Case 1: Empowering Local Government 2002–2004

Decentralisation was on the government and parliamentary agendas even before the first post-conflict elections of 2002. It was to be one of the first policies that would go through the reformed policy process involving power-sharing mechanisms in parliament (double majority, inter-ethnic reconciliation council) and government (drafting the contents of the legislative proposals). Therefore, both the public and NATO and EU representatives were closely following the decentralisation reforms, anticipating the outcome of the first efforts at institutional power-sharing in post-conflict Macedonia.

9 Anonymous, MP for DUI 2002-present: personal interview with the author, 23 July

2010. Between the signing of the OFA in August 2001 and the next elections in September 2002, the government in Macedonia consisted of a grand 'national unity' coalition, established to negotiate the end of the conflict and run the country through the transition period. It was composed of the four largest political parties, VMRO-DPMNE and SDSM from the Macedonian bloc and PDP and PDSh from the Albanian. At the time, the DUI, the political party that succeeded the Albanian rebel groups, did not exist and did not participate in the political process. The coalition had no specific programme or agreed priorities apart from the termination of the conflict and adoption of the OFA and related constitutional amendments. Ministers in the cabinet had different, even opposing, attitudes on many policy issues which affected the quality of policy-making and ethnic accommodation.

One of the first decentralisation laws after the conflict passed by the 'national unity' government was the Law on Local Self-government (LLS). Prepared by the minister of local government, Faik Arslani, Albanian from PDSh, it redefined the competencies and authority of municipalities and the local tier of government according to the provisions in the OFA. Although a product of the grand coalition cabinet, once in parliamentary procedure, it emerged that the proposal had not been jointly prepared by the coalition partners in government, since both Macedonian parties found it problematic. Two major arguments were offered against the proposed law during the parliamentary debates. First, there was a fear that the provisions allowing municipalities to cooperate and build common institutions in the areas of education, health, energy and environment, would be used as a pretext to establish some form of regional institutional structure among predominantly Albanian municipalities. Many from SDSM and smaller Macedonian parties openly stated their fears that such legal provisions presented in terms of more efficient functioning of local government would be abused and lead to regionalisation of the state.10 Few explained why regionalisation would be bad for Macedonia, but the underlying logic was that regionalisation would be a prelude to territorial autonomy and federalisation, which for Macedonians was only a step away from secession. The second argument against the law concerned the proposed transfer of authorities and competencies from the central to the local level, which caused resistance by central institutions. Decentralising authority in health, energy management, education, and other policy competencies stipulated by the proposed law was seen to diminish the authority of central institutions, whose ministers and directors resisted the proposed changes.11

10 Nikola Popovski, MP for SDSM, quoted in 'Parlamentot blokiran so zakonot za lokalna samouprava' [Parliament blocked by Law on local self-government], A1 News, 7 December 2001. Available at:

(accessed 20 November 2010).

11 Transcripts from the first sitting of the 95th session of the Parliament of

R. Macedonia on 6 December 2001. Parliament of R. Macedonia, Transcript Archives. Available at: (accessed 20 November 2010). The two arguments embodied two different logics, the first one based on ethnonational concern and mistrust in ethnic minorities, who are perceived as disloyal to the state; the second an institutional logic of resistance against the changes that would take powers away from the existing institutions. While not necessarily related, on this occasion these two arguments combined well, the first pursued by one Macedonian party (SDSM), the second by the other (VMRO), to create a clear ethnic cleavage between Macedonian and Albanian parties in parliament and to unite the two largest Macedonian parties together against the proposal. This was one of the first visible effects that power-sharing produced in Macedonian politics – Macedonian political elites were required to discuss and consider policy proposals that they considered unacceptable and to seek support for legislative changes from Albanian parties. The agenda-setting powers of the Albanian political elites had increased substantially, since before 2001, issues unpopular for both SDSM and VMRO, would never have been included in the parliament's agenda.

Such division between the Albanian and Macedonian parties in Parliament soon led to a deadlock. While the double-majority vote required Albanian support for passing the law, the resistance of Macedonian parties meant that there were insufficient votes for a simple majority in parliament. As it became clear that the SDSM and VMRO would not withdraw the amendments, Albanian parties, unable to reject the amendments without majority Macedonian support, left parliament and refused to take part in its work until the amendments were withdrawn. Formal power-sharing was not yielding the immediate results that Albanian politicians expected. Instead, they called for an informal leaders' meeting, where the leaders of the four largest political parties would meet, discuss the law and the amendments, and come up with a solution that parliament could confirm.

The Albanian parties also called on the representatives from the international community to support this proposal and encourage the Macedonian political elites to accept it. As this debate was taking place during the first months after the conflict, when the security situation was still not stable, the international community intervened. Passing the Law on local self-government was set as a condition for holding an international donors' conference for Macedonia, aimed at raising money for rebuilding and reconstruction of the damages caused by the conflict. Adopting this crucial systemic law that would pave the way for successful decentralisation of political power would show to donors that the Macedonian government was committed to implementing the OFA and building sustainable peace. International representatives in Macedonia reveal that in the early days after the conflict they did not hesitate to intervene in the political process and use conditionality to elicit the desired response from domestic politicians. The security situation at the time was seen as vulnerable and fragile. The domestic political elites were also aware of this, which made them more willing to listen and follow the advice of the international community.12

12 Anonymous, EC Delegation official: personal interview with the author, Skopje, 4 August 2010. After more than a month of debates, amendments, and negotiations between the leaders of the four largest parties and the international representatives, the members of the Albanian parties returned to Parliament, the opposition withdrew the amendments, and the law was passed by consensus.13 Very little actual accommodation through the new institutional mechanisms took place. The major factor explaining the eventual adoption of the law by all four political parties was the pressure from the international community, in particular the conditionality attached to the law and the international donors' conference. There was no coalition agreement about mutual concessions, nor was a wider consensus across the political spectrum sought. Yet, although the power-sharing mechanisms did not immediately produce accommodation, neither was eventual success ruled out. The pressure of the international community convinced all among the political elites that accommodation was indispensable, whether they arrived at it independently through the formal institutional procedures, or whether the international community exerted sufficient pressure for all to cooperate and agree. The double majority requirement in parliament was also respected, although external factors facilitated its work.

However, the problems related to the adoption of the Law on local selfgovernment were minimal when compared to the controversies raised by the draft Law on territorial organisation two years later. Based on the OFAprovision requiring 'revision of municipal boundaries', the draft law aimed to redraw the municipal boundaries in Macedonia, to allow for creating viable municipalities that would have the capacity to take on all the authority that the process of decentralisation would transfer from central to local level. Since 1996, Macedonian territory was organised in 123 municipalities with minimal powers and authorities, which is why their size and limited human and material capacity was not considered problematic. Transferring competencies to local governments required larger municipalities with greater capacities to enable them to benefit from such transfer. In 2004, the government was composed of the SDSM and DUI, who had won most votes on the 2002 elections among the Macedonian and Albanian electorate. During the 2002 coalition negotiations, the two parties in government reached an agreement on the need to reduce the number of municipalities and worked together to develop the draft Law on territorial organisation. There were going to be problems about such a draft law even if the question was only about deciding which municipalities would meet the criteria for taking over the expanded authorities transferred through decentralisation. Once the government drafted the law, there were referendums in several smaller rural municipalities declaring they did not want to be abolished and merged with other neighbouring municipalities.14

13 Zakon za lokalnata samouprava na RM [Law on local self-government], Official

Gazette of R. Macedonia (No.5/02), from 29 January 2002.

14 Aleksandar Geštakovski, Minister for Local Self-government 2002–2006, Interview for RL/RFE, 16 May 2004. html (accessed 5 November 2013). There were fears among these municipalities that they would be neglected by the government, both central and local, if they lost their municipality status, even though decentralisation was aimed at increasing the power of local governments. However, the revision of the municipal boundaries became linked to another major provision from the OFA – the right to use languages other than Macedonian as official if more than 20 per cent of the population was using them as their mother tongue.15 Changing the municipal boundaries would increase the territory on which Albanian would be official language in addition to Macedonian. Finally and perhaps most controversially, the shifting of municipal boundaries and the adding and subtracting of suburban and rural areas to some mixed municipalities was perceived as an effort to create more municipalities in which Albanians would be the majority. This generated protests and resistance among the ethnic Macedonian population in some mixed areas, most notably in the towns of Struga, Kičevo and Kumanovo, in which the ethnic balance was such that they were rendered potentially Albanian-majority towns.

The problems were related to article 12 which listed the towns and villages that belonged to each of the initially 62, and eventually 86, municipalities replacing the previous 123.16 The opposition on the Macedonian side argued that by adding large rural municipalities to the towns of Struga and Kičevo, the ethnic structure of these municipalities would shift from mixed to Albanian-majority towns. This would lead to a 'soft cleansing' of Macedonians in those areas, as they would leave these municipalities, which would eventually lead to division and federalisation of the state.17 The opposition further accused the government of neglecting the outcome of the local referendums that many municipalities held against their merging with other municipalities, and called upon the obligation stemming from the ratification of the European Charter for Local Self-Government, and especially its article 5, which stipulates that changes of municipal boundaries can only be done in consultation with the local population.18 By not taking the referendums into consideration, the government would act undemocratically, making policies that neglect popular input and participation in the process.

Meanwhile, the Albanian opposition, PDSh and PDP, criticised the proposed territorial organisation of municipalities for playing with municipal boundaries to create dominant Macedonian ethnic majorities. PDSh members of parliament accused the government of creating municipalities in the north-western part of the

15 Framework Agreement, Education and Use of Languages.

16 Zakon za teritorijalnata organizacija na lokalnata samouprava vo RM [Law on territorial organisation], Offi Gazette of R. Macedonia (No.55/04), from 16 August 2004. 17 Statements of VMRO-DPMNE MPs, in Transcripts from 10th to 15th sitting of

the 50th session of the Parliament of R. Macedonia. Parliament of Republic of Macedonia, Transcript Archives. Available at: (accessed 20 November 2010).

18 Council of Europe, 'European Charter of Local Self-Government', 15 October 1985. Available at: (accessed 20

November 2010). country that did not have sufficient infrastructure, natural, economic or human resources and geographic compactness to function as sustainable municipalities. The only criterion for their establishment was that they contained dispersed Macedonian population areas and united them in a single Macedonian-majority municipality.19 In parliament, both the Macedonian and Albanian opposition parties accused the governing parties of betrayal of their ethnic group's interest and attempted to outflank them with a more nationalist discourse. Moreover, the opposition also attacked the government proposal on the grounds of democracy and transparency, for ignoring the local referendums outcomes, accusing the government of not being sufficiently democratic.

The governing parties, the SDSM and DUI, did not respond to the criticisms regarding ethnic interests. They could not at the same time betray both Macedonian and Albanian interests. If they worked to create some municipalities with Albanian majority and some with Macedonian, then both communities'interests were protected to an equal extent and the proposed solution would be a good compromise. However, the government insisted that the municipal boundaries were not designed following demographic criteria, but by creating capable and sustainable municipalities.20 While the government could afford to ignore ethnic complaints, the criticism over undemocratic policy-making and ignoring obligations from international law was diffi to dismiss. Although it was unreasonable to expect that any municipality would vote for its own abolishment, the outcomes of the local referendums pointed to a major resistance among the population towards the proposed policy. The government therefore introduced some changes to the original proposal and, instead of 62, the fi legislative proposal listed 86 municipalities. The most controversial case, of adding the Albanian rural areas of Zajas and Oslomej to the town of Kičevo, was abandoned, as were some other proposed mergers of rural municipalities in order to safeguard the right to self-government of smaller ethnic groups such as Turks in Centar Župa, and Muslims in Plasnica.21

Popular resistance through referendums along with opposition pressure in parliament made the governing coalition more willing to accommodate and incorporate some of the criticisms in the revised version of the law. However, when several months later the law was re-introduced in parliament for the vote, deputies were no closer to agreement than during the first reading of the proposal

19 Statements of PDSH and PDP MPs, in Transcripts from 10th to 15th sitting of the 50th session of the Parliament of R. Macedonia. Parliament of Republic of Macedonia, Transcript Archives. Available at: (accessed 20 November 2010).

20 Aleksandar Geštakovski, Minister for Local Self-Government, Statement in the Transcripts from 9th and 10th sitting of the 50th session of the Parliament of R. Macedonia on 11 and 12 February 2004. Parliament of R. Macedonia, Transcript Archives. Available at: (accessed 20 November 2010).

21 The initial proposal had merged these municipalities with other Albanian-majority areas, so Turks and Muslims would be a below-20 per cent minority and have no right to enjoy OFA language and education rights in the new municipality. in February 2004. The opposition rejected the new proposal and accused the government of 'bargaining behind the scenes' between SDSM and DUI leaders instead of open debate in parliament to change the proposal.22 Despite resolving the most contentious issues, the coalition partners left Struga municipality boundaries unchanged. Earlier in the year, when the text of the proposal first became public, the World Macedonian Congress, a Macedonian-Diaspora organisation based in North America, called for a referendum on the proposed law on territorial organisation, and managed to collect 180,000 signatures from Macedonian citizens to fulfil the constitutional requirement for calling a national referendum.23 Now VMRO-DPMNE quickly joined the referendum camp, advocating rejection of the LTO, despite the accommodating steps by the government which changed the text of the proposal following the initial criticisms.

A national referendum greatly increased the stakes of the policy process. The campaign that preceded the actual referendum was not about article 12 of the Law, neither was it about the actual boundaries of the Struga municipality and how to come up with an optimal municipal map. The campaign quickly turned into a plebiscite over the OFA and what it stood for. The opposition and proreferendum camp argued against the policies that would arguably lead Macedonia to federalisation or even partition, while the government, with the assistance of the international community, campaigned that OFA policies stood for EU integration and reconciliation.24 The representatives of the international community recognised in the referendum a real threat to the post-conflict political order in Macedonia and did not desire to question the OFA and the changes it introduced in the constitutional structure in Macedonia. Therefore, the international community firmly took the side of the government and supported the government campaign by statements asserting that if the referendum passed the country's political system would be undermined, threatening its progress towards EU and NATO integration.25 The EU issued an official statement about the referendum in Macedonia, calling on the Macedonian citizens not to go out to vote, the unusual contents of which only indicated how serious the threat to Macedonia's stability the referendum was perceived to be.26 Committed to promoting democracy and participation, the EU

22 Statement in the Transcripts from 72nd session of the Parliament of R. Macedonia on 26 July 2004. Parliament of R. Macedonia, Transcript Archives. Available at: (accessed 20 November 2010).

23 Though hardly a genuine civil society organisation, WMC has many supporters in Macedonia and generally takes hard nationalist stands on political issues, usually in Macedonian foreign policy and outstanding issues with Greece and Bulgaria, but on this occasion picked-up a domestic issue. Its leader and founder, Todor Petrov, was an independent MP in the first Macedonian Parliament 1990–1994.

24 Christopher Chivvis, 'The Making of Macedonia', Survival, 50 (2008): 141–62. 25 Anikka Bjorkdahl, 'Norm-maker and Norm-taker: Exploring the Normative

Influence of EU in Macedonia', European Foreign Affairs Review, 50 (2005): 257–78.

26 'Declaration by the Presidency on behalf of the European Union on the 7 November referendum in the former Yugoslav Republic of Macedonia', EUROPA Rapid. typically calls for greater voter turnout and encourages citizens to vote, but on this occasion the threat to peace and security seemed serious enough to overcome concerns over the democratic contents of the anti-referendum campaign.

On 7 November 2004, more than 400,000 citizens, mostly ethnic Macedonians, voted on the referendum. The vast majority of these, more than 95 per cent, voted in favour of the referendum question, which asked for keeping the existing territorial organisation of 123 municipalities.27 The turnout of 26.3 per cent of the electorate was insufficient and so the referendum was declared unsuccessful. This meant that the Law on territorial organisation, which the parliament adopted in July 2004, with the required double majority vote, would enter into force immediately and local elections were scheduled soon afterwards.

Given the controversies in adopting the initial decentralisation reforms, few in 2004 would have predicted that the outcomes of such a highly contested policy would come to be evaluated as positive and that decentralisation would soon cease to cause tension in ethnic relations. However, after the first local elections in November 2004 and the start of initial stages of decentralisation in January 2005, the benefits of the policy soon became evident. For the citizens, who had lived in a highly centralised state since 1991, their fears that its unitary nature was under threat were negated as services became more available at a local level and they were afforded greater participation in decisions concerning their communities. Assessments conducted after the 2009 local elections suggested that citizens were satisfied with the extent and quality of services provided by the local government, especially in areas where local government competencies were increased, such as: communal services, urban planning and education.28 Citizens were also aware of many problems that plague the work of local government institutions, such as politicisation and corruption.29 However, the overall picture was positive. As a result, inter-ethnic relations at the local level became more relaxed as a large majority of Macedonian citizens found inter-ethnic relations in their municipality to be very good or excellent30 and many thought ethnic relations in their municipality to be much better than their perceptions of the state of ethnic relations in the country as a whole.31

2 November 2004, Brussels. Available at:

?reference=PESC/04/125&format=HTML&aged=1&language=EN&guiLanguage=en (accessed 5 November 2013).

27 Press Release. 7 November 2004. MOST. Referendum 2004. Available at: id=39

28 OSCE Spill-over Monitor Mission to Skopje, Decentralisation Survey 2009

(Skopje, December 2009).

29 OSCE Spill-over Monitor Mission to Skopje, Decentralisation Survey 2009. 30 OSCE Spill-over Monitor Mission to Skopje, ibid.

31 Common Values, Analysis of the Inter-ethnic Relations in Republic of Macedonia

(Skopje: Koma, 2009). Although the competencies of municipalities increased since the start of decentralisation in 2005, Macedonia still remains one of the more centralised states in Europe, devoting the smallest share of GDP to local government and with very low income for citizen per capita in most of the municipalities.32 This is a severe limit on the municipalities' capacities for exercising their competencies and some smaller rural municipalities struggle with providing the necessary services for their residents. Thus, the much-debated provision in the Law on local self-government about inter-municipal cooperation in practise worked in a more mundane manner than the ethnic Macedonian politicians had feared. Inter-municipal cooperation has become the tool that municipalities use to pool resources for projects that they cannot afford to run themselves, predominantly in areas such as waste management, fire-fighting, local development zones and 'business incubators'.33 The fears about linking of Albanian-majority municipalities into some regional formation with separate institutions that would endanger the sovereignty and territorial integrity of the Macedonian state, seemed to have disappeared, at least from the political elites' rhetoric. Furthermore, municipalities are encouraged to use inter-municipal cooperation to become efficient in providing services to citizens, as central government elites are reluctant to give up more budget funds for the needs of local governments.

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