The United States established full diplomatic relations in September 13, 1995. Lastly, ethnic tensions remain a critical factor in the ability of the Government to maintain its integrity and stability. U.S. assistance will address these problems through targeted efforts in development of the private sector economy, with a particular focus on agriculture and agribusiness, and through assistance to non-governmental organizations, local governments, independent media and other democratic and representative civic intermediaries. An EU Resident Representative has been assigned to Skopje and has established the Macedonia office. Under this objective, direct assistance is provided to enterprises to improve their efficiency and productivity.
Special emphasis is placed on small and medium enterprises, especially in the agricultural area.
While the legal underpinnings for a market economy are nearing completion, the new private sector is far from viable. Many of the socially-owned enterprises were bought by their former managers or by groups of their employees, most of whom have little knowledge of how to manage a business to increase profit rather than production. This is an issue for consideration as the FY 1999-2000 Strategic Plan is prepared. The competitive environment for business has improved, but much remains to be done particularly implementing basic laws, resolving enterprise debts, and developing specific regulations. Banks are still very conservative in their lending practices and lack critical risk assessment skills, and the banking system as a whole does not adequately serve the needs of the growing private sector.