In his interview for ITAR-TASS Russian News Agency, Vice Prime Minister and Minister of Finance, Zoran Stavreski, talks about bilateral relations between Republic of Macedonia and Russia, , economic cooperation, investment opportunities in Macedonia and the projects “South Stream” and Gasification of Macedonia, as well as their significance for the energy future of the country.
Skopje, 2nd August 2012
How do you assess today’s level of bilateral cooperation between Macedonia and the Russian Federation? What should be the course of development of cooperation between the two countries?
Macedonia and Russia have long tradition of friendship, understanding and cultural closeness. And this is not a political flosculus. Both countries have mutual interest in and are committed to intensifying the cooperation in the field of politics, economy and culture. As a result of the mutual commitment, there is an upward trend of cooperation in all fields.
Political relations between the two countries are at high level. Last month, Prime Minister of the Republic of Macedonia, Nikola Gruevski, and President of the Russian Federation, Vladimir Putin, met in St. Petersburg, and during the meeting they acknowledged the positive relations between the two countries, featuring high level of friendship and partnership. Two years ago, President of the Republic of Macedonia, Gorge Ivanov, and former President, now Prime Minister of the Russian Federation, Dmitry Medvedev, met during the same Forum. Last month, Agreement on Mutual Recognition of Documents over Acquired Education and Academic Titles was signed between Macedonia and the Russian Federation, and the citizens of both countries, having acquired diplomas in their countries can work or continue their education in the other country.
We are moving forward in the cooperation in the economic field as well. But I can say that we can do even better in this field. Especially as regards the trade. Large Russian market is a challenge. Macedonia can offer much more on your market, in particular agricultural products, wine and food, as well as pharmaceuticals and other products. Thus, by participating in fairs and through organized appearance of Macedonian companies, we are making efforts to realize the necessary contacts for promotion and distribution of Macedonian products on the Russian market.
Macedonian-Russian Intergovernmental Commission is of especial importance for the trade, economic, scientific and technical cooperation between Republic of Macedonia and the Russian Federation. Sixth session of the Commission was held at the beginning of July in Nizhny Novgorod, when we were delivered draft Agreement for inclusion in the “South Stream” and Memorandum of Cooperation was signed for construction of gas pipeline network in Macedonia. In addition, we consider the Macedonian-Russian Chamber of Commerce, which coordinates organized appearance of Macedonian companies on the Russian market, as an important institution for improvement of both trade and economic cooperation.
What does Macedonian Government do to attract foreign investors, in particular investors from Russia?
Russian is an important investment partner of Macedonia. I believe entrance of Russian “Protek Group” with the construction of a factory for production of homeopathic pharmaceuticals in Bunardzik Free Zone will be a positive experience for the Russian investors and a motive for new investments. It has been thus so far as well. There are many successful Russian investments in Macedonia, such as “Lukoil”, “TE-TO” gas power plant and Bucim and Sasa mines, where Russian capital is invested.
Strategy of the Macedonian Government as regards attracting foreign investments is simple – first, we provide for the most favourable conditions for investments in Europe and, second, we introduce them to the potential investors. With 10% flat tax, Macedonia has the lowest taxes in Europe. Thereby, if a company re-invests or withholds the profit, there is zero tax. Additionally, special incentives for foreign investors are offered by the free economic zones. They include ten-year exemption of paying both taxes and customs duties, symbolic price for land lease, direct state aid and many other privileges, thus being the most competitive investment destination in the region.
Macedonia is one of the rare countries in Europe which, despite the turbulences caused by the European debt crisis, has managed to keep its credit rating unchanged and stable. It is a result of low indebtedness of the country of only 29% and low budget deficit of 2.5% of GDP, as well as the stable financial system. At the same time, relevant international institutions have assessed Macedonia several years in a row among the top-reformer countries and the best business destinations in the world.
As for investors from Russia, since the beginning of this year, high-level Macedonian government delegations visited Russian regions when investment opportunities in Macedonian were presented. During the first visit, Rostovsky region and Krasnodarsky kray were visited, while during the second visit, headed by Prime Minister of the Republic of Macedonia, Nikola Gruevski, investment potentials were presented in Moscow Region, Vladimir Region, Nizhny Novgorod region and Leningrad Region. These presentations were attended by several hundreds of Russian businessmen. I can say that we are satisfied with the interest and the contacts realized during these visits, as well as that we visited different regions in Russia. I expect the contacts established during the visits to continue in future as well and to be operationalized through increased trade and investments.
Which areas of the Macedonian economy you believe could be the most attractive for the Russian capital?
– In general, all of them. Still, I would point out the following: energy, agriculture, real estate, tourism, mineral raw materials and pharmacology. In light thereof, I would like to emphasize that Macedonia has overcome, to a great extent, the handicap of a small market, for it has signed Free Trade Agreements with all European countries. I hope we will sign such agreement with the Russian Federation as well, which would provide for significant increase of trade.
How do you estimate the cooperation with Russia in the field of energy. What obstacles, according to you, could hinder the realization of the mutual agreement as regards the “South Stream" and Gasification of Macedonia?
– Energy is a sector in which Macedonian-Russian cooperation has achieved significant progress. In 2010, we managed to resolve an important issue: We signed agreement on using US$ 60 million from the clearing debt of Russia towards Macedonia for realization of the national gas pipeline network in Macedonia. In the course of this year, at the meeting with Prime Minister, Nikola Gruevski, President of the Russian Federation, Putin, expressed support and commitment for inclusion of Macedonia in “South Stream” corridor, as well as for impending commencement of the project for gasification of the Republic of Macedonia, in line with the Clearing Debt Agreement. What is favourable is that at the next official visit of Macedonian government delegation already, which followed two weeks later, Russian representatives delivered draft Agreement for inclusion of Macedonia in “South Stream” corridor. In addition, Memorandum of Cooperation was signed with the Russian company “StroyТrans Gas”, being the first serious step towards construction of the national gas pipeline network in the country. In the middle of August already, we expect for an expert team from “StroyТrans Gas” to come to Macedonia for the final negotiations and offer. We expect for the Agreement to be signed by the end of this year, followed by commencement of the construction of the network. In the meantime, Macedonia undertakes the necessary activities for commencement of the expropriation procedure and obtaining the approvals for construction.
As for the inclusion of Macedonia in “South Stream”, we are considering the draft Agreement we have received. Once it is harmonized and signed, Russian-Macedonian company will be established, in charge of the realization of the gas pipeline branch towards Macedonia.
Inclusion of Macedonia in the „South Stream“ Project and the project for construction of national gas pipeline network are of exceptional strategic importance for the Republic of Macedonia, which will provide for inclusion of Macedonia in the international gas transportation corridors and stable source of gas for the future generations. Partnership with Russia in this field is of essential significance.