ATTACHMENT_FOUR_-_Questions_&_Answers.pdf

ATTACHMENT FOUR

NOTES

ERA Co-Creation Conference and Stakeholders Workshop

June 25, 2019

Government of Jordan Remarks:

His Excellency, Minister of Industry, Trade, and Supply, Tariq Hammouri’s remarks:

We’re glad to be working with such an esteemed team at USAID- our friends have been very supportive and generous. I apologize for coming late and having to leave early.

We’re looking at various sectors regarding the economy at large, and we need as much support as possible on these and with investment at large. We’re looking at re-engineering, chopping down procedures- things that make the process and procedures easier, all while keeping our checks and balances in place. We’re also very keen to be able to evaluate the new procedures that we’ve already put into place—we’re looking to see if they’re working or not working, and we want to evaluate them continuously- we want to make sure we’re evaluating the markets we’re working in and we could work on diversifying more.

This also includes taking more advantage of the rules of origin agreement with the EU—looking at how to evaluate these systems from the entire process- from the beginning up until the matchmaking and the transactions are done. Maybe part of this is focusing on niche sectors that are important to the economy—it’s important to see which sectors achieve quicker results.

We’ve just established Enterprise Jordan, and we’re very hopeful—this is the result of a study we conducted jointly with USAID based on best practices, and now we need to see how to evaluate and support this. We’re still at a very early stage. EJ is a public-private not for profit partnership. We’ve selected the board very recently, so we’re at a very early stage and we appreciate all the help we can get.

This is on the export side—this includes services as well. On the investment side- Mr. Fareedon will speak in more detail maybe, but export and investment are areas that are highly legible and crucially needed for the economy. We’d like to look at the details for having more specific procedures and specific deliverables, and we want more exports and more diversified exports-and to know how we can get there and what support we need.

His Excellency, Minister of Planning Mohammad Essas, MOPIC remarks- This is truly a unique opportunity. I appreciate USAID opening the platform so bidders can really hear from the government. I’ll give a macro update and from that, I’ll segue into the priorities as I see them in terms of what needs to be done.

First of all, Jordan went through a decade of a perfect storm. One hit after another, we had the

Egyptian gas issue and unprecedented population growth. If you go to the World Bank’s development growth index by country, you’ll see that no country has had population growth like

Jordan did from 2011-2013.

In order to spur Jordan’s growth, we need to be at a growth rate of double our current GDP, which is not impossible because early in the 90s we made it happen with higher digits.

That gets us to where we are today. We have a fiscal consolidation program with the IMF that is going on track, we received a second review a month ago and we’ve more or less been focused on macroeconomic stability. But this is the means to achieve an objective, not the objective itself. It is a means to create growth.

The focus has to be on growth, growth, growth. Jordan’s path to safety must have three elements all coexisting together: Number one is growth, we have to jack up growth rates to their real potential, we have to be ambitious. Business as usual is not going to cut it, passive technical support that is just delivering XYZ is not going to cut it, think as far out of the box as you have been in as possible, because past attempts have failed. I need your support to push us, I need you to push us in ways that other countries have done- to learn from their failures and advance their successes.

My plea to USAID is, if you get any bid that copy paste from other proposals, don’t let that impress you—spare the money. Number two is jobs. In the 2000s, we grew at 6 and a half percent. The growth of jobs for Jordanians has not been growing at similar rates- this a country with 19 percent unemployment. Yet we have a huge number of foreign expats working in low skill jobs, jobs have to be created for Jordanians. What are the core strengths of the Jordanian workforce? You have to triangulate the different factors and come up with that.

The third is lowering debt service cost. We have been borrowing to withstand the shocks we have received. We have to change the dynamics of our borrowing and reduce its cost in a different way that’s not via bond issuance, which does not work anymore. Accessing concessional financing for us to move forward is a priority. Part of the challenge that led to where we are is the trade shock from our closed borders. Our shelf place in these markets is lost, and regaining our place is an uphill battle against many competitors. The real solution is a balance of payment.

Growth has to come from two sources: the IMF program and fiscal discipline, not fiscal or monetary incentives- we cannot rely on the traditional methods.

Throw traditional policy for financing out the window—FDI and exports are the two things we need to work on increasing because we don’t diversify based on our current domestic policies.

We have to start by knowing our core competitors. I’m not able currently to compete with GCC for low energy costs or Egypt for cheap labor. What is it that I’m competitive in? We have done a lot of work with Harvard and we have done our own research, and we’ve found that the answer is high-skilled human services- this will give us market access.

These are the four words you must know- that’s: “what I can export”, that’s what will gain me market access- what do I mean by it? Make a bid that focuses on how you can turn Jordan into the mecca for medical tourism. It can be the destination for Lasik, IVF, hip replacement, stem replacement, you name it. These can be facilitated in top level facilities that are comparable to

U.S. standards at a fraction of the cost.

On health tourism, really think out of the box because Turkey is stiff competition. Turkey has a package industry—you need to sell it as a package and advertise as a country so you have to solve the coordination problem with different providers. Back office services- accounting, consulting, auditing, engineering, etc.—we have these skills but we don’t have the expertise to support the exporting of that. I need to start retaining my human capital and start exporting their services.

Then there’s national security- when borders with Syria and Iraq closed, I lost 11 percent of my

GDP overnight- it’s important to make sure we can export without the reliance on borders. It is not regionalization or Arabization- check out Expedia on the 6th circle- they do first level coding in four centers that code for the mothership in Seattle, and they have the highest female to male ratios of any coding spot in Jordan- go take a look at that and figure out how you can scale it.

The women’s workforce participation rate in Jordan is unacceptable- I can double household income in Jordan by incorporating women. If you think of the source of this issue you may think of legal barriers and harassment- these are important issues but they aren’t binding. You have to deal with two issues to fix this: the first is public transportation; women have much higher transportation costs. And the second is childcare. Think out of the box- don’t expand government programs, engage the private sector and get them involved in childcare and expand the transportation sector.

When you think about the film industry here, we’ve been the landscape for several films such as most recently Aladdin and the Martian. Think about how we can go up the value chain so that we’re no longer simply the landscape, but we’re actually doing production and editing, and we can use our services for that. Look at Morocco and see what you can do better than them.

We also have to think about educational tourism- we have stiff competition with American schools that are opening in the GCC. We can be an educational hub that can support our growth and support Jordanians with jobs, so you’re hitting both of those. We need to become more private-sector-like- we need more KPIs and targets and we need to stick to them. Let me move to the path forward- let me talk about the institutional framework to ensure this happens.

We’ve embarked on structural reforms called the Five Year Economic Growth Matrix. This is not the usual donors coming and saying you need to do 123, this is Jordan saying we need this.

Your program needs to be institutionally demand driven—please ask me what I need and work off of this. USAID, stray away from anything like the one-size-fits all. My one objective is to build the planning side of MOPIC- we need to build a strong macroeconomic team and strong competitiveness team. [Secretary General of MoITS arrives in MoITS Minister’s place]. We need these new teams to be true planning teams that really back our policies. These policies need to be demanded by Jordan and not by donors- this will assure implementation.

On the implementation side, we’re planning a Reform Secretariat that will make sure three things happen- it will assure planning actually leads to implementation across ministries. Second, it will make sure there’s a feedback loop between planning and implementation.

We have to accept failure and cut what fails rather than theorizing about it. The third thing is communication. A lot of these reforms will shock the system- I guarantee you the losers of these reforms will organize and try to fight back. We have to have strategic communications--our way to explain any reform to our citizens to make sure they understand and support us. There is a trust gap here between government promises and what people see, so go find your best communications person who has dealt in countries with a trust gap because that’s crucial.

This will be an implementation unit that will provide project infrastructure for our priorities. We need a national registry of projects- the Project Preparation and Development Facility (PPDF) will run feasibility work.

Follow up remarks after JIC spoke- We also need to focus on increasing the ease of doing business--the cost of labor, the cost of real estate, financing-- and we have to think about how we can lower the cost of doing business so they can scale and make more revenue. We need to get serious about getting out of the red tape in a constructive matter.

Our focus has to be on: what are the top 10 interventions I can do in that space that have the most impact and what are the binding constraints?

His Excellency, Secretary General of the Jordan Investment Commission, Fareedon

Hartouqa, JIC remarks- I will not add much more- your Excellencies went through the majority. Investment equals exports. The Jordan market is a small market so when we talk about investments we’re talking about exports and promoting FTAs, etc. It’s very important to link to investment promotion entities. Investment promotion entities are live entities- they cannot be static- they are constantly changing. One change that I would like at JIC is strategic- we have to reorganize the JIC structure to work better in investment promotion and “one-stop-shop”—second strategic approach is we have to redo our promotion strategy. We’ve done one with USAID three years ago, so we have to think about a new one that will be out of the box, due to the high competition we are seeing from regional countries.

We are working with stakeholders on refining the investment map. Small projects all throughout

Jordan are very important- we have to strengthen the businesses in the governorates and open the door for employment in them. The technical level needs a continuation of enhancing the services- this includes capacity of staff, and procedures and processes that we’re giving at different departments. It’s very important to coordinate with diff government entities and stakeholders- at the end of the day the investment process is a matrix of several different entities.

Therefore, it’s very important to work with all these stakeholders and rethink how we give our support and how to manage it. We need to redefine how we tackle these markets and these sectors that will ensure a very positive impact on attracting FDIs and increasing exports.

SG of MoITS- we have to think about how we can fully benefit from the FTAs that we’ve signed onto- we have to think about how we can maximize these at a strategic level.

Questions from group to Government of Jordan:

Question: I want to ask about the cost of doing business. Is there anything specific that you envision in the area of lowering costs of doing business?

Answer: [From MoPIC] We’re working on conceptualizing a package that focuses on exploring and readjusting the way we package energy costs for certain sectors that allows increased production while being revenue neutral or revenue positive. On cost of labor—we’re thinking of bold ideas that I can’t share with you at this time but yesterday the government took a very bold decision to retire public servants who have served for over 30 years and refine the retirement age. This is really important to attract our youth, this shrinking exercise of the public sector. We need to refine our labor- maybe the way we deal with social security- bifurcation of the market.

It’s not fair for a Jordanian to compete with a foreign labor- and refugees have increased the cost of real-estate. Cost of financing is an issue- central bank windows are open to them and they’re severely under tapped.

Question: How do you envision building Jordanian universities into this project to build their skills?

Answer: [From MoPIC] We have a human resource development strategy- please read it. It deals with how we can align capital skills with employment. I’ll be honest- adjustment at skills will take some time- look at the expedia example- coding bootcamps like those that are popular in Silicon Valley—things like this are of potential but the cost remains a challenge. Another issue in education is vocational- if you want to deal with high to low skilled expats in Jordan. A new law approved by the parliament will institutionalize that driven by the private sector and its needs.

Question: [To MoPIC] I would like to ask about the Secretariat you mentioned—who would be on this? How do you envision forming this?

Answer: [From MoPIC] This is the most important part of it for me, because we’ve never had a shortage of plans but we’ve had a shortage of implementation- we have limited administration resources and limited financial resources- so you need an entity that’s familiar with the landscape- it would work like a “swat team” to help the ministries make things happen. I only care about the caliber of human capital I attract for this- ministries used to graduate real talent-our ability to attract the right capital and pay them at market rates is the real challenge.

Question: [to MoPIC]: I wanted to address the issue about women’s participation- some countries have the things you mentioned but they still haven’t improved women’s labor force participation- what else can we do to make this happen?

Answer: [From MoPIC]: Public sector pay is higher than private sector pay, so no woman would want to work in the private sector. Don’t think cultural taboos- take what you think and throw it out of the window- look at the evidence. We need to have more job fairs- and expand the horizon of youth early on in school to help them think about what they can do when they grow up.

We’ve had marches of young men demanding jobs in the public sector which has been really difficult for us. The path to employment in Jordan is the private sector- the challenge is matching the skills with the demand.

Question: [to MoPIC]: What is your vision in regards to tackling youth issues at the high school level or even younger to get people engaged to looking toward the future?

Answer: [From MoPIC]: Vocational training is part of it- the fact of the matter is the discipline of work that you might see in the States is really missing here because for many of our youth, their first work experience happens after university, not before. Working while you learn is not the norm, internships are not the norm, engagement is not the norm, and you really have a discipline issue, you have to make sure they show up on time and leave on time, etc. This is a problem worldwide but especially here where there’s no internships, no discipline, etc. I would like to give my colleagues the opportunity to answer some questions as well.

Question: Can you elaborate a bit more on what you’re thinking for Enterprise Jordan?

Question: Can you tell us more about Enterprise Jordan and the role of JEDCO going forward-how much engagement has been done with the private sector?

SG of MoITS- At the time being, we are working in export promotion. Also, the private sector used to participate in opportunity fairs without informing the government. Our main goal for

Jordan Enterprise is to refine efforts for export promotion. The board of the Jordan Enterprise is already established- they’re working to have the CEO and the four main directorates and to iron out the role of JEDCO and JIC- it’s a bit difficult to transfer the export promotion from the JIC to Enterprise Jordan-we’re thinking of outsourcing to JE. Nothing will change at JEDCO for the coming 3 years- we will see how Jordan Enterprise will be working for 3 years and we’ll see if the government wants to transfer some of the mandate of JEDCO to JE.

[End of GoJ Q&A]

DESIGN TEAM Q&A

Question: Can you provide more information on the small business set aside under this vehicle?

Will it have the same SOW and will we be responding to the same RFP or will there be a separate one? Will there be a ceiling under the IDIQ for small business utilization? Can you tell us more about task order 2- if we’re interested in doing that but also have to respond to all other things in the requirements that could pose a challenge, how do we do that? Also timing- the forecast says August 30th, do you have any comments on that?

Answer: [response given at conference] The Mission still going through internal processes, please keep an eye out on the forecast and fbo.gov. The Mission is trying to maintain updated timelines to give the industry a realistic idea of our procurements. We hope to have a set aside for U.S. small businesses and task order two may be set-aside. This is not finalized. In terms of the ceiling question, we are more likely to put a certain dollar threshold for task orders that would be set-asides. We are evaluating that now.

We have not decided if the SOW would be the same yet. [update] Task Order 2 will be a small business set-aside and the draft SOO is attachment 1 of this amendment.

Question: How many task orders in total should we expect?

Answer: [response given at conference] We have shared the RFI for Task Order 1 and Task

Order 2 planning is underway. We have not decided how many additional task orders will be needed. [update] Task Order 2 draft SOO is attachment 1 of this amendment.

Question: How would you assure GOJ commitment on the reforms, especially considering the turnover?

Answer: Today, we received a clear commitment from the government but we can’t predict turnover but can plan for it in our design. We need partners that are going to be innovative and adaptive. We can expect that many things will change throughout the course of implementation, that’s why we have component 4 which gives us the opportunity to program in new areas. We have designed the flexibility to pivot. Regarding the current government, the Minister wants to change institutions, not individuals. Not having proper institutions in place has been one of the biggest issues. Through ERA we will support the GoJ in these efforts.

Question: Co-creation workshop in DC—is it true that bidders can choose to bid on task order 1 or not? Is this in the evaluation factors?

Answer: Instructions for submitting a proposal and the evaluation factors for the IDIQ and the task orders will be included in the Request for Proposal document.

Question: No one talked about building the private sector’s capacity to advocate for reform. Is that something USAID intends to do?

Answer: The Five Year Growth Matrix and Renaissance Plan include private sector feedback.

Improving the business enabling environment is not just the government’s responsibility but also private sector driven.

A communications component is included and it should build in a feedback loop with the private sector and other stakeholders. The private sector is not isolated from the government, and through ERA, efforts to integrate and encourage communication between the two will be supported.

Question: Have you thought about integrating youth?

Answer: We will not have a pillar or component dedicated to youth. A crosscutting youth focus will influence interventions.

Question: What did you mean before when you mentioned a new RFI?

Answer: A summary Q&A document from this workshop will be shared through an RFI, similar to what was posted after our Washington DC Co-Creation and Co-Design Workshop.

Question: Will there be any accompanying cash transfer to pay for early retirement? Will you incorporate any of that?

Answer: There are no plans to incorporate cash transfer with ERA.

Question: Is there an overlap regarding the enabling environment with JESA and how will you account for it?

Answer: JESA is focused toward micro and small enterprises—the sources sought clarifies the target and the policies around that. ERA will focus on macro level and anchor firm interventions.

The annual co-work planning that will be required through the two activities will be an opportunity to discuss, deconflict, and synergize BEE interventions between the two activities, as well as with the Women’s Economic Empowerment and Leadership Activity.

Question: What’s the thinking behind not having the Reform Secretariat in task order 1 and how soon can we see how it is incorporated in the second task order?

Answer: We believe we could partition this into a separate work stream if we could design ERA to encourage task order holders to work together well. Through the annual co-work planning requirement, this will create an environment for this partnership. In the near term, the World

Bank will be setting up the Reform Secretariat and USAID support will come in at a later date, and the task order holder will need to forge a partnership with the World Bank team, as well.

Question: All the strategies throughout this discussion focus on jobs and employment. However, there’s no focus on workforce development. Where do you see employment programs in 3-5 years?

Answer: We have a training for employment activity that matches trained youth with jobs. This activity does not have a job training component, but instead deals with policy and firms, which should lead to a trickle down effect of job creation and job placement. Our work will have the indirect outcome of employment by firms growing and employing more people themselves, as well as through increased employment of their domestic suppliers. Additionally, many other donors work in this space. We want to focus on where there is an implementation gap.

Relatedly, in the RFI responses, several respondents asked why access to finance is not included.

In ERA, we work toward the idea of utilization of finance. Access to finance in Jordan has increased and a focus on utilization of that finance may lead to gains for growing firms.

Question: What is the anticipated year of the last year of implementation of task orders?

Answer from USAID: The RFP will stipulate the period of performance for the IDIQ and the ordering period for the issuance of task orders.

Question: We usually get mixed messages on having a local partner as exclusive or not. Is there a preference on having local partners as non-exclusive?

Answer: Be a part of the best team possible. Be a part of the best team you think you can be on that represents the approach responding to the RFP. You could be on your own or be a part of a larger team. That’s up to you, but think about what’s the best proposal you can put together.

Question: How many awards do you anticipate making? Will there be small business and large?

Answer from USAID: The mission anticipates awarding 3-5 unrestricted IDIQ awards and 2-3

U.S. Small Business set aside IDIQs. USAID reserves the right to award more, less, or no IDIQ contracts.

Question: Is this the last stage of the co-creation process before we see the IDIQ and is there an idea of what future co-creation will look like under the IDIQ?

Answer: Further co-creation will be determined down the road with co-work planning, etc. The co-work planning process will be another form that will take life once this and other activities are awarded.

Question: The SOO means there will be a PWS?

Answer from USAID: Yes, there will be a PWS for Task Order 1’s SOO as well as Task Order

2’s SOO.

Question: What are the sectors that USAID would like to focus on? Under the Jordan

Competitiveness Program, they were all about knowledge economy but now we’re focusing on human services—what are the sectors going forward? Are there any sectors USAID would like excluded from this? Agriculture? Manufacturing? What is outside the scope of USAID?

Answer: We’ve learned from past projects and we’re not constraining to certain sectors. We want you to find where the opportunities are and share this with us in your proposals. We want to drive innovation from research and evidence.

Question: There seems to be a lot of mention of micro, small and medium enterprises. Is there any focus on social enterprises?

Answer: ERA is not focused on MSEs. JESA will focus on MSEs. For ERA, social investments and social entrepreneurs are not mentioned in the ERA design. This is a great area to consider as potential bidders and teams bid on ERA. Remember we are looking for innovation and new ideas.

Question: Is there anything you can share with us about designated key personnel? Are there any plans to increase employment requirements that would limit the pool of Jordanians?

USAID: We want to give bidders the space to propose their best key personnel. We are asking for innovation and that includes an innovative staffing plan. We may need certain definitions for the Chief of Party. The trend I’m seeing is that we need to give you the space to be innovative in a SOO situation and you need to be able to explain how your proposals best fit the approach.

We want to be as forward leaning and least prescriptive as possible. That being said, we believe there are Jordanians who can and should be Chiefs of Party going forward.

Question: Does USAID expect bidders to identify sectors specifically or keep it more open to see how things evolve?

USAID: We are not boxing you into anything and are not specifying sectors. Do the research and build on the research and work that has already been done. We are flexible within reason. We want to be responsive enough to move across sectors or a specific number of sectors, etc. and we want to move away from boxing ourselves in.

We’re asking for real innovation. No copy and paste from previous successful proposals. The minister said it has to make sense in a Jordan context. We are asking partners to take risks but explain the rationale and let the USAID evaluation panel rate the best proposals in accordance with the RFP. Proposals have to be rational and Jordan context based.

Question: IDIQ management and the skills and capacities to do that are very different from project management and this mission doesn’t have a history with IDIQ management but there are lots of Jordanians who have managed projects. Will you consider having two sets of key personnel criteria?

USAID: Final requirements will be in the RFP—that will say what we’re requiring.

Question: One way to promote exports is to facilitate imports—is this in the new task orders?

USAID: We don’t specifically mention facilitation of imports. Do what makes sense and form the best proposal with new ideas for us to see.

Question: I understand the strategy of USAID but once contractors take over, it doesn’t really go in the direction that you want to see-- will there be anything in the RFP about component leads, or having a certain percent of Jordanian companies? Etc. How do we encourage Jordanians to join and manage programs?

USAID: That’s part of the approach that you’d be proposing as an offeror. You will propose those thresholds. You’ve heard us say that plenty of Jordanians can be CoPs. You’ve heard us talk about self-reliance. Think about how you would propose how to make enduring impact that leaves the country better off than it is right now and how that would influence your arrangement.

Question: Business Enabling Environment is a macro, huge effort. Will part of this include cooperation with other USAID offices in other sectors?

USAID: We want you to build on what already exists and we would love to cultivate cross-office support. We want to know how you can work better with other USAID activities and other donor activities as well. We want to be able to use good past examples and build on those synergies.

Question: I want to talk about other donors. Is there a way to co-create with other donors?

USAID: We held a donor co-creation conference two weeks ago and shared a similar presentation. We have also held multiple technical meetings with fellow donors to get into the weeds and discuss synergies and minimize overlap. We are utilizing the Five Year Growth

Matrix as our guiding document. Fortunately the development of this document it included extensive consultation from the GoJ, other donors, and broad stakeholders. Could we do better on coordinating with other donors? Yes.