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  Issue 64

   

Dealing with poverty

Macedonia is asking itself – how to get by on 150 denars a day? 

Every fourth citizen of Macedonia has only 150 denars a day to get by. Unemployment has reached a record number of 400.000 unemployed. According to the statistics, in Macedonia there are 250.000 pensioners and 60.000 of them are trying to get by on 5.200 denars per month. Eighty thousand Macedonian families receive social help. Poverty follows households where breadwinners are pensioners, people who have been made redundant and unemployed. In comparison with the East European countries, only Albania and Moldavia live more poorly than us.

It is a fact that statistics speaks a lot. But rarely anyone speaks about the consequences that result from the statistics and how poverty affects the overall social living. Poverty also results in spiritual poverty. Thus Macedonian pupils are declared to be the poorest in the region, only 11 percent of our pupils have access to internet, only two percent of the children study in appropriate conditions. Macedonia, unfortunately, has the highest percentage of infant mortality in the region. The health system is sinking more and more, a lot of chronically ill do not have money for medicaments and rarely anyone has money for private medical treatment.

The industrial production is still in negative, there are about 3.6 billion dollars of internal debts. Salaries in the last three years have been realistically reduced for 12 percent and the living costs have been rapidly increased at the same time. In June this year the Statistics Bureau issued data that the average salary in Macedonia is 12.500 denars, but only a small number of employees have an opportunity to receive this amount. There are a high percentage of workers who get minimum salary, or whose salaries are late for several months.

Until two years ago poverty was characteristic of villages. Now it enters towns, too. Poverty rate is highest in Skopje. About 34 percent of the group of young people at the age 15-19 has no education, no job and there are not any training courses for them, which can be fatal for them as personalities, but also for the society in whole, sociologists warn. As a consequence of the extreme poverty in the country, 500.000 people have already left Macedonia taking a one-way ticket, whole regions have been left and it is assumed that another big emigration wave is to follow.

According to the latest surveys, 84 percent of the Macedonian citizens are worried about the bad economic situation – economic development, unemployment and poverty result in insecure everyday life and hopeless future. Year by year the poverty rate is increasing. While in the ‘90s in Macedonia it was 2%, in 1997, when the first measurements of the level of poverty were made according to the world standards, it was 19.1% and in 1998 the level of poverty was 20.7%. In 2001 the level of poverty in Macedonia was worrying 24.6%. The number of unemployed got higher for 10.000 people within a year.

In December 2005 Macedonia became a candidate country for the EU, but it is far from the European standards in many fields, especially when it is about the living standard of average citizens. A simple example – when Austrians were asked to define poverty, their answer was: not being able to buy a new car, not having a mobile phone and not being able to afford a decent holiday. You assume. In Macedonia the same question was answered: poverty is not having a piece of bread to eat. It is the Macedonian reality, cars and holidays are not even considered. In the cruel Macedonian transition only 200 Macedonians live in clover and one million on tick. The middle class is definitely lost in the Macedonian society, the most numerous class in each developed society and a society pillar. At the top of the social pyramid a small number of citizens are concentrated and the number of those who are rapidly getting closer to the bottom of social hierarchy is increasing.

What does the loss of middle class mean in practice?

Economists say that the middle class is a guarantee for social stability and its disappearance means accumulation of big social dissatisfaction, open or hidden conflicts, and increase of all forms of criminal, prostitution. Issues that have become our everyday life for the last years. And robbery, bribe and corruption have become the Macedonian model for capital transformation.

 

Where is the solution to poverty?

The World Bank recommends the Government to accelerate reforms. However, it is easy to say but difficult to do. Reforms usually imply phasing out job positions, benefits reduction and similar unpopular measures which cause citizens’ dissatisfaction. Our experts say that we should not invent anything new. It is enough to use the experience of the developed countries and above all, they say, a political will is necessary to settle things. The citizens share the same opinion and they, according to surveys, see the pressure by the members of the parliament on the government as a solution to poverty, but the average citizen thinks that the Macedonian economy can be solved by investing in small business and capital buildings, reducing the length of service and engaging labor force abroad.

 

What is the real road?

The real road for solution to poverty certainly exists but it is clear that it is long and many who are tortured by poverty and loss of dignity do not want to walk long roads. They want solutions now and here. But we should not forget! No matter how long the road is, if we do not start walking immediately, we shall never get to the finish.

 

Entrepreneurship as a solution to poverty

“Poverty can be rooted out only through training, education and entrepreneurship. You can help someone by giving him a short-term loan, but if it is not an investment, money shall be spent and the one who has borrowed shall again be at the beginning: with no money and education, and the loan as a burden”, says Tatjana Lazarevska from the management of the Macedonian Enterprise Development Foundation (MEDF). This foundation provides financial and non-financial services. Its activities are supported by the Dutch Embassy.

“Our role will further be to provide access, equal opportunities for all citizens, regardless of whether they are from the rural or urban regions. The role of MEDF is to carry out researches, to identify problems and propose solutions”, adds Lazarevska.

From the beginning of 1999 to the end of June this year, MEDF placed more than 16 million EURO as support of investments of micro and small enterprises. Along with users’ own investments and participation of banks that are accredited by MEDF as financial mediators, that sum is more than 27 million EURO. Before realizing the loans, the number of employees in the credited enterprises was 6.410 and the planned number of newly employed was 1.070. Most of the users are from the agricultural sector (67.65%) and the others like services 15.92%, procession 10.44% and trade 6% with lower percentage. Adequately to this, most of the users (61.48%) are from the rural regions.

Lazarevska points out that so far they have organized a lot of training courses for expert skills and entrepreneurship and they have turned out to be effective. For instance, training courses have enabled young Roma to gain knowledge that would further increase their opportunities for employment. According to the data by the Roma civil society organizations and the statements by the employers that were involved in the project, about 60% of the candidates (30 people) can hope to get employed/additional training, in spite of the fact that this was not employers’ obligation.

 
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