The war in nearby Bosnia, the imposition of international
sanctions on Serbia, and the neighboring Kosovo
crisis in 1999 all delivered successive shocks to
Macedonia’s struggling trade-based economy at the end
of the millennium. In 2001 economic conditions worsened
again, this time as a result of an ethnic Albanian
uprising with the country. Gross domestic product
shrank 4.5 percent, borders were periodically closed, and
government spending spiraled into deficit as security
expenditures rose. Finally, with an unusual degree of
quiet, 2002 and 2003 had brought two full years of relative
calm and slow economic recovery.