The Stability Pact's "South East Europe Investment Compact" has just released an in-depth analysis by OECD and EBRD on the development of small and medium-sized enterprises in the Former Yugoslav Republic of Macedonia (FYROM). This review was undertaken at the request of the EC and the Macedonian Ministry of Economy. The report, entitled Entrepreneurship and Enterprise Development in the Former Yugoslav Republic of Macedonia: Country Assessment and Action Plan, takes a hard look at the current environment for enterprise development and recommends priority actions to improve the situation.

The Country Assessment and Action Plan (CAAP) for FYROM is the first in a series of reviews designed to support countries of the region in developing the potential of their small and medium-sized enterprise sector. A second CAAP has already been launched in Romania, and a Serbian CAAP will begin in November/December. Subsequent CAAP reviews will be undertaken throughout 2002.

This first CAAP reviews progress achieved so far in the development of small and medium-sized enterprises in FYROM. The Ministry of Economy collaborated closely with the OECD and EBRD in this analysis, and other ministries, agencies, private sector firms, NGOs and international organisations also participated. The institutional, political, cultural, economic and social features of FYROM were factored into the analysis to determine the country-specific obstacles to enterprise development.

The review highlights a number of key policy areas where the most rapid and effective progress can now be made. Recommendations for priority action focus on capacity-building of institutions and financial support and on improving the business environment.

Bodo Hombach, Special Co-ordinator of the Stability Pact, noted that "implementation of the recommendations contained in this report, as in many other aspects of the transition process, hinges on the establishment of a stable political framework". The Stability Pact Special Co-ordinator also calls for timely action in implementing the recommendations of this report and in fostering a better business environment for private investment in conjunction with the welcome advances now being made to establish political stability. The CAAP review provides a clear blueprint for such action.

Entrepreneurship and enterprise development are important elements in creating dynamic market economies. However, in many countries in South East Europe the framework for establishing and sustaining businesses remains underdeveloped. By reforming and improving this framework, governments will create an environment which is conducive to enterprise development.

For further information on the CAAP reviews, please contact:
Dr. Ricardo Pinto, Enterprise Development Unit, OECD

Tel: +33 (1) 45 24 76 37 – Fax: +33 (1) 45 24 18 32 – e-mail: ricardo.pinto@oecd.org

Report can be consulted at: www.oecd.org/daf/enterprise-development