The decline of Russia’s economic presence in North Macedonia

Hopes that the market of Russia and the Eurasian Union will develop into a good opportunity for Macedonian companies seem to be fading. The Russian Federation’s aggression in Ukraine, which began in February 2022, led to unprecedented sanctions against Moscow, which severely affected economic relations between the two countries. Over 150 members of the Skopje-based Macedonian-Russian Chamber of Commerce might not have expected such a trend of decline in Russia’s economic presence in the country.

Official data shows that the volume of trade with the Russian Federation last year amounted to just over 310 million US dollars, which is around 37 million dollars less than in 2022. Exports by Macedonian companies fell by 11.3 percent and reached a value of around 48 million US dollars, while imports from this country fell by almost 40 percent and reached 265.3 million US dollars.
The year 2024 appears to be even weaker. Within the first quarter, the trade turnover amounts to just under 80 million US dollars, the lowest value in the last decade of economic cooperation between North Macedonia and the Russian Federation.

Surprisingly, the highest intensity in trade exchange is reached in 2022, at the beginning of which Russia committed the most brutal aggression against neighboring Ukraine. North Macedonia imported goods worth almost 440 million US dollars from Russia this year and exported products worth almost 60 million US dollars. In the previous year, the average import value was just under 150 million US dollars and the export value was just under 50 million US dollars.
Characteristic of this economic cooperation with the Russian Federation is the high trade deficit, which means that the country buys more Russian products than it sells on the Russian market. This large deficit has long been an indication of Russia’s hypocritical policy towards North Macedonia, but also towards other countries in the region with which the country shares common cultural and religious values: On the one hand, it acts as a great friend, but on the other, it merely uses them as a market for placing its products.

A decline in Russian economic presence in the country can also be observed in direct investment. In the last two years, there has been a withdrawal of investment from the Russian Federation amounting to almost 6.5 million dollars, reducing the total amount of direct investment to 22.4 million dollars. This puts Russia in 13th place on the list of countries with the largest investments in North Macedonia.

In contrast to the Russian Federation, only five EU countries (Germany, Greece, Hungary, Bulgaria and the Netherlands) have a total of 2.6 billion direct investments in North Macedonia. Turkey has climbed to the top of the list of the country’s largest investors, followed by Greece, Germany, the Netherlands, the UK, Bulgaria, Hungary, Switzerland and the USA.

Regardless of these economic indicators, Russia continues to be present in the public sphere through its influence on education, culture and religion. Russia’s largest investment in North Macedonia is Lukoil, a company that continues to award scholarships to the best students enrolled in Russian studies at the country’s universities. Moscow’s public diplomatic and cultural foundations – such as “Ruski Mir”, “Rossotrudnichestvo” and “The Gorchakov Fund” – are also active in allocating funds and projects to non-governmental organizations and individuals wishing to create a positive image in the Russian Federation, to participate in conferences and forums organized within the BRICS countries or to win scholarships to study at Russian universities.

The presence in social and online media continues to be significant, as does the use of fake news, propaganda and disinformation. All these tactics or instruments of hybrid war have led to results in terms of political representation in the institutions of North Macedonia. The “Levica” party, which has close ties to Russia, won six deputies in the elections in May this year, which means an increase of four more seats in parliament to 120 seats. The Serbian Democratic Party (SDS), which also has close ties to Moscow, is represented in the government for the first time with a deputy prime minister.
The Russian Federation continues to increase its influence in North Macedonia in inverse proportion to its economic presence. Multi-layered and multi-dimensional communication enables Moscow to gain great influence with little effort.