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Macedonia continues to be in limbo along business and political lines. A host of factors conspire against the country's domestic and international desire for progress....

Macedonia continues to be in limbo along business and political lines. A host of factors conspire against the country's domestic and international desire for progress. On the one hand, the breakup from Yugoslavia dispossessed the country of its protected markets and transfer payments from the centre. This coupled with UN sanctions, a Greek economic embargo and lack of infrastructure stifled Macedonia up until foreign aid, worker remittances, successful privatisation and domestic devices for open economy facilitated modest growth. From the outset, the country's continuing dispute with Greece over its own name has crippled many of its aspirations. This dispute lies at the centre of the country's current inability to accede to the EU or enter Nato.

There hasn't been much to speak of in terms of business in Macedonia. The elections in June did not help address high employment and a sluggish economy. "The June election freezes everything for six months. We thought the crisis ended but everything's stopped while we wait for the new government," one partner said. Nevertheless, despite having a stalling effect, the conservative government takes the helm again and will pursue the same policies. "We hope for some improvement in foreign investment, general production or some other activities...after the global crisis, there's not a lot of improvement," says one partner. The status quo prevails in Macedonia. Infrastructure is frozen with very few developments in the offing; a notable exception being the reconstruction of Skopje airport by the Turkish TAV holdings.

The fresh problems that have afflicted Greece further jeopardise the country's goals. "The biggest investor in Macedonia is Greece," says one partner, adding: "We feel the impact every day. We feel it in the economy; we feel it in the investment portfolio." In light of external forces that prevent the growth of the country, the government has been a huge investor in Macedonia. This is true in economic and cultural matters. "With law firms, there is a shift from the service of the private sector to the public sector. For us, more than half of the foreign clients decreased. We tried to switch to the public sector," says one partner.

In Macedonia, the capital markets and M&A is extant, however, they display very limited activity. The energy sector is not a major source of work with little traditional energy going and, in renewable energy, only traces of hydro and solar power. There are a handful of huge ongoing projects and they revolve around infrastructure with project finance, concessions and PPPs (public-private partnerships). The reconstruction of the airport, the construction of highways and in the real estate sector, work on the largest shopping mall are points of interest. Moreover, the announcement by the KEMET Corporation of its intention to construct a new manufacturing facility in Skopje has been a source of some excitement. The investment in this initial facility is set to be approximately €12 million.