Stefan Andonovski for EUpravo zato: Small Markets Cannot Stand Alone

Digital transformation in North Macedonia is becoming crucial for market development, says Minister Andonovski, alongside plans for new digital services.

In the conversation, following his participation in the BELTALKS: Belgrade Economic Talks conference, organised by GLOBSEC, we also touched upon what small markets can offer investors, and why a predictable business environment, the rule of law, and quality investments are crucial for the development of the region.

What is the significance of global conferences in the Western Balkans?

"It is very important that we have conferences where we discuss the opportunities that the Western Balkans have, both in Europe and at the global level. It is also important that we discuss the entire region, and not just one country, one economy, or one industry, but also cooperation between industries and the opportunities through which we can improve European development and develop our regions."

Has your Ministry contributed to the digitalization of North Macedonia and how to inspire the region to do the same?

"From 2016 to 2024, we had a period of losses, with a focus on political topics and issues related to cooperation, so little growth was recorded in the community. We decided to have a special ministry focused on digital transformation. For 15 years, while Macedonia was focused on digitalization, the then Ministry of Information Society implemented numerous projects that represented a major breakthrough and were pioneering in the digitalization of processes.

Unfortunately, in the period from 2016 to 2024, we lost that focus and turned more towards political topics and issues that created divisions in society and slowed down growth." 

"By returning the focus to digital transformation, we managed, above all, to stimulate domestic growth and gross domestic product. In the first half of this year, we recorded GDP growth of 3.8 percent, while in the second quarter it was 4.3 percent. The growth of the IT industry in that period was 4.7 percent.

We stimulated the growth of the domestic IT industry. Returning the focus to digitalization also means accelerating processes, better functioning of society and administration, better connection with citizens, and the digitalization of services for citizens."

Can North Macedonia position itself as a regional centre regarding data centres and artificial intelligence, considering how much you are working on it?

"We are now taking the first steps and looking at how to achieve progress, not only in Macedonia but also in the entire region.

Our idea is to first become the energy hub of the Balkans, because we are investing heavily in energy infrastructure. Huge investments, worth billions of euros, have been announced in the electrical energy infrastructure and energy production in the country.

To that, we should also add private investments in data centres and artificial intelligence."

"The goal is to create added value in the economy. If that means we manage to stand out in the region and become a regional player, that is good. Because we, as a small country, cannot compete with larger markets.

We are a small market, but we are efficient. That is precisely the message we are sending at these forums as well: we must be fast in attracting investments. This means a stable and predictable business environment, the rule of law, stable taxes, attracting quality investments that bring added value and environmental protection."

Are Western Balkan countries individually relatively small markets? Can they gain a competitive advantage by uniting regarding this ecosystem?

"Of course! Connecting can be significant for the wider economy, but we must show that regional initiatives have concrete results. We have several regional initiatives that are successful, such as the 'Open Balkan' initiative, within which certain barriers and costs have been reduced. There are also agreements between countries that enable faster and simpler payments in the banking system.

My proposal at this conference, from the perspective of the economy, is to make a regional AI transformation. That does not have to be just a matter of regulation, but connecting regional companies, especially small and medium-sized ones, with the infrastructure and capacities that states have," the minister from North Macedonia said, adding:

"The data centre in Kragujevac, cybersecurity companies, Macedonian companies, and similar capacities could be connected into one large regional network or platform. We could enable companies from Macedonia to use infrastructure for testing, laboratories, and development, to see if we can create companies that will be competitive at the European level.

Such a regional platform, with a focus on artificial intelligence, could be successful."

What are the challenges, and what is the first next step to move forward?

"We certainly have many challenges. Now we are increasingly dealing with politics in the Balkans, just as we are dealing with the economy. We will certainly encounter problems, but regional connection is something that is done today at the highest possible level in the world.

We must not forget that we are only a small part of that mosaic, both of Europe and the world. The world has its problems.

We need to organize ourselves through the Regional Cooperation Council (RCC). We have the so-called agreement for the Balkan platform; we have agreements through the Berlin Process. Therefore, there are regional initiatives, and I think we are not using them enough," Andonovski concluded.

(EUpravo zato.rs)