Publication: The Trade Policy Strategy 2.0 for North Macedonia: Trade Competitiveness Diagnostic and State Aid Effectiveness Report
Date
2022-09
ISSN
Published
2022-09
Author(s)
World Bank
Abstract
For a small and landlocked country
like North Macedonia, trade integration is particularly
important to sustain the country's economic growth and
transformation. The importance of trade became even more
visible during a global crisis and in the post-pandemic
recovery period. Trade integration has contributed to North
Macedonia’s rise to the status of a middle-income country,
but its trade strategy is showing signs of fatigue. The lack
of trade diversification and economic transformation limits
the role of trade in North Macedonia’s growth model. Also,
trade openness in services has been weaker than for
merchandise, highlighting the untapped potential for trade
in services. North Macedonia's growth strategy should
aim to diversify the economy and seek export oriented FDI
that would have stronger spillover effects on the domestic
economy. State aid provided through tax incentives to boost
exports and attract FDIs will need to be redesigned to be
more effective. A revamped trade strategy is needed that
will allow North Macedonia to move further up the GVC ladder
and expand its economic diversification through agriculture,
agri-business, services, or more complex manufacturing,
which will ultimately lead to greater job creation, business
survival, and diversification of the economy as a whole. The
proposed reform agenda needs to be considered as part of a
broader strategy to improve the business climate and
attractiveness for investment and raise productivity in the
economy. Ultimately, the country’s ability to achieve
greater economic diversification and upgrading will depend
on a large number of different factors, including
competition policy, investment policies, innovation,
education policies.
Citation
“World Bank. 2022. The Trade Policy Strategy 2.0 for North Macedonia: Trade Competitiveness Diagnostic and State Aid Effectiveness Report. © Washington, DC. http://hdl.handle.net/10986/38049 License: CC BY 3.0 IGO.”