Mr. Minister, your Government has taken a number of major steps in its first year in office to make Macedonia a real „heaven” for business and foreign direct investment. Could you please detail some of the most important measures taken?
I am please to inform you that in October the World Bank has issued its annual report and Macedonia ranked fourth in the world for reforms taken. For example, before we came to power in August 2006 it took 48 days to form a new business in this country; today it takes four hours. We have also reduced taxes to 12 % this year, dropping to 10 % next year, both personal and corporate. We have reduced the complexity of the process to obtain construction permits. There is a very strong anticorruption program installed, aimed mainly at eliminating petty corruption. We have installed cameras at police stations, at the courts, in the customs offices, and we’ve arrested a lot of people for this. We have also installed a nationwide toll-free anti-corruption phone number, and so on. We are changing the fabric of society by implementing a regulatory „guillotine” program which we adopted from some other countries. This involves sharply reducing the bureaucratic procedures and forms in order to make business operate more efficiently. We invited companies to specify what laws, regulations, permits, and other things that are bothering them as regards bureaucratic obstacles in the country, and we have taken all these under consideration, and as a consequence we have slashed many of them. We are at the two thirds stage in this process, and we will finish it by the end of the year.
Your Government started also implementing strong anti-corruption policies, and also has taken measures towards greater openness and transparency in public policy and economy. What are the most important aspects of these policies and the main achievements so far?
I have a vision of Macedonia, as a Singapore of Europe. It is important to understand that 40 years ago Singapore was a swamp. We are trying to mimic their success; however we are not starting from a swamp. We have a reasonably good infrastructure, all things considered, and probably in 20 or 25 years we could be like Singapore, if we keep the reforms started this year with the same speed and intensity. One of the key points of Singapore’s progress was a very strong anti-corruption policy, and by adopting a set of similar reforms in this area we believe that we can approach this goal within our timeframe.
Now let me talk briefly about why I have picked Singapore as a model for us. We have a lot in common with Singapore: we are both small countries, with strong governments and multi-ethnic societies. In addition, we sit at the intersection of trading routes. Singapore is a case for water-based trading routes, our case is one of land-based trading routes, Corridors VIII and X. Another common point is that we both have free economic zones: we have three such zones since last year, the one next to Skopje, 245 hectares; there is one in Tetovo of 97 hectares; and the third in Stip of 200 hectares. The one we are focusing on right now is the one near Skopje. Within these zones we are offering a zero percent tax rate for ten years and ten percent corporate tax rate after that. We are also offering a 50 % discount on the personal income tax which employers pay to employees for the first five years. Infrastructure is also offered, but investors naturally have to build the buildings.
Minister Tashkovich (Photo by Angyal Ágnes)
The last point in common with Singapore is the free trade agreements. We have over 40 free trade agreements, more than any other country on this continent, from Iceland to Turkey and including Ukraine and Russia, a total market of 650 million of people. No other country in Europe can offer this. That is all 27 EU member countries plus 13 more.
What are the fields where you expect foreign investment or participation?
I have 8 primary focus sectors and two additional sectors where I have meetings with some interested parties. The first 8 priorities are: automotive parts, information and computing technology (ICT), food processing and agriculture, mining, pharmaceuticals, the assembly or manufacture of products made of wood, or of leather, and of medical equipment. The two other ones are retail banking, and tourism and aviation. Package towards new airlines routes to other countries.
How about the AMBO project?
Good question. We, that is the region (Bulgaria, Macedonia and Albania – ed.note) have just ratified the inter-governmental treaty document which defines for the next 50 years the construction, operation, and maintenance of the AMBO Trans-Balkan oil pipeline project. This means that from the perspective of the equity investors by incorporating the European Energy Charter and other major international documents, and means also that you are investing in some kind of supranational entity that could be called the United States of the Balkans, for example. For that reason it cannot be modified because of a change of government in one of the three countries. It provides set of rules and it provides confidence in the region for the investors of this project by invoking the terms of the Energy Charter Treaty by reference. The ratification happened in late July, 2007, and then ,according to the terms of the treaty it did not take effect until the 1st of October this year, and now we are aggressively beginning the equity fundraising for the project.
What would be your specific message to potential Hungarian investors and interested companies, including small and medium-size enterprises?
In my cabinet, as long as Hungarian companies are interested in anyone of those ten sectors, we will organize full VIP services for them. This means VIP service at the airport, plus a car and a driver, it also means support of my staff to arrange the desired meetings. All they have to do is to show up and pay for an overnight hotel stay if you stay a night or two, but I mean we will arrange everything and execute it for them flawlessly. They can see the market, do their due diligence, and do not need to stand in the rain looking for a cab to get to the next meting. Everything will be arranged for them by us. We want to make it clear that doing business in the Republic of Macedonia is very easy, and this is in keeping with being ranked the fourth in the world regarding our reform system, and show the world that the next year we should be number one.