Second Programmatic Development Policy Loan

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The Second Programmatic Development Policy Loan Project for Macedonia will be the second in a series of three Programmatic Development Policy Loans (PDPLs) designed to support the Government's economic reform program over a three to four year period. The program aims to promote economic growth and job creation through: 1) reforms to improve the investment climate, and 2) reforms to strengthen the governance and efficiency of the public sector. Improving the investment climate will depend on judicial reform, labor market reform, improving the business environment, and strengthening financial sector regulation and supervision. Strengthening public sector governance will depend on public administration reform, health sector reform, and decentralization. The reform program would be consistent with the Government's aspiration for eventual EU membership. Capacity weakness could impede full implementation of some proposed reforms. The implementation of an ambitious reform agenda sustained over several years will be a challenge given the relatively weak capacity of some public sector institutions. This PDPL series follows up on the reforms initiated under the recent Public Sector Management Adjustment Loan (PSMAL) and the Second Financial and Enterprise Sector Adjustment Loan (FESAL 2) as well as the reforms identified in the recent Financial Sector Assessment Program (FSAP).