P R I L o Z I Contributions Xlvii 1
P R I L o Z I Contributions Xlvii 1
P R I L o Z I Contributions Xlvii 1
PRILOZI
CONTRIBUTIONS
XLVII 1
SKOPJE – SKOPJE
2016
U r e d u v a ~ k i o d b o r:
akad. Vera Bitrakova Grozdanova (pretsedatel)
akad. Vlado Kambovski
dop. чlen Izet Zekiri
Abdylmenaf BEXHETI
Shpresa ALIJA
Abstract
The Pension system as part of the general financial and economic sys-
tem as well as the most important segment of the socio – economic
aspects, continues to be responsible for providing financial resources
and social security for current and future pensioners, that is, the
mobilization of funds and providing pensions for people who fulfill the
legal condition for retirement. The financial stability of the pension sys-
tem depends on a number of factors (demographic and economic) – fac-
tors, that rarely and with difficulties and can reach the long-term
consolidation and financial sustainability of pension system, therefore
undertaking reforms towards improving the pension system remains
inevitable.
Pension reforms, i.e. the improvement of the pension system had to do
mainly with: security in the realization of the rights to pension and disa-
bility insurance, short and long term security of solvency for pension
and disability insurance, maximum insurance and minimal risk, assu-
ring the right to a pension for all generations, strengthening public
confidence, as well as stimulating the development of capital markets
and encourage economic growth. Implementation of the new system
pension (the three-pillar system), brought additional costs, otherwise
known as transition costs. Although the transition costs or transfor-
mation costs, are of temporary character, and by passing time will end,
even so, for the Pension and Disability Insurance Funds, financially,
this burden represents a critical condition, to the fact that to cover these
costs there is need for additional revenue, which the Fund can not pro-
vide because the parameters upon which the reforms are supported, are
6 Abdylmenaf Bexheti, Shpresa Alija
1. Intruduction
This study has to do precisely with the pension system as part of
the overall financial and economic system as well as the most important
segment of the socio-economic life. As we know, the pension system,
since its establishment until today, has operated and continues to operate
under the principle of solidarity between generations – a system, this
which has been established in the nineteenth century by the famous Ger-
man chancellor Otto von Bizmark. Also, this system was initially consi-
dered successful and without problems during the implementation, beca-
use, then, the average life expectancy was about 55 years and the ratio of
the employed – pensioner was 7 to 1 (a ratio, which deeply will be elabo-
rated in the following sections). However, the later, as a result of changes
in the demographic structure (which began in the twentieth century), some
difficulties emerged, especially in the implementation of the principle of
solidarity between generations (the latter stems from the increase in life
expectancy and by reducing the ratio employed – pensioner). Therefore,
demographics – structural changes (which directly define the flow of
income – pension funds), caused deterioration in the pension systems,
creating debts in pension funds, and the need for improvements, i.e re-
forms in pension systems – around the world.
2. Literature review
The reforms in the pension system (which was initially imple-
mented in developed countries), mainly aimed at improving the financial
performance of the pension system, reducing the pressure of aging popu-
lation, changing the system based on the principle of solidarity of gene-
rations, and the introduction of the combined system – by state and pri-
vate funds. Therefore, taking the example of the reforms applied in the
industrial developed countries, to continue with those at countries in tran-
sition, we see that they were largely stimulated by initiatives for consoli-
dation of the pension system and providing funds for payment of pen-
sions, namely insuring long-term financial stability. It can be said that
from 1980 onwards, this period represented a decade of pension reforms
in developed industrial countries, especially countries in transition. For
example, in the UK, from the 1970, and onwards, it operates the pension
system of two pillars, i.e. the first pillar that provides basic pension and
the second pillar that provides mandatory insurance of additional pension.
Further, in Japan the pension system has been functioning since
1924, and the recent reforms have been made in 1965 and 1973. Howe-
ver, in Japan besides the state pension insurance, it is quite well deve-
loped the private pension system, i.e. private pension funds. In Sweden,
the pension reforms have started since 1996, but, the reforms that brought
significant changes regarding to the functioning of the pension system
were made on 1998 (before implementation of reforms, in Sweden, the
pension system consisted of: the state pension insurance and from the
additional pension insurance i.e. mandatory).
8 Abdylmenaf Bexheti, Shpresa Alija
3. Methodology
Taking in consideration the formulated goals, the objective of the
study and the research questions around which will rotate the entire
study, hence, there is a need to define a suitable methodological frame-
work. In this context, first, symmetrically there are analyzed the features
and specifications of compulsory pension and voluntary insurance – where
in this regard, a particular importance is given to the method of structu-
ral – functional analysis (the method of structural – functional analysis,
as part of the research is based on official documents and reports, scienti-
fic papers, articles, laws and legal acts related with the essential changes
to the pension system and creating a new system of RM). Further, the use
of the comparative method is significantly present in this study – a method,
which analyzes the situation of the pension system before and after the
reform, respectively scanning the situation in the past and today, to con-
clude with statistical method, which identifies the actual problems that
the pension and disability fund is facing.
Consolidation and sustainability… 9
Table 1: The number of pension beneficiaries and the number of employed people
(1991–2015)
The number The number of The number of those The number
Years of those who exploit who exploit pensions, up of employees to
employees pensions to 1000 employees 1 pensioner
1991 534.887 180.749 338 3.0
1992 531.083 193.294 364 2.7
1993 503.010 210.537 418 2.4
1994 468.632 216.834 463 2.2
1995 427.658 219.307 513 2.0
1996 403.820 222.727 552 1.8
1997 381.723 227.099 596 1.7
1998 370.869 232.216 626 1.6
1999 374.025 235.839 631 1.6
2000 367.162 241.221 657 1.5
2001 351.009 247.200 704 1.4
2002 332.728 249.421 750 1.3
2003 321.105 254.262 775 1.3
2004 348.212 260.075 747 1.3
2005 348.500 265.152 761 1.3
2006 394.882 269.681 714 1.46
2007 424.338 272.386 693 1.55
2008 451.491 273.281 654 1.65
2009 475.780 273.977 576 1.74
2010 466.280 273.751 587 1.70
2011 489.608 280.891 567 1.74
2012 507.061 285.411 557 1.8
2013 526.909 291.821 549 1.8
2014 536.191 296.215 548 1.8
2015 558.821 299.640 536 1.9
Source: Annual reports for the relevant years – Fund of Pension and Disability Insurance
Table 2: The distribution of membership on the mandatory pension Fund according to their
status - NLB New Pension Fund (2006–2015)
Mandatory
Years Voluntary By Disseminate Temporarily Total Total
contract disseminate (3+4+5) (2+6)
31.12.2006 27.638 22.205 8.437 3.127 33.769 61.407
31.12.2007 28.998 28.682 14.756 4.471 47.909 76.907
31.12.2008 30.240 40.147 20.110 3.169 63.426 93.666
31.12.2009 30.784 47.988 27.395 5.230 80.613 111.397
31.12.2010 31.350 57.945 32.627 4.161 94.733 126.083
31.12.2011 31.801 67.901 36.478 4.039 108.418 140.219
31.12.2012 32.080 76.570 39.705 4.903 121.178 153.258
31.12.2013 32.050 81.369 45.213 7.697 134.279 166.329
31.12.2014 32.009 81.469 56.181 8.134 145.784 177.793
31.12.2015 31.987 82.423 69.527 9.752 161.702 193.689
Source: Aannual reports for the relevant years – ASFFPI
Table 3: The distribution of membership on the mandatory pension Fund according to their
status - KB First Pension Company (2006–2015)
Mandatory
Years Voluntary By Disseminate Temporarily Total Total
contract disseminate (3+4+5) (2+6)
31.12.2006 32.835 21.292 8.770 3.727 33.789 66.624
31.12.2007 34.716 30.174 15.596 5.260 51.030 85.746
31.12.2008 36.060 39.770 21.842 3.802 65.414 101.474
31.12.2009 36.785 51.680 31.701 5.461 88.842 125.627
31.12.2010 37.259 61.386 37.339 4.903 103.628 140.887
31.12.2011 37.500 72.804 41.573 4.535 118.912 156.412
31.12.2012 37.566 82.275 44.992 5.389 132.656 170.222
31.12.2013 37.522 87.862 50.595 7.732 146.189 183.711
31.12.2014 37.473 87.947 61.326 8.612 157.885 195.358
31.12.2015 37.424 89.132 74.838 10.205 174.175 211.599
Source: Annual reports for the relevant years – ASFFPI
Table 6 – presents the financial data by the NLB New Pension Fund,
about managing of pension funds, i.e. financial data for the management of
the second and third pillar, for the period 2006–2015. According to the
presented table above, it appears that NLB New Pension Fund concluded the
first three years of operation of the system, with an accumulated loss of
39.46 million denars in 2006, 34.36 million denars in 2007 and 22.85
million denars in 2008. However, for the first time in 2009 (since the
beginning of operation of the system), NLB New Pension Fund realized
sufficient income to cover accumulated losses from previous years, while
KB First Pension Company, the latter, has realized on 2008.
Tabela 7: The financial data by the KB First Pension Company, about managing of pension funds,
respectively of the second and third pillar, for period 2006–2015 (in million denars)
Vitet 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Të hyrat 66,32 94,95 111,63 137,45 140,71 144,42 154,09 36,61 188,62 204,44
Shpenzimet 69,09 87,56 91,99 95,92 93,73 95,44 99,06 101,22 105,42 115,54
Humbja/fitimi -2,78 -7,39 29,63 41,54 46,98 48,97 55,03 73,60 83,20 88,90
Hum/fit i -27,02 -19,63 28,93 0,00 81,95 44,80 58,36 102,10 107,74 167,05
akumuluar
Source: Annual reports for the relevant years – ASFFPI
Table 7 – also presents the financial data realised from the KB First
Pension Company, i.e. financial data for the management of the second
and third pillar, for the period 2006–2015. KB First Pension Company,
only the first two years of operation of the system completed with an
accumulated losses, of 27.02 million denars in 2006 and 19.63 million
denars in 2007. However, unlike NLB New Pension Fund, the KB First
Pension Company, in 2008, for the first time (since the beginning of
operation of the system), realized a sufficient income to cover accumu-
lated losses from previous years, while NLB New Pension Fund, realized
this in 2009. Whereas, in 2009, the accumulated profit in the mentioned
company reached zero, which means that KB First Pension Company
reached to the critical point, i.e. neither profit nor loss.
surees depends the income of the Fund -which on the other side is based
on the paid contributions for pension insurance. Hence, the increase of the
number of population willing to work is related with the economic growth
and living standards i.e. with the improvement of economic growth, which
on one hand leads to increased activities of the entities and creating the
neccesity for more employees, and on the other hand, enables increasement
of Fund’s revenue. In addition, increasing of living standards directly affects
the increasement of life span – a standard, which means a longer period of
exploitation of pensions by pensioners, as well as greater burden for the
Fund's budget. Also, the movement of the total population in the Republic of
Macedonia (demonstrated in the following table), represents a significant
parameter for the future occurrence in the pensional system – essecially,
from the perspective of the population that is willing to work.
The table above – presents the number of total population from 1950
onwards, as well as the projections for the future, namely the increase of
number of population after the last census (the last census of the population
in Republic of Macedonia was done in 2007). Thus, the projections for the
future show a declining trend in the general population, that in the last year
of the projection period Republic of Macedonia is expected to lose a quarter
of current population number. However, beside the general population mo-
vement on demographic assumptions panel, an important role (in terms of
sustainability of the pension system), takes the assumptions on fertility and
longevity. Fertility rates are important for the number of population that is
willing to work, from which depends the number of insurees, while lon-
gevity represents an indicator of the mortality tables that shows on average
how many years a person will live, at a certain age. On the other hand, the
increase in longevity means that people will live longer. The latter, it will
reflect in the growing number of elderly people, i.e. in the increasing
number of pensioners and the duration of retirement.
nia is facing currently. This public concern has to do precisely with the
capacity and security of the pension system, in an environment characte-
rized by a decreasing ratio in terms of number of employees in financing
a pensioner. In 1995 (from employment perspective), the number of emplo-
yees significantly decreased, thus, in Central and Eastern Europe coun-
tries reached to 12.5% – a number which is not a relevant indicator beca-
use it does not show the informal employment namely the part – time
employment, and for which there is no employment contract. The latter
(informal employment), as a phenomenon, is quite present and with a
emphasize relevance in the economic and social sphere and which auto-
matically creates the need for asking the following question: Which would
be the economic and social consequences by reducing the employment?
As always, from economic and social perspective the reduction of
employment leads to numerous consequences, namely that affects the
employeed people. In our case, mostly is battered the activities and the
pension system, because, on one hand the payments for contributions
continuously are droping, while on the other hand the payments of
pensions are increased known as the phenomenon of "open scissors". The
latter, leading to creation of financial gap which later will grow even
more as a result of the dismissal of workers and their engagement in the
informal sector or outside the framework of authorities for payment of
social contributions (action which led to the reduction of revenues of the
pension system). In Republic of Macedonia, the Pension and Disability
Insurance Fund (as the first pillar of pension system), represents the most
sensitive and less favorable part of pension system. Furthermore, it is
known that the largest financial deterioration of pension system in the
Republic of Macedonia, are as a result of the undertaken reforms, i.e the
transition from a pension system with one pillar - to the three pillar’s
system (for the concerd reform, the state took over the funding of
transition or transformation of the system costs which are of temporary
basis). These costs started in the first year of the reform and gradually
continue to grow, and by 2020 it is expected to reach the level of 1.29%
of GDP, while its maximum of 1.56% of GDP, would be reached by
2030, and will end in 2045, by strengthening the second pillar of the
system. Thus, a part of the burden of financing pensions is transferred to
the second pillar, which directly affects the reduction of costs (for
pensions), of the first pillar. So, taking in consideration the vertiginous
increase of transition costs, from 5 to 10 million euros annually, auto-
matically arises the question which corresponds with the concerned situa-
Consolidation and sustainability… 17
tion, i.e. What happens with these expenditures and how does the Fund
manages to support this budren?
Financially, this burden represents a critical condition, due to the
fact that covering these costs requires additional revenues, which the
Fund can not provide because the parameters upon which are supported
these reforms are affected by:
Decrease of contributions;
Transfering a part in the second pillar;
Unemployment;
Younger pensioners.
The decrease of contributions – represents a huge burden and a
quite uncomfortable situation, which the Fund faces every year. By a
government decision strating from 01.01.2009, contributions were decre-
ased from 21.2% to 19% that is 10% reduction on contributions for pension
insurance. In 2010, the previous decrease was followed by another one but
this time the decrease was 1 point percent that led to todays level which is
18% – and these decreasements, which according to the basis of 21.2% that
was before, it represents a decrease by 15% of pension insurance con-
tributions, or a 15% reduction of income (holding other things constant).
The following table – presents the losses, i.e the financial damage
caused to the Fund, as a result of decreasing the contributions from
21.2% to 18%.
Table 9: Financial losses (demage) as a result of the change in the percentage of contributions for period 2008–2015
% of % of Source Income from the The negative difference The negative difference
Years Contribu- reduction Reve- old rate (before the as a result of change as a result of change in
tions Contribu- nues changes) in contribution rates - in contribution rates – in
tions denars euros
2008 21.2 - 26.355,49 26.355,49 - -
2009 19 10,37 26.536,02 29.287,8 -2.751,78 -44.744.390
2010 18 15,09 26.301,39 30.270,26 -3.968,87 -64.534.470
2011 18 15,09 27.012,55 31.088,74 -4.076,19 -66.279.510
2012 18 15,09 27.744,05 31.930,62 -4.186,57 -68.074.310
2013 18 15,09 28.706,74 33.038,58 -4.331,84 -70.436.420
2014 18 15,09 29.907,64 34.420,7 -4.513,06 -73.383.090
2015 18 15,09 32.236,20 37.100,64 -4.864,44 -79.096.590
Total -28.692,75 -466.548.780
Source: Personal calculation based on data of Pension and Disability Insurance Fund
18 Abdylmenaf Bexheti, Shpresa Alija
Also, the above table helps us to form an idea about the financial
situation of the current pension system of Republik of Macedonia, res-
pectively, it gives us a clear picture about the financial losses and damage
that was caused to the Pension Fund, by decreasing the contributions for
3.2 point percentage, thus, it is noted that since 2009–2015, on pension
fund were swept 466.548.780 milion euros less – funds, that would have
entred into the Fund if the contributions would be on the old level of
21.2%. Although the Pension Fund considers these financial means as
loss, the economic entities considered these as aid or facilitation, if and
only if the latter are directed on productive purposes (the productive
purposes further affect economic growth – so both sides are benefiting).
So, from the perspective of the pension system, this situation is consi-
dered to be a shock, because the coverage of these assets (losses) was
made from other sources such as the budget of RM, and if would be
taken into consideration the projections of World Bank regarding the
reform process – projections which predicted that over a continuous growth
of the economy, to an average of 5% per year, thus the Pension Fund
would not have faced with financial difficulties, respectively the period
of the reforms will be completed with a positive financial balance. Howe-
ver, on the one hand the poor results of economic growth, and on the
other hand the financial crisis after the country independence and the
2008 crisis led the state pension system in its current situation, i.e. being
fully depended on the budget of the Republic of Macedonia.
Transfers in the second pillar – represents the second parameter
according to which the current financial situation of the Fund is created.
After converting of the 6.3% from the total contribution rate for pension
insurance, the Fund keeps only 11.7%, which represents Fund’s total
income, and which both should serve in covering the expenses for pen-
sion’s payment.
Unemployment – as the third parameter on which pension
system reforms are supported, creates an alarming situation on the
Pension and Disability Insurance Fund. All of this, due the fact of not
completing in time the projections of the World Bank and of the Actu-
arial Unit, which recommended that for successful reforms, unemploy-
ment in the country until 2010 should be reduced to 28%, while in 2012
should have reached the level of 26.5%, with a purpose of resurrection of
other economic parameters, respectively their impact on GDP to be more
crucial.
Consolidation and sustainability… 19
Table 10: The movement of employment and unemployment in the period 2008-2015
Years Employment Unemployment
2008 37.3 609.015 33.8 310.409
2009 38.4 629.901 32.2 298.873
2010 38.7 637.855 32.0 300.439
2011 38.9 645.085 31.4 294.963
2012 39.0 650.554 31.0 292.502
2013 40.6 678.838 29.0 277.219
2014 41.2 690.188 28.0 268.809
2015 42.1 705.990 26.1 248.934
Source: Statistical Office of the Republic of Macedonia
Table 11: The movement of employment compared with the strategic priorities of the EU
and with the national employment strategy of RM
Mace- National The The forecast
donia target objective national target of
2010 for 2015 of the EU RM for 2020
for 2020
% of employment from 20 to 64 48.1% 55% 75% 60%
years
% of employment among young 26.5% 29% - -
people 15 to 29 years
% of employment among young 15.4% 17% - -
people 15 to 24 years
% of employment of women 34% 42% - -
from 15 to 64 years
% of employment of older 34.2% 41% - -
people from 55 to 64 years
Source: The Statistical Office and from the labor force survey for 2010
Tabela 13: The flow of expenditures for the period 1994-2015 (in million denars)
Years Pensions Compensations Contributions Professional Other Transition Total
from disability from health service capital costs
insurance expenditures
1994 15.404,40 391,66 2.102,03 - 427,72 - 18.444,58
1995 15.684,34 204,11 2.082,07 - 198,97 - 18.295,69
1996 16.223,17 185,26 2.217,54 - 170,61 - 18.925,01
1997 16.694,20 179,22 2.292,43 - 209,89 - 19.504,07
1998 17.730,56 177,48 2.320,67 - 174,52 - 20.533,40
1999 17.757,99 177,80 2.450,13 - 163,53 - 20.681,29
2000 19.745,20 173,44 2.674,37 - 206,53 - 22.941,57
2001 21.282,34 170,19 2.800,73 - 290,23 - 24.696,86
2002 21.282,34 179,85 2.927,64 - 352,59 - 25.880,42
2003 22.252,52 182,89 3.183,98 - 197,74 - 27.764,35
2004 24.028,33 189,07 3.349,18 - 301,62 - 29.116,81
2005 25.108,05 199,61 3.416,82 - 272,67 - 29.028,91
2006 25.410,57 224,98 3.582,45 177,17 486,40 1.325,14 31.206,70
2007 26.305,27 247,79 3.714,03 240,33 385,13 1.877,00 32.769,55
2008 30.953,74 115,58 4.367,89 256,16 549,24 2.490,53 38.733,14
2009 33.537,64 107,53 4.290,57 264,64 260,39 2.932,20 41.392,97
2010 34.437,32 103,52 4.338,25 251,55 203,89 3.172,93 42.507,46
2011 35.751,31 101,65 4.524,32 273,81 172,07 3.482,61 44.305.77
2012 37.292,59 100,65 4.798,82 257,28 177,93 3.599,49 46.226,76
2013 40.812,95 100,57 5.359,18 247,34 193,43 4.141,29 50.854,76
2014 43.931,60 97,45 5.421,47 241,31 187,30 4.138,32 54.017,45
2015 45.569,34 94,71 5.954,22 248,63 202,47 4.719,99 56.789,36
Source: Pension and Disability Insurance Fund
Table 14: The financial losses from non-payment contributions for 2015 – Project Makedonija (in
million denars)
Employment Scenario Scenario according
under 29 according to the to the average
Financial loss for 2015
Year years of minimum wage salary (2)
2015 project (1)
"Macedonia Mini- Pension Avera- Pension Loss from Loss from
employs" mum contribu- ge contribu- scenario 1 scenario 2
wage tions salary tions
M-1 2973 10080 2904 22356 5923 103.603.104 211.308.948
M-2 8148 10080 2904 22356 5923 283.941.504 579.127.248
Total 11121 10080 2904 22356 5923 387.544.608 790.436.196
Source: Personal calculation based on annual work program of the Employment Agency for 2015
7. Conclusions
1. The pension system, since its establishment until now has
functioned and continues to function based on the principle of solidarity
between generations. This system was initially considered successful and
did not have any problems during the implementation, because, then, the
30 Abdylmenaf Bexheti, Shpresa Alija
average life expectancy was about 55 years of age and the ratio of the
employee – pensioner was 7 to 1. However, later (in the second half of
the twentieth century), as a result of the deterioration of the ratio of
employee- pensioner, the reforms respectively the improvements in pen-
sion systems, took worldwide momentum, because, any postponement or
delay in the reform process, caused bankruptcy or failure in pension
payments, i.e. social problems. However, pension funds, remain the most
important institutional investors, who, through the use of mechanisms of
economic performance, provide security and stability of individuals inco-
me – after retirement. The latter (the security and stability of revenues),
is achieved mainly through deployment of costs over the years of living,
individual saving and national redistribution of income from the rich to
the poor – maintaining the solidarity, as well as through horizontal distri-
bution or to those who have the greatest need (the individuals with disa-
bilities, families with more members, etc).
2. On the other hand, financial stability of pension system de-
pends on a number of factors (demographic and economic) – factors, that
can achieve a consolidation and long – term financial sustainability of
pension system rarely and with lot of difficulties. Therefore, undertaking
reforms, namely improving the pension systems (worldwide), was inevi-
table. The latter, were alluding to mainly in improving the financial per-
formance, reducing the pressure of population aging, changing the sys-
tem based on the principle of solidarity of generations and the introduc-
tion of the combined system by state and private funds.
3. The Republic of Macedonia, during the transitional period, also
undertook a pension reform and pension system – in order to consolidate
the pension fund and providing funds for pension payments. All the
undertaken reforms (parametric), in the Republic of Macedonia, were
intended at rationalizing the existing financial system, and also prepa-
ration of the system with component of equity financing, respectively the
three pillar pension system. The first pillar involves providing mandatory
pension and disability insurance based on generational solidarity, the
second pillar represents private and competitive management, while, the
third pillar represents a new mode of pension (includes all persons), who
would like to provide a high volume of material security, based on defi-
ned contributions on voluntariy basis.
Consolidation and sustainability… 31
REFERENCES
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Consolidation and sustainability… 33
Laws:
1. Закон за дополнување на законот за вработувањето и осигурување во
случај на невработеност
2. Закон за пензиското и инвалидското осигурување
Articles:
1. How das Sweden’s PAYG system work, Finance& Development, published
by the IMF 2001.
2. “State pension ages: look up when you will retire” by Andrew Oxlade,
published “The Telegraph”,15 March 2016.
3. “Time to Raise Social Security’s Retirement Age”, by David C. John, 22
November 2010.
34 Abdylmenaf Bexheti, Shpresa Alija
Abstract
Purpose: Presentation of the trends occurring as a result of two empirical
studies on the attitudes of Bulgarian business in terms of understanding
the importance of the relation between corporate culture and firm com-
petitive performance and related constructs associated for the overall
successful existence of the companies.
Design/methodology/approach: A comparative study based on two natio-
nal surveys of the Bulgarian business – "National survey of business –
September 2010" and “National survey of business and July-August
2015". A survey closed questions based on a representative sample of
1000 companies, realizing business activity in Bulgaria. Ratio micro /
small / medium / large companies is 60:30:10. Respondents are the owners
and top managers of companies. The method used is standardized inter-
view, that later is subsequently implemented by the author as comparative
study between the two surveys from 2010 and 2015.
Findings: Among the survey respondents exists an understanding of the
positive influence of the corporate culture to enhance the competitive
advantages of the company and the importance of the planned manage-
ment of internal communications of the organization and their motivating
effect. Still the importance of professional management of corporate
image is underestimated by Bulgarian business.
Practical Implications: Presentation of the understanding of the impor-
tance of the corporate culture for positive competitive performance
among Bulgarian business. The identification of strengths and weak posi-
tion in terms of understanding the importance of the "intangible values"
for the overall performance of companies, which might served for a basis
for future research in the wider pertaining to the issue.
36 Yanica Dimitrova
Introduction
Interest towards study of the corporate culture arises in academic
fields and among managers in the 80s of the 20th century. One of the
essential aspects that affect this process is the ability of the corporate
culture to support the improvement of the competitive advantages of
companies. During that period, with the aim of survival and adaptation,
as well as the opportunity to reinforce sustainability, companies need to
redefine their nature, with emphasis on those benefits that are associated
with "lighten" of the hierarchical structure, which facilitates the commu-
nication, exchange of information between members of the organization
and the environment, adopting new approaches in management – stra-
tegic, human capital, the introduction of new concepts of development,
all located in the domain of corporate culture.
Literature Review
In the academic literature there is no single accepted definition of
the corporate culture, which is justified by the fact that the study of the
construct requires a multidisciplinary approach – from the perspective of
management, the social sciences and economics. For the purpose of this
study will use one of the popular definitions of corporate culture, which
states: "The culture of the organization is shared, common framework of
relations, I. e. it is taken for granted and is perceived by a significant part
of the group members; acquired and managed, learned in the process of
socialization and transmitted between members. Prescribe rules for their
organizational behavior; provides a sense of common psychological cli-
mate, i.e. indicates the uniqueness of the organization and contribute to
the development of its identity; exists for a long period of time, i.e. could
be found in every relatively stable social unity, for the entire period
during which it exists; is symbolic, i.e. manifested in concepts like lan-
guage and behavior is a construct that defines the meanings; its essence is
Corporate culture and competitive performance… 37
meli and Tishler, 2004; Hitt et al., 2001). Therefore, concurrent use of
"hard" and "soft" factors to measure the competitive performance of the
organization is essential both to establish its advantages and to identify
its weaker positions and detect possible discrepancies, identifying which
could lead to reformulation of strategies, or the creation of new ones that
help to increase competitiveness.
One definition of competitiveness states that "Under the compe-
titiveness we understand the nature of the subject of market relations (the
company) to hit the market equivalent to the present there similar com-
peting entities. The degree of competitiveness determines the ability of the
object to withstand the intensity of counter the competitive market (a mar-
ket objects can be competitive to another – no) (Икономическа енцикло-
педия, 2005: 370). We consider the competitive performance, which trans-
lates into corporate performance, which include both economic perfor-
mance and corporate culture, and related constructs that contribute to
positive results for the overall performance of the business organization.
To measure the competitive performance are created and tested
empirically different models (Denison, 1984; 1990; Kotter and Heskett,
1992; Gordon and DiTomaso, 1992, Marcoulides and Heck, 1993; Deni-
son and Mishra, 1995; Fey and Denison, 2003; Denison et al, 2006, etc.),
using indicators related to the corporate culture / culture strength, adaptabi-
lity, management style, human capital management, customer reporting
requirements, etc. / on par with economic indicators / return on sales; re-
turn on investments; income-sales ration; growth of assets, etc./. Despite
the criticism for certain aspects of research methodology (Wilderom and
Van den Berg, 1998; Alvesson, 2002), and the need to refine the tools for
studying the relationship between corporate culture and competitive per-
formance, we can conclude that there exists such a relation, a positive
character that emphasizes the multifaceted nature of corporate culture and
its vital importance for the development of the modern organization.
2010
2015
2010
2015
Legend: sole proprietorship (SP), cooperative (Coop.), general partnership (GP); limited partner-
ship (LP); limited liability company (LLC); joint stock company (JSC); partnership limited by
shares (PLbySh).
Fig. 2 – Form of registration / corporate culture-competitive performance
2010
2015
Fig. 3 – Business sphere/ corporate culture- competitive performance
2010
2015
2010
2015
2010
2015
The results of both studies showed that the Bulgarian business has
not yet understand the positives professionally maintained corporate
image gives the company. We should note that respondents who are
aware of the positive influence of the corporate culture to enhance the
competitive advantages of the company to a greater extent indicate a
policy of maintaining a corporate image in the public domain through full
time PR specialist within the organizational structure and / or using the
services of experts from PR agencies.
Discussion
By both studies among Bulgarian business within five years we
can deduce positive and negative trends. The understanding of the posi-
tive effect it has the corporate culture for the overall successful perfor-
mance of companies in the business environment in which they realize
their activities remains the same. Most difficulty in defining the nature of
the link between corporate culture and performance showed micro and
some small companies. Micro and small enterprises are differ by the
large companies on certain parameters such as organizational structure,
management style, manner of implementation of competition with other
companies (Man, Lau and Chan, 2001). Regardless of the size of the
companies, however, the establishment, implementation and maintenance
of corporate culture is necessary to not only for their survival, but also to
promote and support the increase of their competitive advantages. Main
sustainable competitive advantage for any organization is its corporate
culture (Parker, 2012), when it managed in harmony with the strategy
and structure. It is necessary to emphasize one of the most significant
advantages of the corporate culture, related to the support of the com-
petitive performance, namely that it can not be imitated, even if there are
attempts, imitation is impossible, since the construct is complex and act
mostly on a subconscious level /Schein, 1985; Kotter and Hesskett, 1992/.
Micro and small companies could not "copy" the corporate culture of
large companies, but may adopt best practices and adapt them in the con-
text of the characteristics of its business, the environment in which they
operate and last but not least, according to their size. Their major advan-
tage is the ability to be more flexible, more adaptable and receptive in
adopting and implementing good practices in the implementation of
organizational change. Therefore, the creation and management of corpo-
rate culture tailored to the specific characteristics of micro and small
46 Yanica Dimitrova
image in the public domain. Identical are the indicators related to firm
size – respondents in the survey, the form of registration, the sectors in
which they operate.
In the first study presented issues related to the specifics of public
and non-public companies and the application of management practices
associated with corporate governance, the existence of long-term market
strategy, linking the remuneration of managers with market success of
companies. In the second study are questions related to the propensity to
generate and implement innovations, and approaches to improve the
competitiveness of companies.
On the future stage of survey is possible the realization of study
that connects perception of the corporate culture in the context of compe-
titiveness with the management of the companies – corporate, strategic,
introducing new methods, policies and practices.
A good option is the realization of a comparative study of Bulga-
rian companies with companies from countries that have experienced a
transition from a planned to a market economy, resulting in the creation
of a tool to identify strengths and weaknesses and effect positive change
in corporate culture and related constructs.
For the managers it is important to realize the significance of the
so-called. "intangible values" of the company that support not only the
overall performance but also the ability to adapt in order to increase its
competitive advantage and sustainable competitiveness.
LITERATURE
Вера БИТРАКОВА ГРОЗДАНОВА
ΛΥΧΝΕΙΔΙΩΝ Η ΠΟΛΗΣ
Нов епиграфски споменик
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Λυχνειδιων η ποληϛ 65
Vera BITRAKOVA GROZDANOVA
ΛΥΧΝΕΙΔΙΩΝ Η ΠΟΛΗΣ
Nouvelle source épigraphique
Résumé
V, entre l’an 197 – 168, lorsque les villes de la Basse Macédoine, telles Pella et
Thessalonique frappaient de l’argent avec les mêmes symboles.
En ce qui concerne le choix des symboles, sur l’avers de la représentation
de Zeus-Amon l’auteur trouve des illustrations analogues dans la ville d’Aphy-
tis à Chalcidique où un temple dédié à cette divinité syncretisée a été érigé au
4ème siècle av. J.-C. Cette ville a également frappé de l’argent à l’époque de Phi-
lippe V. Le cercle épirote, lui aussi, connaît la frappe de l’argent du koinon épi-
rote, ou des villes particulières comme Kassope, Amantie, le koinon Billion sié-
geant à Byllis, avec les mêmes symboles Zeus de Dodone /foudre. Hérodote sig-
nale les relations de Dodone avec le sanctuaire libyen à Cyrène, où est frappé l’ar-
gent portant le symbole Zeus-Amon, sous l’influence de la religion égyptienne.
La frappe de la monnaie portant le nom de la ville et le nom de la tribu
nous mène, dans ce cas aussi, vers la thèse sur l’existence possible de la com-
munauté des Dassarètes dont le centre administratif était Lychnidos. La forme
connue koinon qui s’impose, tenant compte du même type d’organisation
administrative en Epire dans la deuxième moitié du 3ème siècle, après l’an 228,
peut aussi être mise en relation avec l’administration de Philippe V. Malgré le
manque, pour le moment, d’autres sources concernant la présence d’une cer-
taine autonomie de la région lychnidienne-dassarète, excepté la numismatique,
le matériel épigraphique de l’époque romaine donne une nouvelle possibilité
d’interprétation.
Malgré l’importante distance chronologique entre ces deux groupes de
sources épigraphiques et numismatiques, il est tout de même possible d’établir
certaines relations. Si au 3ème siècle av. J.-C. l’espace épirote connaît la forme
administrative koinon, ses attestations les plus anciennes dans la Haute Macé-
doine remontent au 1er siècle à Orestide, région limitrophe de la Dassarétie.
L’administration régionale qui a été adoptée dans les régions montagneuses de
la Haute Macédoine avec l’arrivée des Romains concerne également la Das-
sarétie avec Lychnidos, entre autres due à son statut de « libera gens ». Tout
comme les autres régions de la Haute Macédoine, Lichnidos continue à repré-
senter le centre du vieux territoire ayant une certaine composition administra-
tive, koinon ?, tenant aussi compte des inscriptions qui mentionnent les organes
de la forme administrative adaptée ayant existé dans la période précédente,
évidemment acceptée par les Romains.
Toutes les sources fiables, l’argent à symboles différents, empruntés au
répertoire macédonien et épirote, les inscriptions qui renseignent sur la manière
d’administrer la ville par les Lychnidiens et les Dassarètes, la prosopographie,
l’insula urbaine découverte à Plaošnik, l’inventaire des riches nécropoles, tout
cela renvoie à l’ensemble culturel formé avec la Haute et la Basse Macédoine,
et parfois avec l’Epire. Rajoutons à cela la découverte de l’insula avec des
maisons particulières à Plaošnik, ainsi que les constructions publiques dans le
cadre de la citadelle ; tout cela révèle la vie urbaine très développée de la ville.
traduit par
Ioana Hadji Lega
Λυχνειδιων η ποληϛ 67
Ἀγαθῇ τύχῃ
Λυχνειδίων ἡ πόλις Αὐρή-
λιον Κράτητα Πτολεμαίου
τὸν ἐνδοξότατον ἐπὶ παιδείᾳ
σχολαστικόν, πολείτην ἑαυτῶν,
πάσης ἀρετῆς ἕνεκεν.
Сл. 1
Ἀγαθῇ τύχῃ
Δασσαρήτιοι Αὐρήλιον Κρά-
τητα Πτολεμαίου τὸν ἐπὶ παιδείᾳ
σχολαστικόν, πολείτην ἑ-
αυτῶν, οὗ καὶ Ἀθηναῖοι
ἀνδριάντα ἀνεστάκασιν
ἐν Ἀκροπόλει ἐν τῷ Ἀσ-
κληπείῳ, πάσης ἀρετῆς
ἕνεκεν.
Сл. 2
68 Вера Битракова Грозданова
Сл. 3
Λυχνειδιων η ποληϛ 69
Сл. 4
Сл. 5
70 Вера Битракова Грозданова
Сл. 6
Сл. 7
Λυχνειδιων η ποληϛ 71
Сл. 8
72 Вера Битракова Грозданова
76 Сашо Цветковски
78 Сашо Цветковски
______________________________
13
Ц. Грозданов, op. cit., 160–164.
14
Истражувањата за присуството и делата на зографи од Македонија во
црквите на Косово и Метохија се реализира во 2014 г. во рамките на проект што
беше поддржан од Министерството за култура.
15
Ктиторскиот натпис од јужната фасада под лунетата и сликаната прет-
става на Успението на Богородица го објавува И. Женарју, Дебарски зографи на
Косову и Метохији, Саопштења XLIV (2012), 220.
Новооткриени портрети на св. Ѓорѓи Јанински… 79
80 Сашо Цветковски
82 Сашо Цветковски
84 Сашо Цветковски
Sašo CVETKOVSKI
Summary
SODR@INA
TABLE OF CONTENTS
YANICA DIMITROVA
CORPORATE CULTURE AND COMPETITIVE PERFORMANCE IN
THE CONTEXT OF BULGARIAN ENTERPRISES ……………………….. 35
САШО ЦВЕТКОВСКИ
НОВООТКРИЕНИ ПОРТРЕТИ НА СВ. ЃОРЃИ ЈАНИНСКИ ВО
ЖИВОПИСОТ ОД XIX ВЕК ........................................................................ 73
Издавач:
Македонска академија на науките и уметностите – Скопје
Компјутерска подготовка:
Драгица Топузоска
Соња Трајановска
Печат:
„Мар-саж“ – Скопје
Тираж:
300 примероци
______________________________________________________________________
Бројот е излезен од печат во ноември 2016 година