Sunday, 27 September 2020 | News today: 0

Legimitation crisis


Columnist: Timco Mucunski, PhD student in Law


In 1973, German Jürgen Habermas presented the theoretical concept of legitimation crisis. According to him, this form of political crisis implies to reduced trust in institutions and their leadership. By the way, although so far this term has not been used in public debates, the opposition in Macedonia is constantly trying to hint to its existence in the very context of the current political situation in the country.

There is no doubt that there is a parliamentary crisis in the Republic of Macedonia due to the boycott of the participation of the opposition in Parliament, but it can not be automatically interpreted as a legitimation crisis because, actually, the legitimacy of none of the institutions has been disputed. The greatest confirmation of this assertion comes from the fact that foreign mediation is conducted through the European Parliament (as related institution of the Macedonian Parliament), whereby Europe de facto concludes and accepts that at the present moment the biggest problem in Macedonia is the very several-month-long boycott of the opposition and the non-participation in the work of the highest representative and legislative body. At the same time, the expectations of the representatives of the international community are clearly expressed, as well as of the majority of the Macedonian citizens who jointly and unanimously point to a clear message that the place for dialogue and seeking the best possible solutions is precisely in Parliament by arguing about the serious commitment of the elected MPs to actively participate in the work of the institution that draws its entire legitimacy precisely from the given confidence of the citizens. At the very least, it is politically incorrect that the MPs because some political needs and calculations of their own to abuse the electoral will of those who chose to give their voice believing in their sincerity, honesty, promises and offered election programs.

In that context, and without getting into the issue that caused the current political crisis, it is high time to return the unnecessarily damaged reputation of Parliament, as well as the international reputation of the state because the status quo position not only suits all of us that actively live and work here, but all those who wish to return to their homeland and the benevolent investors who believe in us and want to help us create the future modern, democratic and economically prosperous Macedonia.

The policy of further destroying of the reputation of Parliament and the state as a whole, without serious arguments, in any case should not be a desirable future scenario of either of the parties involved, which we hope to be ready to seek a quick, efficient, quality and honorable exit solution.

However, referring to the topic on legimitation crisis, it is desirable to go back a little in the historical development of our country, during the time of privatization. The Law on transformation of enterprises with social capital (known in public as Law on Privatization) was the legal act that set the framework and the possibility for social enterprises to be transformed into joint stock companies and limited liability companies, whereby the dominant technique for implementing this process was the sale of the enterprises to people that took over management of the company, winning only real chance to gain a controlled block of shares. At this point the only thing necessary to conclude is that the method of acquisition of that controlled block of shares is seriously questionable and probably quite controversial.

If you go to further analysis, despite the factor of controversial legislation that allows such a process of privatization and change of ownership structure, we can safely draw the conclusion that the key to today’s problems over the closeness of our companies to new stock issues due to inadequate assessment of that social capital.

A confirmation of the mentioned thesis is that during the very assessment of social capital various factors were not taken into account,  which determined its value, of which I will mention: the cash flow (certainly it is not the same if a company makes a quick cash flow and simultaneously fertilizes let’s say for 2 or 3 months, or the funds to make a “turnover” for a year), the positioning of the market (as the value of the company itself and the chances for success, which were not taken in consideration as input in determining the value of the social capital) and the rights of intellectual and industrial ownership  (patent, trademark, brand, findings were not considered, and their value probably would multiply surpass the value of the social capital).

Typical examples of companies where these factors were not considered in the assessment were: Alkaloid, Evropa, Godel, Makpetrol, Fersped, Tito metal factory and others.

Taking into account all these problems, we come to the key issue related to the institutional structure during the time of privatization. Besides the assessment that had substantial impact on the determination of the value of the social capital, no less important was the absence of certain institutions, if they existed at the time, they would have probably in a way guaranteed legal protection and proper implementation of privatization and would have provided at least the minimum sense of fairness in the implementation of the privatization process. A confirmation of that is the fact that almost all institutions in this field, such as the Macedonian Stock Exchange, the Central Registry, the Central Securities Depository, the Securities and Exchange Commission and others, were created a few years after the adoption of the Law on transformation of enterprises with social capital. This greatly influenced this “black hole in the institutional system” to give the opportunity to put this original accumulation of capital in the Macedonian corporations which is largely due to the current concentrated ownership structure in the same.

It is not correct in these times of unnecessary created political crisis to hear debates about the legitimacy of the institutions from certain individuals that in key moments for the country participated in the process of complete transformation of the social capital and ownership structure, without the existence of any appropriate institutions that would play the role of minimum protective mechanisms. Here, perhaps, it is about a far more serious crisis than the legitimation, and that is the ethical crisis.