Faster and Greener Growth toward Shared Prosperity: The Continuing Partnership of FYR Macedonia and the World Bank Group

Much has changed in the Former Yugoslav Republic of Macedonia since it first entered into a new partnership with the World Bank in 1994 - three years after gaining independence. This initial partnership, forged through $80 million in financing to help the country’s economy stabilize following inflation of 230% in 1993, led the way for much needed economic recovery and laid the foundation for a strategic partnership that has lasted for two decades and counting.

“Compared to 15-20 years ago, I see a big difference. I was a child back then. Macedonia faced a lot of turbulence and many changes, which affected all of us. My parents lost their jobs and switched to working in agriculture,” recalls Slavche Atanasovski, 32, who, like his parents, has continued to farm after finishing university.

Today, Macedonia is committed to a path of increased European integration and the World Bank Group continues to act as a strong partner, working side by side with the country as it moves toward accession into the European Union (EU) – and toward creating better living standards for all Macedonian citizens.

“I am trying to make some investments, but there are also expenses," says Atanasovski "I really hope that Macedonia is facing a better future."

Financing through projects such as the Agriculture Strengthening and Accession Project is helping to provide this better future and ensure the types of investments made today can pay off tomorrow. This project improved the delivery of government assistance to the agriculture sector, in alignment with the European Union's pre-accession requirements. This has allowed, among other things, for beneficiaries to make use of IPARD (Instrument for Pre-accession Assistance in Rural Development) grant opportunities and has led to an increase in the availability of credit in rural areas across the country.

Agriculture is just one of many sectors being brought in compliance with EU acquis as the country moves toward a more prosperous - and inclusive - future.

“In the past twenty years, the World Bank Group has been a faithful partner to Macedonia. The Bank has provided technical support and around 1.7 billion USD in financial support, while the IFC - our private sector arm - has provided around 300 million USD in investments to Macedonia. Our support has been steadfast and will remain so, in pursuit of a prosperous and cohesive Macedonia,” says Ellen Goldstein, Country Director for South East Europe.

This commitment to Macedonia by the World Bank Group over the last two decades has been provided through more than 40 operations - including investments in agriculture, energy, infrastructure, cultural heritage, and others.  

Energy is a key sector that the World Bank Group has supported in the country. A grant from the Global Environment Facility (GEF), with co-financing from participating municipalities and from financial intermediaries and private investors, helped support investments in energy efficiency and renewable energy between 2009-2103. Interventions such as the installation of thermal-facade insulation and new windows in 41 schools and kindergartens is now saving an average of $19,000 in every building each year - while providing more warmth, comfort, and better indoor air quality for students to learn in. These improvements also mean a reduction of over 3 million tons of CO2 over the course of 20 years and a reduction of 200,000 MWh of electricity imports per year for Macedonia.

The first major solar power plant in Macedonia was also built through an investment supported by GEF making it possible to tap a vast and unused source of energy in a country that has more than 200 days of sunshine a year.

“Over the past four years we have focused our collaboration with the Macedonian government on supporting a faster, ‘greener,’ and more inclusive growth, while simultaneously helping the country to prepare for EU accession," says Tatiana Proskuryakova, Country Manager for Macedonia, "we have supported competitiveness, employability, social protection, and environmentally sustainable growth as key areas that put people to work and improve living standards for all,”

Better living standards for people in the village of Canaklija means no longer having to fetch water after a new water supply system is installed through a World Bank Group project. The Improvements of municipal infrastructure and services project, under the responsibility of municipalities and their communal service enterprises, is helping several communities improve their water supply, sanitation, and solid waste management.

Beyond energy, infrastructure, and environmental projects, the World Bank Group also recognizes the importance of cultural heritage. The World Bank has supported communities that house sites and assets of particular cultural importance - such as the restoration of the House of Jordan Hadzi Konstantinov Dzinot in Veles or Skopje’s Old Bazaar.

All of these changes, coupled with the country’s continuing efforts to promote reforms that will generate faster economic growth and better and more jobs as the country moves toward EU membership, lay the foundation for a continued partnership between the World Bank Group and Macedonia - with the common goal of supporting the country as it improves the prospects for a better future for its people over the next 20 years.