North Macedonia faces a temporary slowdown in economic activity as it gears up for presidential and parliamentary elections set for late April and early May, according to Law Office Serdjuk Managing Partner Petar Serdjuk, while the post-election period holds promise of revitalizing key sectors such as construction and infrastructure through long-awaited public procurement projects.
"North Macedonia is currently in the midst of an election process with presidential elections scheduled for April 24 and parliamentary elections in early May," Serdjuk begins. "This has temporarily stalled many business activities as the government is restricted from using budget funds for new projects during this period. We are eagerly anticipating the post-election period as it typically brings a surge in business activities, especially in public procurements and tenders, which have seen delays over the past year," he explains.
Focusing on specific projects expected to move ahead following the election period, Serdjuk mentions that there are several significant ones on the horizon: "Most notably, we expect advancements in major public procurement projects, particularly in infrastructure. Key areas include highway and railway projects, renewable energy initiatives like solar and wind, as well as the development of dams, and, possibly, enhancements in the public healthcare sector," he says, adding that these projects present substantial opportunities for foreign investments and PPP.
And, speaking of investments, Serdjuk goes on to say the renewable energy sector appears to be "particularly attractive to foreign direct investments. Given the global shift towards sustainable energy sources, our country's initiatives to expand capacity in solar and wind energy have garnered significant attention," he says. "This aligns with a broader interest in infrastructure, where the scale of projects often translates to larger investment and revenue opportunities for international firms."
Additionally, Serdjuk reports that there have been interesting legislative changes concerning financial technologies. "Recently, there was significant progress with the implementation of the new Law on Payment Services and Payment systems which transposes the PSD2, which aims to enhance online payment security and market competition. This includes stronger customer authentication processes, new licensing requirements, and broader data access for fintech companies," he reports. According to him, these changes are paving the way for "innovative financial services in North Macedonia, such as institutions for electronic money, payment initiation services providers (PISPs), and account information service providers (AISPs) previously unavailable."
On the flip side, these changes pose certain challenges as well. "With these innovations, there is an inherently increased risk of cybercrime, which necessitates robust cybersecurity measures. Thankfully, the new law also includes stringent security protocols," Serdjuk says. "Service providers have clear deadlines to comply with these new standards, with most needing to update their systems by October 1, 2024, and 2026 for payment institutions that provide transactions at a distance to ensure enhanced security measures are in place."
Finally, Serdjuk reports that the legal field in the country is changing. "We're seeing a decrease in the number of students pursuing law, caused by an overproduction of attorneys in the past, which has led to heightened competition and increased demand," he reports. "Law firms are actively headhunting qualified candidates from competitors, which is a trend that we expect to continue as the market adjusts to these new dynamics."
