Official Name: Republic of Macedonia

PROFILE

Geography
Area: 25,713 square km. (slightly larger than Vermont).
Cities (2001 est.): Capital--Skopje 600,000; Tetovo, Kumanovo, Gostivar, and Bitola 100,000+.
Geography: Situated in the southern region of the Balkan Peninsula, Macedonia is landlocked
and mountainous.
Climate: Three climatic types overlap--Mediterranean; moderately continental; and mountainous,
producing hot, dry summers and cold, snowy winters.

People
Population (2006 est.): 2,053,799.
Population growth rate (2006 est.): 0.2%.
Ethnic groups (2002): Macedonian 64.18%, Albanian 25.17%, Turkish 3.85%, Roma 2.66%,
Serb 1.78%.
Religions: Eastern Orthodox 65%, Muslim 29%, Catholic 4% and others 2%.
Languages: Macedonian 70%, Albanian 21%, Turkish 3%, Serbian 3%, and others 3%.
Education: Years compulsory--12. Literacy--94.6%.
Health (2006 est.): Infant mortality rate--10.8 deaths/per 1,000 live births. Life expectancy (2006
est.)--males 71.79 years; females 76.43 years.
Labor force (third quarter 2009): 940,661; employed 642,541: services--36.0%; industry and
commerce--45.4%; agriculture--18.6%.

Government
Type: Parliamentary democracy.
Constitution: Adopted November 17, 1991, effective November 20, 1991; amended 2001, 2005,
and 2009. (Note: Amended November 2001 by a series of new constitutional amendments
strengthening minority rights, in 2005 with amendments related to the judiciary, and in 2009
related to the census for the election of president.)
Independence: September 8, 1991 (from Yugoslavia).
Branches: Executive--prime minister (head of government), council of ministers (cabinet),
president (head of state). Legislative--unicameral parliament or Sobranie (120 members elected
by popular vote to 4-year terms from party lists based on the percentage parties gain of the
overall vote in each of six election units, with 20 seats per unit). Judicial--Supreme Court, State
Judicial Council, Constitutional Court, Public Prosecutor's Office, Public Attorney. Legal system
is based on civil law; judicial review of legislative acts.
Subdivisions: 84 opstini (municipalities) plus the city of Skopje.
Suffrage: Universal at age 18.
Main political parties: Democratic Alliance or DS (Pavie Trajanov), Democratic Party of Serbs
in Macedonia (Ivan Stoiljkovic), Democratic Party of the Albanians PDSh/DPA (Menduh
Thaci), Democratic Party of Turks in Macedonia (Kenan Hasipi), Movement for Reconstruction
of Macedonia or DOM (Liljana Popovska), Democratic Union for Integration or BDI/DUI (Ali
Ahmeti), Liberal Democratic Party (Jovan Manasijevski), Liberal Party (Borce Stojanovski),
New Alternative (Gjorgji Orovcanec), New Democracy or DR (Imer Selmani), New Social-
Democratic Party or NSDP (Tito Petkovski), Party for Democratic Action in Macedonia or
SDAM (Avdija Pepic), Party for European Future or PEI (Fijat Canoski), Social-Democratic
Union of Macedonia or SDSM (Branko Crvenkovski), Socialist Party (Ljubisav Ivanov Dzingo),
Union of Roma of Macedonia (Amdi Bajram), VMRO-DPMNE Democratic Party for
Macedonian National Unity (Nikola Gruevski), VMRO-Macedonian (Borislav Stojmenov),
United for Macedonia or OM (Ljube Boskovski).

Economy
GDP (2009 est.): $9.473 billion.
Per capita GDP (2009 est.): $9,000.
Real GDP growth (2009 est.): -1.5%.
Annualized inflation rate (2009 est., Consumer Price Index-based): -0.8%.
Unemployment rate (third quarter 2009): 31.7%.
Trade: Significant exports--steel, textile products, chromium, lead, zinc, nickel, tobacco, lamb,
and wine.
Official exchange rate (2009 avg.): 44.13 Macedonian denars = U.S. $1; (2008 avg.): 41.83
Macedonian denars = U.S. $1.

GEOGRAPHY
Macedonia is located in the heart of south central Europe. It shares a border with Greece to the
south, Bulgaria to the east, Serbia and Kosovo to the north, and Albania to the west. The country
is 80% mountainous, rising to its highest point at Mt. Korab (peak 2,764 meters).

PEOPLE
Since the end of the Second World War, Macedonia's population has grown steadily, with the
greatest increases occurring in the ethnic Albanian community. From 1953 through the time of
the latest official census in 2002 (initial official results were released December 2003), the
percentage of ethnic Albanians living in Macedonia rose threefold. The western part of the
country, where most ethnic Albanians live, is the most heavily populated, with approximately
40% of the total population. As in many countries, people have moved into the cities in search of
employment. Macedonia has also experienced sustained high rates of permanent or seasonal
emigration.

HISTORY
Throughout its history, the present-day territory of Macedonia has been a crossroads for both
traders and conquerors moving between the European continent and Asia Minor. Each of these
transiting powers left its mark upon the region, giving rise to a rich and varied cultural and
historical tradition.

After the fall of the Western Roman Empire, the territory of Macedonia fell under the control of
the Byzantine Empire in the 6th and 7th centuries. It was during this period that large groups of
Slavic people migrated to the Balkan region. The Ottoman Turks conquered the territory in the
15th century; it remained under Ottoman Turkish rule until 1912.

After more than four centuries of rule, Ottoman power in the region began to wane, and by the
middle of the 19th century, Greece, Bulgaria, and Serbia were competing for influence in the
territory. During this time, a nationalist movement emerged and grew in Macedonia. The latter
half of the 19th century, and continuing into the early part of the 20th century, was marked by
sporadic nationalist uprisings, culminating in the Ilinden Uprising of August 2, 1903.

Macedonian revolutionaries liberated the town of Krushevo and established the short-lived
Republic of Krushevo, which was put down by Ottoman forces after 10 days. Following
Ottoman Turkey's defeat by the allied Balkan countries--Bulgaria, Serbia, Montenegro, and
Greece--during the First Balkan War in autumn 1912, the same allies fought the Second Balkan
War over the division of Macedonia. The August 1913 Treaty of Bucharest ended this conflict by
dividing the territory between Bulgaria, Greece, and Serbia. The 1919 Treaty of Versailles
sanctioned partitioning Macedonia between The Kingdom of Serbs, Croats and Slovenes,
Bulgaria, and Greece. In the wake of the First World War, Vardar Macedonia (the present day
area of the Republic of Macedonia) was incorporated into the newly formed Kingdom of Serbs,
Croats, and Slovenes.

Throughout much of the Second World War, Bulgaria and Italy occupied Macedonia. Many
citizens joined partisan movements during this time and succeeded in liberating the region in late
1944. Following the war, Macedonia became one of the constituent republics of the new
Socialist Federal Republic of Yugoslavia under Marshall Tito. During this period, Macedonian
culture and language flourished.

As communism fell throughout Eastern Europe in the late 20th century, Macedonia followed its
other federation partners and declared its independence from Yugoslavia in late 1991.
Macedonia was the only republic of the former Yugoslavia whose secession in 1991 was not
clouded by ethnic or other armed conflict, although the ethnic Albanian population declined to
participate in the referendum on independence. The new Macedonian constitution took effect
November 20, 1991 and called for a system of government based on a parliamentary democracy.
The first democratically elected coalition government was led by Prime Minister Branko
Crvenkovski of the Social Democratic Union of Macedonia (SDSM) and included the ethnic
Albanian Party for Democratic Prosperity (PDP). Kiro Gligorov became the first President of an
independent Macedonia.

President Gligorov was the first president of a former Yugoslav republic to relinquish office. In
accordance with the terms of the Macedonian constitution, his presidency ended in November
1999 after 8 years in office, which included surviving a car bombing assassination attempt on
October 3 in 1995. He was succeeded by former Deputy Foreign Minister Boris Trajkovski
(VMRO-DPMNE), who defeated Tito Petkovski (SDSM) in a second-round run-off election for
the presidency on November 14, 1999. Trajkovski's election was confirmed by a December 5,
1999 partial re-vote in 230 polling stations, which the Macedonian Supreme Court mandated due
to election irregularities.

In November 1998 parliamentary elections, the SDSM lost its majority. A new coalition
government emerged under the leadership of Prime Minister Ljubco Georgievski of the Internal
Macedonian Revolutionary Organization-Democratic Party for Macedonian National Unity
(VMRO-DPMNE). The initial coalition included the ethnic Albanian Democratic Party of
Albanians (DPA).

During the Yugoslav period, most of Macedonia's Slavic population identified themselves as
Macedonians, while several minority groups, in particular ethnic Albanians, retained their own
distinct political culture and language. Although interethnic tensions simmered under Yugoslav
authority and during the first decade of its independence, the country avoided ethnically
motivated conflict until several years after independence. Ethnic minority grievances, which had
erupted on occasion (1995 and 1997), rapidly began to gain political currency in late 2000,
leading many in the ethnic Albanian community in Macedonia to question their minority
protection under, and participation in, the government. Tensions erupted into open hostilities in
Macedonia in February 2001, when a group of ethnic Albanians near the Kosovo border carried
out armed provocations that soon escalated into an insurgency. Purporting to fight for greater
civil rights for ethnic Albanians in Macedonia, the group seized territory and launched attacks
against government forces. Many observers ascribed other motives to the so-called National
Liberation Army (NLA), including support for criminality and the assertion of political control
over affected areas. The insurgency spread through northern and western Macedonia during the
first half of 2001. Under international mediation, a cease-fire was brokered in July 2001, and the
government coalition was expanded in July 2001 to form a grand coalition which included the
major opposition parties.

The expanded coalition of ruling ethnic Macedonian and ethnic Albanian political leaders, with
facilitation by U.S. and European Union (EU) diplomats, negotiated and then signed the Ohrid
Framework Agreement in August 2001, which brought an end to the fighting. The agreement
called for implementation of constitutional and legislative changes, which laid the foundation for
improved civil rights for minority groups. The Macedonian parliament adopted the constitutional
changes outlined in the accord in November 2001. The grand coalition disbanded following the
signing of the Ohrid Framework Agreement and the passage of new constitutional amendments.
A coalition led by Prime Minister Georgievski, including DPA and several smaller parties,
completed its parliamentary term.
In September 2002 elections, an SDSM-led pre-election coalition won half of the 120 seats in
parliament. Branko Crvenkovski was elected Prime Minister in coalition with the ethnic
Albanian Democratic Union for Integration (DUI) party and the Liberal-Democratic Party
(LDP).

On February 26, 2004 President Trajkovski died in a plane crash in Bosnia. Presidential elections
were held April 14 and 28, 2004. Then-Prime Minister Branko Crvenkovski won the second
round and was inaugurated President on May 12, 2004. The parliament confirmed Hari Kostov,
former Interior Minister, as Prime Minister June 2, 2004, but Kostov resigned on November 15
of the same year. On December 17, 2004, former Defense Minister Vlado Buckovski was
confirmed by parliament as Prime Minister, maintaining the coalition with the ethnic Albanian
Democratic Union for Integration (DUI) and the Liberal-Democratic (LDP) parties.

With international assistance, the SDSM-DUI-LDP governing coalition completed the legislative
implementation of the Ohrid Framework Agreement, which is a precondition for Macedonia's
integration into Euro-Atlantic institutions. A November 7, 2004 referendum opposing the law on
new municipal organization failed, freeing the way for the government to complete Framework
Agreement implementation.

Local elections were held in March-April 2005 under a new territorial reorganization plan that
consolidated the overall number of Macedonia's municipalities and created a number of
ethnically-mixed municipalities in which ethnic Albanian populations were dominant. The
process of decentralization began in the new municipalities in July 2005 and is continuing.

The July 2006 parliamentary elections resulted in a VMRO-DPMNE-led government under

Prime Minister Nikola Gruevski assuming power, in coalition with DPA, NSDP, and several
smaller parties. The new government, which was confirmed in office by a parliamentary vote on
August 26, 2006, stated its commitment to completing Framework Agreement implementation
and reaffirmed its commitment to pursuing NATO and EU membership.

At NATO's Bucharest Summit in April 2008, all 26 NATO Allies agreed Macedonia had met the
criteria for membership. Consensus on extending a NATO membership invitation could not be
reached, due to the unresolved dispute with Greece over Macedonia's name.

Following the Bucharest Summit, the opposition DUI party, in collaboration with the governing
VMRO-DPMNE and DPA parties, called for the dissolution of parliament and for early
parliamentary elections, which were held in June 2008. On July 26, Prime Minister Gruevski was
reconfirmed in office with a new coalition along with the DUI party and one smaller party. Next
regular parliamentary elections should be in 2012.

In 2009, Macedonia held presidential and local elections in March (first round) and April
(second round). In the presidential race, VMRO-DPMNE candidate Gjorge Ivanov won with
64% of the vote.

GOVERNMENT AND POLITICAL CONDITIONS

The unicameral assembly (Sobranie) consists of 120 seats. Members are elected by popular vote
from party lists, based on the percentage parties gain of the overall vote in each of six election
districts of 20 seats each. Members of parliament have a 4-year mandate.

The Prime Minister is the head of government and is selected by the party or coalition that gains
a majority of seats in parliament. The Prime Minister and other ministers must not be members
of parliament.

The President represents Macedonia at home and abroad. He is the commander in chief of the
armed forces of Macedonia and heads its Security Council. He also appoints the Chief of the
Defense Staff (CHOD) and the head of the intelligence agency. The President is elected by
general, direct ballot and has a term of 5 years, with the right to one re-election.

The court system consists of a Supreme Court, Constitutional Court, and local and appeals
courts. The State Judicial Council monitors the ethical conduct of judges and recommends to
parliament the election of judges. The Supreme Court is the highest court in the country and is
responsible for the equal administration of laws by all courts. Its judges are appointed by
parliament without time limit. The Constitutional Court is responsible for the protection of
constitutional and legal rights and for resolving conflicts of power between the three branches of
government. Its 9 judges are appointed by parliament with a mandate of 9 years, without the
possibility of re-election. An independent Public Prosecutor is appointed by parliament with a 6-
year mandate.

Principal Government Officials

President--Gjorge Ivanov
Prime Minister--Nikola Gruevski
Deputy Prime Minister (Economic Affairs)--Vladimir Pesevski
Deputy Prime Minister (Euro-Atlantic Integration)--Vasko Naumovski
Deputy Prime Minister (Framework Agreement Implementation)--Abdulaqim Ademi
Deputy Prime Minister and Finance Minister--Zoran Stavreski
Foreign Minister--Antonio Milososki
Education Minister--Nikola Todorov
Information Society Minister--Ivo Ivanovski
Defense Minister--Zoran Konjanovski
Economy Minister--Fatmir Besimi
Interior Minister--Gordana Jankuloska
Agriculture, Forestry and Water Minister--Ljupco Dimovski
Justice Minister--Mihajlo Manevski
Ambassador to the United States--Zoran Jolevski
Ambassador to the United Nations--Slobodan Tasovski

The country maintains an embassy in the United States at 2129 Wyoming Ave, NW,
Washington, DC 20008 (tel: (202) 667-0501; fax: (202) 667-2131). It maintains a Consulate
General in Detroit: 2000 Town Center, Suite 1130, Southfield, MI 48075 (tel: (248) 354-5537;
fax: (248) 354-5538); and a Consulate General in Chicago: 121 West Wackor Drive, Suite 2036,
Chicago, IL 60601 (tel: (312) 419-8020; fax: (312) 419-8040).
ECONOMY
Macedonia is a small economy with a gross domestic product (GDP) of about $9.4 billion,
representing about 0.01% of the total world output. It is an open economy, highly integrated into
international trade, with a total trade-to-GDP ratio of 81.6% at the end of 2009. Agriculture and
industry have been the two most important sectors of the economy in the past, but the services
sector has gained the lead in the last few years. Economic problems persist, even as Macedonia
undertakes structural reforms to finish the transition to a market-oriented economy. A largely
obsolete industrial infrastructure has not seen much investment during the transition period.
Labor force education and skills are competitive in some technical areas and industries but
significantly lacking in others. Without adequate job opportunities, many with the best skills
seek employment abroad. A relatively low standard of living, high unemployment rate, and
modest economic growth rate are the central economic problems.

Five years of continuous economic expansion in Macedonia was interrupted by the 2001 conflict,
which led to a contraction of 4.5% in 2001. Growth started to pick up in 2003 (2.8%) and
continued in 2004 (4.1%), 2005 (4.1%), 2006 (4.0%), 2007 (5.9%), and 2008 (4.8%). In 2009,
the economy was affected by the world economic crisis, although the financial sector remained
sound. Real GDP is estimated to have fallen by 1.5% for 2009, and Consumer Price Index (CPI)-
based inflation was negative 0.8%. Living standards still lag behind those enjoyed before
independence. The United States is supporting Macedonia's transition to a democratic, secure,
market-oriented society with substantial amounts of assistance.

Background
After the breakup of Yugoslavia in 1991, Macedonia, the former Yugoslavia's poorest republic,
faced formidable economic challenges posed by both the transition to a market economy and a
difficult regional situation. The breakup deprived Macedonia of key protected markets and large
transfer payments from the central Yugoslav government. The war in Bosnia, international
sanctions on Serbia, and the 1999 crisis in neighboring Kosovo delivered successive shocks to
Macedonia's trade-dependent economy. The government's painful but necessary structural
reforms and macroeconomic stabilization program generated additional economic dislocation.
Macedonia's economy was hurt especially by a trade embargo imposed by Greece in February
1994 in a dispute over the country's name, flag, and constitution, and by international trade
sanctions against Serbia that were not suspended until a month after conclusion of the Dayton
Accords. The impact of the 2001 ethnic Albanian insurgency in Macedonia, decreased
international demand for Macedonian products, canceled contracts in the textile and iron and
steel industry, and poor restructuring of the private sector affected Macedonia's growth and
foreign trade prospects through 2004.

Macedonia's political and security situation is stable. This has allowed the government to refocus
energies on domestic reforms, boosting economic growth, and attracting increased levels of
foreign investment. In 2004, the government passed a progressive Trade Companies Law aimed
at easing impediments to foreign investment, providing tax and investment incentives, and
guaranteeing shareholder rights. The government's fiscal policy, aligned with International
Monetary Fund (IMF) and World Bank policies, helped maintain a stable macroeconomic
environment which sent promising signals to investors. However, economic growth remained
sub-par in 2005 and 2006, due in part to poor government results in combating corruption, a
weak judiciary, poor contract enforcement, and high domestic finance costs.

The new government that took office in August 2006 put the fight against corruption and
attracting foreign investors at the very top of its priority list. In 2007, it launched an expensive
marketing campaign promoting the country as a good investment destination and put in place a
one-stop process for business registration that considerably shortened the time required to
register a new business. It provided business incentives by cutting rates on profit tax and
personal income tax and implemented a so-called "regulatory guillotine"--an activity which
reduced procedures and legislative requirements for doing business. Reinvested profits became
tax free, social contributions rates on salaries are being gradually reduced, and a regulatory
impact assessment (RIA) procedure is being carried out to re-evaluate legislation for doing
business.

Macedonia's moderate economic growth was halted by the world economic crisis in 2009, which
hit the real sector strongly, although the financial sector remained sound and stable. Exports
dropped dramatically and the economy entered into a recession, albeit one that was far less
severe than in many transition and developed economies.

Macroeconomy
Real GDP dropped in the third quarter of 2009 by 1.8% on annual basis, thus annulling the
progress of 5.9% growth in 2007 and 4.8% growth in 2008. The biggest fall was 13.4% in the
mining, quarrying, and manufacturing industry, followed by a 4.1% drop in hotel and restaurant
services and a 2.3% drop in transport and communication services. Industrial output in 2009 was
7.7% less than in 2008. A very conservative monetary policy caused the economy to enter into
deflation, with the cumulative CPI dropping by 0.8%. Lower price indices for transport by 10%
and for recreation and culture by 4.2% were the main drivers of the CPI’s fall. The official
unemployment rate came down a bit to 31.7% in the third quarter of 2009.

Faced with poor revenue collection, the Government of Macedonia needed to make a fiscal
adjustment twice in 2009 to fit within the budget deficit target of 2.8% of GDP. Total budget
revenues in 2009 were down 8.7% from 2008, while expenditures remained about the same. In
addition, fiscal policy required borrowing at high rates domestically and abroad to be able to
cover fiscal expenditures. This resulted in increased public debt to 32.4% of GDP at end-
November 2009, a level still considered moderate, but one that could raise concerns if fiscal
performance were to continue this pattern in the mid- to long term. The monetary policy
response to increased Treasury bill rates was to increase the Central Bank bills rate in 2009 to
9%. In addition, the Central Bank introduced new liquidity indicators for banks, increased the
reserve requirement, and put a ceiling on credit to households, which ultimately curbed credit to
private sector expansion to just 3.5%.

Trade terms in 2009 significantly worsened due to the world economic crisis; imports fell by
26.4% and exports by 32.3%, creating a huge trade deficit of about 25% of GDP. The current
account balance significantly improved in the second half of 2009 and was expected to be within
the targeted 9.5% of GDP by the end of 2009. This was primarily due to a large inflow of private
transfers in the second half of 2009, despite poor foreign direct investment (FDI) of about $170
million by end-October 2009. Foreign currency reserves significantly dropped in the first half of
2009 to a level that seriously threatened the ability of the Central Bank to preserve the stability
of the domestic currency. However, the Government of Macedonia’s borrowing 175 million
euros (about $245 million) abroad by selling a Eurobond, withdrawing $65 million from its IMF
quota, and the recovery of private transfers brought up the reserves to the pre-crisis level of
about $2.3 billion, or well over 4 months of import coverage.

After the conclusion of its 3-year Stand-By Arrangement (SBA) with the IMF in August 2008,
the Government of Macedonia decided not to request additional financial assistance from the
IMF. The IMF concluded its regular Article IV Consultation with Macedonia in October 2009
and the IMF Board approved the staff report in January 2010. In March 2007, the World Bank
Board adopted a new 4-year Country Partnership Strategy for Macedonia, which could
potentially bring to the country total lending of up to $280 million. In 2009, the Government of
Macedonia received approval from the World Bank for a credit facility for local government
development worth $19 million, and $20 million in direct support.

Trade
Macedonia remains committed to pursuing membership in the European Union and NATO. It
became a full World Trade Organization (WTO) member in April 2003. Following a 1997
cooperation agreement with the European Union (EU), Macedonia signed a Stabilization and
Association Agreement with the EU in April 2001, giving Macedonia duty-free access to
European markets. In December 2005, it moved a step forward, obtaining candidate country
status for EU accession. Macedonia has had a foreign trade deficit since 1994, which reached a
record high of $2.873 billion in 2008, or 30.2% of GDP. Total trade in 2009 (imports plus
exports of goods and services) was $7.734 billion, and the trade deficit amounted to $2.352
billion, or about 25% of GDP. A significant 53.6% of Macedonia's total trade was with EU 27
countries. By separate countries, Macedonia's major trading partners are Germany, Serbia,
Russia, Greece, and Italy. In 2009, total trade between Macedonia and the United States was
$120.2 million. U.S. exports accounted for 2.2% of Macedonia's total imports. U.S. meat, mainly
poultry, and electrical machinery and equipment have been particularly attractive to Macedonian
importers. Principal Macedonian exports to the United States are tobacco, apparel, and iron and
steel.

Macedonia has free trade agreements with Ukraine, Turkey, and the European Free Trade
Association countries. Bilateral agreements with Albania, Bosnia and Herzegovina, Croatia,
Serbia, Montenegro, UN Mission in Kosovo (UNMIK), and Moldova were replaced with
membership in the Central European Free Trade Agreement (CEFTA), which the other countries
joined in December 2006.

DEFENSE
Macedonia established its armed forces following independence and the complete withdrawal of
the Yugoslav National Army (JNA) in March 1992. The Macedonian Armed Forces consist of an
army, navy, air and air defense force, and a police force (under the Ministry of Interior). Under
its North Atlantic Treaty Organization (NATO) Membership Action Plan, Macedonia has made
strong strides on major reforms and reconstruction of its armed forces toward the goal of
building and sustaining a modern, professional defense force of about 12,000 troops.
Successive Macedonian governments have viewed integration into Euro-Atlantic political,
economic, and security institutions as the country's primary foreign policy goal. In pursuit of
these goals, Macedonia is restructuring its military to be smaller, more affordable, defensively
oriented, and interoperable with NATO. The Macedonian Government has welcomed close
cooperation with the U.S. military and seeks to deepen this relationship as it restructures its
forces.

Macedonia continues to play an indispensable role as the Kosovo Force's (KFOR) rear area,
hosting the logistical supply line for KFOR troops in Kosovo. As part of these efforts,
Macedonia hosts NATO troops, including U.S. troops, in support of NATO operations in
Kosovo and to assist Macedonia's efforts to reform its military to meet NATO standards. Close
U.S.-Macedonian bilateral defense cooperation continues. Macedonia has contributed troops to
international coalition operations in Iraq, and continues to have troops in Afghanistan and in the
EU peace support operation in Bosnia and Herzegovina, with 4% of its military.

FOREIGN RELATIONS
In February 1994, Greece imposed a trade embargo on Macedonia due to disputes over the use of
the name "Macedonia" and other issues. Greece and Macedonia signed an interim accord in
October 1995 ending the embargo and opening the way to diplomatic recognition and increased
trade. After signing the agreement with Greece, Macedonia joined the Council of Europe, the
Organization for Security and Cooperation in Europe (OSCE), and NATO's Partnership for
Peace (PfP). Athens and Skopje began talks on the name issue in New York under UN auspices
in December 1995, opening liaison offices in respective capitals January 1996. These talks
continue.

The stability of the young state was gravely tested during the 1999 Kosovo crisis, when
Macedonia temporarily hosted about 360,000 refugees from the violence and ethnic cleansing in
Kosovo. The refugee influx put significant stress on Macedonia's weak social infrastructure.
With the help of NATO and the international community, Macedonia ultimately was able to
accommodate the influx. Following the resolution of the conflict, the overwhelming majority of
refugees returned to Kosovo. A small number of Roma refugees from Kosovo remains in
Macedonia, most of them housed in the predominantly Roma municipality of Suto Orizari in the
Skopje suburbs, and supported by the UN High Commissioner for Refugees (UNHCR).

Macedonia enjoys good relations with its neighbors. It has strong trade and tourism ties with
Greece, and has developed similarly robust political and trade ties with Albania and Bulgaria.
Relations between Belgrade and Skopje are good overall, although a dispute between the
Macedonian Orthodox Church and the Serb Orthodox Church has strained ties over the past
several years. Relations with Kosovo are good, with Macedonia having signed an Interim Free
Trade Agreement with UNMIK in 2005 and with regular bilateral political contacts occurring
between Pristina and Skopje since 2005. Macedonia recognized Kosovo’s independence in
October 2008. Macedonia and Kosovo completed demarcation of their shared border and
established formal diplomatic relations in October 2009.

Macedonia has made important strides toward Euro-Atlantic integration. Macedonia is an active
participant in NATO's Partnership for Peace and Membership Action Plan, the OSCE, and
United Nations, and was accepted as a member of the World Trade Organization (WTO) in
October 2002. In May 2003, Macedonia, Albania, Croatia, and the U.S. created the Adriatic
Charter, modeled on the Baltic Charter, as a mechanism for promoting regional cooperation to
advance each country's NATO candidacy. Since then, the Adriatic Charter countries have
cooperated closely in regional military exercises, and have deployed a joint medical team to
support international coalition operations in Afghanistan. The Adriatic Charter expanded to
include Bosnia-Herzegovina and Montenegro as members in December 2008. At the NATO
Bucharest Summit in April 2008, Albania and Croatia received invitations to join the Alliance.
NATO Allies noted that Macedonia met NATO membership criteria, but could not reach
consensus on issuing an invitation for membership, in the absence of a solution to Macedonia's
dispute with NATO member Greece over Macedonia's name. The United States believes
Macedonia has met the performance-based standards for membership.

At the April 2009 Strasbourg-Kehl Summit, Allies re-confirmed the commitment to invite
Macedonia to join NATO as soon as the name issue is resolved.

In 1999, the EU agreed to pursue a Stabilization and Association Agreement (SAA) with
Macedonia; negotiations with Macedonia were launched April 5, 2000. The SAA was signed
April 2001 and came into force in April 2004. Its trade and trade-related provisions have been in
force since June 2001. In December 2005, the European Council granted candidate country
status to Macedonia. In March 2008, the Council provided the Government of Macedonia a list
of benchmarks to guide Macedonia's preparations to open formal accession negotiations. In
October 2009, the European Commission recommended that Macedonia commence EU
accession negotiations. In December 2009 European Council deferred discussion of a start date
for negotiations.

U.S.-MACEDONIAN RELATIONS
The United States and Macedonia have enjoyed good bilateral relations since Macedonia gained
its independence in 1991. The United States formally recognized Macedonia on February 8,
1994, and the two countries established full diplomatic relations on September 13, 1995. The
U.S. Liaison Office was upgraded to an Embassy in February 1996, and the first U.S.
Ambassador to Skopje arrived in July 1996. The development of political relations between the
United States and Macedonia has ushered in a whole host of other contacts between the two
states.

The United States, together with its European allies, strongly condemned the initiators of the
2001 insurgency in Macedonia and closely supported the government and major parties'
successful efforts to forge a peaceful, political solution to the crisis through the Ohrid
Framework Agreement. In partnership with the EU and other international organizations active
in Macedonia, the United States is facilitating the Macedonian Government's implementation of
the Framework Agreement and fostering long-term peace and stability in the country. Macedonia
continues to make an important contribution to regional stability by facilitating the logistical
supply of NATO (including U.S.) peacekeepers in Kosovo.

The United States strongly supports Macedonia's aspirations for full integration into Euro-
Atlantic institutions. Today, Macedonia and the United States enjoy a cooperative relationship
across a broad range of political, economic, cultural, military, and social issues. The United
States has supported Macedonia's progress in building a democratic, secure, and market-oriented
multiethnic society with large amounts of foreign assistance for democracy and economic
reforms, defense reforms, and projects to strengthen rule of law and improve education. Bilateral
assistance budgeted to Macedonia under the Support for East European Democracy (SEED) Act
totaled over $500 million from 1990 to 2010. Macedonia received approximately $19 million in
SEED Act assistance in 2009 and will receive approximately $23 million in 2010.

U.S. Agency for International Development (USAID) programs in Macedonia promote

accelerated growth, support stronger democratic institutions, and help educate Macedonians for a
modern economy. In the democracy sector, a focus of U.S. assistance has been to assist
Macedonia in implementing the August 2001 Framework Agreement. Successful completion of
the decentralization process is a remaining priority for framework implementation. USAID is
also focused on promoting an independent and efficient judiciary, a more vibrant civil society,
and strengthening parliament.

A further priority of U.S. assistance is to facilitate Macedonia's transition to a market economy

and increase employment and growth levels. USAID economic assistance is focused on two
levels. At the macro-level, programs target improvements in the business-enabling environment
by helping to bring legislative and regulatory frameworks in line with EU standards, build the
capacity of the administration to implement them, and improve the transparency and efficiency
of government services through technology. At the micro-level, assistance is given to firms and
agribusinesses to increase their competitiveness and productivity, coupled with initiatives to
attract foreign investment and stimulate local investment and support creation of new jobs and
new enterprises. Training programs that provide career-enhancing education to prepare youth
and adults for growth sectors are also supported. In the energy area, USAID will support the
Government of Macedonia to align the domestic energy system to EU norms, build institutional
capacity to develop and implement energy policies, and help introduce energy efficiency
interventions in households and the business sector.

USAID is focused on helping the Macedonian Government and civil society combat corruption,
enhancing democratic political competition, supporting government decentralization, and
promoting the rule of law. USAID also supported the State Commission for Prevention of
Corruption in developing a comprehensive State Program for Prevention of Conflict of Interest
and assisted in training over 150 judges and prosecutors in dealing with conflict of interest cases.
USAID provides technical and material support to assist the Macedonian judiciary in developing
into a more independent, efficient, transparent, and accountable branch of government, capable
of standing on an equal basis with other government branches. A U.S. Department of Justice
Resident Legal Advisor and a Senior Law Enforcement Advisor focus on strengthening the
independence of the judiciary, efficacy of public prosecution, reform of criminal codes,
increasing police capacity, and abating trafficking in persons and organized crime.

Complementing its assistance in Macedonia's political and economic transition, USAID

programs improve education and human capacity in Macedonia through projects on the primary,
secondary, and post-secondary levels. Targets include improving teaching techniques,
modernizing vocational education, introducing information and communication technology
(ICT) as a learning tool in the classroom, applying accurate school-based assessment techniques,
and focusing on workforce development activities in schools. Other programs address
crosscutting issues, including interethnic cooperation, assistance to the Roma minority,
performance improvement of key institutions, and corruption.

On May 7, 2008, Secretary of State Condoleezza Rice and Foreign Minister Antonio Milososki
signed a joint Declaration of Strategic Partnership and Cooperation affirming the determination
of our governments to further expand and deepen the partnership between our two countries
based upon common goals, interests, and values. The full text of the declaration is available at
http://2001-2009.state.gov/p/eur/rls/or/104441.htm.

Principal U.S. Officials

Ambassador--Philip T. Reeker
Deputy Chief of Mission--Brian Aggeler
USAID Mission Director--Michael Fritz
Political and Economic Affairs--David Burger
Economic/Commercial Affairs--Darren Hultman
Consul--Carolyn Gorman
Management Affairs--Matthew Spivak
Public Affairs--Angela Aggeler
Defense Attaché--Col. Todd Brown

The U.S. Embassy in Macedonia is located at Str. “Samoilova” Nr. 21. 1000 Skopje (tel: [389]
(2) 310-2000; fax: [389] (2) 310-2299).

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program advises Americans traveling and
residing abroad through Country Specific Information, Travel Alerts, and Travel Warnings.
Country Specific Information exists for all countries and includes information on entry and
exit requirements, currency regulations, health conditions, safety and security, crime, political
disturbances, and the addresses of the U.S. embassies and consulates abroad. Travel Alerts are
issued to disseminate information quickly about terrorist threats and other relatively short-term
conditions overseas that pose significant risks to the security of American travelers. Travel
Warnings are issued when the State Department recommends that Americans avoid travel to a
certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad should regularly
monitor the Department's Bureau of Consular Affairs Internet web site at
http://www.travel.state.gov, where the current Worldwide Caution, Travel Alerts, and Travel
Warnings can be found. Consular Affairs Publications, which contain information on obtaining
passports and planning a safe trip abroad, are also available at http://www.travel.state.gov. For
additional information on international travel, see
http://www.usa.gov/Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S. citizens traveling or residing abroad to register via
the State Department's travel registration website or at the nearest U.S. embassy or consulate
abroad. Registration will make your presence and whereabouts known in case it is necessary to
contact you in an emergency and will enable you to receive up-to-date information on security
conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-

888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers
outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single,
centralized public contact center for U.S. passport information. Telephone: 1-877-4-USA-PPT
(1-877-487-2778); TDD/TTY: 1-888-874-7793. Passport information is available 24 hours, 7
days a week. You may speak with a representative Monday-Friday, 8 a.m. to 10 p.m., Eastern
Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and
Prevention in Atlanta, Georgia. A hotline at 800-CDC-INFO (800-232-4636) and a web site at
http://wwwn.cdc.gov/travel/default.aspx give the most recent health advisories, immunization
recommendations or requirements, and advice on food and drinking water safety for regions and
countries. The CDC publication "Health Information for International Travel" can be found at
http://wwwn.cdc.gov/travel/contentYellowBook.aspx.

Further Electronic Information

Department of State Web Site. Available on the Internet at http://www.state.gov, the
Department of State web site provides timely, global access to official U.S. foreign policy
information, including Background Notes and daily press briefings along with the directory of
key officers of Foreign Service posts and more. The Overseas Security Advisory Council
(OSAC) provides security information and regional news that impact U.S. companies working
abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by
the federal government and provides trade leads, free export counseling, help with the export
process, and more.