Savo Klimovski, president of Macedonia's assembly, said yesterday a planned joint investment project between the European country and Taiwan would strengthen economic and political links between the two.
But a leading Taiwanese diplomat cast doubt on the success of the economic cooperation, saying -- often in blunt words -- that Macedonia's banking system and government regulations were cumbersome and would discourage Taiwanese investment.
Earlier this month, Taiwan and Macedonia agreed to establish a US$110 million export processing zone on the outskirts of the capital Skopje. The project -- to be funded largely by an unspecified amount of Taiwanese capital -- will be "decisive in terms of the success of the economic and political links between the two countries," Klimovski said.
Klimovski, who was speaking at the first-ever economic forum between the two nations in Taipei yesterday, also said he hoped Taiwan would encourage private sector investment in his country, which he described as a "gateway to the European market."
But Taiwanese Ambassador-at-large Loh I-cheng (
Since accepting the Ministry of Economic Affair's (
The major obstacle, Loh said, "is the utter lack of understanding of how international trade is conducted."
He cited the example of one Taiwan businessman whose letter of credit was refused. Instead, the businessman was asked by his Macedonian partners to pay in cash.
And if Taiwan businessmen manage to get their money into the country, it costs a fortune to get it out, Loh said. Macedonian banks charge transfer fees of 1.3 percent of the total amount to be moved, meaning transfers of large sums of money would result in fees amounting in the tens of thousands of US dollars.
In addition to these disincentives, the relatively high cost of labor due to high taxes made Macedonia less competitive compared to other developing nations, such as Indonesia, Vietnam and China.
"It is necessary for Macedonia to modernize its banking system and streamline its administrative procedures," Loh said. "Unless we take a realistic, pragmatic attitude towards promoting economic cooperation ... then talk will remain talk."
Klimovski attempted to dispel the concerns, saying change was on the way within the next few months.
"Macedonia will adopt important legislation, making way for thorough reform of the banking and taxation systems and completing the process of privatization," he said. "[T]he basic premises will be put in place for the functioning of a new economic system in our country."
Country name:The Former Yugoslav Republic of Macedonia
Government type:Emerging democracy
Natural resources:Chromium, lead, zinc, manganese, tungsten, nickel, low-grade iron ore, asbestos, sulfur, timber
GDP:Agriculture: 20.4%, industry: 38.6%, Services: 41% (1995est.)
Labor force:Approx. 600,000
Industries:Coal, metallic chromium, lead, zinc, ferronickel, textiles, wood products, tobacco
Agricultural products:rice, tobacco, wheat, corn, millet, cotton, sesame, mulberry leaves, citrus, vegetables, beef, pork, poultry, mutton
Exports:Food, beverages, tobacco:17.0%; machinery and transport equipment:13.3%; other manufactured goods:58%
Imports:Machinery and equipment:19%; chemicals 14%; fuels 12%
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