Slander and libel laws have led to media self-censorship. Political influence on the judiciary is significant. Public administration is inefficient, and potentially undermined by the rapidly changing composition of the country s ethnic populations. Addressing ethnic tensions in Macedonia is key to sustaining its evolution as a democracy. The Kosovo conflict increased tensions among ethnic Macedonians, Albanians, and Serbs.
Endemic corruption darkens prospects for consolidation of democratic and economic reforms.
In 1998, indicators of macroeconomic stability were good. GDP expanded by three percent. Prior to the Kosovo conflict, Macedonia had lowered its inflation rate in successive years through tight fiscal control, and the rate of inflation in 1998 was the lowest of all transition economies. Despite the collapse of trade with Serbia and decline in domestic and foreign investment due to the Kosovo crisis, Macedonia maintained macroeconomic stability in 1999. Macedonia s commitment to democracy and to a market economy warrants continued support.