The social and economic landscape of Kicevo has been shaped by the rise and fall of socialist industrialisation. In the decades following the Second World War, most ethnic Macedonians left their harsh life as subsistence farmers in villages and moved to the town of Kicevo to take up jobs in the new socialist companies and the administration.
The amenities of the modern lifestyle that accompanied these new urban jobs, however, became increasingly uncertain in the 1990s, after the disintegration of Yugoslavia and the resulting economic downturn. In Kicevo – like in many small towns in former Yugoslavia – history seemed to turn into reverse, in the form of a process of de-industrialisation. Of some 6,600 jobs in socialist companies in 1990, half had disappeared by 2002.
While Albanians made up about half of the Kicevo area's population, they were much less affected by the industrial collapse. Largely excluded from these jobs during socialism, their economic survival strategies were early on strongly oriented towards migration abroad. Later on they also increasingly engaged in small private sector activities, primarily driven by money from the diaspora. Conservative estimates from 2002 suggest an inflow of at least € 16 million in remittances in that year, more than the total salaries paid to Kicevo's ethnic Macedonians in the public sector and the former socialist industries combined. However, opportunities for further emigration have been drastically curbed by the EU in recent years.
ESI found both ethnic Macedonians and Albanians unperceptive for the difficulties of the respective other group. Many Albanians perceived ethnic Macedonians as lacking initiative, wedded to white collar jobs and patronage networks. Many Macedonians saw Albanians as backward and prone to crime.
It is against this socio-economic background that the Ohrid agreement has been signed.