Report on the Costing of the Implementation of the Framework Agreement

Prepared with the financial assistance of the European Commission and endorsed by the Government of the fYR of Macedonia

Skopje, February 12, 2002

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Executive Summary 

In February 2001 the fYR of Macedonia entered a deep political and military crisis caused by the uprising of Ethnic Albanian Armed Groups (EAAG). A Framework Agreement (FA), signed on 13 August 2001 by all major parties of the country, marked the end of five months of hostilities between the security forces of the fYR of Macedonia and the Ethnic Albanian Armed Groups. The main objectives of the FA are:

• to preserve the unitary character of the State and the multi-ethnic character of the fYR of Macedonia's society;
• to promote the peaceful and harmonious development of civil society;
• to respect the ethnic identity and the interest of all citizens of the fYR of Macedonia;
• to ensure that the Constitution fully meets the needs of all citizens and continually reflects the development and maturation of a modern democratic state.

The FA calls for a number of important constitutional amendments and structural reforms, notably in areas of:

• the use of Albanian and other minority languages in the organs of the fYR of Macedonia, in municipalities and in the courts;
• the development of local self-government;
• the composition and distribution of police forces;
• the institution of the Ombudsman;
• Albanian language media;
• access to primary and secondary education for all minorities in the students' native language;
• reform of the public administration to assure equitable representation of minorities (in central and local public bodies).

In September 2001, a team at the ministry of finance had already started to estimate the cost of implementing the FA. The government bodies that would be involved in the reforms to implement the FA were identified and requested to submit estimates of implementation costs. These were then categorised. In October 2001, based on the information available, a Dutch team carried out an excellent review and analysis on estimates for decentralisation (2), education (7) and equitable participation in the public administration (8). A few weeks later, a team financed by the European Commission (EC), in close collaboration with the Dutch team, completed the exercise on the remaining categories of use of languages (1), the Ministry of the Interior (3), the Ombudsman (4), Channel III (5) and Census (6).

The present report is a summary report that combines the results of the work of both teams (the Dutch and the EC teams). The objective of the report is to inform donors of the state of play of the work on costing the FA, and the issues that remain to be resolved. The initial costs of items, (and also most of the recurrent costs), that could be estimated on the basis of clear assumptions about the policy direction, have been estimated with an acceptable degree of certainty (in categories 1,3,4,5 and 6). However, because some costs can only be properly estimated once the amended legislation required for implementing the FA is adopted (and once the basic policy decisions have been elaborated), estimates presented in this case are not necessarily inaccurate but rather preliminary or incomplete (in categories 2,7 and 8). Estimates for all categories are presented as follows:

From the above table, only the recurrent salary costs for the new (to be hired) police officers (estimated at $ 1.8 million in 2002, $ 4. 6 million in 2003 and $ 5.7 million in 2004 and being part of category 3) are included in the state budget.

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