Introduction:
Macedonia gained its independence peacefully from Yugoslavia in 1991, but Greece's objection to the new state's use of what it considered a Hellenic name and symbols delayed international recognition, which occurred under the provisional designation of "the Former Yugoslav Republic of Macedonia." In 1995, Greece lifted a 20-month trade embargo and the two countries agreed to normalize relations. The United States began referring to Macedonia by its constitutional name, Republic of Macedonia, in 2004 and negotiations continue between Greece and Macedonia to resolve the name issue. Some ethnic Albanians, angered by perceived political and economic inequities, launched an insurgency in 2001 that eventually won the support of the majority of Macedonia's Albanian population and led to the internationally-brokered Framework Agreement, which ended the fighting by establishing a set of new laws enhancing the rights of minorities. The undetermined status of neighboring Kosovo, implementation of the Framework Agreement, and a weak economy continue to be challenges for Macedonia.

Location: Southeastern Europe, north of Greece

Population: 2,050,554 (July 2006 est.)

Languages: Macedonian 66.5%, Albanian 25.1%, Turkish 3.5%, Roma 1.9%, Serbian 1.2%, other 1.8% (2002 census)

Country name: conventional long form: Republic of Macedonia
conventional short form: Macedonia
local long form: Republika Makedonija
local short form: Makedonija
note: the provisional designation used by the UN, EU, and NATO is Former Yugoslav Republic of Macedonia (FYROM)
former: People's Republic of Macedonia, Socialist Republic of Macedonia

Capital: name: Skopje
geographic coordinates: 41 59 N, 21 26 E
time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time)
daylight saving time: +1hr, begins

Economy - overview:
At independence in September 1991, Macedonia was the least developed of the Yugoslav republics, producing a mere 5% of the total federal output of goods and services. The collapse of Yugoslavia ended transfer payments from the central government and eliminated advantages from inclusion in a de facto free trade area. An absence of infrastructure, UN sanctions on the downsized Yugoslavia, and a Greek economic embargo over a dispute about the country's constitutional name and flag hindered economic growth until 1996. GDP subsequently rose each year through 2000. However, the leadership's commitment to economic reform, free trade, and regional integration was undermined by the ethnic Albanian insurgency of 2001. The economy shrank 4.5% because of decreased trade, intermittent border closures, increased deficit spending on security needs, and investor uncertainty. Growth barely recovered in 2002 to 0.9%, then averaged 4% per year during 2003-06. Macedonia has maintained macroeconomic stability with low inflation, but it has lagged the region in attracting foreign investment and job growth has been anemic. Macedonia has an extensive grey market, estimated to be more than 20 percent of GDP, that falls outside official statistics.