Friday, 27 April 2012
ADDRESS OF THE PRESIDENT VELJANOSKI ON THE OCCASION OF 20 YEARS SINCE THE MONETARY INDEPENDENCE OF THE REPUBLIC OF MACEDONIA
Distinguished Governor of the National Bank of the Republic of Macedonia, Mr. Dimitar Bogov
Distinguished Former Governors
Distinguished MPs,
Distinguished Ministers,
Your Excellences,
Ladies and gentlemen,
It is my sincere honour and pleasure to address on the occasion of the 20th Anniversary of the Monetary Independence of the Republic of Macedonia. Last year we marked the key dates related to the sovereignty of independent and democratic Republic of Macedonia, and this year we are marking other historically important anniversaries, among which is the 20th anniversary of the monetary independence of our state.
Ladies and gentlemen,
In the past 20 years we have achieved a lot, we have solved many issues. Certainly, some were successfully solved, some less successfully. We have passed hard times, we were tempted in many situations when decisive and important moves, important for the future and the existence of the independent and sovereign Republic of Macedonia, were made.
One of these key moves was made in the evening, on 26 April 1992, in the Assembly of the Republic of Macedonia, when the former Prime Minister Nikola Kljusev proclaimed the monetary independence of the Republic of Macedonia and presented the Macedonian national currency- Denar.
“Pursuant to the Law on Monetary Currency, the Republic of Macedonia has its currency and it is my pleasure to present it. Congratulations!- stated Nikola Kljusev from the stand of the Assembly of the Republic of Macedonia, when the MPs adopted the Law on National Bank of the Republic of Macedonia, the Law on Monetary Unit and the decisions on the monetary independence of the Republic of Macedonia.
This has been one of the most impressive images, marking the monetary independence of Macedonia.
The former Government of the Republic of Macedonia, headed by the Academic Nikola Kljusev, accompanied by the key laws and decisions for monetary independence submitted the Anti-inflation Program to the Assembly of the Republic of Macedonia.
We should remember that in this period the inflation rate was 86%. The power of our economy in that period, in the period of proclamation of independence, was deeply influenced by the wars of other parts of Former Yugoslavia Federation and a blockade from Greece was imposed, which was beyond the international ethics. These events and blockades were accompanied by a strong and uncontrolled emission of Dinars by the National Bank of Yugoslavia, in order to transfer the great expenses from the war on the backs of the citizens in the independent states. These politics led to erosion of the Yugoslavia Dinar, disabling the Dinar as legitimate payment medium in payment operations. The debts of the Macedonian economy towards the foreign states were very high, together with the interest- above 1 billion dollars. The same level of debt was in the currency saving of the citizens.
All these issues could not be solved swiftly and were connected with the succession and the divisible balance of the Ex-Yugoslavia Federation. At that time, the level of currency stock was very low and the stocks could not take the stabilizing role in the Macedonian market and the Macedonian currency in general.
By the end of 1991 our level of exchange stocks reached 12 million dollars, of which 7 million dollars in monetary gold. By the end of April, by the monetary independence, the exchange stocks were barely 16 million dollars.
We should remember the other circumstances and events immediately connected with the monetary independence. By the mid-April 1992, the Yugoslavia Army left the territory of the Republic of Macedonia. The exchange of the Yugoslavia dinar into Macedonian Denar, one-to-one rate, started. This process was finalized within the planned timeline of 3 days. In this manner we have successfully surpassed the critical moment.
Nevertheless, in the following period, large amount of money entered the Republic of Macedonia, attempting to cause devaluation of our currency and burdened the revival of the Macedonian currency. Strengthening the monetary control swiftly surpassed this undermining activity as well.
In the years that followed, the process of establishment of the Macedonian currency was finalized. The circulation of the first Macedonian money started the battle with the hyperinflation, applying the restrictive monetary policy, and consequently, in the period May- December 1992 the inflation was decreased on 12.7%.
By the end of 1992 the Council of the National Bank of Macedonia adopted decision on new money, and the first Macedonian denars replacing the coupons, were presented in May 1993. In the following years, the National Bank of the Republic of Macedonia introduced market oriented mechanism as an introduction for the open market.
Ladies and gentlemen,
The introduction of the Macedonian currency and the monetary independence was logic follow up of the steps for creation of the state after the successful referendum and the proclamation of independence on 8 September 1991.
In the past 20 years, since our independence, the Republic of Macedonia became a member of almost all significant international organizations. It is respected partner in the cooperation with many states in the world, with which we have established successful diplomatic, political as well as economic and cultural ties.
The National Bank of the Republic of Macedonia, in the past 2 decades faced all challenges and today it is fully matured and capable institution in the exercising its Constitutional and legislative function.
The National Bank of the Republic of Macedonia learned from its own experience and the experience of other central banks. The achieved results demonstrate that the impressively long string of low and stabile inflation and solid banking system, were not swung during the great world recession.
In the past 20 years after the independence, we have achieved financial stability and our key priority is the high economic growth in direction of better lives for our citizens. Our unequivocal interest is to apply the European standards and to finalize the reforms. Our priority is to qualify our economy as a competitive economy in the European markets, rising new educated generations equal with the generations of the developed world. We are dedicated on improving the living standard of all the citizens and we will fight together to achieve our key goal.
The years to come are the time of sufficient historic distance, liberated politics, when we can truly evaluate the complexity of our achievements and mistakes.
Even now, we can conclude that the macroeconomic stability of the Republic of Macedonia in the past period had a positive influence on other state functions.
In addition to sustaining the macroeconomic stability, as a precondition for further development, our efforts are focused on responsible financial policy, maintaining a reasonable level of budget deficit and sustainable level of public debt. On the other hand, the low taxes, the social incomes and other expenses to the state, create assumptions for attraction of the domestic and foreign investments.
We need to work constantly and to be dedicated on the improvement of the business climate and improvement of the quality of the labour force.
In the end, allow me, once again, to congratulate you the jubilee- 20 years of monetary independence of the Republic of Macedonia and to express appreciation to all factors embodied in this process and in the same time to recall and underline the merits of everyone, who unfortunately are not among us, but were the basis and the engine of this crucial process for the Republic of Macedonia.
Thank you.