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Overdue State Payments Imperil Macedonian Firms

March 23, 2012

Late payments by the government to Macedonian entrepreneurs are leaving many in the private sector in financial difficulties.

Sinisa Jakov Marusic, Balkan Insight, 23.03.2012
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Overdue state payments to local companies are threatening the liquidity of some of them, business leaders say.

“Some companies are owed tens of millions of euros by the state and simply cannot operate because of delayed payments,” a source in the Chamber of Commerce, which groups the country’s biggest companies, says.

The same source said the rate of retrieval of debts from state institutions is “catastrophic”, resulting in “a very low overall liquidity level” in the economy.

According to unofficial data, state-run departments and agencies annually commission up to 60 percent of the procurements in Macedonia.

These contracts vary from buying office suplies to commissioning works on major projects such as Skopje 2014, the project to revamp the city.

Vanja Mihajlovska, a former member of the state Anti-Corruption Commission, says most businesses are afraid to openly speak about the problem.

“In a situation where the government is the biggest investor, they have no alternative and are afraid of losing existing and future state contracts,” Mihajlovska says.

In 2010 the government changed the law to allow state institutions to sign annexes to existing and future public procurement contracts with companies, delaying the payment timeframe.

The Finance Ministry says this only “strengthened the guarantees that companies will get their money” in the end.

It says the state has proven in the past to be a reliable payer. But the ministry has no data on the total amount that the government owes the private sector. The State Statistical Office and the National Bank also have no such records.

However, the liquidity problem has been noted for years in financial surveys and is also mentioned in last year’s European Commission report on the country.

The government earlier this month introduced a mechanism to allow claimant firms easy access to the bank accounts of debtors that are overdue with their payments.

However, the government excluded itself from this same provision.

From → Economy, FYROM

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