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Macedonia's 'Taiwan Adventure' Ends

Macedonia seeks closer ties with China after attempts to court Taiwanese investment come to naught
By Dragan Nikolic

Macedonia's new ruling coalition appears to be shoring up relations with China following the dramatic departure earlier this month of a top government official who'd long campaigned for closer ties with Taiwan.


Deputy Prime Minister and leader of the Democratic Alternative, DA, Vasil Tupurkovski sought to oust the ruling coalition by withdrawing his party and joining up with the opposition Social Democratic Alliance of Macedonia, SDSM, to form a new governing alliance


The tactic backfired. Prime Minister Ljubco Georgievski immediately sacked Tupurkovski and five DA ministers. Georgievski has also purged public companies and government institutions of DA officials.


On December 7 parliament approved the Premier's revised cabinet, including ministers from the new coalition partner, the Liberal Party, known to be eager to reverse Macedonia's support for Taipei and re-establish good relations with China.


Skopje's so-called "Taiwan Adventure" began on the eve of the 1998 parliamentary elections, when Tupurkovski promised voters an unknown foreign partner would donate $1 billion to the Macedonian economy - creating around 120,000 jobs - as soon as he won the elections.


Should some parts of the economic recovery programme not be realised within two years, he went on, then all DA officials would resign.


Some opponents branded Tupurkovski a liar, others suggested ironically he should be allowed to dispense with elections if he could deliver such a bonanza.


Georgievski's right-wing Internal Macedonian Revolutionary Organisation - Democratic Party for Macedonian National Unity or VMRO-DPMNE, although sceptical of Tupurkovski's "billion dollar project", opted to form a coalition with the left-wing DA on a platform promising economic revival.


It's now widely believed in Macedonia that the promised "billion dollars" won Tupurkovski and Georgievski the 1998 election and formed the basis of the unnatural coalition of right-wing VMRO-DPMNE and left-wing DA.


From the outset the coalition was shaky. The VMRO-DPMNE and DA differed over policy and control over the privatisation of particular companies and industries.


The identity of the mystery "billion dollar" donor was revealed shortly after the 1998 election during a visit by Tupurkovski to Taiwan. News reports claimed a deal had been struck whereby Macedonia would recognise Taiwan's independence and establish diplomatic relations in exchange for large-scale investment in Macedonian reconstruction and development programmes.


Taipei strenuously denied any financial incentive was at play.


Macedonia duly recognised Taiwan on January 27, 1999 despite the vocal protests of the then president, Kiro Gligorov. His successor Boris Trajkovski has so far refused to accredit the would-be Taiwanese ambassador to Skopje.


Besides the Vatican, Macedonia is the only European state to have recognised Taiwan, a move which prompted a furious response from China. Beijing severed diplomatic ties with Macedonia and used its seat on the United Nations Security Council to veto an extension of the UN peacekeeping mandate in Macedonia.


Gligorov had requested UN troops for Macedonia as a deterrent to former Yugoslav president Slobodan Milosevic who refused to acknowledge the state border between Serbia and Macedonia and laid claim to some areas of the latter's territory.


Tupurkovski countered that Macedonia, as a tiny and impoverished country, posed no threat to China. He began touring the republic opening duty-free zones for future Taiwanese capital investments, the largest at Bunardzik outside Skopje. He laid foundation stones at farms and small industrial enterprises. He promised credits to small businesses and local governments.


During the 1999 presidential campaign, Tupurkovski said the foreign money would build a huge petrochemical complex and refinery.


But two years after his original promises, the "billion dollars" has yet to materialise.


Tupurkovski did appear on television shortly after Macedonia recognised Taiwan to announce $36 million in investments from Taipei. The money was earmarked for sports and medical facilities, he said.


But even this more modest sum failed to appear. Opposition leaders protested. Dr Djordje Marjanovic, leader of the Democratic League, called for Tupurkovski to be prosecuted.


Tupurkovski, meanwhile, blamed the VMRO-DPMNE for blocking the Taiwanese project.


Senior Taiwanese officials visited Skopje and said a $1 billion could indeed be invested in Macedonia from the Far East, but from private capital sources. The only prerequisite was a suitable investment opportunity - apparently none could be found.


As the Taiwanese venture failed to bear fruit, Tupurkovski's position in the coalition diminished. Georgievski was quick to point out the minimal economic benefits the policy had brought to the country.


Tupurkovski was eventually sidelined from government activity, including the privatisation programmes. Shortly before the coalition collapsed, the government rejected Tupurkovski's calls for $300 million to be invested in his reconstruction and development agency.


The money was targeted instead at diffusing social tensions, currently on the rise in Macedonia, where 230,000 people, out of a population of 2 million, are out of work.


Tupurkovski sought to bring down the Georgievski administration in a desperate attempt to realise his Taiwanese dream. He wanted to finalise his agreement with Taipei, adamant the "billion dollar" promise was genuine, and not an electoral fraud.


With Tupurkovski out of government, it looks like the would-be Taiwanese ambassador will be packing his bags.


Trajkovski said Macedonia would only develop trade relations with Taiwan in future. Macedonia's new deputy prime minister Zoran Krstevski pointedly called Taiwan "Chinese territory".


Macedonia's present situation in the Balkans is far from secure. The recent flare up in southern Serbia between Albanian separatists and Serbian police is just the other side of the border. Skopje has sent troops to reinforce the frontier fearful Albanian extremists may try to set up supply routes through Macedonian territory.


Then there are outstanding border disputes with Serbia, arguments with Bulgaria and Greece over language and the country's name respectively.


The new Macedonian coalition government believes the benefits of Chinese support on the UN Security Council outweigh any advantages to be gained from vague and unfulfilled promises of Taiwanese financial investment.


Dragan Nikolic is a regular IWPR contributor.