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Wednesday, July 28, 1999 Published at 07:06 GMT 08:06 UK

Business: The Economy

Rebuilding Macedonia

Factories lie idle as markets are closed off

By Nils Blythe reporting from Kosovo for BBC1's Business Breakfast

The refugee camps in the former Yugoslav republic of Macedonia have shrunk to a fraction of their size at the height of the Kosovo conflict.

Rebuilding the Balkans
But long after the world's attention has moved on, there are still over 20,000 ethnic Albanian refugees in Macedonia, unable or unwilling to return to Kosovo.

[ image: Macedonia is one of Europe's poorest countries]
Macedonia is one of Europe's poorest countries
"We all know the what the conditions in Kosovo are - a lot of houses destroyed. People are staying here because they don't have anywhere to go back to. Everything that they have has been destroyed," says one refugee, Nikola Kljusev.

The arrival of thousands of refugees had a huge impact here in Macedonia. It is a country with its own uneasy balance between the ethnic Macedonians and a large minority of Albanians.

And even now most of the refugees have gone home, the effects of the Kosovo crisis are still being felt throughout the Macedonian economy.

Factories closed

OHIS is one of the largest companies in Macedonia, making and exporting plastics around the Balkans.

[ image: Unemployment is high in Macedonia]
Unemployment is high in Macedonia
But the destruction of rail routes through Serbia has forced them to close down much of their production and send home most of the workforce, according to the firm's general manager.

"Before the crisis we had about 3,800 who were employed and after the crisis because we stopped several plants in our group of factories we had 2,600 people at home," says Jorgo Cuka.

"There are a lot of social tensions in the country because according to the contract with the trade union we pay them 50% from the normal salary. This is a big problem for the company because we are going to pay them without any production. But it is a big problem for the people because they cannot survive on 50% of their salary," he added.

High unemployment

Even before the Kosovo crisis, many families struggled to find work in a country with 40% unemployment.

Nils Blythe looks at how regional instability has damaged the Macedonian economy
Xhevahir Lutar has a family of 14 people spanning three generations to support. He says that that since the war in Kosovo began, regular work has been even harder to find than before.

"It's very difficult to find a proper job here in Macedonia. We are trying to make a living by trading in the market. Buying cheap, selling a little more expensive just to make a living," he explained.

Promises, promises

Financial support for Macedonia and other countries affected by the Kosovo crisis has been promised. But a key Minister says he's still waiting for the promises to be made good.

"A lot of promises have been made. But we are not happy with the aid that is coming to Macedonia because it comes very slowly. A lot of promises have been made but not all of them have been implemented," says Nikola Kljusev, the Minister of Defence.

Like refugees, economic problems linger long after a conflict is over.

And in the Balkans many people believe that unless the regional economy recovers rapidly from the latest crisis, the misery and instability of the last 10 years are set to continue.

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