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Draft report - Work in progress

The Royal Norwegian Society for Development Pre-feasibility study on alternative tourism in Macedonia Main conclusions and recommendations
March 2010

The Royal Norwegian Society for Development Pre-feasibility study on alternative tourism in Macedonia Main conclusions and recommendations
March 2010

Title: Pre-feasibility study on alternative tourism in Macedonia Report no.: 2 Issue no.: 1 Date of issue: March 2010 Prepared: TBJ, CFP Checked: Approved:

The study has been carried out by representatives from The Royal Norwegian Society for Development. Important assistance has been received from Slow Food Macedonia, FAGRICOM and Dunira Strategy among others. The contents and the views expressed remain the responsibility of Norges Vel.
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Acknowledgements
For their in-kind and moral support of this study, the Royal Norwegian Society for Development (Norges Vel) would like to thank our main contributing partners in this pre-feasibility study: FAGRICOM, Dunira Strategy and Slow Food Macedonia. Thanks also to the many individuals representing their organizations which took the time and care to meet with us and share of their knowledge. Tefikoski Tefik deserves special thanks for hosting us and taking time off and introducing us to local villages, business networks and development opportunities in the Mavrovo-region. We also like to send a special gratitude to Filippo Unterhofer representing Slow Food Macedonia Convivium Sharplaninska and Violeta Jankova in Tikvesh Wine Route Foundation, for assisting us in carrying out the field trip. The pre-feasibility field study was carried out between 15th and 21st February, by a team of three people from Norges Vel: Asbjrn Garnes (Local representative in Kriva Palanka, Macedonia since 2002) Torbjrn Bjnness (In charge of the study) Carl Fredrik Pedersen The pre-feasibility study was financed by the internal budget for new development projects in Norges Vel.

This report is available by request at: torbjorn.bjonness@norgesvel.no The Royal Norwegian Society for Development Pb 115 2026 Skjetten Norway Phone: +47 64 83 20 00 Fax: +47 64 83 20 01 Email: post@norgesvel.no Web: www.norgesvel.no The Royal Norwegian Society for Development - 2010. This report, or portions thereof, may be freely quoted or reproduced for educational purposes only. Please credit the author, Torbjrn Bjnness, and the Royal Norwegian Society for Development.
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Table of contents
1.0 INTRODUCTION 2.0 IMPORTANT STAKE HOLDERS, POLICIES, PRIORITIES AND REGULATIONS 2.1 NATIONAL POLICIES AND PRIORITIES WITHIN ALTERNATIVE TOURISM 2.2 PLANNED AND PRESENT GOVERNMENT INTERVENTIONS AND THE EXACT PROGRESS 2.3 THE LEGISLATION AND POLICIES REGULATING THE SECTOR 2.4 REGIONAL POLITICAL STABILITY AND RELATIONS 2.5 LAND RIGHTS 2.6 OTHERS 3.0 HOW THE SECTOR OF ALTERNATIVE TOURISM IS FUNCTIONING 3.1 KEY SERVICES, PRODUCTS AND ATTRACTIONS 3.2 PRIVATE, GOVERNMENT AND THIRD SECTOR INITIATIVES WITHIN ALTERNATIVE TOURISM 3.3 THE PERFORMANCE AND SECTOR PROSPECTS 3.4 THE NUMBER AND CAPACITY OF TOURISM- AND HOSPITALITY TRAINING INSTITUTIONS 3.5 MARKETING, BRANDING ACTIVITIES AND WEB SERVICES 3.6 THE STATISTICS ON ALTERNATIVE TOURISM 4.0 POTENTIAL LOCAL COMMUNITIES FOR DEVELOPMENT 4.1 THE DEGREE OF DEDICATION AND COMMITMENT AMONG LOCAL AUTHORITIES AND OTHER GATEKEEPERS 4.2 ESTIMATES FOR A POSITIVE ENVIRONMENTAL AND SOCIAL IMPACT 4.3 CULTURAL, ETHNIC, CROSS BORDER AND INTERPERSONAL BARRIERS OF ENTRY AND EXECUTION 4.4 THE LOCAL POTENTIAL AND CAPACITY FOR DEVELOPMENT 4.5 ECONOMY AND EMPLOYMENT PATTERNS 4.6 INDUSTRY GROUPS AND INDUSTRY RELATIONS WITH NEIGHBOURING DESTINATIONS 5.0 DEVELOPMENT OPTIONS AND THE FRAMEWORK IT RESTS ON 5.1 NORGES VEL GUIDELINES 5.2 MACEDONIAN NATIONAL TOURISM DEVELOPMENT STRATEGY 2009-2013 GUIDELINES 5.3 PROPOSED DEVELOPMENT OPTIONS 5.3.1 WINE TOURISM 5.3.2 TOURISM INCUBATOR 5.3.3 VILLAGE TOURISM NETWORK 6.0 REFERENCES 6 7 7 7 7 8 9 9 10 10 11 11 12 12 12 13 13 13 13 14 14 14 15 15 16 16 17 20 22 24
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6.1 DOCUMENTS 6.2 WEB RESOURCES APPDENDIX I - Abbreviations and Acronyms APPENDIX II - Travel Route APPENDIX III - Empiric Program APPENDIX IV - Possible project partners APPENDIX V - Terms of Reference

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1.0 Introduction
A pre-feasibility study on the alternative tourism sector in Macedonia has been conducted in the period November 2009 - March 2010. As Norges Vel is in the process of reshaping its Balkan strategy, this is one of several measures made in order to develop a long term platform for development in the region. The objective of the pre-feasibility study has been to assess the current situation related to tourism as well as the overall need and potential for developing alternative tourism in Macedonia, and to provide recommendations for project implementation of the most suitable development options in terms of alignment, technical standards and organization. The concept of alternative tourism refers to the share of the tourism market that is defined as not being mass tourism. Under the alternative tourism concept we can find a series of classifications and types of tourism. What characterizes the concept of Alternative is the existence of small or medium companies, created by families or friends, where there is the possibility of more contact with the communities and where most of the times there is a respect for the environment. This concept is generally used by government institutions and academics, and very rarely a traveler will ask in an information centre for places or activities of alternative tourism. Therefore, it is important to emphasize that the term alternative tourism may encompass components related to natural heritage, built heritage, cultural heritage, local traditions, food, activities, etc. The main focus on developing alternative tourism is for the development to be sustainable socially, culturally, economically and environmentally. For the purpose of this report the term alternative tourism also reflects the goal of developing tourism related projects that will benefit the local community in terms of preserving the heritage whilst creating opportunities for economic development. Despite Macedonia being rich in alternative tourism resources, it has become clear that just a fraction of the potential is utilized. The National Tourism Development Strategy 2009-2013 and the National Agricultural and Rural Development Strategy (NARDS) 2007-2013 are important documents, but very few of the proposed activities have made- and are able to make significant impacts when it comes to development of rural alternative tourism in Macedonia. Various actors in the development sector are also addressing issues of relevance for making decisions on the development of alternative tourism in Macedonia. Some of these have in close cooperation with the local municipalities, made extensive development strategies and action plans. But what seems to lack is the ability to make these plans come operational. There are also challenges related to the fact that most of the attractions Macedonia has to offer need further development in order to draw tourists attention.

Macedonia has many local food varieties of which many are endangered of disappearing. Above you see a dessert cake made from an old family recipe in Delcevo-region of Macedonia. Many of the local food varieties are ecological and made of local - or even self made and self grown ingredients.
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2.0 Important stake holders, policies, priorities and regulations


2.1 National policies and priorities within alternative tourism Together with agriculture, the Government of the Republic of Macedonia has identified tourism as a priority sector for development. A Master Plan Study for Tourism in the Republic of Macedonia was produced in 2003, but it was not implemented. The newer Tourism Development Strategy for 20092013 has so far been followed up. However, the strategy is expected to undergo a revision in 2010, but it is not likely that this will impose any fundamental changes to the strategic framework when it comes to alternative tourism. Even though the existing action plan on tourism development includes rural tourism and states that making use of rural resources and sights have an enormous potential as an alternative form of tourism, alternative tourism is still neglected. One of the reasons might be that it is easier to gain momentum for business in mass tourism. Consequently the regions of Mavrovo and Ohrid have been favored, and they do also stand out as good examples in that matter. Although they are few, we also found examples of successful projects within alternative tourism in Macedonia, and in this respect the Brajcino village eco-tourism project near Lake Prespa often seems to be mentioned. The vision for Macedonian tourism (Page 27, National Tourism development Strategy, 2009-2013): The Republic of Macedonia will by 2013 have established its image as a notable European destination for cultural and natural heritage based tourism and be recognized for its environmentally sensitive and sustainable, high quality products and services developed inline with global best practice. 2.2 Planned and present government interventions and the exact progress The present strategic plan for tourism has allocated 300 000 Euro to the exploitation of rural tourism. The goal is that three additional rural villages will be able to marketing themselves as rural tourist destinations by 2012. There are also allocated resources to sign posts for wine tourism, to an awareness campaign on tourism hospitality, to the making of a hiking trail directory, etc. In addition to these already funded activities, some activities also rely on donor support, and its therefore not yet clear how many of these activities which will be accomplished. The progress of the already funded activities is so far and in general on or somewhat behind the schedule. 2.3 The legislation and policies regulating the sector As a country which presently has a candidate status with the EU, Macedonia is rapidly harmonizing its legislation to accord with the European Union acquisition. The Constitution of Macedonia guarantees equal treatment for all market participants and the right for foreign investors to freely transfer and repatriate investment capital and profits. There is no single law regulating foreign investment. Rather, the legal framework applicable to foreign investors is made up of various laws. 80 per cent of the temporary stay tax remains with local governments, as does associated property tax and communal tax. It is the duty of the Tourist Department of the Ministry to follow the enforcement of the legislation.

Policy and legislation are the foundations on which the industry is built. These include: The Program of the Government of the Republic of Macedonia 2006 2010 National Development Plan 2007 2009 Spatial Plan of the Republic of Macedonia (2004)

-And the following existing legislation and the principal regulations: Law of Tourism Activity No. 62/2004 Law on Catering Activity No. 62/2004 Law for Tax for Short Stay No. 19/1996 amended 26/2002, amended Law on Establishment of Agency for Promotion and Support of Tourism No.103/2008 Rulebook on the Minimum Technical Requirements for Performing Catering Activities (Ref to #16/2006) Rulebook on The Requirements for Categorization of the Facilities on the Tourist Offer (Ref to #16/2006)

Other legislation impacting on tourism includes the legislation and regulations on environment, transport, land improvement and training. 2.4 Regional political stability and relations In the last one hundred years, many population movements and intensive migration flows occurred on the territory of Macedonia. These have caused continuous demographic changes within the country that are effective still today. However, a 2001 conflict between Macedonian forces and ethnic Albanian insurgents ended with a peace treaty granting the 25-percent Albanian minority greater rights and a key role in politics, but relations between the two communities are still tainted by mistrust. In many areas where Albanians and Macedonians are living together, including the towns of Gostivar, Kumanovo and Debar, the ethnic segregation in schools is almost complete. Albanian and Macedonian students only study together in the towns of Tetovo and Kicevo where Macedonian pupils are very few and pressure groups and government critics say any move toward integration likely is not on the horizon. Representatives at the National Roma Center, for instance, are upset that neither the government nor individual schools have taken serious steps to wipe segregation off the map. They suggest that the government is permitting it rather than dealing with the political difficulties of changing the situation. Some voices even claim that national ethnic tensions are used to distract the media when they get too close on political scandals and starts questioning the political power-elite. Further progress is needed also in key areas such as public administration reform, the fight against corruption and reform of judiciary, as well as the implementation of the Ohrid Framework Agreement. However, the demarcation of the border with Kosovo was very positive for regional stability. As a country undergoing considerable economic reforms since independence, Macedonia was recently ranked as the fourth best reformatory state out of 178 countries ranked by the WB. Internationally a name dispute with Greece over the right to use the name Macedonia is hampering the integration process with EU and NATO, and a decision on the matter is promised by the Macedonian Government by mid 2010 if no significant progress is achieved on the matter. To establish political stability and integrate into the EU and NATO are also two of seven fundamental aims of The Program of the Government of the Republic of Macedonia 2006 2012 which sets out the Governments priorities for economic and social development.
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2.5 Land rights According to the Constitution, the investors right to property is guaranteed. Foreign investors may acquire property rights for buildings and rights for other immovable assets to be used for their business activities. They may acquire residential property, but not ownership rights over construction land. Foreign investors are only permitted to have land-use rights, not land ownership rights. Local people holding a residence for many generations can in many cases not document their ownership of the property and land. When ownership can not be documented, there is a risk that family members and others claim the right of the property also after a transaction has been done. This might represent a challenge which not should be underestimated by foreign as well as local investors.

2.6 Others Macedonia has become a major point in a network of trafficking in women, mostly from the former Communist bloc. Macedonia has tried to take action: The government has gained international praise for opening a refuge for the women and moving to close bars and send some of the women home, but the problem still persists. Macedonia also lies along one of several land routes used by drug mules to ship southwest Asian drugs to the markets in Western Europe. Porous borders and the influence of regional narcotics trafficking groups suggest the country will continue to provide an important route for transit of drugs trafficking.

Wedding celebrants in the Romani quarter of Skopje, Macedonia (Source: Richard Mertens) The Rom constitutes an ethnic group in the Republic of Macedonia. According to the last census from 2002, there were 53,879 persons counted as Roma, or 2.66% of the population. Municipality uto Orizari is the only municipality in the world with a Roma majority and the only municipality where Roma is official language. Due to the demographics, both Romani and Macedonian are official in uto Orizar, the municipality being officially bilingual. The mayor of the municipality, Erduan Iseini, is an ethnic Rom. The Republic of Macedonia is the region's leader in respecting the rights of the Roma people. It is the first country in the region with a minister of Roma ethnicity and also has a lot of Roma's in high government positions. However, there has still a lot to be done in the spheres of education and integration of the Roma. In 2009, the Government of the Republic of Macedonia took measures to enlarge inclusion of Roma in the education process. The culture and traditions of the ethnic Rom are exotic to most tourists from outside the European continent, and therefore also has the potential for becoming a tourist attraction if developed appropriate.

3.0 How the sector of alternative tourism is functioning


3.1 Key services, products and attractions A Government-commissioned Border Crossing Survey conducted in 2004 (and thus far not repeated) found that Skopje is the destination for almost 50 per cent of foreign visitors followed by Bitola and Ohrid with around 15 percent each while it is clear that for the domestic market, the traditional summertime attraction of Ohrid is the main destination for their overnight stays.

Panorama of Bitola from Krkardas (Source: Wikipedia)

Outside of Skopje, Ohrid, Struga and Mavrovo there is a shortage of quality accommodation. Only 20 per cent of accommodation, nationally, (14,000 beds) is in hotels but their accommodation categorization criteria and its implementation is not aligned to international standards and there is only a limited presence of international accommodation brands, which can help stimulate higher operating standards. Monastery accommodation is a potential tourism asset if publicized effectively. Workers and childrens accommodation is significant in quantity but mostly in very poor condition with unclear ownership and not suitable for the tourist market in its present conditions. Auto camps and camp sites are well below European standards as well. Up to 50 per cent of accommodation is in the unregistered and unofficial market. The spa tourism offer is of low quality and would need complete renovation and/or reconstruction to match European spa and wellness product standards. The National Park tourism offer is at a low development level but has good potential as a product and as a revenue source for the parks. Lake Ohrid has reached its carrying capacity in the peak summer months, but has significant rooms capacity at other times. Lakes Prespa and Dojran have development potential, but this needs to be strictly controlled to avoid the environmental errors of the past. Show caves have good visitor potential but currently possess poor facilities, including safety standards, lighting and interpretation. The rich religious heritage is a major asset, but interpretation and the retail offer is mostly very poor. Even major archaeological sites and museums are poorly interpreted and have limited retail offers. Few winter sports destinations offer international quality facilities but other activity sports have good potential once improved organization, coordination and promotion takes place. Rural tourism has good potential, but requires improved organization, product presentation and promotion. Wine tourism is an emerging product linked to rural tourism and has equally good potential. Responsibility for the maintenance of hiking and biking trails is unclear and there is a lack of municipal funds for investment. Fishing is an important activity for the local or regional markets. Hunting has good potential subject to an intensive game breeding program and strict enforcement of controls on the sport. There is a severe shortage of competent inbound tour operators with equipment and promotional resources and the Tourist Information Centre network is incomplete, lacks coordination and professional operating standards.
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3.2 Private, government and third sector initiatives within alternative tourism The Government is working according to The National Tourism Development Strategy, and is implementing the activities independently or in cooperation with local or international partners. There are also some initiatives of foreign and local NGOs within alternative tourism in Macedonia, but in general they are small and lack the necessary coordination and marketing. Below we mention some of the initiatives within alternative tourism going on in Macedonia at present. Tikvesh Wine Route Foundation works on the development of wine routes, wine tourism and activities related to the wine industry in the Tikvesh region. They are in the process of strengthening their presence and activities in 2010. A website is in the tube along with various promotional and educational activities and events.

Several wine route sign posts were put up in 2009. Source: TWR

Among upcoming events the Centre for Development of the East Planning Region and the Centre for Development of the South-East Planning Region, in cooperation with The German Technical Cooperation for Regional Economic Development (GTZ RED) and the German Embassy in Macedonia are hosting a two days International Symposium Event (April 2010), Iron Curtain Trail - Developing Alternative Tourism Potentials in Macedonia to discuss Sustainable Cycling Tourism, the Euro Velo and Iron Curtain Trail as significant actions implemented in European Cycle tourism and its touristic potential. 3.3 The performance and sector prospects The 2002-2009 statistic average on tourism in Macedonia shows a steady increase in number of both foreign and domestic accommodation registrations and overnights in registered accommodation. Other tourism indicators are also pointing in the same direction. In terms of physical size and population size, Macedonia compares most directly with Albania and Slovenia but in terms of most of the other indicators, Macedonia ranks either lowest or second lowest. Albania and Macedonia have, respectively, the lowest and second lowest levels of international arrivals, but it appears that Albania generates several times the level of foreign exchange earnings from its international arrivals than does Macedonia whose earnings are the lowest of all the nations compared. GDP per head of population is lowest in Albania but not much higher in Macedonia while Slovenia has a GDP per head nearly six times that of Macedonia. The principal source markets for foreign visitors (the top four most significant markets) to Macedonia in 2007 are its immediate neighbors, with Serbia-Montenegro, Greece, Bulgaria and Albania (in that order) being responsible for almost 48 percent of foreign registrations (arrivals) and 49 percent of overnights. Serbia-Montenegro and Greece have always been the leading nationalities. It is quite clear therefore that the volumes and values of Macedonia tourism are at the lowest end of the comparative range presented here and this demonstrates that Macedonia is lagging behind its regional competitors; however, it also demonstrates that there is a considerable opportunity to catch up with the progress made by its neighbors and implementation of the tourism strategy is designed to accelerate this process.

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There is a potential to capitalize on the growing market for alternative tourism, in particular in western and northern Europe, if the natural, cultural and historical resources of Macedonia are developed, packaged and marketed to the right segments. Modern and experienced tourists who are well travelled and have disposable incomes are increasingly looking to undertake holidays which allows them to experience something alternative compared to charter holidays, and developing forms of alternative tourism activities in Macedonia may position the country so that it can attract a larger share of this market. 3.4 The number and capacity of tourism- and hospitality training institutions The Macedonian educational system in general and the current education and training programs and the effectiveness of these programs as such, have obvious weaknesses. There is a lack of well organized and well structured practical work, poor transfer of theoretical knowledge and skills into practical skills and an enormous gap between industry needs and educational programs. The industry is complaining that the education system is isolated and is producing an unsuitable and unusable workforce. It is therefore crucial importance to develop a high performing educational system and a high performing working environment if the aim is to develop a highly qualified and highly performing Tourism Industry workforce. The National Tourism Development Strategy states that a review of the current education and training programs and their effectiveness has made obvious the weakness of the Macedonian educational system. The shortage of practice laboratorys, organized and well structured practical work, poor transfer of theoretical knowledge and skills into practical skills, enormous gap between industry needs and educational programs are obvious concerns. The industry is complaining that the education system is isolated and is producing an unsuitable and unusable workforce. It is necessary to develop a high performing educational system and a high performing working environment if the aim is to develop a highly qualified and highly performing Tourism Industry work force. 3.5 Marketing, branding activities and web services The tourism industry is active in promoting its services and products and the destinations, but in an ad hoc and uncoordinated fashion. The national tourism portal has made good progress in making information on Macedonia tourism accessible and providing reservations facilities. However, the intended private/public partnership on which it is based lacks public sector support. The promotional materials produced are of good quality, but published in an ad hoc fashion and lack both design unity and especially planned distribution. The image of Macedonia as a tourism destination is very weak internationally and insufficient efforts are being made to raise awareness of the countrys many and positive appeals. One exception might be the promotional TV-campaign, a campaign being criticized on grass root level for painting an unrealistic picture of Macedonia as a tourist nation and thereby broadening the gap between visitor expectations and the actual experience. 3.6 The statistics on alternative tourism Macedonias tourist industry has never become a major economic factor. At its peak, in 1987, it attracted four million overnight stays by tourists (compared to 68 million in Croatia). Since the late 1990s, the number of nights spent by tourists collapsed to 1.8 million. Foreigner visits dried up most dramatically to only 346,000 overnight stays in 2003 (State Statistical Office). For more statistic information, please consult the National Tourism Development Strategy.

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4.0 Potential local communities for development


The Municipalities of the Republic of Macedonia are first-order administrative divisions. In August 2004, the Republic of Macedonia was reorganized into 84 municipalities. Ten of the municipalities constitute the City of Skopje (or Greater Skopje), a distinct unit of local self-government and the country's capital. Most of the Municipalities consist of many smaller villages. In total there are about 1,700 throughout Macedonia. 4.1 The degree of dedication and commitment among local authorities and other gatekeepers In general our impression is that local authorities are very eager to cooperate on development initiatives. However, all initiatives have to be well anchored (Sometimes also politically) and expectations well managed in order to avoid loss of enthusiasm over the project period. Showing visible results early on in a project is important to keep the momentum, to gain trust and in order to avoid scepticism from dominating the agenda. 4.2 Estimates for a positive environmental and social impact Alternative tourism is in itself not environment friendly. However, any projects implemented by Norges Vel will have to comply with Norwegian environmental standards. This guarantees that our impact will be environment friendly, as the overall Norwegian regulations are stricter than those of Macedonia. This said, we also looked into the local potential for a positive environmental and social impact, and found both environmental (garbage) and social problems (unemployment) which can be positively affected by an increased focus on alternative tourism. 4.3 Cultural, ethnic, cross border and interpersonal barriers of entry and execution Ethnic Macedonians live in contiguous parts of Bulgaria, Greece, and Albania, and Muslim speakers of Slavic dialects classifiable as Macedonian who consider themselves to have a separate ethnicity (Goran) live in Kosovo and Albania. Albania recognizes as Macedonian only the Christians living in its southeast, omitting the Macedonian-speaking Muslim and Christian population of the eastern highlands and the Gorans. In 1999, Bulgaria recognized the independent existence of the Macedonian literary language, but in return Macedonia has renounced support for the Macedonian minority in Bulgaria. Greece claims to have no national minorities and thus does not recognize the existence of its Macedonian minority. In Greek EU-funded minority language projects, Macedonian has never been included. Within Macedonia, religion is as important an organizing principle as language: Most Macedonians, Serbs, and Aromanians (Vlahs) are Christian, and most Albanians, Turks, and Rom are Muslim. The national culture is identified with the Macedonian Orthodox Church, and Macedonianspeaking Muslims are divided among those who self-identify as Macedonians on the basis of language and those who self-identify as Muslims. Macedonia do also have challenges when it comes to student segregation, and a decision by local authorities in 2009 to separate ethnic Macedonian and ethnic Albanian high school students in different shifts sparked a debate about the ethnic segregation of young people in a country where ethnic relations are generally calm, but still far from cordial. In many areas where Albanians and Macedonians live together, including the towns of Gostivar, Kumanovo and Debar, the ethnic segregation is schools is almost complete. The same can be said across villages. This imposes social challenges to the society and undermines the stability of Macedonia as such.
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4.4 The local potential and capacity for development The local capacity for development is low basically due to lack of capital, -investments, -marketing and -competence. In general the investments in fixed assets in the tourism sector are low. Hotels and restaurants accounted only for 3 per cent of total investments in 2006 and 1.5 per cent of FDI in 2006. Prior to that FDI in the sector was well below 1 per cent. The industry viewed the lack of destination marketing, bureaucracy and high interest rates as the principal barriers to entrepreneurs. There are also few initiatives, in the range from training to financial support, stimulating and backing entrepreneurship within the tourism sector. 4.5 Economy and employment patterns Despite a number of economic reforms, as of 2005 Macedonia's unemployment rate was 37.2 % and as of 2006 its poverty rate was 22 %. Corruption and a relatively ineffective legal system also act as significant restraints on successful economic development. Macedonia still has one of the lowest per capita GDPs in Europe. Furthermore, the country's grey market is estimated at close to 20 % of GDP. In terms of structure, as of 2005 the service sector constituted by far the largest part of GDP at 57.1 %, up from 54.2 % in 2000. The industrial sector represents 29.3 % of GDP, down from 33.7 % in 2000 while agriculture represents only 12.9 %, up from 12 %. Textiles represent the most significant sector for trade, accounting for more than half of total export. Other important exports include iron, steel, wine and vegetables. With a GDP per capita of $ 9,157 at purchasing power parity and a Human Development Index of 0.808, Macedonia is less developed and has a considerably smaller economy than most of the former Yugoslav states. According to Eurostat data, Macedonian PPS GDP per capita stood at 32 per cent of the EU average in 2008. Youth, and in particular youth women, unemployment in Macedonia is one of the highest in the Balkans. According to the 2003 data, about 30 % of the unemployed were young people aged 15 24. In addition, in 2001, only 32 % of Macedonian women of active working age were employed, comparing to the 51 % average in the EU. About 60 % of young people were looking for work without a job for at least four years. In relation to employment, male participation at the job market is just about 73 % while female participation is about 49 % and is slightly rising. Read more at: http://balkanyouth.org 4.6 Industry groups and industry relations with neighbouring destinations The outbreak of the Yugoslav wars and the imposition of sanctions on Serbia and Montenegro caused great damage to the Republic's economy, with Serbia constituting 60 % of its markets prior to the disintegration of Yugoslavia. When Greece imposed a trade embargo on the Republic in 199495, the economy was also affected. Some relief was afforded by the end of the Bosnian war in November 1995 and the lifting of the Greek embargo, but the Kosovo War of 1999 and the 2001 Albanian crisis caused further destabilization. Since the end of the Greek embargo, Greece has become the country's most important business partner. Many Greek companies have bought former state companies in Macedonia such as the oil refinery Okta, the baking company Zhito Luks, a marble mine in Prilep, textile facilities in Bitola etc, and employ 20,000 people. Other key partners are Germany, Italy, the United States, Slovenia, Austria and Turkey.
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5.0 Development options and the framework it rests on


In this report, we have basically addressed three questions: 1. How can Norges Vel contribute to development of alternative tourism in Macedonia? 2. What is the Macedonian demand and priorities for the development of alternative tourism? 3. Which potential projects have the capacity to utilize and mobilize the needed resources for the successful development of alternative tourism in Macedonia? Based on our brief analysis of the empirical literature, experience of stakeholders in Macedonia, our own impressions from the field trip, and Macedonias strategies, we are now in a position to present some recommendations. However, for a better understanding of our recommendations, we have described the Norges Vel guidelines and the Macedonian national Tourism Strategy in short below. Please also keep in mind that the development options presented here are to be considered as suggestions for future development of alternative tourism in Macedonia. We are open to any comments on how to improve the recommendations, changed them to the better, make them more specific, etc.

Macedonia offers good conditions for extreme sports like hang gliding and paragliding.

5.1 Norges Vel guidelines The strategic plan of Norges Vel, dated January 2008, states that Norges Vel has the following vision and business idea: Vision: Vigorous local communities Business idea: Sustainable economic growth- and welfare creation in local communities. The strategy also specifies the products to be delivered by the international department. They are: Organizing producers for
o o o o Increased quality and processing of their product Product development Distribution and access to market and information Linking to financial institutions, local development, etc.

Entrepreneurship processes and training


o Assisting in elaborating business plans

Value chain development


o Through value chain leadership and management

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5.2 Macedonian National Tourism Development Strategy 2009-2013 guidelines The Tourism Development Strategy for 2009- 2013 provides a framework and forms the basis for Norges Vel in the process of identifying possible development projects within alternative tourism in Macedonia. A bit simplified, Macedonia has the following priorities within tourism: Improve the tourist experience and capacity - accommodation, training, etc. Job creation - to grow the industry and release the potential. Develop attractions - wine routes, rural tourism, etc. Statistics - data collection and monitoring. Infrastructure - airport, road signs, etc. Marketing - create awareness, etc. Improvement of skills in the tourism industry - service delivery, marketing and sales, language, and product development.

5.3 Proposed development options The proposed development options on next page and forward are compatible with the priorities of both Norges Vel and the Ministry of Economy - department of tourism, in Macedonia. In addition, the recommendations are based on Norges Vels findings on the recently undertaken familiarization trip to the country, where a number of regions were visited and stakeholders interviewed. To a certain degree, options have been selected on the basis that they have a certain potential and a baseline to build on. In the process of identifying these development options we also considered preliminary impact estimates including job creation and environmental issues, funding opportunities, commitment among local partners, the target group and level of ethnic tension and segregation.

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5.3.1 Wine tourism Rationale Wine tourism is closely connected to agriculture - a sector Norges Vel has extensive experience from both nationally and internationally. Wine is also the ultimate product for combining alternative tourism, rural development, export marketing and agricultural knowledge. As of today the wine sector in Macedonia does by no means utilize its potential for tourism. In combination these factors make wine tourism an interesting development opportunity which deserves to be explored further by Norges Vel. Facts The oenological history as such dates back to ancient times well before the ancient Romans who prized the wines produced by its vineyards. In the days of former Yugoslavia, Macedonia accounted for two thirds of the total wine production in the country. Based on environmental conditions and grape plantings, Macedonia is divided into three grape growing regions: 1. Povardarie (Central Region) 2. Pchinya - Osogovo (Eastern Region) 3. Pelagonia - Polog (Western Region) Each has further established wine districts with specific localities. There are 16 wine districts in total. The largest and most famous grape growing region is the Povardarie (Vardar Valley) region, where 85% of Macedonian wine is produced.

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The vineyard area in the Republic of Macedonia occupied approximately 22,400 ha in 2005 (wine grapes only). Wine production in 2005 was approximately 980,000 hl from 150,000 tons of harvested grapes, an increase of 20 % on the 817,126 hl produced in 2004. The annual average wine production in the previous five years was 875,373 hl, of which Povardarie Region produced the majority (85%). Polog-Pelagonia Region produced 11 % and Pcinja-Osogovo Region 4%. 4,000 small vine growers with an average holding of 2.3 ha dominate the industry. They typically sell grapes to medium and small size wineries that produce and market wines. There are 38 wineries in Macedonia, 25 of which export on foreign markets in more than 26 countries around the world. Several national wine associations and generic promotional bodies complete the Macedonian wine industry. Wineries process about 65 % of the total wine grapes, while about 35 % are processed directly by farmers for their own consumption of wine and grape brandy-rakija. All wineries in Macedonia that used to be part of the agrokombinats have now been privatized. Macedonian wine producers are adopting a contemporary label and packaging outlook. The wineries have started to promote and market their wines in a more consolidated way by selling their wines under the Macedonian brand rather than individually. As wine consumption trends change globally, Macedonia is trying to keep pace with current preferred wine tastes by adjusting its vine varieties accordingly. In the last 10 years, there has been a positive trend in favor of the production and export of quality bottled wine, which increased from 7 % of total wine exports in 1998 to over 30 % in 2004. The domestic market in 2004 was 95,875 hl, while the export market hit 549,398 hl. The top three export markets in 2004 were Germany, Serbia and Montenegro, and Croatia. The export strategy will continue targeting neighboring and EU markets, with special emphasis on the UK. In 2004 the Republic of Macedonia enacted a new Law on Wine to improve technological practices and decrease trade barriers, aiming to implement a gradual and timely approximation of EU legislation. The establishment of the Vineyard Monitoring and Management System that began in 2004 is aiming at enabling grape to bottle traceability of the winemaking process, and further complement the production of quality wine. Macedonian grape growers have also initiated a longterm strategy on vineyard structure to better meet EU standards and export quotas.

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Present wine tourism development initiatives The national strategy for tourism has an indicative budget of 100,000 for sign posts aimed at increasing awareness of the wine routes. The implementing partner is Tikvesh Wine Route Foundation (TWR). TWR also carry out other activities related to wine tourism and the wine sector, such as wine tasting competitions, etc. However TWR lacks resources and is not capable of lifting the wine tourism industry to the level it deserves without external financial support. Go Macedonia is one of a very few private agencies dedicated to promoting alternative tourism in Macedonia. They organize daily and weekend wine tours tailored to the needs of people keen to learn more about Macedonia's cultural heritage, customs and traditions. There is a webpage www.winemk.com sponsored by USAID, providing information about the Macedonian wine industry, its producers, processors and products. Development opportunities Attraction development - Food, wine, atmosphere, activities, etc. Offer training at first line and management level - marketing, service, etc. Strengthen lateral and multilateral wine tourism cooperation and innovation Improve the quality of the tourist experience and educational benefit to tourists Improve the quality of stewardship of the destination Linking wine routes with online sales and booking capacity

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5.3.2 Tourism incubator Rationale Norges Vel has by its vision an obligation to get involved in creation of employment opportunities and income generating activities. So far too many of Norges Vels international projects and programs have been focusing on capacity building which in general makes measurement of results more demanding. Based on Norges Vels extensive knowledge from teaching entrepreneurship in Norway, taking the step towards working more closely together with incubators is already in the tube and just a matter of time. A potential tourism incubator also address the employment challenge described in chapter four, and the overall need of training, innovation and entrepreneurship in the sector. However, this approach still has to be solid anchored with local partners and the Government, and preferably build on existing incubators already in place. Facts Business incubation is a dynamic process of business enterprise development. In essence these are small business assistance programs that are designed to offer various forms of support to entrepreneurs who are in the process of setting up businesses. Business incubators nurture young businesses by helping them survive and grow during the start-up period, as it is at this stage that they are most vulnerable. In short then, a business incubator is a facility to assist new businesses in overcoming the difficulties of the early years of business life. A Tourism Business Incubator (TBI) is a hybrid instrument for economic development. The incubator supports small and medium-sized tourism businesses in the establishment, growth, or restitution of tourism growth in regions where the private sector is underdeveloped. Macedonia of today does not have an incubator dedicated to tourism as such. Present incubators The Youth Entrepreneurial Service (YES) Foundation is a NGO seeking to strengthen the local innovation system in Macedonia by stimulating to practical entrepreneurship among youth by offering a complementary package of services to ease the start-up of new ventures. Main donors and founders of the YES project are the Norwegian Ministry of Foreign Affairs and the Foundation Open Society Institute of Macedonia. This project was implemented by SINTEFs local branch (www.sintef.no) in Skopje, the Foundation MIR (Management Industrial Research, (www.mir.org.mk) and Foundation Open Society Institute - Macedonia (www.soros.org.mk). Read more at: www.yesincubator.org.mk
Other business incubators are: Name Incubator Delcevo Incubator Sasa Gica Incubator Ohrid Incubator Biljana Prilep Business Start-up Centre Incubator Turtel Shtip Inkubator Strumica Deni Incubator Veles Location Delcevo Makedonska Kamenica Ohrid Prilep Skopje Stip Strumica Veles
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Examples abroad Bulungula Incubator Food Business Incubator Centre Signaghi Tourism Business Incubator

http://bulungulaincubator.wordpress.com http://www.desu.edu/food-business-incubator-center http://www.iesc.ge/index.php?article_id=296&clang=0

Development opportunities Strengthen local innovation systems within tourism. Introduce tourism to existing incubators. Explore bilateral cooperation opportunities for exchange of knowledge. Involve students in entrepreneurship. Consider a SME Support program

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5.3.3 Village tourism network Rationale Development of local communities is at the hearth of Norges Vels vision. It is then satisfying to discover that Macedonia can offer a number of cross village and cross municipality challenges. Some of these are related to ethnic coexistence and cooperation (See 2.4), others to economic development, etc. Villages also face many of the same challenges when it comes to building capacity for tourism, challenges that might be solved more efficient in cooperation with other villages. From what we cud observe villages have common issues when it comes to garbage handling, developing capacity for local tourism and reaching out with marketing efforts, just to mention a few. However, in the end, it will be up to the villages themselves to decide upon which issues within tourism to address the first. Some might like to focus on endogenous food and food traditions, while others might prefer to improve infrastructure at present tourist attractions. A village project involving three to five highly motivated villages might earn as a good start. Villages might be recruited through advertisements and an application and screening process. Only villages with a high potential for joband income creating activities should be chosen in the first project phase, as the rate of success has to be high as they will earn as models for other villages recruited by the network later. The aim of the network will be to address common issues for improving the most basic tourism services and tourism products. As Macedonia offers a broad mosaic of smaller attractions and villages with limited resources, this approach can prove to be successful. An approach like this does also open up for villages and networks of villages in other countries to be involved, and for the exchange of knowledge and experience across boarders. Facts Macedonia has about 1,700 villages throughout the country. Many of these have their own characteristics such as the Vevcani people of Vevcni village, known as skilful builders which can also be noted in the village architecture. Another interesting village is the village of Brajcino situated 6 km from Lake Prespa in a valley on the edge of Pelister National Park. It's a perfect location for combining outdoor activities on the mountain with the leisure of the lake. Many villages like Brajcino have maintained its traditional character and an Traditional wedding in Galinik intimate link with its surroundings. These villages are disturbed only by the roaring sound of the local river and by the evening winds rustling through the trees. Many villages are also rich in festivals such as the remote village of Galinik which actually do not have any full time residents. But on one weekend each summer, former residents all return to their ancestral homes with hundreds of sightseers to attend a unique two-day wedding festival. This tradition will probably keep the village alive in a sustainable fashion a long time after it first gave up on offering attractive premises for living and employment.
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Present development initiatives We were not able to identify Macedonian projects with the same approach as the proposed one. However, there are some tangible projects on independent activities as garbage handling, rural tourism, etc. which preferably integrates into the approach of the potential network as it forms. Development opportunities Address common tourism development issues across villages, boarders and regions Build a sustainable foundation for a tourism-network of self-improving villages Create role models on village level for other villages to learn from Organize sustainable mechanisms for garbage handling, etc. Basic training in skills such as language, service delivery and sales

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6.0 References
The number of references referred to in the report is limited. However, you will find all the sources of information in this chapter. Please also be aware that some text might have been copied directly from the sources and that some text has been slightly modified. 6.1 Documents National Agricultural and Rural Development Strategy (NARDS) (2007-2013) National Tourism Development Strategy (2009-2013) Project for Sustainable Agriculture and Rural Development in Mountain Regions (SARD-M) Jasmina Ginovska, August 2007 The Macedonian Wine Cluster, Harvard Business School, Microeconomics of Competitiveness, Spring 2006 Instructor: Prof. Michael E. Porter Bartol Letica, Dan Doncev, Ersin Esen, Nem Mijic, Susanne Cassel http://www.isc.hbs.edu/pdf/Student_Projects/Macedonian_Wine_Cluster_2006.pdf Strategisk Plan 2008, Norges Vel

6.2 Web Resources Please also see Appendix II. Wikipedia www.wikipedia.org Exploring Macedonia www.exploringmacedonia.com Slow Food Macedonia Convivium Sharplaninska www.slowfood-sharplaninska.org.mk Slow Food International www.slowfood.com Slow Food Norway www.slowfood.no IAAS Macedonia www.iaasmacedonia.org Chalkboard http://chalkboard.tol.org/macedonia-class-struggle

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Chamber of Tourism of Macedonia (Including the two faculties of tourism from Skopje and Ohrid) www.sktm.org.mk UCODEP www.ucodep.it Regional Agency for Development and Innovation of Agriculture of Region Tuscany www.arsia.toscana.it Agency for the Development of the Agriculture www.agencija.gov.mk University of Gastronomic Sciences (Founded by Slow Food) www.unisg.it Terra Madre (Network of Slow Food Networks) www.terramadre.org MAKVINO www.winemk.com Macedonia Timeless www.macedonia-timeless.com Travel2Macedonia www.travel2macedonia.com.mk Macedonian Cultural & Information Centre www.macedonia.co.uk

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APPENDIX I
Abbreviations and acronyms
EU FDI GDP GTZ MIR NARDS NATO NDC NGO Norges Vel PPS RED SME SNV SWG TBI TWR UK UN WB YES European Union Foreign Direct Investment Gross Domestic Product Deutsche Gesellschaft fr Technische Zusammenarbeit Management Industrial Research National Agricultural and Rural Development Strategy North Atlantic Treaty Organization Nansen Dialogue Centre Non Governmental Organization The Royal Norwegian Society for Development Purchasing Power Standard Regional Economic Development Small and Medium sized Enterprises Stichting Nederlandse Vrijwilligers (Netherlands Development organization) Standing Working Group of SEE Tourism Business Incubator Tikvesh Wine Route Foundation United Kingdom United Nations World Bank Youth Entrepreneurial Service Foundation

26

APPENDIX II

APPENDIX III
EMPIRIC PROGRAM PRE-FEASIBILITY STUDY - MACEDONIA FEB 2010
DAY Mon DATE 15.02.10 TIME 12:45 14:00 16:00 ACTIVITY Arrival FAGRICOM SNV Daniela Buzarovska Daniela.buzarovska@fagricom.org.mk Nehat Ramadani Senior Tourism Advisor nramadani@snvworld.org Peter Kampen Senior Advisor Forestry pkampen@snvworld.org Sonja Andonova sonja.andonova@gtz.de Boban Ilic Secretary General boba.ilic@swg-seerural.org swgsecretariat@mt.net.mk Violeta Jankova tadukat@gmail.com twr@t-home.mk Divna Jordanovska twr@t-home.mk Mr.Gjoko Danailov gjoko.danailov@ffrm.org.mk gjokod@yahoo.com Aleksandar Buzalkov A_buzalkov@yahoo.com Mr Zoran Nikolovski zoran.nikolovski@economy.gov.mk Jadranka Ivanova j.ivanova@moepp.gov.mk jadrankaivanova@yahoo.com Mr. Vlado Srbinovski v.srbinovski@yahoo.com Gorgi Peovski Gorgi.peovski@mt.net.mk Jens Adler Ms. Palazzo M: +389 75389637 T: +389 23179066 T+389 23217322 Ul. 27 Mart br. 14 1000 Skopje Orce Nikolov 109 1000 Skopje CONTACT PERSON PHONE ACCOM/PLACE

T+3892 32173222/1 F +389 2 3217322/0 M +389 70 34 33 76 T: +389 23103562 M: +389 70248636 T: +389 23217708

17:30 Tue 16.02.10

GTZ SWG (Regional Rural Development Standing Working Group in SEE

III Makedonska Brigada bb Makedonija Tabak Building, 2nd Floor www.seerural.org Partizanska 29 1440 Negotino hotelunipalas@t-home.mk http://www.unipalas.com.mk/index.html Gigo Mihajlovski Str., No 3 1000 Skopje

12:30

Tikvesh Wine Route Foundation http://www.facebook.com/profile.php?v= wall&ref=ts&id=100000872942009

+389 71 219 609

T: +389 71219610 M: +389 78421734 T: +389 23099042 T: +389 7220690 M: +389 70 222 582 T: +389 23093540 M: +389 75250234

President for the Farmer Federation

Wed

17.02.10

Veles Municipality Ministry of Economy, Dep of Tourism Ministry of Environment and Physical Planning, Dep for EU head of European Integration Balkania

Jurij Gagarin 15 1000 Skopje www.moepp.gov.mk

Thu

18.02.10

Fri

19.02.10

10:30

Municipality of Berovo Department of Development and International Cooperation GTZ Regional Economic Development in Macedonia (RED)

M: +389 78337171 T: +389-75-480759 M: +389 71302604 T: +389 33471057 T +38923103 576 M +38971-325 903

www.balkania-association.org www.berovo.gov.mk

Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH

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jens.adler@gtz.de Jan Johannsmeier Regional Economic Development (RED) Jan.johannsmeier@gtz.de Sasho Stojkovski sasho@ndc.net.mk Philippo Unterhofer filippo.unter@gmail.com Tefikoski Tefik info@tutto.com.mk Contact@smbk.org.mk Mukrem Mehmedi Mukrem.mehmedi@gmail.com Metodij Hadzi-Vaskov metodij.hadzi-vaskov@economy.gov.mk Goran Jovanovic goranjovster@gmail.com

F +3892-3103 578 T +389-2-3103 585 M +389-72-228 081 M +389 75 455 111 M: +389 71944776 M: +389 071241373 T: +389 42470999 M: +389 70271452 T: +389 42478814 T: +389 23093400 T: +389 31412224 M: +389 75476424

Antonie Grubisic Nr. 5 1000 Skopje www.gtz.de

13:00 20:00 Sat 20.02.10

Nansen Dialogue Network SFSC (Slow Food) Jance Village Slovenian - Macedonian Trade Cooperation Municipality Mavrovo & Rostusa Ministry of Economy

www.slowfood-sharplaninska.org.mk www.tutto.com.mk www.smbk.org.mk www.mavrovoirostuse.gov.mk

Sun

21.02.10

11:00 14:00

SVMS Kiro Burnaz (Kumanovo) Departure

Skopje Airport Skopje Airport

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APPENDIX IV
Possible project partners
There are a number of potential project partners ready to cooperate on alternative tourism in Macedonia. Some of these are briefly described below. Others will be contacted once and if we decide on going forward with a project. Further information regarding potential partners and their capacity can be obtained by contacting Norges Vel. SWG The Regional Rural Development Standing Working Group of SEE (SWG) is an organization consisting of institutions responsible for rural development in the respective countries and territories of SouthEastern Europe. In accordance with the agreed principles and with the aim of utilizing more effectively their human, natural and other resources for attaining a sustained growth of rural areas and the social well-being of their people, the members shall cooperate in specific areas. One of these areas is tourism and rural tourism. SNV SNV is an international development organization of Dutch origin with over 40 years of experience. They are working in the Balkans with an increasing presence of national advisors in country, and support national and local actors within government, civil society and the private sector to find and implement local solutions to social and economic development challenges. Tourism is a priority for SNV to promote sustainable development that directly impacts and benefits the rural poor. Their approach place people at the centre of development, promotes participation, non-discrimination, openness and transparency as well as responsibility and accountability. SNV has a good reputation and runs at present a forestry program in the Balkans. They are not into tourism as such, but should be considered as a partner on alternative tourism in areas where their forestry program is present. GTZ As an international cooperation enterprise for sustainable development with worldwide operations, the federally owned Deutsche Gesellschaft fr Technische Zusammenarbeit (GTZ) GmbH supports the German Government in achieving its development-policy objectives. GTZ core competence is capacity development. Capacity is the ability of people, organisations and societies to shape development on a sustainable basis. This entails identifying problems and then developing and successfully implementing strategies to reach solutions. GTZ support developing and emerging countries in building their capacities and managing the learning and change processes involved. Norges Vel might work with GTZ on implementation of the strategies made for the countrys alternative tourism sector. GTZ demonstrated interest in a cooperation on projects like the Iron Curtain Trail. Unfortunately GTZ pulls out of Macedonia in 2012. Slow Food Convivium Sharplaninska Founded by Carlo Petrini in 1986, Slow Food became an international association in 1989. Today, with the growth of the Terra Madre network, there are 100,000 members around the world and supporters in 130 countries. Slow Food believe that everyone has a fundamental right to pleasure

and consequently the responsibility to protect the heritage of food, tradition and culture that make this pleasure possible. The movement is founded upon this concept of eco-gastronomy a recognition of the strong connections between plate and planet. Slow Food also believe that the food we eat should taste good; that it should be produced in a clean way that does not harm the environment, animal welfare or our health; and that food producers should receive fair compensation for their work. Slow Food consider themselves co-producers, not consumers, because by being informed about how the food is produced and actively supporting those who produce it, they become a part of and a partner in the production process. Slow Food Convivium Sharplaninska is newly established, but already got an extensive network (Internationally as well) and works goal oriented. A joint cooperation between Slow Food and Norges Vel in Macedonia might also involve Balkania and other institutions, municipalities and organizations. Since the main focus of Slow Food is not alternative tourism, the extent of the cooperation within alternative tourism consequently will have to be limited to specific project components. Tikvesh Wine Route Foundation (TWR) TWRs mission is development of alternative tourism in the Tikvesh region. The Foundation is a nongovernmental organization, founded by four municipalities: Kavadarci, Negotino, Demir Kapija and Rosoman, and two representatives from the private sectors of tourism Violeta Jankova and winemaking Divna Jordanovska. The foundation has a written support and a member in the Management board from the Ministry of economy, sector of tourism, and Faculty of tourism as well. TWR is a partner not to be overseen if Norges Vel is going to do something within wine tourism- and wine culture marketing and development. FAGRICOM Fagricom has more than twenty full or part time employed experts striving towards empowerment of farming population in the Republic of Macedonia. They also make efforts to stimulate vibrant rural development and activities for environmental protection. Fagricom has been partnering with Norges Vel on projects in Macedonia since 2005, and their main focus today is on improving agricultural production and increasing productivity of farmers. Fagricom might be a partner on rural- and agricultural based tourism. Nansen Dialogue Network The Nansen Dialogue Network consists of Nansen Dialogue Centres in the Western Balkans and the Nansen Academy in Norway. The Nansen Dialogue Centres (NDCs) are organised as local NGOs with a total of 70 people working full time. The main objective of the network is to contribute to reconciliation and peace building through interethnic dialogue between strategic individuals and groups that have strong influence or decision making power in deeply divided communities. Nansen Dialogue in Macedonia is most known for its school projects and ethnic bridge building activities in small rural villages. Their activities are at present financially supported by the Norwegian Ministry of Foreign Affairs. Nansen Dialogue will be a valuable partner to consult in projects where insight and experience in ethnic conflicts are crucial.

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Local Municipalities During the field study we met with representatives from Berovo, Veles and Mavrovo & Rostusa municipalities. The overall impression was a strong will to cooperate and achieve progress in development of local villages and projects. Below we have provided a few facts about four of the municipalities we visited. Other municipalities have to be addressed and considered as well in the process of initiating a potential project within alternative tourism. Berovo Sustained by the Bregalnica River, Berovo stands at 830-900 meters (2,7252,950 ft) above sea level and can be reached by car using a single asphalt road leading to the city. The Berovo Lake and the forest of the Malsevo Mountains are two popular sites for tourists and Berovo craftsmen are well known for their skill in traditional wood crafting. Berovo cheese is also a well-known commodity. Of the 13,941 inhabitants, 13,335 are Macedonians, 459 Roma and 197 of other ethnic origin (2002 census). Veles Veles is known as an industrial center and recently, as a leader in the implementing of IT in the local administration in Macedonia. Veles is a city of poetry, culture, history and tradition, as well as a town with plentiful and precious cultural heritage and old churches. Veles is also the name of the town where the municipal seat is found and it has about 55,000 inhabitants. Mavrovo & Rostua Mavrovo & Rostua is a municipality consisting of 42 villages located in western Republic of Macedonia. The municipal seat is located in the village of Rostua and in 2002 the municipality had 8618 inhabitants. Ethnic groups in the municipality include: Macedonians: 4,349, Turks: 2,680, Albanians: 1,483, other ethnic groups: 106. Kavadarci The Municipality of Kavadarci covers a large area in the Tikve valley with a total ground surface of 391 km2 which comprises 23 settlements, the largest of these being Vataa. Kavadarcis most famous export is wine, the city being home to the largest winery in south-eastern Europe. Vineyards in the region cover a total area of 120 square kilometres, producing up to 85,000 tons of grapes annually. The Tikve winery is one of the oldest wineries in the Republic of Macedonia processing up to 55 million kilograms of grapes to produce approximately 35 million litres of wine each year. Of the 38,000 citizens, it is estimated that up to 85% are involved with the growing of grapes.

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NORGES VEL
Terms of Reference (ToR)

A PRE-FEASIBILITY STUDY ON LTERNATIVE TOURISM IN MACEDONIA

In consultancy with: FAGRICOM Slow Food Macedonia Dunira Strategy

Contact person: Torbjrn Bjnness Ph: +47 9202 4062 Em: torbjorn.bjonness@norgesvel.no

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1.0 Introduction
1.1 Norges Vel The Royal Norwegian Society for Development (Norges Vel) is an independent, non governmental and non-profit organisation, presently consisting of 33 member organisations and 1100 individual members. Our main focus is to contribute to viable local communities through sustainable business development both domestically and in numerous countries worldwide. In addition to our operations in Norway, we are at present involved in a number of projects in the Balkans, Eastern- and SouthEastern Africa and Eastern Europe. For more information, please visit: www.norgesvel.no 1.2 Assisting partners The main partners in planning and execution of this pre-feasibility study are briefly described below. 1.2.1 FAGRICOM The Non-Governmental Organization for Agricultural Marketing and Rural Development, FAGRICOM was founded in autumn 2005 by five senior professional consultants with HQ in Skopje. Today FAGRICOM is full grown, modern organization with more than twenty full or part time employed experts striving towards empowerment of farming population in the Republic of Macedonia. FAGRICOM has since 2006 worked closely with Norges Vel on a number of nature based projects in Macedonia. For more information, please visit: www.fagricom.org.mk 1.2.2 SFCS The Slow Food Convivium Sharplaninska (SFCS) was born from the will of some enthusiasts of sustainable rural development, food and wine lovers and enthusiasts of the natural beauties of Macedonia to create something new in a field, the agricultural quality food production, which is only now starting to make the first steps in Macedonia. For more information, please visit: www.slowfood-sharplaninska.org.mk

1.2.3 Dunira Strategy Dunira Strategy is an independent marketing, PR and training consultancy with a focus on the sustainable development and environmental management of tourism. Dunira's expertise lies in facilitating enduring partnerships between stakeholders and we have particular experience building local capacity for sustainable development through tourism. For more information, please visit: www.dunira.com/index.html
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1.3 Process overview

Phase I II III IV V

OVERVIEW OF THE PROCESS Milestone Deadline Mapping for decision and decision made 30.03.2010 Project development completed Partner agreement(s) and funding in place Project/program implemented Exit and evaluation done

Status In progress

Key document ToR

The process will be according to the table above. This ToR is in detail describing what has to be mapped in phase one. A decision on a potential project will first be made when all the data are collected. The deadline is set to 30th of March 2010, but an earlier clarification might be possible. Contributions from potential partners are most welcomed in the mapping process. The ToR is made to ensure that those carrying out the desired tasks: Give effect to the overall Norges Vel goal of developing sustainable local business. Follow specific direction on the integration of mainstreamed and cross-cutting issues Use participatory approaches and build partner ownership for the activity

35

2.0 Background and thematic introduction


This pre-feasibility study has been initiated on background of a project proposal presented to Director of International Development, yvind rbeck Srheim at Norges Vel by Filippo Unterhofer (SFCS) in 4Q 2009. Mr. Srheim found the proposal relevant and interesting, and Norges Vel consequently decided to look further into the possibilities of doing a project on alternative tourism with one or more components of slow food in Macedonia. At a time when traditional conservation through enforced protection of natural areas are being questioned for its effectiveness and social impacts, strategies such as ecotourism, agritourism and slow food might offer considerable potential for integrating conservation with development. This is well in line with the vision of Norges Vel:

Prosper local communities.


2.1 Alternative tourism Alternative Tourism is a concept that is defined as not being mass tourism. Under the alternative tourism concept we can find a series of classifications and types of tourism. What characterizes the concept of Alternative is the existence of small or medium companies, created by families or friends, where there is the possibility of more contact with the communities and where most of the times there is a respect for the environment. This concept is generally used by government institutions and academics, and very rarely a traveler will ask in an information centre for places or activities of alternative tourism. This pre-feasibility study will basically focus on agritourism and ecotourism. 2.1.1 Ecotourism Ecotourism is a new concept in tourism, which was originally sparked off by the idea of making harmonious co-existence with nature a reality once again. As defined by the Ecotourism Society, it is the responsible travel to natural areas, which conserves the environment and sustains the well being of local people. Today, ecotourism is one of the fastest-growing segments of the tourism industry. Its potential for growth is virtually unlimited. Any tourism program which is : nature based, ecologically sustainable, where education and interpretation is a major concept and where local people are benefited can be called ecotourism. The International Ecotourism Society (TIES ) defines ecotourism as : Responsible travel that conserves the environment and sustains the well - being of local people. In the past five decades of organized protection of natural rarities in the Macedonia, 74 objects of nature have been included in the protected areas network, with a total area of 187,895 ha, or 7.30% of the national territory. According to the Law on Nature Protection OG (67/04; 14/06 and 84/07), the following have a status of protected wealth:

3 national parks, with an area of 108,338 ha 4 natural reserves, with an area of 12,855 ha 3 landscapes with special natural characteristics, with an area of 2,338 ha 14 distinct plant and animal species outside the natural reserves, with an area of 2,709 ha 33 nature parks protected (category of nature monuments), with an area of 61,655 ha

Others 92,31 % 4,20 % 7,29 % 2,40 % 0,50 % National 0,09 % reserves 0,10 %

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2.1.2 Agritourism The scope of agritourism varies drastically depending on the type of farm, available land and how much of the business is aimed at the agritourism market. However, the varying forms can be broken down into three basic groups:

Direct-market agritourism If you've ever seen a roadside produce stand, you've seen direct-market agritourism in action. Farmers sell goods like produce, canned items and other organic products directly to consumers either at markets and fairs or on the farm itself, often alongside other agritourism offerings. Farmers may be selling an organic product similar to what consumers could find at a grocery store, but their product has the added appeal of coming directly from a local farm. To appeal to some consumers, the goods may be marketed as organic, all-natural, or the product of "old-fashioned" methods. Education and experience agritourism This form of agritourism includes pick-your-own apple groves, farm tours, bed-and-breakfasts and packages aimed at giving guests a hands-on education in farm life. The farm itself is marketed as a tourist destination. Whether agritourists pay to pick their own produce, attend wine tastings at a vineyard or simply enjoy the farm atmosphere, the draw is first-hand experience. Once visitors are acquainted with the farm more closely, they may also be more inclined to buy its agri-products. Recreation and event agritourism While still considered agritourism, these offerings tend to involve using farm land for other marketable uses. Harvest festivals, corn mazes, haunted hay rides and country weddings held on farm land may draw heavily on the farm's atmosphere. Other activities like camping, archery and horseback riding are often less dependent on the farm itself. However, such forms of agritourism still draw in guests who may be tempted to buy goods. Agritourism is a style of vacation that normally takes place on a farm or ranch. This may include the chance to help with farming and ranching tasks during the visit. Agritourism is considered to be a niche or uniquely adapted form of tourism and is often practiced in wine growing regions such as Australia, Italy, Portugal, Spain, and North America. Tourists engage in farm activities ranging from picking fruit or feeding animals, or planting crops. People are more interested in how their food is produced and want to meet the producers and talk with them about what goes into food production, children who visit the farms often have not seen a live duck, or pig, and have not picked an apple right off the tree. This form of expanded agritourism has given birth to what are often called entertainment farms. These farms cater to the pick-your-own crowd, offering not only regular farm products, but also food, mazes, open-pen animals, train rides, picnic facilities and pick-your-own produce.
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3.0 Framework and priorities


3.1 Duration Fieldwork: 10 days included travel Phase I: Dec. 2009 Mar. 2010 3.2 Areas of interest All areas within Macedonia will in principle be of interest as this is a pre-feasibility study. However a few areas will be chosen for a visit. Contact Torbjrn for more information on this.

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4.0 Deliverables
The main goal of the study is to Provide Norges Vel with sufficient information to make qualified decisions on possible future interventions within alternative tourism in Macedonia. 4.1 Objectives Christopher Imbsen at Dunira Strategy in Edinburgh has provided Norges Vel with a general feasibility study checklist on tourism. The checklist has been an important tool in the process of hammering out relevant objectives for this pre-feasibility study on alternative tourism in Macedonia. The main objectives are as follows: Identify important stake holders, policies, priorities and regulations considering: National policies and priorities within alternative tourism Planned and present government interventions and the exact progress The legislation regulating the sector Regional political stability and relations Land rights Assess how the sector is functioning considering: Key services, products and attractions Where and how the products and services are offered and marketed. Private, government and third sector initiatives within alternative tourism The performance and sector prospects. Statuary rules and regulations The number and capacity of tourism- and hospitality training institutions Innovation, research and training methods Marketing, branding activities and web services The statistics on alternative tourism Identify possible project partners and their capacity considering: Their financial and organisational capacity Their competence and experience Their transparency and attitudes towards corruption Roles and responsibilities that can be played by Norges Vel as related to roles and responsibilities to be held by other players Their code of conduct Their network and reputation Possible conflict of interest (COI) Their compliance with The Universal Declaration of Human Rights Identify potential local communities for development considering: The degree of dedication and commitment among local authorities and other gatekeepers Compared estimates for a positive environmental and social impact Cultural, ethnic, cross border and interpersonal barriers of entry and execution The local potential an capacity for development Assess private sector and infrastructure considering: Employment patterns Industry groups and industry relations with neighbouring destinations
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4.2 Method This ToR is made to ensure that the outcomes sought have a clear development focus and are achieved in ways that advance aid effectiveness according to the Paris Declaration on Aid Effectiveness. However, its of importance to notice that not all of the ToR objects will be explored to the same extent in this pre-feasibility study. Some objects will be explored more in details in phase II. The main methods will be: Interviews with key sector personnel. Descriptive observations, including meetings and site visits. Desk study of reports, plans, strategies, etc.

4.3 Team composition and reporting relations

Reporting relations NORGES VEL Management yvind rbeck Srheim NORGES VEL Project Team Torbjrn Bjnness (PL) Asbjrn Garnes Carl Fredrik Pedersen

Reference group Organisation Norges Vel Norges Vel Name Anne Siri Brandrud Jorunn Tnnesen Email Phone Anne.siri.brandrud@norgesvel.no Jorunn.tonnesen@norgesvel.no

4.4 Outputs On the basis of the information gathered one expects the following outputs to be produced: A no more than 20 pages long report (excluding attachments) summing up the main findings and the recommendations for the way forward including: A list of critical success factors for the establishment of new project initiatives within the tourism sector in Macedonia. A list of possible project partners, alliances and initiatives. A list of potential funding sources.

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4.5 Timing and reporting The preparations, the field study and the reporting on the feasibility study will be carried out according to the following schedule: Activity Data collection and preparations for the field study. Field study Reporting Time Dec - Feb 2009/2010 15th-2nd February 2010 Feb - Mar 2010

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5.0 Travel information


It has been considered necessary to arrange a trip to Macedonia in order to accomplish some of the objectives listed in chapter 4. The details are outlined below and must be considered as tentative.

5.1 Team of participants Name Asbjrn Garnes Carl Fredrik Pedersen Torbjrn Bjnness Organization Norges Vel Norges Vel Norges Vel Email Asbjorn.garnes@norgesvel.no Phone

Torbjorn.bjonness@norgesvel.no +47 9202 4062

5.2 Flight Schedule (Tentative) Activity Arrival Departure Time 12:15 14:00 Date 15.02.2010 21.02.2010

5.3 Tentative program Please contact Torbjrn for more information.

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