The power of small states

Why would a country like Macedonia be of interest to the United States?

Increasingly, small countries in Europe, such as Macedonia and Slovenia, are taking actions that larger states are not initiating. These countries and their people have an entrepreneurial spirit to build and create businesses and an environment that fosters growth and entrepreneurship. Let’s drill down on Macedonia to make the point because a leader in there has plans to make it a great place to do business and is poised to come back to power soon.

{mosads}The Republic of Macedonia—a small country in Eastern Europe with a population of 2 million—quickly developed a sophisticated economy and forged strong foreign alliances since it gained its independence in 1991. Today, Macedonia plays a crucial role in assuaging the European refugee crisis by communicating the needs of the refugees to its allies and the international community in general. 

The former Prime Minster of Macedonia and leader of the political party VMRO-DPMNE, Nikola Gruevski, recently visited Washington, D.C. and Berlin, to meet with various academics and diplomats to discuss the challenges facing Macedonia. In Washington, Gruevski met with key decision makers and leaders such as Council on Foreign Relations President Richard Hass and Ambassador Wendy Sherman, and other officials, think tank experts, and NGO professionals. In Berlin, Gruevski met with State Secretary Jens Spahn and Federal Minister Christian Schmidt and others.

During the meetings, Gruevski established Macedonia as a valuable partner to Germany and proposed new ways to help solve some of problems associated with the refugee crisis. The discussions also incorporated the economic, political, and social future of Macedonia and allowed Gruevski to highlight Macedonia’s international standing before his likely re-election this coming December.

A solid political leader is someone who can work well with others. Political and diplomatic success is about a creating and fostering a culture of dialogue and empowerment. Throughout his political career, Mr. Gruevski has worked with many officials, advisors, and international stakeholders, learning from the mistakes of others and understanding that success comes with compromise. Macedonian officials must work with leaders from around the world to empower this relatively small nation and its citizens. Gruevski understands this idea and used this knowledge to achieve success during his events and meetings abroad.

Some of Prime Minister Gruevski’s accomplishments over recent years demonstrate how he has begun to build up Macedonia’s international standing. During his term as Prime Minister, Gruevski stimulated the economy, making Macedonia an attractive business landscape for foreign direct investment. In fact, the World Bank’s annual ‘Doing Business’ report ranked Macedonia 12th globally and 6th in Europe in the list of states for doing business.

The Macedonian government invested in infrastructure and developed free economic zones, thus demonstrating to the international community that it is a country open for business. As a result of these government actions, Macedonia has become a popular location for foreign direct investment.

The combination of a skilled labor force, a proactive government, and cooperation with foreign investors ensures Macedonia’s appeal to international business ventures. The outcomes are positive for everyone.

Between 2009 and 2014, foreign companies invested $1.72 billion in Macedonia. Almost $350 million of that is from 2014 alone. And, according to UNCTAD’s 2015 World Investment Report, international interest in Macedonia has only grown.

Fostering a pro-business environment is necessary for Macedonia to remain as one of Europe’s top emerging markets. As a result of promoting these economic conditions, Macedonia became the number one place for job creation from foreign direct investment per capita, according to Global Location Trends 2016 Annual Report, released this August by the IBM Institute for Business Value.

Throughout its development, Macedonia has remained competitive by keeping tax rates down, with a flat 10% personal income tax and a flat 10% profits tax. It was even recognized for having the lowest tax rates in the world.

As Macedonia moves forward into a new year and a new global environment, the country and its leadership needs to continue the momentum that it developed over the past decade. By continuing its path of economic growth, bolstering its reputation as a hub for FDI, and taking a strong leadership position in the region, Macedonia and Nikola Gruevski are demonstrating Macedonia’s worth and power to the world. Macedonia’s time is now. The same can be said for other tiny states, such as Slovenia.

Tanter is President of the Iran Policy Committee and was a member of the National Security Council staff in the Reagan-Bush administration.

The views expressed by authors are their own and not the views of The Hill.


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