Human development

The experiences faced by the Republic of Macedonia in the last decade have shifted the focus of political priorities from fulfilment of basic social expectations and well-being to overcoming public security problems. Yet worries of political contingency have affected the social and economic situation and, to a certain extent, transformed the entire fabric of social life.

Unemployment
The expected economic leap forward still has to occur and, in the short term, the whole restructuring process has evidenced major shortcomings. Privatisation regularly results in massive dislocation of labour as the work organisation shifts from state-owned or, as in this case, social to private enterprises.
The biggest transition shock in Macedonia is, in fact, the one involving the labour market: the average annual drop in employment has been �6.5 percent and the corresponding average increase in unemployment was almost 8.8.
The ultimate aim of the structural transformation of the State, is, in fact, the re-qualification of labour force and a subsequent reemployment in a more efficient economic environment. The process, in case, is time-costing and immediately detrimental to large groups of workers.
The reason for such a dramatic rise in unemployment rates lies in an inadequate macroeconomic policy: the sudden change from a centrally-planned system to market economy denied the inherent characteristic of the previous system mainly developed for the welfare of people. Unemployment in the country, in fact, has been growing at an unsustainable speed and, notwithstanding the recent arrest, remains at a high level: the year 2000 estimates still place it at 32%.

Poverty reduction
Unemployment also constitutes one of the key factors of diffused poverty within the State. It is estimated that about 18.1 of the population lives below the poverty line.
FYR of Macedonia has joined the World Bank in 1993 and accepted its CAS (Country Assistance Strategy) programme - calculated around US$ 231 million - conditional to the structural transformation plan issued by the institution. More recently the Boards of Directors of the Bank has positively evaluated the Interim-Poverty Reduction Strategy Paper proposed by the Macedonian Government that should give way to a further loan of US$ 50.3 million. The Executive Board of the International Monetary Fund (IMF), moreover, has approved a three year loan in an amount equivalent to about US 31million $ to support the government economic program.

Population changes
The population composition has gone through a considerable increase in terms of size and of life-expectancy.
While in the pre-independence period the size of the young population tended to diminish, the trend has inverted from 1991: the number of persons aged under 20 has slightly increased. The phenomenon is explicable by observing infant-mortality rates of the country. Over the past decades, due to the unfavourable socio-economic situation, infant-mortality was extremely high (105.8 per 1,000 live births in 1965). Through several actions programs, infant mortality rate has decreased by ten to twenty per thousand in five-year periods and reached the level of 15,7 per thousand live births in 1997.
If the rate of growth of this strip of population was to remain the same, the process might have implications on the growth of potential labour force.

Rise in life-expectancy (which in 1998 had achieved 73 years) is a clear signifier of attainment of higher life-conditions. The score, anyway, is to be interpreted in connection with a worrying increase of the most aged strata of the population. This phenomenon, together with the ongoing process of aging of the population �will significantly impact the� already �high health expenditures�.

Changes in the population composition found evidence in the further phenomenon of progressive abandonment of rural areas. The process has been clear during the entire second half of the century: in the period between 1948 and 1994 about the 4,4 of the existing rural population migrated to the cities The phenomenon is still recognisable in recent times since urban population has increased constantly from 1991. Rural communities, in fact, reacted with difficulty to the challenges of transition: in the case of Macedonia, loss of human resources � and consequential �de-agrarisation� - due to sensible migration from the countryside, finds a partial explanation in the loss of the Yugoslav market for agricultural products.