North Macedonia Sustainability Issues

The critical environmental and sustainability issues of North Macedonia:

  1. Corruption

There is a high risk of corruption when dealing with Macedonia’s judiciary due to extensive political interference and corruption. Companies perceive bribes and irregular payments to be often exchanged in return for favorable judicial decisions (Global Competitiveness Report 2015-2016). Nearly half of citizens consider the judicial system to be corrupt (Global Corruption Barometer 2017). Investors complain of political interference in court cases and cite slow and inefficient legal proceedings as constraints to business (ICS 2017). The reforms over the past decade to improve the judiciary continue to be undermined, to the extent of backsliding by political interference in the work and appointment of members of the judiciary (European Commission 2016). More safeguards are needed to ensure court cases are not allocated to a specific judge based on political or personal grounds (European Commission 2016). There are reports that prosecutors are unable to properly prosecute high-profile or politically sensitive cases (European Commission 2016). The judiciary suffers from a lack of funding and the prosecutor’s office remains understaffed and is lacking in other capacities (BTI 2016). Since July 2015, companies are required to enter into mediation over disputes of up to EUR 15,000 before they may pursue their claim in court (ICS 2017); companies have complained that the measure imposes additional costs and lengthens the time required to enforce contracts. Enforcing a contract in Macedonia takes significantly longer than the regional average (DB 2018).

 

  1. Waste Management

 According to the data of the State Statistical Office, the total amount of collected municipal waste in the Republic of North Macedonia in 2018 was 625,386t. Compared to 2017, the total amount of collected municipal waste decreased by 1.6 %. 99.5 % of it was dumped in landfills. Thus, reusing, recycling, composting and incinerating waste with energy recovery should be encouraged and selective collection of waste increased. Waste disposal on uncontrolled landfills is estimated to be around 20%, which is a direct threat to the environment and natural resources. Actions aiming at closing down these illegal dumping sites and building regional waste management sites continue. The goal of the Government is to have a system for selective collection of waste in every municipality by the end of 2020. However, economic efforts to promote recycling and reduction of waste are still scarce. Due to lacking administrative and financial resources, the regional waste management structures are only partially functional and the waste management plans have not been implemented fully. Waste has not been recognized as a source of energy yet. North Macedonia should implement an integrated regional waste management system, encourage the usage of up-to-date solutions and focus on shutting down the illegal landfills, while at the same time maintaining the proper ones.

 

  1. Gender Balance

North Macedonia has a GII value of 0.145, ranking it 36 out of 162 countries in the 2018 index. In North Macedonia, however, only 38.3 percent of parliamentary seats are held by women, and just about 41.6 percent of adult women have reached at least a secondary level of education compared to 57.6 percent of their male counterparts. For every 100,000 live births, 8.0 women die from pregnancy related causes; and the adolescent birth rate is 15.7 births per 1,000 women of ages 15-19. Female participation in the labour market is 42.7 percent compared to 67.5 for men.

 

  1. Income Inequality

Income inequality can and should be improved but Macedonia is by no means a global outlier in terms of income inequality. According to the official statistical data published by the State Statistical Office (using Eurostat methodology), income inequality has been improving with the Gini index declining from 40.6% in 2010 to 33.6% in 2016 (with a moderate, but continuous decline through those years).

Regardless of how unequal some may believe Macedonia is, a progressive income tax system is not the most efficient way to address income inequality. Indeed, the country until 2007 had a progressive tax system, but the Gini index was higher than today. Macedonia should look to encourage and attract high-productivity industries that pay high wages, e.g. IT and BPO. These industries should not be penalized because of their success. The answer to income equality is not more taxes but more jobs and higher wages. Macedonia’s unemployment rate, at 22.4 percent (2017), remains very high by world standards. Growing and modern industries need to be encouraged.

 

  1. Unemployment

Unemployment, estimated at 17.9% in 2019 by the IMF – is very high, although it is expected to decrease to 16.6% by 2021. However, much of the workforce is employed in the informal economy, making the exact level of unemployment hard to assess. According to the latest data available from the World Bank, 5.2% of the population is estimated to live below the national poverty line. There has been improvement, as progress was made on social inclusion and protection. The new Law on Social Protection has been prepared. The law provides for major reforms in the social protection system. The risk of poverty in 2017, considering the poverty threshold of 60% of median equalised income, was 22.2%. The rate of employed people at risk of poverty was 9%, while for pensioners it was 7.7%.