How to develop Macedonia's Southwestern Region?

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Human activities, and thus the economic activities take place in a certain area, certain place, and then they spread beyond that place in the farther environment. The numerous interactions between these specific areas complicate the task of creating the economic policy, such as the rational allocation of materials, energy, labor and other resources, which leads to the need of developing and preparing a strategic economic document and plans, among which the most important is the Strategy for regional development of the Republic of Macedonia. The Strategy is one of the main strategic documents for planning the development of the country, among the National plan for development, the Spatial plan of the Republic of Macedonia along with the individual Programs for development of the regions in the country.The Southwestern region is one of the eight planning regions in the Republic of Macedonia, which coincide with the statistical regions determined by the nomenclature of territorial statistical units, in order to provide a statistical basis for their development. The other seven regions are 1) Vardar region, 2) Eastern region, 3) Southeastern region, 4) Pelagonia region, 5) Polog region, 6) Northeastern region and 7) Skopje region.

Today, we are witnessing how dinamic the economic activities are becoming, the relationship between the economic entities are intertwining, and even more so – the self-sufficiency of economic units is lost, which emphasises the need to initiate, direct and plan the economic development. This constatation applies on both – microeconomic (the case of individual enterprises) and macroeconomic level (directing the development of the overall economy).

It is a fact that uncoordinated development can lead to monocentrism and neglect the development of peripheral regions, which is the reason for the development of national strategies for balanced regional development, but also individual programs for development of the planning regions which, of course, should be in accordance with the national economic policy priorities and vision. In the interest of the well-being of the citizens, the successful regional development is achieved by making use of the competitive advantages offered by the region, optimal allocation of scarce resources, support and encouragement of entrepreneurship and improving of business climate, harmonisation of the education system with labour market needs, environmental protection, social cohesion, etc.

The southwestern region of the Republic of Macedonia is rich with natural resources and cultural and historical heritage can be found. In fact, the fact that the southwestern region occupies the first place when it comes to domestic and foreign tourists in Macedonia speaks for itself. Thus, for the development of the southwestern region of the Republic of Macedonia, the economic activities related to tourism are of great importance. The southwestern region distinguish itself by the beautiful nature that is, in fact,protected by many national and international organizations. Within the southwestern region belong: Lake Ohrid as a protected zone, several historical sites, the National Park Galicica, but also the newly proposed areas with a high degree of natural value that can be found on the mountain Jablanica, such as Vevchani springs, Pitom Kosten – Gorna Belica, Ela – Vevcani, Drenacka River, Lukovo and so on. Lake Ohrid is of great value in terms of protection of biodiversity, and has enormous geomorphological, natural and hydrological value. This area includes the swamp near Ohrid and the remains of the Struga swamp between the villages of Kalishta, Radolishta that are located near Struga. According to the National Register of Cultural Heritage, more than 350 cultural and historical sites have been registered in the Southwestern region. The city of Ohrid with its natural rarity and cultural heritage is protected by UNESCO. There are many manifestations of international and national character that take place in the region, such as: Struga Poetry Evenings, Ohrid Summer, Balkan Festival of Folk Songs and Dances, Prlichev Sermons, Velestovo Poetry Evenings, Struga Music Autumn, Revision of Folk Costumes - Struga, Vevchani Carnival , Days of Culture - Debar, Days of Theater - Debar, Days of Goce in Podgorci, Art Colonies in Debar, Kicevo and Vevcani and many others.

The Southwest Planning Region is the first in terms of the number of tourists who visited the regions, followed by the Skopje Region. The other regions have a much smaller share in the total number of tourists in the Republic of Macedonia. It is important to note that the highest number of tourists is in the summer months, with the difference being most noticeable in the Southwest region. There, the number of tourists in July and August reaches almost 90,000, and in other annual seasons the number ranges between 10,000-20,000. The exception is the Skopje region, where the differences are not so obvious in different seasons, so throughout the year the number of tourists ranges from 20,000-30,000, and in summer the number of tourists rises to 40,000.

However, the problem arises in the efficient use of such benefits, the interest, incentive and motivation of the population, corruption of institutions and policy makers, and a key role in all this is the lack of willingness to utilise the available funds for project implementation that are provided in The Strategy for regional development of the Republic of Macedonia. Although, in recent years dominates the intended allocation of funds, which means that the funds are allocated for specific projects, and not to budget users, the realisation of those funds is stagnant. The reasons why are numerous, but perhaps the most significant are the low utilisation rate of available funds from domestic and foreign sources, while the poor ratings of the international community in terms of corruption suggest perhaps the most important obstacle towards developed economy.

Since fair amount of research papers have already confirmed the worrying fact that, unlike the countries in the region, Macedonia country is characterised by negative capital multipliers of public expenditures, the question is whether favourable economic growth and development can be achieved through direct influence of the state on the economic flows. The multiplier effects of public expenditures are generally low, so the question arises as to whether there is any stimulus effect of fiscal policy on the economic activity.

Although the above does not exclude the need for economic planning and directing the development of the regions, it is important to keep in mind that greater economic growth is more likely to be achieved through "soft measures", i.e attempts to narrow the loop and opportunities for corruption in the institutional system, enabling a favourable business climate, favourable attitude towards domestic and foreign investors, improving the background for development of innovation and entrepreneurship, improving education and production of top and highly qualified staff that will be the engine of growth and development of the national economy. From what has been said so far, this does not exclude the need for economic planning and directing the development of the regions, it is important to keep in mind that greater economic growth is more likely to be achieved through "soft measures", i.e attempts to reduce the opportunities for corruption in the institutional system, enabling a favourable business climate, favourable attitude towards domestic and foreign investors, improving the background for development of innovation and entrepreneurship, improving education that will lead to production of highly qualified staff that will be the engine of growth and development of the national economy.

Finally, carefully selected projects that have proven to have a positive impact within the regions and the economies of the countries in the region and beyond should be accepted as useful but, of course, modified and aligned with the needs of the specific economic reality at the time of their implementation. The Southwestern planning region, with all its opportunities and advantages, but also risks and weaknesses, can and should be turned into a region that will be characterised by sustainable development, will guarantee economic security, will guarantee safety, social and health care, will protect the environment, thus making the Southwestern planning region a region of high prosperity.

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