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Investment in Macedonia

by Suleman


Foreign investment industry is best characterized by investment in assets or in company ownership stakes by another company or an individual in another country. With the rise in globalization, it is now a common trend for big companies to branch out into other countries. This is mainly motivated by cheaper labor, access to a larger customer base, fewer taxes or pursuit of a specific technology. Foreign Investment can be divided into either: Direct or Indirect Investments. When companies physically purchase buildings, machines, factories or other equipment outside their country, such is termed direct investments. Foreign direct investment (FDI) is seen as a major contributor of growth in modern economies. Indirect investment is when financial institutions or corporations purchase positions or stakes in companies on a foreign stock exchange (Trakman & Ranieri, 2013).

In a report published by the African Re-insurance Corporation (Africa Re), the amount brought in through foreign investment in Nairobi, Kenya in 2007 was $36billion doubling that in 2005.This strong trend in Kenya and other developing countries indicates that Africa is quickly becoming the preferred destination for foreign investment despite the G8 countries’ failure to uphold their Gleeneagles commitment.

Ministry of Foreign Investment Macedonia

Macedonia has very vibrant ministry of foreign exchange. One of the contributing factors to this is the strategic location the country enjoys.  It is positioned along major transport routes that join the Middle East, Asia and Europe. The ministry focus areas include manufacturing, automotive, logistics, business process outsourcing, industrial, and automation, engineering, textile, leather and service sectors. In recent years, big global corporations like Johnson Controls, EVN, Societe Genarale, Telkom Austria, Vienna Insurance Group and many more have diversified their operations into Macedonia (KPMG, 2017). The year 2016 saw a rise in the current account deficit which previously was at EUR 187 million in 2015 to EUR 303.3 million. This translated into 3.1% of the total GDP (KPMG, 2017).

SWOT Analysis

The state officers report that, the country’s net FDI rose steadily from 2014, which stood at EUR 197.4 million to EUR 202.8 in 2015, to a whooping EUR 354million in 2016 (KPMG, 2017). The GDP rose from EUR 3,459 per capita in 2010 to EUR 4, 125 per capita in 2014. Golablly, the country ranked 12 in 2016 out of 189 countries in World Bank’s Doing Business analysis, and number 60 out of 140 in 2015’s World Economic Forum index. To ensure the continued success, the government institution must have a SWOT analysis.


  • Strong business partnerships- Strong business alliances with strong global brands translate into a big customer base for the ministry.

  • Lucrative position-Macedonia is strategically placed between Europe, Asia and Middle East which is strengthened further by the good transport system (road, rail, air etc)

  • Financially strong-this helps the Ministry deal with any problems, ride any dip in profits and outperform their competitors.
  • Experienced employees-skilled labor is important to drive any economy forward to customers’ satisfaction


  • Damaged reputation-The government will have to work to instill a sense of trustworthiness otherwise foreigners will not invest in Macedonia

  • Lack of original products/services-this is fundamental flaw in future thriving of any business

  • Lack of effective marketing strategy-this seriously hampers the success of foreign investment in Macedonia


  • Available government support-Being a government institution, the Ministry could bend the rules such as regulations, taxes to work in their favor.
  • Expand products/services- diversification of service or products could help the Ministry attract new customers


  • Changing consumer lifestyle-this could lead to a lessened demand of service of product which could translate in reduced profit margins or no market at all.
  • Not keeping abreast with new technology-In this digital era, failure to invest in innovation and new technology could mean that the Ministry would slip behind their competitors.

Porter’s Five Forces Analysis

Competitive Rivalry

Increased competitive rivalry from other Foreign Investment ministries especially in European countries could mean a reduced market size for Macedonia foreign investment which would result in reduced profit margins

Supplier Power

When the supply of a product or service is high- the demand for it goes down. This would mean that the Ministry would lose. Affording the suppliers better incentives would help in creating supplier loyalty.

Buyer Power

Investors want to purchase best services or product at the lowest prices possible. This makes the ministry afford them tax exempts and discounts which lowers the profit margins. This can be mitigated by acquiring a vast and varied customer base

Threat of New Entry

The firm is almost protected from this as it enjoys government support; however private firms offering foreign investment products and services offering better product innovation poses a great threat to the ministry.

Threat of Substitution

New products or services offered by other foreign investment firms which suits the customers’ needs better while at the same time producing good profits is a great threat to the ministry. The ministry should continually spy on their competitors to stay ahead.

Gligor Tashkovich-Minister of Foreign Investment (Ret)

Gligor has a wealth of experience in foreign investment having served as the Macedonia’s Minister for Foreign Investment for 6years. His expertise ranges from international political relations in energy in the Black Sea and Caspian countries, internet development projects in North America and Europe (1984-1994) and international business development. During his tenure as a Minster, Macedonia became the first country in the world to have an approved Stabilization and Association Agreement with 28 member states of the European Union. He sits in various boards of directors of many firms across the world.

Interview Questions

  • Mr. Gligor, your track record speaks for itself, what might you attribute your success in life to?
  • What are the irreducible minimum drivers to a thriving foreign investment economy?
  • If you were to go back being the Minister for Foreign Investment in Macedonia, what is that one thing that you would change or handle differently?


  • KPMG. (2017). Investment in Macedonia 2017. Retrieved from https://assets.kpmg.com/content/dam/kpmg/mk/pdf/Investment-in-Macedonia-2017.pdf
  • Trakman, L. E., & Ranieri, N. W. (2013). Foreign Direct Investment: A Historical
  • Perspective. “Regionalism in international investment law”. Oxford: Oxford University Press.

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