RFI__-_Export_Lead_Growth.pdf

USAID/Kosovo: Developing Export-led Growth in Kosovo

Subject: Request for Information (RFI) and Expression of Interest (EOI)

Date of issuance: June 24, 2019

Response due: July 17, 2019 (12:00 p.m., Kosovo time)

Response to: Urime Abdyli at uabdyli@usaid.gov and Elyssa Jeter at ejeter@usaid.gov

Dear Interested Parties, USAID/Kosovo seeks information about interests, capabilities, and market information related to the draft problem statement below and responses to the RFI questions enclosed in order to inform the design of a future mechanism. This RFI/EOI is open for comments from any interested party.

This RFI/EOI has two sections. You may respond to either section but are encouraged to respond to both:

1. Reponses to the RFI questions in Attachment 1 (“Questions for Industry and Partner Feedback”) should be no more than 6/six pages in length. Responses must be written in English. Number each page consecutively. Any response form may be used but USAID values concise, issue-specific responses. Please ensure submitted comments make specific reference to RFI page and question numbers.

2. EOI responses should be sent using Attachment No. 2. Beyond the form, respondents may also include self/organization information, including past experience working in this subject area and working with relevant stakeholders on the ground.

Send responses to this RFI/EOI to the emails listed in the header of this letter with the subject title “RFI/EOI: USAID/Kosovo Developing Export-led Growth in Kosovo Activity”, no later than the date/time stated above. You may receive an electronic confirmation acknowledging receipt of your response, but will not receive individualized feedback on any suggestions. We may revise the concept based on comments received, but are not obligated to do so.

Per FAR 52.215-3, this is not a solicitation and is not to be construed as a commitment by the U.S Government to issue any solicitation or ultimately award on the basis of this RFI/EOI, or to pay for any cost incurred in the preparation and submission in response to this RFI/EOI. It should be noted that responding to this RFI will not give any advantage to any firm or mailto:uabdyli@usaid.gov mailto:ejeter@usaid.gov

ATTACHMENT 1:

1. Draft Problem Statement

Problem Statement Kosovo’s encouraging rate of growth over the last decade, recently at over 4% annually,1 has not been matched with commensurate economic development. Rates of job creation (approximately 4%), labor force participation (just over 40%), and labor productivity (approximately 4%) remain low, and despite modest improvement in recent years, unemployment rates remain unsustainably high at around 30% overall and over 50% for youth.2 The unemployment rate among women is 37%, but 64% for young women (ages 15-24).3 The discrepancy between these indicators of economic health is in part explained by the large volume of donor assistance, shorter term capital projects, as well as remittances and the associated spending on consumption, driving up the economic growth rate.

Kosovo is a small market, so although there are opportunities for improvement in fulfilling domestic demand, significant growth leading to development will depend significantly on increasing the value and/or volume of exports. Kosovo’s ability to grow exports and expand its share of its domestic market is constrained by both the private sector’s ability to identify and fulfill market demand, and the market conditions created by government policies, laws, regulations, and procedures. USAID/Kosovo is launching an Economic Governance program specifically targeted to work primarily with government entities in improving that business enabling environment (BEE), including the legislation, regulation, and procedures associated with cross-border trade. As such, the design team intends to target the private sector side of this equation through this activity, and has identified the overarching problem this activity will target as: Kosovo’s products and services are not successfully competing in local, regional, and international markets. As illustrated by Kosovo’s dramatic trade deficit4, Kosovo’s over-reliance on imports and under performance in exports is constraining its economic development.

To improve its performance in these markets, the private sector must be able to identify opportunities matching their abilities, and deliver a product to the consumer more efficiently, with better quality, higher quantities, and/or in a more unique form to meet demand. To date, internal Mission discussions, desk research, and consultations with a broad range of stakeholders have identified three primary, interrelated private sector challenges which are contributing to its inability to respond to market opportunities:

1. Sophistication and information: Kosovo’s firms do not possess the sophistication or access to information and established trade networks needed to consistently identify and meet market demand.

2. Workforce: Kosovo’s available workforce does not fulfill employer demand, as they are unable to hire and retain adequate unskilled labor and labor with skills matching their needs.

1 Kosovo Agency of Statistics, 2017 Gross Domestic Product (GDP) Data.

2 World Bank Group, Western Balkans Labor Market Trends 2019.

3 Kosovo Gender Analysis, European Union Kosovo 2018 4 Over 8 to 1 imports over exports. Kosovo Agency of Statistics, 2017 International Trade Statistics.

3. Access to Finance (A2F): Kosovo’s financial sector is not meeting firms’ needs, with limited products on offer and high collateral requirements, relatively short pay back periods, exacerbating a donor-dependent mentality.

Anticipated Objectives The overall purpose of the activity is to facilitate Kosovo’s firms towards becoming more competitive in local, regional and international markets, thereby promoting export-led growth.

The anticipated objectives are:

1. Increase exports through improved SME sophistication and market knowledge and linkages.

2. A skilled workforce that better meets private sector needs.

3. Expand access to finance to facilitate firms’ growth and productivity.

Questions for Industry and Partner Feedback

1. What factors are constraining the competitiveness of Kosovo firms/sectors on domestic and foreign export markets? Please note if constraints are more at the firm level or at the trade regulation/policy level.

2. What are markets/products (either domestic or for export) with the biggest growth potential (jobs and sales)? Where are the export countries and products with the greatest potential located (jobs and sales)?

3. What sectors have the largest potential for job creation for women and youth?

4. By what percentage do you estimate jobs/sales/exports to be increased by the high potential sectors/markets over a 3-5 year period and what is the basis for your estimates?

5. How can Kosovo attract FDI through an export led growth approach?

6. How do you define the market systems approach?

Additional Resources/Links

1. BEAM’s Market Systems Operational Guide funded by DFID

2. A Framework for Inclusive Market System Development

3. Kosovo Agency of Statistics, 2017 Gross Domestic Product (GDP) Data

4. World Bank Group, Western Balkans Labor Market Trends 2019

5. Kosovo Gender Analysis, European Union Kosovo 2018 https://womensnetwork.org/wp-content/uploads/2018/10/womens-network.pdf

6. World Bank, Kosovo Jobs Diagnostic 2017 https://beamexchange.org/guidance/m4p-operational-guide/ https://www.marketlinks.org/library/framework-inclusive-market-system-development http://ask.rks-gov.net/en/kosovo-agency-of-statistics/add-news/gross-domestic-product-gdp-by-economic-activity-and-expenditure-approach-2017 https://www.worldbank.org/en/region/eca/publication/labor-trends-in-wb https://womensnetwork.org/wp-content/uploads/2018/10/womens-network.pdf https://openknowledge.worldbank.org/handle/10986/27173?show=full

ATTACHMENT 2:

Response Form

RFI/EOI No. 72016719RFI00003

GENERAL INFORMATION

Name of the Organization:

Address: _____________________________________________________________

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Type of Organization:

� US Organization (other than small business) � US Small Business - (Please indicate type______________) � International Organization � Non-US Organization (Please indicate: ____________________)