without any doubt puts the central bank in a delicate position when the external position is deteriorated, since the current account is a function of the interactions between the private sector entities'decisions and the decisions of the economic policy decision - makers. therefore, the identification of the factors that cause these movements and the implications for the monetary policy conduct are essential. the analyses of the main features of the balance of payments in transition countries indicate that the key and dominant factor for the external disequilibrium is high trade deficit. the experiences of the transition countries in dealing with this problem vary. one can notice, though, that in most of them the process of structural reforms implementation and conduct of sound and consistent macroeconomic policies, with the eu integration being a clearly defined objective, produced positive achievements in the external sector. nevertheless, registered improvements in the exports are still insufficient for a more significant reduction of the trade deficit, having in mind the initially high imbalance in the foreign trade, which is a logical consequence of the inherited economic structures, whose main p. lane, g. m. milesi - ferreti, " capital flows to central and eastern europe, working paper 188, 2006, imf. it refers to 11 countries from central and eastern europe - cee. feature is lack of flexibility and import dependence. the problem regarding the balance of payments current account deficit is even bigger if one has in mind the fact that the negative trade balance is to a large extent compensated with the positive achievements in services and private transfers, as current account components, which in 2003 ( according to bis 3 calculations ) compensated over 45 percent of the negative trade balance. vulnerability of the transition economies with respect to the sustainability of the current account balance is additionally increased, if it is considered that in the process of creating a " market economy ", these economies faced also with a process of trade liberalization, which, especially in a short run, may additionally contribute to the trade imbalance. the intensification of the process of financial integration and liberalization of the capital transactions as global processes, have set new challenges for the countries in transition, which reflected not only in the balance of payments capital account, but in return in the balance of payments current account, as well as the exchange rate regime. positive macroeconomic performances of the countries, as well as the fast global growth, low rate of inflation and historically low level of the interest rates in the developed countries are factors that caused high capital inflow in the transition countries and produced

anita angelovska bezhoska : how to make capitalism work for all speech by ms anita angelovska bezhoska, governor of the national bank of the republic of north macedonia, at the imf / wb constituency meeting, skopje, 22 june 2019. * * * distinguished prime minister, ministers of finance and other respective representatives of government institutions, governors of central banks and other respective representatives of central banks, executive directors, vice presidents in world bank group directors in international monetary fund, professor zingales, delegates of the constituency, excellences, fellow colleagues, representatives of the media, at the very beginning, let me say how honored we are to have the opportunity to host this important gathering of our constituency. sixteen years have passed since the last meeting of the constituency in skopje, and we are delighted to have all of you with us here during these three days. by a twist of fate, i recently came across a book that i have not seen since my early youth days ; a book that starts with a very powerful notion – “ happy families are all alike ; every unhappy family is unhappy in its own way ” – you might recall tolstoy ’ s “ anna karenina ”. few days after, while searching for the most recent discussions on the matter of capitalism, inequality, wealth distribution, i read an analytical piece where the author cited the same quote, linking it with all the different modalities of inequality, as a symbol of the global unhappiness. standard metrics on inequality point to a widespread and rising phenomenon. it obviously underpins the rising populism, that reflects the dissatisfaction with the system that does not create equal opportunities for everyone, a system where reward is not merit based, i. e., system that gradually evolves into a crony capitalism. against this background, i have no doubts that we have chosen the perfect spotlight for this constituency meeting. let me shortly use the historical lenses – what questioned the sustainability of capitalism and led to marxism was the stagnation of wages and concentration of wealth in the early phases of industrial revolution. it gave ground for rising inequality, and as thomas pikketty, the so - called “ modern marx ” reveals in his book “ capital in the twenty - first century ”, the only exception from this rising trend of global inequality is the period as of 1914 until 1970s, as a historical outlier. indeed, actual data does indicate rising income inequality since the 1980s onwards almost across the board