The Kosovo conflict has accentuated internal ethnic tensions between the Slav Macedonian majority and the ethnic Albanian minority. While tensions continue, the departure of Milosevic from Belgrade is seen potentially as a major contribution to stability in the region. The government s policy of economic reform includes privatisation of state industries and banks but Macedonia s uncertain security situation has not encouraged investors. The economy remains weak, while the reforms themselves have caused further hardship. The manufacturing industry was hit by the effects of the Kosovo conflict, although substantial foreign loans will enable Macedonia to cover its financing balance.
Unemployment is disproportionately high among the ethnic Albanian community.
Poor health care, environmental degradation and pollution, rural disadvantage and the lack of civil society are cross-regional issues in the Balkans. These combined with the economic and social effects of the transition, such as increasing unemployment and decreasing social provision, have resulted in specific groups, such as women, older people and children, being particularly disadvantaged. There is increasing evidence throughout the region that children from poor families and minorities are dropping out of school in order to work and contribute to family incomes. Economic hardship has resulted in more children being abandoned by parents to state-run homes, which do not provide an adequate education or preparation for life. Many of these children go on to become street children, become involved in crime or become sex workers.