A business forum organized by the Foreign Investors Council and the Economic Chamber of Macedonia was held- INTENSIFICATION OF THE MUTUAL COOPERATION BETWEEN FOREIGN INVESTORS AND DOMESTIC COMPANIES

In the Alexander Palace Hotel, a Business forum was held with the aim to provide business connection of the foreign investors in the Republic of Macedonia with the domestic companies that have the potential to become their suppliers, and this Forum was initiated by the Foreign Investors Council and the Economic Chamber of Macedonia with the support of the Government of the Republic of Macedonia (30.11.2017).


Professor Kocho Angjushev, PhD, Deputy Prime Minister of the Government of the Republic of Macedonia responsible for economic affairs and for the coordination of the economic institutions, Stefen Peter, MSc., President of the Foreign Investors Council and Avram Stojchevski, chairman of the Automotive Industry Association addressed the numerous guests. Irena Jakimovska, vice-president of the Foreign Investors Council was moderator of the event.

- In order for us to make a strategy for attracting foreign investors, we should trust the numbers and the facts and they show that today there are 23 foreign companies that use state assistance, 19 of which are active- said professor Kocho Angjushev, PhD, Deputy Prime Minister of the Government of the Republic of Macedonia.

When it comes to the cooperation with the local suppliers, the numbers are disastrous- the domestic suppliers participate with less than 1% in the overall procurements of the companies from the free zones. This cooperation is mostly based on using security, catering services, maintenance, utility services and an exceptionally small percentage participate in the production process.  

-The question is to which extent these investors have a direct impact on the Macedonian economy, apart from employing over 20.000 persons, but it is tragic that they are not directly employed, but they are taking over from domestic companies, and that, according to me, is an unfair competition and unhealthy economic logic- said the Deputy Prime Minister of the Government of the Republic of Macedonia.

Mr. Anjgushev, PhD, talked about the new measures of the Government of the Republic of Macedonia, with clearly defined criteria, incorporated in the Plan on economic development, that are equally applicable for both foreign and domestic companies, among which he stated the following measures:

- for every new job, the minimum financial support will be 10% of the salary if at least 80% of the newly employed people were registered at the Employment Agency of the Republic of Macedonia for a period of at least 3 months, or if they are employed right after completing their educational process;
- for permanently established business cooperation of the FDI with domestic enterprises, for procurement 10% of the production input from the domestic companies higher than the average for the past 3 years, the financial support will be 1% of the value of the procurement, for every additional 10% of procured inputs, the financial support will increase for 2% of the value of the procurements;
- for an increase of the total income from the work higher than the overall income in the past 3 years, there will be 10% return of the investments made in the previous year.

At the end, Kocho Angjushev, PhD, said that there is an announcement for 19 new foreign investors with which contracts are to be signed for their investment in the Republic of Macedonia.

At the question which the most important factors for a foreign company to invest in one country, Stefan Peter, MSc., President of the Foreign Investors Council, said that the package of advantages offered by the state is not the most important factor for this kind of decision to be made. It is necessary to have a set of long-term measures and economic policies for creating a favorable business climate and doing business, i.e. a consistent legal regulation for investing, equal treatment and care for foreign investments, legal security, available workforce, its quality, the educational system, functional and efficient domestic market, infrastructure and the presence of other investors and all of these are some of the factors that influence the investment decision.

- When the investment conditions are compared within the region, it is not very difficult to opt about the most favorable conditions that Macedonia offers as an attractive investment destination- said the President of the Foreign Investors Council, Stefen Peter, MSc. He also highlighted the fact that the foreign investors should only be referred to as the companies that work in the free zones, because their number is rather higher on the whole territory of the country, while the meaning of the foreign investments is not only to be a source of investment means, but it is also expected for them to bring new technologies, to hire domestic workforce, to contribute to the use of the domestic resources and, generally, to bring a new business philosophy that will have a positive influence on the other economic and political climate in the country.

-Having in mind that the biggest part of the foreign investors that have more recently entered the country, mainly from the automotive industry, it is logical that the greatest part of the Macedonian companies, potential suppliers for the foreigners, to come from this industry- said Avram Stojchevski, Chairman of the Automotive Industry Association within the Foreign Investors Council.

- The foreign companies in the free zones, generally, have a centralized procurement from known and already traditional partners, however, the potential for cooperation with the domestic companies is large and it should be fully used in the following period.

- For the domestic companies this cooperation means more work and development, transfer of knowledge and new technologies, new standards and increased competitiveness and, of course, the possibility of export to the foreign markets- said Stojcjhevski.

Therefore, the Macedonian companies should put more effort in directing themselves towards intensifying the cooperation with the foreign companies that work in the country, to be more aggressive and to impose to the foreign companies, first and foremost, with high quality products, competitive prices and owning the necessary quality certificates.

-The cooperation of the domestic companies with the foreign investors in the country is a kind of replacement of the export. They can together achieve a technological progress, as well as introduction of modern managerial skills. And when one becomes a supplier of a foreign company, then the road to the foreign markets is easier- added Stojchevski.

At the end, the moderator, Irena Jakimovska, highlighted that it is necessary for the Macedonian companies to improve the quality and assortment of their own production and they can do that only by having easier access to cheap credits, reforms in the educational system and investment in high quality workforce tailored for the private sectors.

After the end of the official part of the Business forum, bilateral meetings took place at which the future business cooperation between 35 foreign investors and over 60 domestic companies was discussed and negotiated.

The results of the Analysis of the National Bank of the Republic of Macedonia about the effects of the new export oriented companies in the domestic economy show that the amount of the overall procurements of the companies from the industrial zones from companies of the domestic market in 2014 and 2015 are about 45 million euros, while in 2016 their amount is near 33 million euros.

The added value, i.e. the "clean" new value generated from the companies in the industrial zones for the past four years was about 617 million euros . The value of the investment procurements (procurement of basic goods) made from domestic companies is estimated to be about 148 million euros, while the value of the total expenditures for goods and services procured from the domestic market is about 78 million euros.

Milena Perchinkova, MSc.
Vlatko Stojanovski