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10 December 2005NGO Fair- Skopje Center for Research and Policy Making Local Economic Development of Gostivar municipality- Collapse of the industry, emigrants.

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Presentation on theme: "10 December 2005NGO Fair- Skopje Center for Research and Policy Making Local Economic Development of Gostivar municipality- Collapse of the industry, emigrants."— Presentation transcript:

1 10 December 2005NGO Fair- Skopje Center for Research and Policy Making Local Economic Development of Gostivar municipality- Collapse of the industry, emigrants key for surviving

2 History of Gostivar Gostivar is mentioned for the first time in Middle Ages In XVII century Gostivar became center of Gorni Polog In 1904 Gostivar had inhabitants. Today the municipality of Gostivar has 35 inhabited places with the population of: - the municipality of Gostivar inhabitants - the town of Gostivar inhabitants

3 Historical Overview: Population Year# of inhabitants

4 Inhabitants in Municipality Gostivar YearTotalMacedoniansAlbaniansTurksRomaSerbsOthers … …

5 Inhabitants in the Town of Gostivar YearTotalMacedoniansAlbaniansTurksRomaSerbsOthers … …

6 Developments in Socialist Times Internal migration The rural population from the mountains descended to the Polog valley; many people from the villages moved to the town of Gostivar. In 1954 the Turkish left. Macedonians and Albanians moved in from the surrounded villages. Gorni Polog is highly fertile land – key economic activities crafts and agriculture. But! Incoming peasants are being employed in Industry.

7 Developments in Socialist Times Rapid Industrialization Dekon (clothing manufacturing) founded in 1948 Silika (fire proof materials) in 1954 Mermeri c.1955 (industry for decorative stone -industrija za ukrasen kamen) Goteks founded in 1958 Gorni Polog Slaughterhouse 1960

8 Developments in Socialist Times Decline of Agriculture, Old Crafts In 1971 agriculture sector provides only 20% of total revenues of the municipality whereas the industry makes 41% of the revenues. But! Many still work in agriculture- in 1973, 4720 households employed in agriculture and cattle- breeding, 98% of cultivation area (obrabotliva povrsina) private. Old craft is dying the younger craftsmen do not show any interest. Turks left.

9 The Story of Silika Before Transformation Giant in ex-Yu consists of Alumosilikatna, Dolomitna and Chajle mine Selling all over Europe, 70% of production. In 1980 exported 8882 tons. In 1989, total turnover USD 100 mil, out of which USD 63 mil. profit.

10 The Story of Silika Before Transformation Major employer - total of 1900 employees Alumosilikatna worked in 5 shifts; Dolomitna in 4 shifts the mines in 2 shifts. The average salary was DEM 750. Equipped with top technology, imported from Europe, staff trained abroad.

11 Factors For Fall of Silika After 89 Break Down of Traditional Markets Transport Costs Increase (x-Yu Wars) Over- employment (450 employees as technological surplus). Increasing debts Problems with enforcement of payments Government policy stimulating SME based economy

12 The leftovers of Silika In 1995, RIOMSILIKA started bankruptcy procedure. SILIKA was divided in three business units: 1.AD ALUMO SILIKAT 2.AD REMONT 3.AD DOLOMIT The mines Chajle Chajle and Minerals Silika Makedonski Brod, as well as the brick-plant Ciglana had been separated. Nowadays only ADDOLOMIT works- bought in 2003 by HAZNEDAR - exports tones fireproof materials annually to Bulgaria

13 Aftermaths of Gostivars transition Type of ownership Privateno definedsociallymixedco-operativestate 89.8%4.5%3.3%1.1%1.0%0.3% The big industrial capacities have collapsed Number of active enterprises in 2004: 4352 enterprises (99.1% SMEs)

14 Main employers in today's Gostivar economy Only 37 of registered companies have more than 10 employees Only 5 of them have more than 100 employees (DEKON, OHIM Ges, Komunalec, Zito Sar, Getro) ESM branch Gostivar is a major employer, but recorded in Skopje The rest are dominated by companies dealing with trade and production of furniture and construction materials

15 Unemployment in Gostivar Number of unemployed ( ) : Number of unemployed in 2005 in urban areas – 8985; and in rural areas 7788 Employed are 7195

16 Emigrants – key for survival CRPM estimation on basis of its research is that the number of emigrants from Gostivar is between The vast majority of migrants- for economic reasons, guest workers 54.60% of remittances for family needs, home investments %, renovations of the family houses - 13%, buying house/apartment %, savings %, and other reasons %. From 1993 until 2004 the Macedonian economic emigrants brought to the country 3 billion dollars

17 Effect of Remittances on towns dynamics The town becomes lively when the guest workers arrive / summer and New Years / This summer 1000 weddings some worth of euros Construction of houses main activity in the summer period Belvicica street – the housing and furniture paradise Trade and services booming in summer

18 New trends in emigration With negative impact on economy In recent years emigrants come in smaller numbers Spend less time and money They take the entire family Buy apartments rather than houses With positive impact on economy Home comers bringing in investment and know-how (Gudalat, Fejzi, Fatina)

19 Decentralization and municipal good governance Dynamic new mayor euro invested in municipal infrastructure in the last 6 months (parking, improvement of the water supply, park, street, organization of traffic, waste depot) One stop shop Removal of illegally built houses Gradual payment of the municipal debts

20 CRPM basic findings 80 companies and individuals were interviewed in the period April-December 2005 Highlight – decent / fair inter ethnic relations Most of them identified the same issues of concern: - unfaithful competition - problems with enforcing payments - limited access to finance (bad loan criteria) - no state aid - high dependence on emigrants financial assistance - lack of industrial capacities in the town and employment - predominance of petty trade - high level of corruption and nepotism - lack of FDI - too many seasonal jobs / no stable employment

21 Recommendations and conclusions Discussion paper on CRPMs Gostivar research – coming soon -

22 Thanks to our Partners and Donors European Stability Initiative The German Marshall Fund of the United States of America Libertas Institute Olof Palme International Center Foundation Open Society Institute MacedoniaJournal of Southeast European Politics

23 CRPM Your comments and suggestions are welcomed at

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