Kicevo is a town of 30,000 inhabitants in the west of Macedonia. Ethnic Macedonians make up the majority of the population with 53.5 percent while Albanians constitute a significant minority of 30.5 percent (2002 Census). Despite its ethnic mix, the town remained peaceful during the 2001 conflict, building on decades of peaceful co-existence. The different socio-economic histories of the two ethnic groups in Kicevo, however, are illustrative for the underlying structural reasons for the armed conflict in 2001.
Under Yugoslav socialism the authorities pursued a conscious policy of promoting urbanisation and the creation of industrial centres. The little town of Kicevo saw its population explode as workers migrated from rural areas in search of jobs in the new socialist industrial enterprises. The town also gained a number of public institutions, including outlets of ministries, public utility companies, schools and a 4,000-strong Yugoslav army barracks. These provided a further opportunity for employment for educated Macedonians.
The Albanians in the region were largely excluded from jobs in both Kicevo's industry and the public sector. Middleclass ethnic Macedonians looked down on them for their comparative lack of education. Most Albanians in the town, and particularly the surrounding villages failed to complete anything more than primary education. Since Macedonian dominated as the language of instruction in secondary and tertiary education, they were at a natural disadvantage.
With the route to formal employment largely closed off, many ethnic Albanians migrated in search of better prospects abroad. The remittances sent by these migrants became an important source of income for Albanian families in Kicevo. Conservative estimates of remittances sent in 2002 to the Kicevo area put the figure at € 16 million per year – more than the total salaries of ethnic Macedonians in socially owned enterprises and the public sector combined. Migrants also contribute economically by returning in the summer months, boosting the revenue of small Albanian businesses. Many come back to get married, a phenomenon that has caused reception halls and shops selling wedding gowns to spring up in the Albanian quarter.
The collapse of Socialist Yugoslavia meant that Kicevo's industries were exposed to a new environment which exposed many as unviable. Economic transition brought about a painful process of deindustrialisation. Of 6,600 jobs in socialist enterprises in 1989 only half remained by 2002. A further 465 jobs had been lost by 2006. With some companies threatened by bankruptcy and many overstaffed and inefficient, this process is likely to continue. The development of the private sector, a key element of transition, has not really taken place. Between 2002 and 2005 a small construction company was the only production company with more than 10 workers to be formed in Kicevo. Those that had existed prior to 2002 were all experiencing financial difficulties three years later.
Ethnic Macedonians are the hardest hit by Kicevo's deindustrialisation. Albanians had for the most part been excluded from such jobs and came to be economically dependent on remittances from abroad rather than official employment at home. Ethnic Macedonians seem to have been unable to take this route, partly due to the lack of a Macedonian community abroad that would have facilitated emigration. The decline of industry has left middle class families in Kicevo with one last resort – the public sector. This is why a central provision of the Ohrid Agreement, "equitable representation" in the public sector, is a sensitive issue among Kicevo's ethnic communities.
In 2001, when the Ohrid Agreement was signed, Albanians were still vastly underrepresented in Kicevo's state administration. Leaving aside education, which was ethnically balanced for reasons of language, roughly 15 percent of jobs in the Kicevo area were held by Albanians (50 percent of the area's inhabitants are Albanian). In the town of Kicevo the figure was less than 10 percent. Redressing this imbalance by raising public sector employment (which might already have been too high) was impossible due to public-finance constraints. Public sector jobs for Albanians thus had to come at the cost of the already beleaguered ethnic Macedonian community.
In some respects Kicevo can be seen as a success story. In the years since the Ohrid agreement was signed the share of Albanians in the state administration has significantly increased. In 2002 there were three Albanians in important administrative positions in Kicevo, by autumn 2005 there were over 20. The number of Albanians working in the police force, the hospital and schools increased, even when overall employment declined. These changes hurt the economic prospects for the ethnic Macedonian community but were not met with a major public outcry or protests.
Nevertheless the economic outlook for Kicevo remains bleak. The slow demise of its socialist industries has not been offset by a new, dynamic private sector. Emigration, traditionally a valve for large scale unemployment and a source of income, has become more difficult due to the EU's immigration policies. Remittances from the Albanian community living abroad have generally not led to productive investments in the area. Only when Kicevo's ethnic groups can share in the development of new prospects, rather than grumbling over the division of scraps from its socialist legacy, will the structural causes of conflict be resolved.