Macedonia Transformed Through Broadband

In a few short years, a nationwide wireless project has brought broadband Internet access to almost 95 percent of the residents of Macedonia with the results that the country is moving from a conflict-torn region to an economy harnessing information technology.  

by / November 9, 2007
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As Milivoje Gorgevic (Misko to his friends), executive producer and co-founder of the FX3X, a Macedonia-based digital animation company, came out of a late-evening meeting, the only thing he wanted was to go home for some well-earned rest. The day was particularly grueling for him and he was tired. But he had to rush to his office to finalize plans for roping in yet another local school to make it a part of his company's education program.

"We are growing very fast," said Misko, "and we need more skilled people in our company and the schools in Macedonia are our biggest source."

FX3X runs education programs in 80 secondary schools in Macedonia on the basics of animation and uses those schools for developing the talent pool it needs to expand. Back in 1997, when Misko and his friend Kristijan Danilovski started their visual effects and 3D animation venture in the Balkans, they had to be content serving just the local markets. "Although we wanted to serve the global markets, there was hardly any infrastructure and not enough talent to support our ideas," says Misko "But thanks to USAID and the Macedonia Connect (MK) project, FX3X has been growing at over a hundred percent each year for the last two years. The wireless infrastructure that MK incorporates has not only given us the opportunity to build a talent pool in Macedonia but also an opportunity to tap the global markets."

"Two years ago we hardly had any foreign clients," added Misko. "Today with MK, big data transfers are not a problem any more. We have reached a point where we derive just 10 percent of our total revenues from local clients while the balance comes from global clients."

Indeed, it is hard to imagine that a country -- formerly part of Yugoslavia -- which until about six years back was an ethnic trouble spot torn by the conflict between government and ethnic Albanian rebels. Today, it easily serves as a role model for other developing states as the first wireless country. But courtesy the nationwide wireless project MK, that has brought broadband Internet access to almost 95 percent of the country's residents, Macedonia can now look forward to moving from a conflict-torn region to an economy moving forward on information, communication and technology (ICT).

Funded partly by the U.S. Agency for International Development (USAID) and partly by the Macedonian Government, the $5 million (shared equally by the two), Macedonia Connects is a three-year program which is providing broadband Internet connectivity to almost 545 elementary and secondary schools, research institutes, universities and dorms throughout the Republic of Macedonia.

Initially it was conceived as an education project but it was soon realized that the project could also achieve other strategic objectives like economic development and democracy. The network was soon extended to almost to the whole of Macedonia, reaching rural communities scattered throughout the rugged mountainous countryside to become the backbone for a national wireless system.

"The impact of the project has been enormous as Macedonia now enjoys the benefits that a broadband wireless network generally brings to a developing country," says Glenn Strachan, a former USAID contractor who directed the MK activity and is now an independent contractor. But besides the fact that MK increased Internet penetration dramatically (from 4 percent to almost 33 percent), which has enabled most residents of Macedonia -- who migrate from their small villages and move to the capital city of Skopje to find employment -- to start a business outside Skopje and communicate with new clients around the world (like Misko, many apparel companies, and even lamb farmers, who for the first time, have found markets outside Macedonia by opening a website) MK stands out from similar other projects.

For one, says Strachan, MK has ushered in competition in a monopolistic telecom environment

that has not only created telecom laws for the first time but has also drastically reduced cost of Internet and telecom access in the country. According to Strachan, when the project began implementation in 2004 there was just one state-owned telecom operator that charged about $150 per month for a broadband account "while the average salary in Macedonia was $450."

Now, the cost of a basic broadband connection has come down to about $10 while the new telecom law has allowed private telecom operators to compete freely in Macedonia. "In fact On.Net, the local telecom operator that worked with USAID to set up the network has even emerged as one of the largest telcos there," says Strachan. "The project could not have been successful without changes in the telecom regulatory environment."

MK has also shown that private-public partnerships can work effectively. "One reason why Internet access was suffering in Macedonia was that there was neither capital nor initiative from the government. This project worked because USAID provided the critical capital, which was key to establishing a Public-Private-partnership solution. This ultimately brought benefit not only to the schools, but also the general public at large who benefited from the lowered costs for Internet access," Strachan says.

Nevertheless the biggest achievement of MK is perhaps the fact that the Macedonian government now realizes that a broadband network is crucial for the country's development. Funding from the USAID, which is still running the network, is ending this year. However, having seen the results, the government has already stated that it is "committed to the network and will continue to provide free Internet for all Macedonian schools."

"Although the details of the future funding are still being worked out," said Antonio Atanasov, advisor to the Ministry for Information Society, Macedonia, "what has been decided already is that from 2008 the project will run by Ministry of Education and Science with financial support from the government of the Republic of Macedonia."

Meanwhile to increase the efficiency and transparency of public sector management in the country, the government has already implemented a slew of e-government initiatives around the network that includes online applications for government jobs, electronic health registers, an electronic system for tax filing, electronic system for public procurement, automated allocation of cargo transport licenses, and most importantly, a national e-budgeting process "that will provide a modern, efficient electronic tool for preparation of the national budget and the monitoring of its execution."

Indrajit Basu is the international correspondent for Government Technology's Digital Communities.