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Updated on: 11 November, 2020
Between the ends of August and September, North Macedonia saw a steady decrease in Covid-19 cases. As of 30 September, the economy had 857 active cases per 100,000 inhabitants (17,786 in total, with 737 deaths reported) and ranked 38th in the world. This trend did not last for long as from mid-October the second wave hit much harder with an exponential increase in the number of infected citizens, thus putting huge pressure on the health system.
By 8 November 2020, the total number of positive diagnoses since the beginning of the epidemic is 39,760 (2% of the total population), the number of cured patients is 23,035, the number of deaths is 1,136 and the number of active cases is 15,589.
The newest measures active as of 3 November is the mandatory wearing of face masks in open and enclosed areas, the restriction of public gatherings of more than 4 people after 21:00 and the requirement of catering facilities to close by 21:00 each day. Social distancing (2 m) and hygiene recommendations remain the same.
The declared state of emergency by the President of R. N. Macedonia was in force from 18 March until 22 June 2020 and gave the government the right to issue decrees with the force of the law. During that period, various government curfews restricted the movement of people and public life. Since May 2020, the government has been conducting a de-confinement plan, which is, however, sporadically accompanied by temporary re-confinement measures.
The rapid spread of the pandemic in early March 2020 interrupted the growth momentum abruptly. Measures to prevent the spread of the virus have slowed economic activity, which in turn has begun to negatively impact the national budget.
The ongoing crisis is expected to:
The decline in GDP for the second quarter of 2020 is 12.7% but more affected is the manufacturing sector with a decline of 29.4%.
Overall, the IMF forecasts that the economy of R.N. Macedonia will shrink by almost 5.5% in 2020 (or by 3.5% according to the forecast of the National Bank of the Republic of R.N. Macedonia).
The unemployment rate was decreasing for almost 14 years and was projected to reach 16.8% this year. However, the rapid spread of the pandemic interrupted the growth momentum. Since the pandemic outbreak (between 29 February and 31 May 2020), 16,778 labour layoffs were registered at Employment Service Agency of R. N. Macedonia (ESA) (affected by Covid-19), resulting in a 16.1% increase of the total number of unemployed in only three months, and affecting more women. Due to labour layoffs and exceptionally low job creation, it is forecasted that unemployment will increase to 20.4% at end of 2020. These trends will inevitably affect the poverty rate, which according to our forecasts, will increase to 21%. Even with government support, companies are facing serious and unprecedented cash flow, supply, and operational problems, and the economy will not be able to reach the pre-crisis level (or the counterfactual scenario without the pandemic and without new government reforms). The cumulative output losses for 2020 and 2021 are estimated at EUR 3.7 billion. Based on more recent projections, the National Bank forecasts a fall in exports of goods and services of 17.1% in real terms.
Export-oriented industries, including the textile sector, are already affected by the Covid-19 pandemic and it is expected to be the hardest hit after the tourism industry in the country. Although at the moment most of the textile factories in the country are continuing with their work, the factories are facing order cancellations predominantly affecting those who sew fashion items.
Macedonian textile production is mainly export-oriented and constitutes the largest part of the national exports of Macedonia, accounting for up to 13% of total exports. About 93% of the production is CM or CMT (Cut, Make & Trim) for foreign markets. Around 37% of employees in the Macedonian manufacturing industry works within the textile industry (36,877 out of 111,559 workers) (Source: Fair Wear Macedonia Country Study 2017)
Apart from cancelled orders from international buyers, the factories that continue with regular production are facing a workforce shortage, leading to delayed delivery of orders. Big financial losses are anticipated in paying wages to the workers while they are absent from work due to different reasons related to the coronavirus (self-isolation, symptoms of the virus, right to stay at home take care of children, etc.). The textile sector faced a contraction of its production capacities during this period and according to the employer’s textile association it is estimated that around 30% of the workers in this sector were staying at home due to the previous government preventive measures. This is reflected in delayed order delivery due to the incapacity of the factories to respond to production orders.
Several garment factories started producing medical masks for local health institutions at their own cost and initiative, trying to help the country to deal with the crisis. Also, some of the factories have contracted export for face masks, but this was only temporary and has not been seen as a sustainable source of income.
The Macedonian production volume saw a serious decline in January – September 2020 compared to the same period in 2019 for the following sectors:
The employment rate for the period of January-June 2020 is decreasing, and the economy was mostly negatively impacted in April, May and June. For example: The manufacture of textiles (-62.5%, -44.9% and -20.6% respectively compared to the previous month); Manufacture of wearing apparel (-44.7%, -35.8% and -23.5% respectively compared to the previous month) and manufacture of leather and related products (-69.9%, -58.9% and -40.6% respectively compared to the previous month).
Employers’ associations in the country already alerted that many factories will face bankruptcy and closures during the inactive period, affecting over approximately 35,000 textile workers.
Several factories have already laid-off workers without providing any notice or severance pay. Delays in payments are being observed in some cases and the sector fears the possible bankruptcy if they do not receive any support. The lesser affected textile factories are those who are producing workwear.
On 27 September 2020, the government announced the launch of the 4th package of measures aimed at mitigating the negative impact of the pandemic on the economy. This package (the estimated cost of which is EUR 470 million), taken as a direct extension of the three previous ones, will bring R.N. Macedonia’s aid up to EUR 1 billion. It consists of 31 measures:
The 4th package of measures also includes support for payment of the salaries of workers in the private sector at the level of 14,500 to 21,776 MKD per employee during the entire fourth quarter of 2020, which would protect a large number of jobs (€70 million allocated to support 250,000 jobs). Companies and employees in the textile, leather and shoe industries will be able to use funds from the key measures of the package, but also from a number of other measures. In addition, state aid for purchasing domestic products was provided for about 280,000 citizens through the payment card system (€27.6 million).
The protocol for preventive measures for all jobs, arising from the plan to reduce restrictive measures to prevent the spread of coronavirus, defines activities to be undertaken in working environments:
The previous governmental support packages have not been implemented consistently by the beneficiaries. To make matters worse, this started during the period of early parliamentary elections and affected the newly-formed technical government, and has raised the interest of the stakeholders and the public on the effect of those measures.
Thus, the possibility for timely and efficient action during the pandemic turned into rapid adoption of some of the decrees with legal force without proper and public debate, as well as an analysis of the manner and form and legal solutions to be achieved by adopting these decrees, measures and recommendations. If some of the decrees with legal force are carefully analysed, i.e. if some of the institutes of labour law are analysed, it will be possible to see their opposition to part of the labour law, but also the ILO conventions and recommendations. The private sector is only given the recommendation to adhere to the adopted measures, conclusions, recommendations, but the recommendations themselves are not mandatory and cannot be legally enforced. Simply, the employees from the public and private sector were not placed in the same position, but the public sector is now in a privileged position, which in itself contradicts the Constitution as the highest body in R.N. Macedonia and contrary to all conventions.
The less-than-ideal situation in the textile, leather and shoe industry before the pandemic was reflected after the declaration of the pandemic in the R.N. Macedonia and it further deteriorated. Government decrees, measures and recommendations were vague, confusing, and it can be said that some of them were contrary to the positive labour legislation. Only a small part of the decrees, measures and recommendations have substantially reached the labour market in labour-intensive and low-wage industries in a positive way for workers. However, in practice in the labour market, especially in the private sector, there have been a number of violations, especially in the release of these vulnerable categories of workers.
Relevant economic relief measures from the previous governmental package:
In practice, in the labour market and especially the private sector, there have been a number of violations especially in the area of wage payment and release of workers, and the vulnerable categories of workers.
Local NGO Glasen Tekstilec together with Helsinki committee for human rights is working directly on the field to protect the garment workers by providing advisory support on what the worker should do if they face job losses or a violation of their labour rights. They are using an intensive media campaign through social media channels to address the support for workers in daily shows, contact programmes etc. Glasen Tekstilec is publicly exposing the names of the garment factories which dismissed workers and submits legal charges against employers to the Labour Inspectorate. Glasen Testilec was quite active in reaching out to workers in textile and garment factories. The following cases were reported for the period 10 March-10 June 2020, and legal advice was provided to protect workers’ rights, especially the ones which were redefined with the government decisions to fight the pandemic:
Various reasons were used by the employers to terminate contracts, such as cases where employees on a part-time contract were terminated prematurely, i.e. before the expiration of the fixed-term employment contract.
The Macedonian Occupational Safety and Health Association (MOSHA) has been closely monitoring the progress of the disease, offering information and resources for dealing with Covid-19 in North Macedonia and Western Balkans, in cooperation with its partners. During the pandemic, MOSHA has prepared and distributed guidelines and recommendations on infection control and prevention to more than 7,000 health workers, together with the Trade Union of Health Workers from Centre Clinic in Skopje and the Institute of Public Health. MOSHA also provided assistance to construction and factory workers for compliance with the Coronavirus Prevention Guide. The Construction, Industry and Engineering Union has 3,800 members who comply with these Guidelines in their day to day activities.
Macedonian Occupational Health and Safety organisation (MOSHA) is actively working on raising awareness on extended measures for worker safety. Many of the activities include translating fighting the coronavirus guidance, or how to act in situation of contracting the coronavirus. MOSHA has issued guidances for production facilities on how to adhere to the recommendations for workers protection. In cooperation with the MOT National Office, it has made the translation and technical editing of the publication ‘Faced with a pandemic: Care for occupational safety and health’. Within the CIVICA Mobilitas programme, MOSHA received an emergency ad hoc grant to work on protection of workers at risk from the crisis and will educate service sector workers about their rights and opportunities.
Macedonian Occupational Safety and Health Association (MOSHA) and PHI Institute of Public Health (IPH) of the Republic of Northern Macedonia established the knowledge centre ‘EPI KOVID-19 Center for Occupational Safety and Health.’
Ministry of Health
Corona virus in MK
Ministry of Labour
Macedonian chamber of doctors
Macedonian occupational safety and health association
Adopted economic measures for support of the business sector
Institute of public health
Employers Association from North Macedonia
Federation of Trade Union SSM
Straightening Social dialogue- EU funded project