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Honorary Macedonian Consul in Perth meets Australian foreign, and justice ministers

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Perth, 6 November 2007 (MIA) -

The Honorary Macedonian Consul in Perth, Australia, Zoran Coseski met Tuesday with Foreign Minister Alexander Downer and with the Minister for Justice and Customs David Johnston, MIA reports.

Talks focused on development and strengthening of Australian-Macedonian commercial exchange and investments, with a special emphasis on the Republic of Macedonia as an attractive business destination for Australian investors.

Interlocutors agreed that current development of investments and business contacts represent a good start for future cooperation and entry of Australian capital in Macedonia.

They also referred to the cultural development of the Macedonian community in Australia, as well as its efforts to preserve the language and cultural identity within multicultural Australia, along with the signing of a bilateral agreement on social insurance between Australia and Macedonia.

Minister Downer stressed that the Australian Government would continue to provide support to the Macedonian community regarding its cultural projects, as well as on intensification of mutual relations. Commenting on bilateral relations, FM Downer told state radio SBS that they have experienced large progress, taking into account they were almost non-existent a decade ago. "I gave the permit for the opening an embassy in Canberra, the Macedonian Government has opened several consulates in Australia, while several ministers have paid a visit to our country. Relations are gradually built, and we can see that commercial exchange has also increased, which is very encouraging", he said.

Minister Downer stated there is enormous space for bilateral agreements, because Australia provides a home for a large Macedonian community.

"We should start talks on the social insurance agreement, and I would be happy if this process begins in 2008. Moreover, if Australian investments in Macedonia increase, then we will have to seek for some kind of investment protection, along with an appropriate agreement", stressed Australian Foreign Minister Downer. ik/fd/11:27

Business

• The big picture on taxes  
  
Neil Reynolds Wednesday, January 23, 2008

OTTAWA — Although not a member state of the European Union, the tiny Balkan nation of Macedonia (population: 2.1 million) has a comprehensive free-trade agreement with the EU that makes the country - for all practical purposes - an integral part of the European economy. Macedonia's own economy is doing well, growing at twice the pace of the EU itself. Among other things, it exports car parts (seat belts, clutches, gears, brake systems) to the auto makers of Europe, collectively the largest manufacturer of cars in the world. Now Macedonia has introduced Europe's most aggressive package of pro-growth tax reforms - advertising itself in The Economist as Europe's "business heaven." Here's how they do it in paradise. Macedonia's personal flat-tax rate, effective Jan. 1, dropped to 10 per cent. Its corporate flat-tax rate dropped to 10 per cent. (Its corporate rate on re-invested profits dropped to zero.) For individuals and businesses that invest in specially designated "technology parks," the personal tax rate drops to 5 per cent for five years; the corporate rate drops to zero for 10 years; and companies operate VAT-exempt. As for the general environment, Macedonia's educational standards are apparently comparable to the rest of Europe; English is widely spoken. Companies can complete the legal requirements of registration within four hours. Last year, the government enacted laws making it easier to fire and to hire - in contrast to Establishment Europe, where the firing of incompetent workers has long been effectively prohibited. The World Bank, in its 2008 Doing Business report, ranked Macedonia as the No. 4 (out of 10) "reformer nations" in the world, recognition that prompted a joyful national celebration. With these aggressive reforms, Macedonia transforms itself into a kind of Trojan Horse for tax reform in Europe itself. (The metaphor is not necessarily pejorative.) Although a candidate for EU membership, Macedonia won't get accepted by Establishment Europe any time soon. The prevalent Establishment perspective is that high tax rates are always to be preferred to low tax rates. EU member states, fortunately, retain the sovereign right to set whatever tax rates they want, a right defiantly exercised a few years back by Ireland (corporate tax rate: 12 per cent). The European Commission, the executive branch of the EU, doesn't want that sort of thing to happen again. It has worked for years to forbid EU countries - 27 of them now, and counting - from competing on corporate tax rates, a policy that now gets expressed in the EU quest for a single EU-wide tax rate. This tax would be known as the Common Consolidated Corporate Tax Base (CCCTB for short). It goes without saying that this rate would be an oxygen-depriving high rate. The commission established high corporate tax rates as a matter of principle as early as 1996 in a tax policy "code of conduct." One article stipulates: "Tax measures which provide for significantly lower effective levels of taxation (including zero taxation) are to be regarded as harmful and therefore covered by this code." Another article stipulates: "Member states commit themselves not to introduce tax measures which are harmful within the meaning of the code." By 1999, the commission had classified 66 corporate tax measures as "harmful." A single, low corporate tax rate would be a terrific economic advantage for Europe, as important, perhaps, as a single currency - for starters. EU tax codes are absurdly chaotic. In a year-end interview, Laszlo Kovacs, former foreign minister of Hungary and current EU Commissioner for Taxation, championed a single tax rate for cars and trucks: "In EU countries where there is a registration tax [on cars], the amount can vary from a few hundred euros to 16,000 euros [$24,000 Canadian] in the Scandinavian countries. For 16,000 euros, you can buy a nice car in Belgium." Europe taxes cars, trucks and gasoline at high rates - and often. You pay VAT (value-added tax) when you buy your vehicle (EU membership obliges member countries to levy VAT at a minimum rate of 15 per cent). The various VATs are an administrative mess. (Germany says VAT fraud costs it €17-billion a year.) You pay registration taxes (in all but eight EU countries). You pay different gasoline taxes, country to country, producing eco-wasteful "tank tourism." With the capacity to travel 3,000 kilometres on a single tank, truckers routinely drive hundreds of kilometres out of their way (especially to Poland and the Czech Republic) to get low gas prices. Europe needs radical tax reform - for simplicity and for efficiency. With its distinctly subversive tax reforms, little Macedonia may well show the way.

© The Globe and Mail,            January 23, 2008


• Dow Jones Launches Balkan Blue-Chip Index   
  
Alkaloid, Komercijalna banka, Granit, Makpetrol and Toplifikacija are the five Macedonian companies which became part with 50 shares each in the new Balkan blue-chip index, Dow Jones STOXX Balkan 50 Equal Weighted, created by the methodology of the renowned U.S. company Dow Jones. Stock market analysts find this to be very affirmative for the companies, because Macedonian firms are for the first time part of such an index. On the other hand, this shows that they have the credibility and value not only on the Macedonian, but also on the capital market of the region.

Courtesy of Macedonian Information Centre,            8 November 2007

• Think about Macedonia as a place to invest  
  
By THOMAS P.M. BARNETT Scripps Howard News Service Friday, November 23, 2007

I recently caught a glimpse of what victory will look like in this long struggle against radical extremism, and it didn't involve a trial or a corpse or a parade. Actually, it's an advertisement you've probably already run across in the back pages of the Economist or Wall Street Journal. Its message is disarmingly simple: Invest in Macedonia. Now, I know what you're thinking: "Macedonia? Isn't that one of those lousy Balkan countries we fought in a while back?" The answer is, sort of. The Balkan Wars (1991-2001) encompassed the break-up of Yugoslavia, which until that time constituted a federation of six republics. Three successive wars defined Yugoslavia's initial fracturing: Slovenia's secession in 1991, the 1991-95 Croatian war of independence, and the infamous Bosnian civil war of 1992-95. Additional conflicts ensued among the Albanian populations of Kosovo (1997-99), southern Serbia (2000-01), and Macedonia (2001). After the United Nations failed to stem the initial armed conflicts and incidences of genocide, U.S.-led NATO forces intervened twice in the second half of the 1990s, leaving behind peacekeepers who continue serving today -- under UN auspices -- in Kosovo, a Serbian province still seeking independence. Of the six independent states to emerge from the ruins of Yugoslavia, Macedonia is arguably least well known internationally, in large part because it escaped mass bloodshed following its quiet departure in 1991. Thanks to a continuing naming dispute with Greece, Macedonia is still formally known in global circles as the "former Yugoslav Republic of Macedonia," or F.Y.R.O.M. -- an awkward moniker befitting its centuries of living anonymously under other civilizations' great empires. Having joined the UN in 1993, Macedonia seeks future membership in both NATO and the European Union, which named it a "candidate country" two years ago. Roughly the size of Vermont and landlocked amidst Albania, Greece, Bulgaria and Serbia, Macedonia offers little beyond its location as a major transportation corridor between larger economic players. To that end, Macedonia, with the help of the U.S. Agency for International Development, made itself the first all-broadband wireless country of its size in the world. The name of that USAID program, "Macedonia Connects," is wonderfully symbolic of this small country's dogged determination to join the global economy. So when I first came across those "Invest in Macedonia" ads, I couldn't help but think to myself that this is what victory would look like in places like Iraq and Afghanistan -- not our victory but theirs. The ad, appropriately enough, is one big sales job. Describing itself as the "new business heaven in Europe," the unspoken come-on in the ad seems to be, "if you can't afford Croatia any more, try us instead!" Most impressively, the ad promises that investors can register their new company in four hours or less. Try matching that in your average developing country and you'd be lucky to get your papers signed in four months! As for investor benefit packages, which the ad declares "will be approved within 10 business days," try these on for size: no corporate tax for 10 years; 5 percent individual income tax for five years; free connections to gas, electricity, sewer and water; and concessionary land leases "for up to 75 years." All that for joining a free economic zone with "immediate access to main international airport, railroad and vital road corridors." As an international businessman who focuses on infrastructure development, let me tell you, that sort of offer gets my attention, along with the fact that the World Bank's "Doing Business 2008" report just named Macedonia the fourth-best reforming economy in the world (China was ninth). What I like about the ad is how shamelessly Macedonia sells its existing connectivity to attract even more: Free economic zone, transportation hubs, and free trade agreements encompassing 650 million consumers. Toss in cheap labor and nationwide wi-fi, and you've got yourself a country just itching to be "exploited." And yeah, that's what victory looks like for your average failed state: getting yourself off the front page and into the business advertising section. One last image: the ad includes a map that delineates, in successive 500 kilometre rings, Macedonia's connective grasp across Europe. Think about that for a second: not the reach of Macedonia's missiles but its economic ambition. Show me a similarly plausible "invest in Iraq" advertisement and I'll be the first to light up your cigar.

(Thomas P.M. Barnett is a visiting scholar at the University of Tennessee's Howard Baker Center and the senior managing director of Enterra Solutions LLC. Contact him at tom(AT)thomaspmbarnett.com. For more stories, visit scrippsnews.com.)