Old challenges for new government in North Macedonia

Old challenges for new government in North Macedonia
Dimitar Kovacevski's new government was voted in by the parliament on January 16. / vlada.mk
By Valentina Dimitrievska in Skopje January 18, 2022

North Macedonia got a new coalition government led by PM Dimitar Kovacevski on January 16, following the resignation of Zoran Zaev as a result of the ruling party’s local election defeat and the repeated failures of the country to start long-awaited EU accession talks.

The government with 21 ministers inherited the old challenges faced by its predecessor, such as solving divisions with Bulgaria that have blocked Skopje’s EU integration process, as well as dealing with the COVID-19 pandemic, the energy crisis and rising inflation.

The Kovacevski-led cabinet is backed by the Social Democratic Union of Macedonia (SDSM)-led ruling coalition and includes the SDSM’s old partner the ethnic Albanian Democratic Union for Integration (DUI), while another party representing ethnic Albanians, Besa, which exited the coalition, was replaced by the opposition Alternative.

Kovacevski said that the government has a mandate to rule the country until 2024 based on the July 2020 general election results, but the conservative opposition VMRO-DPMNE party claims that the government is illegitimate because the SDSM won the election two years ago in coalition with Besa, which recently decided to join the opposition.

Life expectancy 

Some analysts expect Kovacevski’s government to be short-lived due to its composition and opposition pressure for snap elections.

Aleksandar Krzalovski, an executive director at the Macedonian Center for International Cooperation (MCIC), told bne Intellinews that he thinks it will not be easy for Kovacevski to lead the government with such a composition due to the unfortunate compromises within the SDSM and the questionable entry of Alternative into the new cabinet.

“First, within the SDSM it seems that some not best compromises have been made. Namely, although there are two to three ministers who, according to public opinion, deserve the trust of citizens, there are also two to three for whom the public assessment is far from good, but yet Kovacevski explained they led their sectors well,” Krzalovski said in a written statement, without elaborating.

According to Dimitar Apasiev from the opposition Left party, the new Justice Minister Nikola Tupanceski is the only bright spot in the new government. He criticised the re-appointment of Oliver Spasovski as minister of interior, after he was engulfed in a scandal over fake passports, a well as the appointments of several female ministers from the SDSM.  

Who is Kovacevski?

47-year-old Kovacevski, who served as deputy finance minister in Zaev’s cabinet, was elected leader of the ruling SDSM on December 12, after Zaev resigned from this position. 

Kovacevski was an economics professor at the American College in Skopje. He finished high school in Minnesota in the US and graduated from the St. Cyril and Methodius University in Skopje. He gained his doctoral degree in economics in 2008 at the Economics Faculty at the University of Montenegro. He completed his professional training at the School of Business at Harvard University in 2011.

He started his career in Skopje-based telco Makedonski Telekom, part of Deutsche Telekom, as a financial associate and was promoted to a number of managerial positions. Then he became the executive director of the telco One-Vip Macedonia, now A1 Makedonija, part of the group Telekom Austria Group (2017-2018).

In 2020, he was part of the government’s Economic Council set up to deal with the economic consequences of the COVID-19 pandemic.

Opposition VMRO-DPMNE has criticised Kovacevski, saying that he is only a pawn of Zaev and a faithful follower of Zaev’s policy.

VMRO-DPMNE vice president Aleksandar Nikoloski said that the government proposed by the new SDSM leader Kovacevski was composed of ‘defeated politicians’.

On the other hand, local media cited Kovacevski’s colleagues as saying that the new prime minister will be able to deal with the COVID-19 pandemic and the energy crisis, as they described him as an energetic and knowledgeable man.

47-year-old Zaev, a former businessman and mayor of Strumica, served as prime minister from May 2017 to January 2020 and again from August 2020. Under Zaev’s leadership, Macedonia changed its name to North Macedonia under the Prespa name deal with Greece, which enabled the country to become a Nato member in March 2020, but it failed to launch EU accession talks due to the unexpected Bulgarian veto. 

New government programme

The key goal of the new government's economic policy is to achieve sustainable economic growth by doubling the GDP growth rates in the medium term from 2.5% to 5% and to improve the living standard of the population, Kovacevski said while presenting the programme in the parliament.

To this end, one of the measures of the new government will be to increase pensions. The employment rate is projected to increase to 51.1% in 2024, and the jobless rate to drop to 11.4% by the end of the government’s mandate, for the first time entering a single-digit zone of 8.6% by the end of 2026.

This will be achieved through the increase of domestic and foreign investments, investments in public and private projects, as well as through implementation of capital investments.

In the area of infrastructure, the top priority is the construction of Corridor VIII, that links the country with neighbouring Bulgaria and Albania as well as the construction of Kicevo-Ohrid motorway and the Skopje-Blace motorway section that links to Kosovo.

The COVID-19 pandemic and the energy crisis remain major challenges for the economy, Kovacevski said.

At the beginning of its mandate, the government will draw up an intervention plan to help the population and the economy through the energy crisis. This will be done in order to mitigate the negative effects on prices and protect citizens from price shocks.

Kovacevski also spoke of the other major challenge faced by Skopje: resolving the issue with Bulgaria and finally advancing to EU accession negotiations. He said the governments of North Macedonia and Bulgaria are determined to find solutions to their divisions through dialogue and cooperation.

“Macedonian and Bulgarian citizens are more interested in the economy, cultural, educational and youth exchanges and infrastructure and we must cooperate much more in these areas,” Kovacevski said.

He underlined that neither the identity of the Macedonian people nor the historically and scientifically confirmed specificity and uniqueness of the Macedonian language are up for negotiation. 

On the other hand, Bulgaria wants North Macedonia to admit that Macedonian language is a Bulgarian dialect and that the Macedonian nation emerged only after WWII in 1944 when Macedonia became part of Yugoslavia.

Following a change of government in Sofia, Bulgaria’s new Prime Minister Kiril Petkov told North Macedonia’s news agency MIA that he is coming to Skopje with a constructive attitude and readiness for a new beginning. However, he denied he will submit annexes to the 2017 Friendship Treaty between the two countries, which is a basis for the negotiations, but interpreted differently by the two sides.

Petkov said that the tone in the dialogue will be dynamic and practical, free from the declarative commitments so far and focused on important issues that affect the daily lives of the citizens of both countries.

Alternative, the stumbling block

The language and historical issues raised by Bulgaria are deeply important to many people in North Macedonia, which suffered a crushing blow when the radical step of changing the country’s name to resolve a dispute with Greece failed to secure the start of EU accession negotiations.  The failure to progress with EU accession also weakened the SDSM-led ruling coalition. 

With the entry of the Alternative to the coalition, the majority in the 120-seat parliament was expanded to 64. However, there are already signs of tensions within the SDSM and among its coalition partners, which could impede the new government’s ability to tackle this highly politically sensitive issue. 

For Krzalovski, the new coalition partner is an issue. "Due to the entry of Alternative, the smaller partners in the SDSM-led coalition are obviously dissatisfied and are already conditioning their support with additional concessions and the gap will only deepen," he said. The distribution of ministerial posts among parties is also clearly disproportional; despite having just four MPs, Alternative has three ministerial positions. 

Another problem related to Alternative is the fact that the party was extremely critical of Zaev’s government and especially of the DUI ministers. It remains to be seen how ministers from Alternative and the DUI will work together in the new government.

"And finally, the opposition may leave the first 100 days for the new government to show results, but it will not wait long after that to demand snap elections again and to increase the pressure after that, for [snap elections] to happen this year," Krzalovski said.

The entry of Alternative, led by Afrim Gashi, in the government was agreed upon when Zaev was still prime minister, in December 2021. Previously, Alternative was part of the opposition coalition led by VMRO-DPMNE that collected signatures for the overthrow of Zaev's government, but after failing to do so, the party changed sides and agreed to enter the new government following Zaev’s resignation.

The problems within the SDSM came into the spotlight when several ministers from the Zaev government decided not to participate in the new government, including former defence minister Radmila Sekerinska and education minister Mila Carovska.

Health minister Venko Filipce carried the burden during the entire coronavirus crisis and became the target of criticism from the opposition for not resolving the case of the fire in the makeshift COVID-19 hospital in Tetovo in September 2021, in which 14 people died. He was replaced by a minister from Alternative.

The most public attention was attracted by Nikola Dimitrov, who served as deputy prime minister in charge of European integration. Previously, Dimitrov served as foreign minister, and during his mandate he signed the Prespa name deal with Greece in 2018, which changed the name of the country from Macedonia to North Macedonia.

Dimiitrov held a news conference and made media appearances a few days before the new government was voted in, complaining that he was not in the new cabinet due to his political stance on the issue of Bulgaria. Dimitrov, who is not a member of any party, said that he does not trust Foreign Minister Bujar Osmani from the DUI regarding the issue with Bulgaria, claiming that the new government is ready to make concessions on the red lines with Sofia in order to start negotiations with the EU.

His statements provoked harsh reactions from the public, and from both government and opposition. Politicians asked questions such as why Dimitrov did not say earlier if an agreement harmful for North Macedonia was being prepared?

However, Dimitrov was one of the officials who firmly and consistently insisted on the red lines. Unlike some government officials, he did not raise citizens' hopes that a deal with Bulgaria would be possible soon; this proved to be a false hope.

Dimitrov claimed that his positions on the dispute with Bulgaria were the reason for his removal from office, and that ‘internal and external factors’ did not want him to be part of the new government. He said he was even offered the post of ambassador to the US or other country of his choice, which he rejected because he believes that only in North Macedonia he can fight for the country's national interests.

At the end of his engagement in the government, Dimitrov said that his duty is to sound the alarm on the negotiations with Bulgaria to prevent any ‘bad and undignified solutions’.

Kovacevski reacted to Dimitrov's news conference saying that it was a matter of Dimitrov's dissatisfaction due to his non-participation in the new government. He added that the government will defend North Macedonia’s national interests and urged citizens to stay calm.

Osmani assessed Dimitrov's criticism as ‘unproductive and unfair’ before the upcoming visit of the high Bulgarian delegation led by Petkov due on January 18. The office of former prime minister Zoran Zaev also reacted, calling it an ‘inaccurate and speculative’ statement.