Competitiveness DPL 2

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The objective of the Second Programmatic Competitiveness Development Policy Operation Program is to strengthen the competitiveness of FYR Macedonia's economy by incentivizing productive investment and technology upgrading in the manufacturing, agribusiness and trade logistics sectors, and establishing enabling conditions to progressively increase labor market flexibility and innovation capacity. The Second Programmatic Competitiveness Development Policy Loan (DPL2) to the Former Yugoslav Republic of Macedonia (FYR Macedonia) supports the government's competitiveness development agenda. It will be the second of two DPLs in FYR Macedonia aimed at strengthening key export-oriented economic sectors with strong potential for growth and employment. Building on the reforms supported by the First Programmatic Competitiveness DPL (DPL1), the operation advances the competitiveness agenda and intensifies its impact on poverty reduction and shared prosperity in several important ways. It puts emphasis on reforms to incentivize greenfield investment in manufacturing, which can boost demand for both low skilled and high skilled workers. It promotes agribusiness development through improved management of state-owned agricultural land. It supports the introduction of a risk-based approach to customs inspections to significantly reduce the time and cost of international trade. It also supports labor market reforms that improve the incentives to work. Finally, it supports more new policies to stimulate growth of Research and Development (R&D)-intensive industries.