Macedonia 2004
INTRODUCTION:
The fifth of the NHDRs of the Former Yugoslav Republic of Macedonia, this 2004 Report focuses on decentralization. It follows the 2001 edition's analysis of social exclusion and human insecurity with a cogent presentation of how devolving decision-making power and appropriate resources to municipalities can help solve closely related problems, notably poverty, unemployment, and shortcomings in health and education.
The Resident Representative notes in his Foreword that decentralization is a key requirement of the Ohrid Peace Framework, itself a precondition of the country's integration into the EU. The current governance system channels only minimal resources to municipalities and is therefore inconsistent with the subsidiarity principle - an inconsistency particularly grave in a country whose memories of conflict remain vivid and which is still rife with ethnic hostility.
The text demonstrates in lucid language available to most literate citizens - except in some fairly technical passages on the economics of transition - that decentralization is a tool rather than a panacea for Macedonia's problems. It can nonetheless remedy some shortcomings of present national policies geared to stabilization rather than development, especially human development as distinct from GDP growth in a time of transition to a market economy.
To the great credit of the Report's core team, the Executive Summary as well as its last chapter, conclude not with a rosy projection, but a summary of the potential threats inherent in decentralizing the governance of a country with so short a history of democratic traditions.
Corporate Principle 1: National Ownership
2. Participatory Process
Although the text of the Report does not indicate how its theme was chosen, it lists 52 experts who assisted the core UNDP team of three. These specialists include national government officials, representatives of CSOs, academic institutions, the media, a Macedonian bank, and international organizations (notably UNICEF, WHO and the World Bank), along with two members of the Open Society Foundation - apparently a diverse and fairly comprehensive range of views, which in itself would appear to generate a significant readership. One also presumes from the prominent listing of the group's members that a fairly meticulous peer review was carried out.
One striking characteristic of the list is the number of women at high levels who participated. It is difficult, however, to determine to what extent representatives of the country's ethnic minorities took part in the process (there are very few names of obvious Muslim origin), though one assumes that this was indeed the case, given that the sub-theme of ethnic diversity runs throughout the Report.
Linkages and Contributions to National Development Plans and Policies As indicated above, the consultative group encompasses representatives of the ministries of education, health, finance, local self-government and labour and social policy, as well as the World Bank. Together with the text's continuous references to existing policies, this ensures that the Report is closely linked to both general national development and planning for specific sectors. In addition, the Resident Representative's Foreword expresses the hope that the debate sparked by the Report will extend well beyond the adoption of legislation in the near term.
Corporate Principle 2: Participatory and Inclusive Preparation
Please see above.
Corporate Principle 3: Independence of Analysis
The sheer diversity of the consultative body, whatever its breakdown into a steering committee, advisory group or any of the other customary structures of NHDR development, appears to ensure the independence of the Report's analyses. The Report's analytical rigor avoids supporting the viewpoint of any single group.
Corporate Principle 4: Quality of Analysis
a) Purpose and Coherence
The Report consists of six organically and tightly structured chapters preceded by an excellent two-page Introduction and four-page Overview, the first of which presents a brief lucid exposition of the methodology used for the disaggregation of statistics along urban/rural and municipal lines and the second, thematic rather than chapter summaries. Almost 50 pages of tables complement the narrative, followed by five pages of vivid maps presenting municipal standing by theme (GDP per capita, Education, etc.) that permit the reader to navigate easily between the text and its statistical supports.
b) Human Development Analysis
Two of the prominent features of Macedonia 2004 are its calculation of GDI and, equally if not more important, HDI by municipality - both first-time achievements for the country that have significant potential for helping to structure development priorities. It should be noted that the release of this NHDR anticipated the country's first MDG report by a few months.
All in all, however, for a publication presumably aimed at the citizen-in-the street, including university and high school students, the Report curiously presents few people's voices. Nor does it feature a glossary or list of acronyms - shortcomings that sometimes can discourage individual readers and diminish readership. In the first chapter's tabular comparison of other countries in terms of the discrepancy of GDP and HDI, Macedonia 2004 does not mention any country except Croatia that has succeeded in emerging from prolonged ethnic conflict. (The cases of Poland, Estonia, Lithuania, Uruguay and Chile were revolts against dictatorship rather than civil war, however complex their respective ethnic problems.) The Report might have been strengthened through a discussion of Macedonia's vulnerability to natural disasters, even though the rebuilding of Skopje in the 1970s after an earthquake occasioned its rapid development and aggravated the socioeconomic imbalances of the country.
Chapter 1, Decentralization and local development in Macedonia, presents a brief history of decentralization issues since the beginning of World War II, recapitulating the development of citizen's associations and organizations of the socialist period that carried out activities the state could not encompass and often served as ideological instruments of the Communist Party, but nevertheless played a significant role in the country's social capital formation process. A high point of the chapter is a tabular summary of the major competencies of the municipalities under the 2002 Local Self-Government Act, amplified with regard to its potential for the devolution of power and resources in each substantive sector - and, hardly incidentally, bringing Macedonia closer to prevailing European standards.
Chapter 2, the Human Development Profile in a decentralized perspective, outlines the components of HDI and compares Macedonian HD with that of other countries worldwide as well as within the country itself, using selected municipalities to point up contrasts. It then carries out a parallel presentation of GDI in the domestic context. Most important, perhaps, a Box outlines the problems inherent in applying the HDI concept in statistical practice and drawing overly sanguine or alarmist conclusions on the basis of inadequate data.
Chapter 3, Income, Employment and local economic development from a human development perspective, turns to the differences between using classical economics for stabilization rather than human development. It highlights the correlations and disparities of monetary poverty and income inequality, analyzing subjective poverty and household expenditure patterns and examines current unemployment patterns by age group, gender and municipality throwing into relief the extent of the country's shadow economy. The chapter then discusses effective responses to unemployment, given recent legislation for enterprise development, training to that end, and micro-credit provision. It also highlights social assistance and welfare beneficiaries and explores the possibilities of reforming the current pay-as-you go system in the light of the insolvency of the current pension funds (old age, disability, family support) and the vulnerability of today?s pensioners.
Turning to The Social sector and the challenges of decentralization, Chapter 4 explores ways of using the momentum of the high levels of education and health inherited from socialism to reform the social sector at the municipal level vis-a-vis current economic realities. Educational disparities are analyzed by school level, ethnicity (as manifest in language), rural/urban comparisons, particularly with regard to teaching staff, and, of course, municipalities, to culminate in the Report's advocacy of decentralizing education as a precondition of local HD, together with mother-tongue/bilingual instruction and vocational education vis-a-vis local labour market needs.
A comparable exercise is then carried out for health care, with breakdowns of primary health care facilities, hospitals and the availability of doctors, and tabular presentations of life expectancy and crude birth and death rates by municipality and, by implication, ethnicity. Significantly, Macedonia still lacks an overall health strategy, despite a World Bank health sector transition project that targeted health financing and management, primary and preventive health care and health care personnel, among other areas. However, health sector provisions in the Law on Local Self-Government are cautious and, as a Box reveals, vague - critical matters for discussion in the forthcoming debate on the country's Health Care Law.
Chapter 5, Towards sustainable local development, announces in its opening paragraph that the 'development of urban municipalities at the expense of rural ones', together with 'the concentration of economic development in Skopje', has led to 'high unemployment, social distortion, inadequate municipal and social infrastructure, and a lack of residential space.' The opening section recapitulates elements of the opening chapter on history, setting out the need for reform and its ethnic dimensions. The chapter then turns to fiscal sustainability, examining the current local self-government funding system, setting out the municipalities' own revenues in relation to transfers, and breaking down the revenue sources and expenditure types of Skopje vis-a-vis the urban and rural areas of the rest of the country in terms of property taxes, communal charges, non-tax revenues (national government services, property revenues and administrative fees) transfers, international grants, and loans.
The narrative subsequently delves into the transfers from the central government, and their impact on the budgets of urban and rural municipalities, culminating in its case for fiscal decentralization for human development and its potential impact on local economic development and local social programmes. Economic development, the authors assert, will grow out of opportunities to design secondary vocational education in accordance with advancing economic sectors, as well as the founding of organizations for job training and retraining along the lines of the UK Private Finance initiative in which the national government, local authorities and private enterprises reach joint agreements on implementing selected projects. With regard to social programmes, local governments have a comparative advantage in information for targeting potential beneficiaries and thus the presumed ability to ensure that social benefits reach the most needy.
The chapter concludes with yet another challenge: 'the development of a political culture that puts the common interests of citizens above partisan politics and seeks to find solutions to shared problems in a collaborative manner' - a sizeable response for any country, let alone one that has only recently emerged from armed ethnic conflict. The Report attributes the root difficulty to the weakening of citizen trust in the state during Macedonia's subjection to the Yugoslav central government during the decades of the socialist rule and the simultaneous strengthening of social relations within extended families and ethnic groups. Yet the authors express relative confidence that local governance participation can gradually overcome this gap because of results observed elsewhere: people participate more willingly in political decision-making if they know that their engagement in these processes will have an impact. They also cite the major danger involved: a mere transfer of power from a central government to local elites, along with the need to develop institutions to promote democracy and mechanisms to enforce the accountability of politicians to the electorate.
Chapter 6 presents A Policy Agenda for improved local self-government, noting that centralization during the transition period created a need for reforms concerning local competencies, financing and territorial division, as well as on the organization of Skopje.
The agenda consists of the following major elements (in highly truncated form):
- Increasing local-level competencies while improving the country's organizational structure, including its administrative aspects and the devolution of resources in the spheres where capacity has been adequately demonstrated;
- Accelerated growth and improved employment opportunities with better coordination and consistency between the economic and social policies at both the national and local levels and continuous education adapted to labour market demands and complementarity between labour market policy and social protection measures;
- A comprehensive vision for reducing local-level disparities in accordance with the exigencies of sustainable development and the protection of human rights. This calls for a comprehensive vision of Macedonia's spatial development and the elaboration of a national development framework with clearly defined goals.
- Fiscal sustainability that introduces enhanced clarity on the schemes of funding sources, which, in turn, entail a new approach to tax collection and a reduction of the share of the informal sector on Macedonia's economy;
- Optimizing territorial divisions to assure an urban-rural balance with mechanisms for guaranteeing minority interests and the consideration of a multi-tiered system of governance as a means of opening the way to real rather than rhetorical multiculturalism and diversity;
- Inter-municipal cooperation, to reduce funding costs wherever municipalities have common interests, perhaps along the lines of Finland's joint municipal boards, agreement-based cooperation and joint ventures between and among municipalities;
- Strengthening the culture of political participation, initially perhaps through curriculum development at the secondary school level, complemented by media coverage of such developments and coverage of the contributions of engaged citizens, NGOs and CSOs.
- Reinforcing professional competencies, initially through a nationwide training programme led and coordinated by such institutions as the Civil Servants Agency, the Ministry of Local Self-government and the Association of Local Self-Governments.
The chapter nonetheless concludes with a recapitulation of advantages and risks, including the potential contribution of decentralization to political and/or economic oligarchies and the structures of organized crime - as well as to the mitigation of risks for future interethnic conflict.
c) Policy Analysis and Recommendations
Each chapter sets out the HD implications of the Report's analyses - most of which are couched in implicit critiques of existing policy - and its proposals. The presentation of alternatives and the costing of the proposals contained here would be premature in view of the urgency for tabling and debating a comprehensive decentralization plan. Some initial discussion, however, on possible sources of financing and types of additional reforms required - as well as at the costs of not reforming - might have been useful.
d) HDI and other Indices and Data
As indicated above, Macedonia 2004 provides not only the calculations of HDI (including HD trends from 1996 - 2002), HPI and GDI, but calculates the last of the indices for the first time in the country's succession of NHDRs. The Report also presents HDI disaggregated across municipalities.
In addition, it presents other vital data by municipality and, wherever possible, sex, in the following categories:
- Population by declared ethnic affiliation;
- Employment and unemployment by sex and municipality;
- Employment and unemployment by sex alone;
- Unemployment rates by ethnic affiliation;
- Total unemployed by age groups;
- Gross and net primary enrolment rates;
- Population at 10 years of age and over by sex and literacy;
- Education imbalances by municipality, sex and ethnicity;
- Pre-school education by language;
- Crude birth and death rates; and
- Deaths from tuberculosis.
Other significant statistics, most of them indicating trends between 1996 and 2002, both within and outside the narrative include:
- Women's access to education
- Women's participation in political life;
- Child survival and development;
- Macedonia's health profile;
- Food security;
- Access to information and communication;
- Use of disposable funds per average household;
- Approved credits and new jobs generated by the National Agency for the Promotion of Enterprises (NEPA);
- Impact of the national Social Help Project on the Labour Market;
- Pension beneficiaries by volume of pension and by municipality;
- Growing urbanization;
- Ethnic structure after reform in two municipalities (Kicevo and Struga)
- Population trends, including contraceptive use;
- Macedonia's profile of environmental degradation;
- National income accounts;
- Trends in economic performance; and
- Social stress and social change (by adult prison sentences, juvenile detention, intentional homicides, casualties from road accidents; suicides, divorces, single female families, births to mothers aged 15-19 and population aged 65 and over).
The data is clearly sourced. The HDI methodology, partially presented at the beginning of the Report, is developed in technical detail in an annex and followed by a good bibliography. However, as observed at the beginning of the section, no glossary exists to acquaint readers with HD terminology; although many of these concepts are well explained in the course of the narrative, often at the beginning of each chapter, there is no single reference repository.
Corporate Principle 5: Flexibility and Creativity in Presentation
Overall, Decentralization for human development is a brisk, comprehensive document. The note of warning with which even the Executive Summary concludes, together with a consistent presentation of 'challenge' in its basic sense of demanding a response, strengthens the text throughout, as do lead paragraphs - offset by their colour typeface - that define in simple terms the core concepts of each chapter. The text works synergetically with the many Boxes, graphs and charts of each chapter and the sober two-colour green presentation (with the striking exception of the excellent maps) reflects the seriousness of the theme.
As noted in the HD section of this review, the Report might have been strengthened through a broader and more direct reflection of citizens' voices so plentiful in some of the earlier Macedonian NHDRs. This could have be done through additional case studies, quotes, and other qualitative, reflecting in particular perspectives of marginalized groups.
As mentioned earlier, the Executive Summary is a true overview, very well written, followed in each chapter by lead paragraphs that explain the key themes of its content. In view of all these strengths, the absence of people?s voices is all the more marked.
The cover montage, with the Report's title and date, includes good photographs, all echoed in the black-and-white versions which open each chapter and reinforce their progression.
Corporate Principle 6: Sustained Follow-Up
As the UNDP web page of Macedonia was not available during this HDR review period, it was difficult to obtain any information on the Report beyond the blurb on the HDRO website. As noted above in first section of this review, the breadth of the consultative group would seem to have prompted a launch of some national importance, as well as a broad readership amplified by word of mouth.
Given the importance of the Report's theme to Macedonian debate and development, one hopes that such information has been made available and that appropriate follow-up activities were conducted outside Skopje - indeed, in at least the central city of each municipality - and covered by colleagues of the three journalists of the consultative group, as well as broadcast on national radio, if not television as well. In this connection, it is curious that the Report makes no specific mention of any of the Macedonian media channels or their activities to promote development since the Ohrid accord.
It would also be interesting to learn the role of the Open Society Foundation in the Report's dissemination, as well as subsequent debate in Parliament, municipal councils, the country's several universities and research institutes and, perhaps above all, the secondary schools whose importance the authors so frequently underscore for the development of Macedonian democracy and a culture of participation by grassroots citizens.
Final Comments:
With the exception of information on Advocacy and Follow-up - perhaps unavailable only because of temporary technical Web difficulties - Macedonia 2004 shows a high degree of compliance with the six NHDR corporate principles and related standards.
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