The Honorable Zoran Stavreski, Deputy Prime Minister and Minister of Finance for the Republic of Macedonia, spoke at The Heritage Foundation on April 23rd about the economic reforms that have helped his country weather the recent global storm.
According to Stavreski, adherence to the principles of free enterprise and individual freedom account for Macedonia’s recent success. In contrast to the United States’ post-crisis management, Macedonia has reduced taxes, eased regulations, and simplified bankruptcy law. As a result, Macedonia suffered only a modest recession in 2009 and is back on a solid economic growth path now.
Macedonia’s experience demonstrates the gains to be had by sticking to economic freedom in trying times. Macedonian authorities had the political will to continue with regulatory reforms, making it easier and cheaper to start a business. They streamlined tax administration and maintained the matching 10 percent flat tax rates for both personal and corporate income. Additionally, Stavreski noted that government kept expenditure relatively low by reducing non-productive expenditure and increasing capital expenditure only as necessary. In 2009, Macedonia had the second lowest budget deficit in all of Europe at 2.7 percent.
Macedonia’s economic reforms were recognized in the 2010 Index of Economic Freedom in which Macedonia ranked 56th freest out of the 179 economies assessed. Further, Macedonia posted the fourth largest gain in economic freedom over the previous year–thus embracing free market principles when many other economies retreated.