IN ARMENIA, GEORGIA, MACEDONIA AND SERBIA DESK RESEARCH MACEDONIA. Prepared by Aleksandra Dukovska in November December 2012, updated September 2012

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1 1 [RURAL TOURISM AS ALTERNATIVE INOCOME FOR MARGINALIZED COMMUNITIES IN ARMENIA, GEORGIA, MACEDONIA AND SERBIA DESK RESEARCH MACEDONIA] Prepared by Aleksandra Dukovska in November December 2012, updated September 2012 Republic of Macedonia is geographically situated on Balkan Peninsula and in the heart of sought central Europe and borders with Greece to the sought, Bulgaria to the east, Serbia and Kosovo to the north. Map of Republic of Macedonia It is landlocked country and according to the last census data of 2002 it has inhabitants. It is multiethnic country with Macedonians, Albanians, Turks, Roma, Vlach, Serbs, Bosnians and others who live together over the years. The country is an 80% mountain and the highest point is at mountain Korab with the peak of 2,764 meters. The USA federal department that works on representing American foreign policy abroad defines important categories for different countries around the globe. Department of State economic description in the Background notes explains key data on Macedonia s economy profile. Macedonia is a small economy with a gross domestic product (GDP) of about $9.8 billion). It is an open economy, highly integrated into international trade. The services sector is becoming increasingly important, accounting for more than 45% of GDP creation, presents State Department (State Department Document (2011, November ) Accordingly, the industrial sector, which was dominant in the early transition years, is now secondary, although it remains the 1 RURAL TOURISM AS ALTERNATIVE INOCOME FOR MARGINALIZED COMMUNITIES IN ARMENIA, GEORGIA, MACEDONIA AND SERBIA DESK RESEARCH MACEDONIA

2 leading exporting sector. Agriculture is gradually losing significance in terms of GDP creation, says State Department background notes report on Macedonia, published in November The official statistic number of the unemployment dropped on 31,3% in the second quarter of 2011, but remained of the highest in Europe. The State Department Background note on Macedonia in November 2011 underlines many people work in the gray economy, and many experts estimate Macedonia s actual unemployment as being somewhere between 20%-25%. Although, the data on unemployment in the country presented on the online site of financial magazine Global Finance (GLOBAL FINANCE MEDIA INC, 2012), shows 31,2% of unemployment in 2011 with estimation the number will stay the same in According to the basic economic data of the National Bank of the Republic of Macedonia ( (2012, August 3), that has central role in creating monetary policy, the percentage of unemployment increased in the first quarter of 2012 to 31,6 percentage compared to 31,4 percentage in Latest data on unemployment published by the State Statistical Office ( (2012, September 17) are for the second quarter of 2012 and shows that Republic of Macedonia numbered persons, of which or 68.8% were employed, while or 31.2% were unemployed persons. Despite the slight differences in sources of unemployment data in the country, international organizations work to research and offer solution to challenges for labor market in the country. World Bank is an international organization that unities International Bank for Reconstruction and Development and International Development Association and has a mission to fight poverty in the middle income and world s poorest countries. In the International Bank for Reconstruction and Development and International Financial Corporation report for Macedonia named Country Partnership Strategy prepared for World Bank and published

3 in September 2010, noticed that reducing the stubbornly high unemployment and creating employment through analysis of structural problems. According to the report of International Bank for Reconstruction and Development and International Finance Cooperation, Macedonia has highest rate of unemployment percentage, compared with unemployment of 17,4% in Serbia, 29% in Bosnia and Herzegovina and 12,5% in Albania ( IBRD 2010, p. 10) Than, the report discusses the level of poverty in the country. The Bank s Poverty Analysis revealed that poverty in the nation s commercial and political capital, Skopje, fell by nearly half during the first half of the decade while stagnating or increasingly elsewhere. Overall, the poverty rate varied from around 10 percent in the sought west region to more than 30 percent in the northwest region. (IBRD, 2010, p. 13) Beside the broader economic and political issues that can influence the development of the country, the World Bank Report of 2010 identifies other two risks for Macedonia and those are: failure to create jobs could undermine Government support and increase social tensions and the vulnerability of the country to the natural disasters, including earthquakes, drought and floods. Considering, the broader scope of the Rural development project as alternative income for marginalized communities for Armenia, Georgia, Macedonia and Serbia influence of natural condition and their impact is important to climate change and its effects to environment. World Bank study Adapting to Climate Change in Eastern and Central Europe notifies for Macedonia that by 2050 will be exposed to an average 1.9 C degree increase in mean annual temperature, as 5 percent mean annual drop in precipitation, a riskier agricultural environment, and exposure to new pests and crop diseases. (IBRD, 2010, p. 15)

4 Agricultural land in Macedonia In those terms, World Bank suggests developing a long-term strategy to address basic questions concerning the pressing environmental and economic importance of agriculture - which accounts to 18 percent of employment and 12 percentage of GDP. Considering that, World Bank Agriculture Strengthening and Assessment Project concludes agriculture sector plays an important role in the country economy, trade and the rural economy, with the country s nearly half the population living in rural areas. Around half of the land in the country, or 1.16 million hectares (ha) is agricultural. Data from the World Bank project shows about 49% of the total land area is agricultural land, split evenly between cultivable land and pastures. Of the cultivated land, about 80% is used by approximately 180,000 private family farms. First, development of the agricultural sector in the country should lead in better skills to farmers, people who live in rural area, agro-food processors, state institutions to use the possibilities of EU IPARD program for agriculture. And second, preparing the strategies and concrete projects to help people who lives in rural area to build and start developing self-supported rural tourism projects. To summarize, the open challenges are important to address to basic question, as defined in the World Bank Country Policy Strategy: which agricultural systems, including crop, and livestock varieties, production technologies, irrigation systems and farmers skills will be

5 most resilient in a changing climate and which products will be most competitive in the European Union market? IS RURAL TOURISM CHANCE FOR LOCAL OPPORTUNITIES? Developing of rural tourism can add value to the ongoing reforms of the agricultural sector in Macedonia in terms of economic strengthening of population, protection of the environment, nature, live spices and attract domestic and foreign visitors. The four countries targeted by the project are well renowned for their rich history; geography, abundant natural resources and diverse cultural heritage are reflected in a greatly appreciated warm hospitality. However, the rural economies of these countries are facing a myriad of challenges to develop more competitive and sustainable societies. All these countries are considered to be predominantly rural considering the population densities per area. Rural development in the past has been focused mostly on improving agricultural performance, increasing competitiveness, consolidating land and improving market access and orientation. However, it has become obvious that there is a necessity to balance agricultural production with other economic activities, environmental protection, and social development. Integration of alternative rural income generating activities with agricultural production and sustainable use of resources is an essential precondition for the diversification of the rural economy in a socially, economically and environmentally sustainable way. Development of rural tourism for marginalized communities is one innovative model to improve the quality of life while improving social justice, eradicating poverty and fighting environmental degradation. Promotion of rural tourism reconciles the conflicts between the communities of the hosting areas and tourists and the tourism industry. In short, it minimizes environmental and cultural damage, promotes conservation of cultural heritage, optimizes visitor

6 satisfaction, maximizes long-term economic growth, and balances tourism growth potential and the conservation needs of the region. The project is important both nationally and regionally and will involve a range of diverse stakeholders from local community people or small businesses (guesthouses, Bed and Breakfast providers, etc.) who would host tourists, local town leaders to governmental, agricultural and environmental groups within countries and regions. Development organizations, academic institutions, national tourism associations, international experts, and others would also be contacted during the project for their involvement and help. This project took place in rural, impoverished communities in Armenia, Georgia, Macedonia, and Serbia. It is envisioned as having both a localized impact on the respective communities, while also promoting regional and cross-border cooperation in the West Balkans and South Caucasus to tackle shared problems of rural economic poverty, cultural preservation and ecological health. The four project countries are facing many challenges to developing more successful and competitive economies, while simultaneously building more sustainable communities. Economic opportunities in these rural communities are scarce, leading many people to leave for cities for better job opportunities, which threatens the health and viability of the rural areas, and leads to a loss of cultural vitality and responsible land stewardship. Rural tourism can help diversify the local economies, while also preserving the way of life that makes these areas so important culturally and ecologically. The local impact of the project is to promote possible home stays for tourists with local families and farms, and to add value to their products that they can feed or sell to tourists (cheese making, dried fruits, herbs, flowers, etc.). Despite the fact that rural tourism is a new activity in Macedonia, over time it could grow into important facet of development of tourism in the country. According to the 2010 World Bank data, 32% of the population in Macedonia lives in rural area. Rural area consist 90% of Macedonia territory, has 1,758 rural settlements, out of which 10%

7 are abundant and 50% are with bellow 150 inhabitants, accentuate Rural Development Policy presentation, prepared by the Ministry of Agriculture, forestry and water economy. The rural areas are mostly poorly inhabited because of the tendency of migration of rural population to urban parts. There is a possibility around 141 rural settlements to loose their citizens due to the fact the population is very old and there are no newborns in those villages. Negative demographics tendencies in the rural areas are underlined in the research publication Macedonia through numbers 2010, prepared (Novkovska, 2010, p. 12) by the State Statistical Office. The publication stressed out that population is highly concentrated in a relative small number of villages located in the western and northeastern part of the country. Any groups with reduced access to social status, political influence, economic advancement, educational advancement, health care, information or any of the goods, services, and powers of a society can be considered marginalized according to the definition from the Cornell University. (Cornell University College of Agriculture and Life Science, 2010) In general, perception for the marginalized in Macedonia is connected with women and members of ethnic communities, especially members of Roma community. Thus, marginalization is related to social exclusion or the level on which everyone in the society can participate in it. Baseline study on poverty and social exclusion in the Republic of Macedonia prepared by the Ministry of labor and social policy and financed by the Austrian Development Cooperation defines social exclusion as a lack of possibilities to participate in the economic, cultural, social life and results into distance from the usual activities in the society. (Baseline study on poverty and social exclusion in the Republic of Macedonia, (2011, March), p. 8 The study prepared for Ministry of labor was conducted in eight municipalities in Macedonia, among them four was pre-dominantly rural Lipkovo, Caska, Studenicani and Konce. It recognizes that tourism can influence on improvement of the employment and economic situations in those municipalities.

8 For example, Konce has been considered as a mid sized rural area in the country with dominant social problems that include poverty and unemployment. Although, according to this study, Konce perspectives are that it is clean and environmentally healthy municipality with resources and potentials for healthy food production and it also disposes of vast forest and water resources. (Baseline study on poverty and social exclusion in the Republic of Macedonia, (2011, March) p. 149 In addition, information of State Statistical Office shows that relative poverty in the country is connected with the place of residence. The data from 2010 shows that 41% of those considered to belong to the people who live in relative poverty live in rural area in Macedonia. (State Statistical Office. (2011, July 11) The ruling government acknowledges the potential of the rural tourism, although says that with better organization and presentation this sector could lead in future protection of the natural environment and placing the villages in the regional and world tourism map. The Government s prepared national strategy for development of tourism underlines that Macedonia has long history nonetheless it is relatively unknown tourism destination. Flannery, J. (2009). National Strategy on Tourism , page 15) Comparing to other countries in Europe, Macedonia lacks the specific law on rural tourism, although this part of the economy of the country is regulated with the broader law on tourism from There are no specific data on the percentage of rural tourism in the domestic economy, especially when compered to other places in the world. Although written and prepared decades ago in 1994, Organization for Economic Cooperation and Development s Tourism Strategies and Rural Development defines importance of this economy sector. Growth in rural tourism is difficult to quantify, because few countries collect statistics in a way which separates purely rural from other forms of tourism, although, most national tourism administration agree that is a growth sector, explains OECD

9 document on rural development of 1994.(Organization for Economic Cooperation and Development, 1994, p.8) Field of wine grapes When Macedonia is in question it is not easy to distinguish the level of percentage or participation of rural tourism in the country economy. Rural tourism is a relatively new term in Republic of Macedonia s tourism terminology and as a part of the tourism product, has no significant contribution into gross domestic product, underlines authors of private consulting company Target Communication in the National Strategy on rural tourism prepared last year in the period of September - December 2011 for the Ministry of economy. (Ministry of Economy , p. 5). In general, participation of tourism in the economy is still in the range of cardinal numbers.

10 The Government of Republic of Macedonia prepared national strategy on tourism uses data from National Bank that shows 3,1 % of the country s GDP in 2008 came from tourism. The predictions are that in 2013 tourism will reach 3,4% of the country s GDP. (Flannery, J. (2009). p.14 & 15) View on Skopska Crna Gora Mounatin DEFINITION OF RURAL TOURISIM Is there a common definition on rural tourism? Various authors through research materials give different explanation on the essence of rural tourism. In general, rural tourism includes holidays on farms, eco-tourism, camping, educational travel and heritage tourism. A project from UK Department for International Development focuses on the pro-poor tourism development as a possibilities of the countries in Africa and Eastern Europe to thrive toward more liberalized economy. This project underlines that in Eastern Europe, the emphasis has been more on tourism as a tool for rural development following agricultural collapse. (Holland, Burian, Dixey, 2003, p.39)

11 Considering those concepts of the rural tourism, although this is a relatively new activity in the country, it can offer opportunities for affirmation of the cultural and natural heritage and it can gradually introduce the economic improvement in the rural area of the country and their revitalization. In the country, several projects are developed to scan, research and find the possibilities for rural tourism. International organizations have been giving financial support for development of rural tourism in the country and they were the first initiators to begin such activities in the rural areas. One example of already developed rural tourism is the village of Brajcino, located in the Prespa region, close to the border with Greece. Swiss agency Pro-Natura organized a pilot project in the village helping to the local population to develop the idea of rural tourism by giving the necessary training, helping in organization of the hiking and tracking trails, organization of several village houses as guest facilities in traditional room set and offering the home made food. Despite this example, there are several regions in Macedonia that could be developed and promoted as example for local economy growth, opening of new job places and places for implementation of United Nations Millennium Development goals to reduce poverty and to promote opening of new jobs for population in the rural area.

12 Macedonia has mountains, gorges, caves, rivers, lakes, springs, forests, national parks, monuments of nature, landscapes, towers, churches, monasteries and diversity in folklore - customs, songs, dances, costumes. This region could benefit of the rural tourism development. Berovo region and its promotion because of production in white cheese, beautiful mountain area, possibilities for development of mountain tourism, collecting and production of honey and honey products and farming; Ovce Pole region with cultivation of sunflower and cereal grains; Kavadarci Negotino region with the vineyards and ancient mine Alshar; Mavrovo region with its potentialities to use as movie and TV series set locations; Gevgelija region with its potentialities as cross-border point with neighboring Greece and cultivation of traditional agriculture products; Western Part of Republic of Macedonia as a region that is mixture of domestic and influence of diaspora, ethnic customs and tradition, mixture of different ethnicities and their culture and food. According to the National Strategy for tourism, the potential places for development of rural tourism are: Pehcevo, Berovo, Koleshino, Bansko, Mokrino, Smolare, Vevcani and Galicnik. Interesting example can be production of white and yellow cheese in

13 Galicnik, the village that is depopulated and live its life while summer season. Further, other potential villages that could be considered as possible location to develop rural tourism are villages near towns of Struga and Ohrid, not only because of the proximity of the Ohrid Lake, but although because of the nature in their surroundings. Another example is the region around the village of Zrnovci. A private consulting company EPICentar (EPICentar International. (2007) has vision to contribute to the economic prosperity of the region identified need for tourism development in the municipalities of Zrnovci and Cesinovo- Oblesevo. They supported 20 family business in the creation of the basic tourism services via establishment of accommodation, organizing the women in the village into a souvenir group, establish the tourism guides team, located 27 boards and signs throughout the village and organize first tourism cooperative. This municipality has people in three villages of which the majority has finished elementary school. The municipality has several natural attractions such as: unpolluted river Zrnovka, small cave called Babina dupka, drinking fountain, a place for paragliding, California trout fish, river crab, thermal bath close to the village, historic cultural sites from different times, among them is Vinica citadel with Vinica terracotta. Rural tourism could foster the cross-border cooperation between Macedonia and other neighboring countries. Although supportive toward that kind of cooperation, National Strategy admits that direct competition to Macedonia came from Albania and Serbia. Nevertheless, fostering of cross-border cooperation is one of the important facets of the IPARD program and the competiveness could be transform to the advantage via using of positive examples of neighboring countries. A long tradition in Serbia that dates from the 70s in the development of the concept of rural tourism could be of benefit to Macedonia. In general, every country experience in the development of the rural tourism can give various ideas to find several interesting

14 focuses and accommodate to the local environment. ( Village of Zrnovci One example as possible stratification of the target groups interested in rural tourism is the tourist target groups from the EpiCentar consultancy company strategy on the village of Zrnovci. They could be foreign or domestic tourist such as: families with children from urban places, young people, couples, religious tourists, regional visitors from the neighboring countries, members of the International community in the country, relatives and friends of Peace Corps volunteers and young people. According to the National Strategy for tourism , the advantages for Macedonia in rural tourism are: hospitality of its citizens, good geographic location, rich cultural heritage and good infrastructure. Some of the weaknesses, according to the strategy are lack of the public-private partnership, bad condition in the cultural and natural heritage sites. The possibilities for the country are that it is relatively unknown tourism destination, increase in the interest for rural and in

15 general for individual tourism, specific village architecture, various customs in the region of the country. Pollution of the environment, possible escalation of occasional manifestation of ethnic intolerance could influence on the possibilities for broader development of rural tourism in the whole territory of the country. Effects on future rural tourism development can have possibilities of destructive naturally or human caused fires in the mountain and rural areas, nevertheless they occur in the country or around the border areas with neighboring countries. ( dodavam za stranskite turisiti) Nature, services on the roads and ecological value OTHER COUNTRIES EXAMPLES IN RURAL TOURISM Every country has its own specific history and customs and those should be preserved and offered to the potential visitors. For example, the components of rural tourism in Ukraine are: traditional technique for bread production, folk art, creation of souvenirs, decoration of the Eastern eggs, and reconstruction of pottery. Romania helped development of rural tourism with the special law and 10 years tax deduction for the international and other agro-tourism firms. Bosnia and Herzegovina has the King trail in Jajce and created the school for traditional handy craft. Hungary has positive examples from Eastern Europe countries based on a combination of successful national tourism industry, a serious policy commitment to rural tourism, attractive rural setting and attracting of foreign tourists. Austria has been developing rural tourism sin 1964 in order to decrease the rural area depopulation. Nowadays these activities include various cultural services, leisure activities, horse - riding, production of bread, weaving. Farmers in addition to high quality food and lodging offer them. As example of project developed with EU funds

16 is Alpine Pearls - brand new name for 21 municipalities in the Alps that connect villages in the countries that share Alps and promote ecological way of transportation in those places. This is highly developed project that could be example for future development of mountain border regions of the countries in the project. ( ) Another example is Nepal, where the government launched in 2011 rural poverty alleviation program to develop sustainable rural tourism. A Finish NGO promotes 72 km trail winding through six towns. Majority of population in Nepal are women and usually they run the tea houses and trackers lodges (Trekking Trails Lead Nepal Women to Empowerment 2011, July 22) Reflecting other countries examples, future development of rural tourism in Macedonia should recognize and integrate already existing examples of rural tourism, develop new rural tourism sites through cooperation on national and local level and gradually to establish recognizable rural tourism concept. References: State Department Documents / FIND. (2011, November). Background Notes : Macedonia Retrieved from International Bank for Reconstruction and Development and International Finance Cooperation. (2010, September). The World Bank's Strategy in FYR of Macedonia: Retrieved December 18, 2011, from page 1

17 Ibid, page 10 Ibid, page 13 Ibid, page 15 The World Bank Group. (2010, September). FYR Macedonia: Agriculture Strengthening and Accession Project. Retrieved December 15, 2011, from : ONIAEXTN/0,,contentMDK: ~menuPK: ~pagePK: ~piPK: ~theSitePK:304473,00.html BASELINE STUDY ON POVERTY AND SOCIAL EXCLUSION IN THE REPUBLIC OF MACEDONIA, March 2011 (2011, March). Retrieved December 4, 2011, p. 8 ( GLOBAL FINANCE MEDIA INC. (n.d.). Macedonia Country Report: GDP data and GDP forecasts; economic, financial and trade information; the best banks in Macedonia; country and population overview Read more: In Global Finance. Retrieved September 16, 2012, from ONIAEXTN/0,,contentMDK: ~ (2012, August 3). Basic Economic Data. In National Bank of the Republic of Macedonia. Retrieved September 17, 2012, from OECD. (1994). Tourism Strategies and Rural Development. Paris, France: Author. Retrieved November 2, (2012, September 17). Labour Market_NewsRelease. In Republic of Macedonia, State Statistical Office. Retrieved September 17, 2012, from Course Proposal Instruction. (2010). In Cornell University College of Agriculture and Life Science. Retrieved November 23, 2011, from (Jenny Holand, 2003) Flannery, J. (2009). National Strategy on Tourism Governement of Republic of Macedonia, Ministry of Economy. Skopje: Ministry of Economy, Republic of Macedonia, page 15 Novkovska, R. B. (2010). Macedonia through nubers State Statistical Office. Skopje: State Statistical Office., page 12

18 Republic of Macedonia, State Statistical Office. (2011, July 11). Relative poverty in (S. Nolev, Ed.) Retrieved November 20, 2011, from EPICentar International. (2007). Strategy for development of rural tourism in Municipality of Zrnovci, Republic of Macedonia. Skopje: Ljubomir Dimovski, director of EPICentar International and Blagoj Nikolov, mayer of Zrnovic municipality in Bouckova, B. (2008, March). Definition of Agritourism. Retrieved November 17, 2011, from Docstoc.com: AGRITOURISM (2011, July 22). Trekking Trails Lead Nepal Women to Empowerment. Global Information Network, Retrieved from National Geographic (Publisher). (2011). Map. The Balkans [Map]. Retrieved (Republic of Macedonia, State Statistical Office, 2011)from Austria. (n.d.). In Rural Tourism International Training Network. Retrieved November 23, 2011, from Serbia. (n.d.). In Rural Tourism International Training Network. Retrieved November 23, 2011, from Dukovska, A. (2005, May). Brajcino - Residency Of God. Weekly News Magazine Tea. National Geographic Traveler. (2011). The Western Balkans Land of Discovery. A National Geographic Traveler & USAID Special Suplement, p. 47. National Geographic Society. (2011, September 28). Conservation Beyond Borders: Balkans 2011 Academic Expedition by Todd Walters. In Retrieved October 10, 2011, from NPR. (2011, October 2). In npr.org. Retrieved December 24, 2011, from In Minn. and Wis., signs more young people see opportunity in farming By DINESH RAMDE, Associated Press (2011, December 21). In Retrieved December 21, 2011, from

19 Young farmers keep tradition in the villages by Risto Tasev (2011, November 6). In Retrieved November 7, 2011, from EB19