect job positions.
This is something that really makes me happy. This is a concrete and direct solution to the biggest problem of the citizens, namely, unemployment. This is something which has been a top priority in recent time and one of my main motifs for entering into the world of politics.
Let me remind you that we started with a 38 percent unemployment rate, and we have reduced the rate to 24.6 percent. From a total of 560, 000 employed persons in 2006, we have increased that number to 710,000. That is over a 150,000 new employments. Despite the unemployment rate still being high, 10 years ago this number seemed like an unattainable dream.
It must be taken into consideration that this was accomplished during a global and European crisis that jointly lasted 4-5 years, which is nearly half the time of our efforts, and during our local political crisis that has been going on for nearly a year and a half. As a ruling party we will continue with the realization of economic activities which will open new job positions.
T: Will there be new activities in regards to that?
“Yes, we are soon planning for a second phase of the project “Macedonia Employs”, which yielded great results and allowed for the realization of around 19,000 new employments in just a year. We are continuing with the positive measures which will bring about new job positions and a fortification of the economy.
T: Will these measures or some other measures bring about an increase of salaries in Macedonia?
“Indirectly, these job openings will slowly increase pressure in the labor market in terms of salary hikes for employees. This will happen because the labor value will increase as the number of unemployed persons drops. And vice versa. When there are a lot of people looking for a job at all costs, the labor value decreases.
This will lead to an increase in earnings and life standard of the people.
If an employer has at his disposal thousands of unemployed persons who would work for EUR 200-300 per month, then why would he choose to pay more? But, if there are a lot less such persons, plus if the more capable ones are already employed, then he does not need that kind of workers, he will willingly, without any strikes or government interventions, start offering higher salaries.
So, the way to bigger salaries and better life standard is achieved through decreasing unemployment, which must be followed through with an increase of productivity. This has been happening over the past few years. Due to the excellent business conditions and a network of potential investors, there has been a constant decrease of unemployment.
Look, when we came in power, World Bank’s Ease of Doing Business list ranked Macedonia as 94th in the world. It now ranks as 12th on the world list, and 6th on the European list, right after Scandinavian countries and England, which have much greater manufacturing and work expenditures.
As a leader of the biggest ruling party, which is foremost concerned with the priorities of the citizens, I am constantly in tune of this process. Furthermore, there have been 17 new foreign investments since the start of the year. Certain investors have started the construction of a factory, while other investors are working on an already existing but abandoned factory building, some have signed an agreement with the Government after long negotiations, and finally others have finished and they have started operations.
T: You have been accused of neglecting local investors on account of foreign ones. Is this true?
“I do not agree, local investors are not far behind foreign ones, they are constantly opening new job positions. But, the main force for export are the foreign investors, which is normal because they are economically stronger and have larger capacities.
Global companies, whose market includes the whole world and which have an enormous capital and experience, have entered our economy. What is important is that the foreign investors have started working with local companies. Last year alone, they bought goods in the amount of EUR 50 million from local companies. This amount will hike with each coming year because local investors are becoming more and more aware of the new opportunities for cooperation with the conglomerate factories which are now in their neighborhood.
We have shifted the circumstances, we have gained their trust through the continuity of our economic policies and now things are working in a solid dynamic.
Two Macedonian factories, that fulfill the conditions, have also become part of the free economic zones. One is currently under construction, and the second one is being designed. Other interested investors are welcomed but they have to fulfill the conditions.
Negotiations with a lot of other investors are also ongoing. I believe that part of them will be successful.
T: How has the political crisis impacted investments and new job openings?
“It has had a great impact which is still ongoing. Success would have been greater if the crisis did not happen. Despite the crisis, we have still had a tremendous amount of success. Last year, with an ongoing political crisis, we still had 30 foreign investments. But, some companies gave up or postponed their visits here, they postponed negotiations when the crisis peaked, some postponed their investment decisions and some left to invest in other states.
Due to the political crisis and the uncertainty it brings, part of the investors said that they do not feel it is safe to invest and that they are not sure whether the banks will support them. A portion openly said that they are afraid the atmosphere and business conditions would change and that taxes will hike if the opposition comes into power.
Some of them analyzed the economic policies of SDSM and are afraid of things going back to the way they were. More specifically, part of the companies got scared and decided to either postpone their decisions or to invest in other countries. But, unfortunately, this was the opposition’s goal in creating the political crisis. That is why we purposely call them a destructive opposition.
Instead of focusing on detecting our weaknesses, they should focus on coming up with a better concept, which would yield better results. But instead they choose to focus all their energy toward demeaning our successes, the successes which benefit Macedonia and its citizens. That is destruction. I cannot become more successful than you, but I will belittle you so I can have a shot at beating you at elections. That is what the SDSM leadership is doing now and what it has done in the past. But the people see right through this and they will punish them at elections. But Zaev still does not get this. Let’s take the example of the loan stock.
Most countries plan a certain budget deficit for accelerated economy development and a budget part for returning old debts. So, nearly all countries operate in the same manner. The deficit is covered through two sources, an exterior source, often through issuing a bond, and an interior source with local bonds to the banks, which, in turn, resolve the excess funds. And this is planned on an annual level.
And what did SDSM do? It used the opportunity with the Deputy Finance Minister who had a veto right, to allot the adopted budget a half year bond. So liquidity decreased and payments were late for the companies, citizens, pensioners, farmers, police salaries, army, doctors, teachers and administration.
And all of this for what? So the citizens and the companies would get mad and not vote for VMRO-DPMNE, while SDSM is the alternative. What makes this even more ironic is that a larger portion of the bond was intended for repaying an old state debt, which was also created by issuing a bond, with a bigger interest rate, by SDSM 10 years ago.
T: There is some fear among the public regarding the bank savings accounts, how real is that?
“The same operation I talked about, they tried to do through other two methods. The pressure over the banks not to buy state bonds, although that is in their interest, and artificially, with no basis crated hysteria among the people, and made them withdraw their deposits, which apart from the direct pressure, sometimes even public, also affects the banks in terms of keeping the funds they planned for buying state bonds, because they need the money to pay out the deposits.
Citizens here lose the most, because they lost a lot of the interest rates due to withdrawing the deposits, but who in SDSM care about the citizens? The governor of the National Bank of the Republic of Macedonia (NBRM) has stated that by withdrawing their deposits, citizens have lost a total of EUR 4 million.
Some of the bankers have sustained the pressure. Not so much the public, as the private one, such as publishing private recordings of some of them.
I will address SDSM: too much effort, no effect at all. So many issues for the voters, for the people, but the anger was pointed at them, instead of us. I see that through the public opinion surveys we carry out over this period, a period when SDSM slowly but continually loses its support from people, but the trust toward VMRO-DPMNE grew with the same dynamics.
This happens because the people know it already. A guy like Zaev cannot trick them, as much as he may think he can. People see everything. He may trick them for a moment, but soon it all comes out. Just remember, before every election, SDSM creates psychosis that there will be devaluation. It was the same in 2008, 2011, and 2014.
SDSM publicly says that if they were to win, they would raise the minimum wages to EUR 200, and average wages to EUR 500, and the entire Strumica, if not wider, knows how much their president pays the employees in his private firms.
Plus, the average wages cannot be created by a decree, or a political decision, but rather with many investments, drastically decreasing unemployment, and what I explained before. Exactly what SDSM now goes against with their actions, under the cover that they are looking for freedom and democracy.
Here is another example. They keep pushing the theory that the state is overloaded in debt. They have been saying the same thing for 10 years not. According to the European Statistical Agency, Eurostat, the state debt amounts to 36.8 percent, and Macedonia is among the 5 least debt-ridden countries in Europe. And now what? Instead of being ashamed, he along with his associates continues the same rhetoric. They probably think the people do not understand a thing and that these lies will start being perceived as truth.
Cheap tricks and false promises do not make a Prime Minister. Especially if everyone has read you, like Zaev.
T: You mentioned that many people started to withdraw deposits from the banks. You are an economist and leader of the ruling party. What would you recommend to the citizen?
“I would tell them they should not fall for these lies and speculations. There will be no devaluation, nor anything negative with their savings deposits. The only thing that can happen if they follow SDSM, is that they will lose their interest rates, and expose themselves at risk of thefts if they keep the cash at home.
They should keep this in mind, before each election SDSM will try to create this kind of psychosis. That is what they are good at, and for jobs, reforms, projects, ideas for better life, they are tabula rasa.
Even in a 10 times worse crisis than this, the state and the Central Bank have mechanisms to manage the challenges and not allow devaluation, nor endanger the citizens’ savings. I was a Finance Minister during the conflict in 2001. There was a real war in the country. I was Prime Minister in the period of the greatest world financial crisis in the past 80 years, and immediately after that the European debt crisis, which had a direct and strong negative effect on our economy.
We did not allow such thing at the time, and will not allow it now, with 2,000 very well paid people, painting buildings and monuments, thinking they are creating some revolution.
T: Are you saying the protesters do it for money?
“Not all of them. But one third, or maybe one half of them, have been paid by organizers, mainly NGOs, they are the majority of the aggressive ones. They are people that not only are they paid, but live from that payment. Great deal of money is spent for this. The rest are SDSM activists, sent by the party at every possible protest against us.
Then there are the haters, who hate everyone who is ruling, because the reasons for their own failure they seek in the government, not themselves and their mistakes. There are some naïve believers, thinking SDSM will come to rule, so they think they will benefit somehow.
There are those unsuccessful officials who in every project of the Government recognize their own failure, so they take out their frustrations hoping SDSM will win.
Still, there are some dissatisfied citizens, due to some mistakes of the Government.
They are the main reason we analyze each protest in order to correct some of our actions and to move toward better behavior.
T: In the pre-electoral period, which was stopped with the decision of the Constitutional Court, you announced several new projects which were supposed to be part of your campaign and program. What will happen with the projects? Will they be realized or will you wait for elections?
“Yes, we have announced 40 new projects for the youth, 5 new large projects for agriculture workers, subsidies for pellet stoves instead of wood burning stoves, as well as the plans for gas pipelines in the sector of ecology, forming an elite mathematical gymnasium, building a gymnasium in Aerodrom municipality, the “Youth Housing Project” and many more.
We have created those as a team within the party, and that is just a small part of the total program we had prepared. The ministers in the Government have already started the procedures for some of the projects we have announced, they made action plans and started the preparations. Some of them are realized, like free public transportation for students, or high school Wednesdays, or free train tickets twice a month for students.
The Agency for Youth and Sports has already started the plans for the construction of the 150 basketball courts. The procedure for installing open air fitness machines in 28 settlements has also started. I had an opportunity to see the project, the machines are very high quality.
The public call for construction of the open roman theater Skupi in Karpos is ongoing. This will be a place for gathering of young people, at many musical, theatrical, and other art events. We are also finishing up the two mobile stages for the city squares, a total of 6 we have announced.
In the sphere of agriculture, as it was announced, the subsidies for 80 percent of the drop-by-drop systems, and wells will begin, which are to increase the farmers’ income for at least 50 percent in some cultures, up to 300-400 percent in others, and that will eventually increase their profit as well.
The same goes for the newly announced 80 percent subsidies for the purchase of high produce cattle, for the farmers that breeds cattle, which will also increase their profit.
We are working on law changes to create opportunities for farmer councilors, after the methodology I described at the press conference, and there is also an action plan to realize the mega project for the construction of a contemporary, modern center for purchase of agriculture products in Macedonia.
The project “Buy a House in the County” will be enabled as soon as the law changes are completed.
T: Mentioning this project, what is going on with the “Youth Housing Project”?
“We are working on it will full steam. The project has been legally enabled and we already have the first users of the project, which will help a lot of young people to buy a house with the help of the state, a chance that has rarely anywhere been available.
I would like to remind, that this project allows extra convenient credits, which subsides house construction for people under 35. Mayors of VMRO-DPMNE are working on creating more housing lots and the Government funds will help in constructing the infrastructure in the new settlements which will allow at least 100 locations for houses.
The other projects are already pending. The project for pellet stoves for heating will start functioning in 2017, which will allow 70 percent subsidies, for which the drafts for changes to the laws are in procedure. The value added tax for these stoves will be decreased, as well as for the pellets.
We have started the tender procedures for construction the primary gas pipeline to Stip, Negotino, from Skopje to Gostivar, and from Negotino, through Prilep to Bitola, as the first phase of the project. The gas pipeline to Stip should be completed next month.
We have met with the mayor of Aerodrom to establish the location for the gymnasium, after what the preparations for the detailed urbanistic plan. The Bureau for Education Development is already working on the concept of the new elite mathematical gymnasium.
Shortly, all that was promised will be completed, regardless of the elections, and when the new program is published people will see that this is just a bit of the great plan and vision of VMRO-DPMNE for the development of Macedonia and support of its people all over the county.