J.1 USAID Trade Central Asia SOO.pdf

RFP 72011521R00002

USAID Trade Central Asia Activity

Attachment J.1 Statement of Objectives

DESCRIPTION / SPECIFICATIONS/STATEMENT OF OBJECTIVES

1. PURPOSE

The purpose of this Statement of Objectives (SOO) is to obtain services specified herein for USAID Trade Central Asia activity (“the activity”). The activity will be implemented through a contract with USAID/Central Asia.

2. PERIOD AND PLACE OF PERFORMANCE

The expected period of performance for the activity is five years. The activity will implement regional activities throughout the five countries of Central Asia: Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, and will support connectivity with Afghanistan.

Offices: The Contractor shall have a regional base office in Almaty, Kazakhstan in close proximity to the USAID/Central Asia Almaty office as well as representatives located in Ashgabat, Bishkek, Dushanbe, and Tashkent. Additional offices may be required in cities other than Almaty, Kazakhstan should the work demands necessitate. The Offeror is free to propose the technical expertise of staff it deems most appropriate for each country and may also propose additional staff located in other Central Asian countries in line with its proposed approach.

3. BACKGROUND

The “United States Strategy for Central Asia 2019-2025: Advancing Sovereignty and Economic Prosperity” envisions a region of sovereign, independent states that are strong economically and with which the United States can partner on a wide range of issues. Echoing this, the USAID/Central Asia Regional Development Cooperation Strategy’s (RDCS) goal is “A self-reliant Central Asia that is interconnected, independent, and resistant to malign influences.” The USAID Trade Central Asia activity will support the first development objective of this RDCS, which is “Regional Connectivity Strengthened, including with Afghanistan.”

The five countries that make up Central Asia are diverse, dynamic, rapidly developing, and strategically important. It is a region that lacks direct access to the sea. It is surrounded by countries that are at times unstable or are led by repressive regimes--and which do not always have their smaller neighbors’ interests at heart. At the same time, Central Asia is positioned geographically such that direct trade routes between its many neighbors go directly through it, as does the most direct overland route between the European Union and China. The region is also well positioned to serve as both an end-market and transit route for goods from Afghanistan.

The region’s population of 74 million people is growing quickly with a large population of youth who have entered or will soon enter the labor force. Economic growth rates are generally high, but employment opportunities have not kept pace, and many Central Asians have been excluded from the economic benefits accruing to the countries at a national level. The Kyrgyz

Republic and Tajikistan lack the natural resources of their wealthier neighbors, face high rates of poverty, and are largely dependent on the agriculture sector for employment. Men and women often have distinct and unequal employment opportunities and access to the resources necessary to start and grow businesses. Women face additional constraints to accessing entrepreneurship opportunities and engaging in trade due to prevailing stereotypes about their role in society, persistent patriarchal structures, and unequal access to assets and business opportunities. In all five countries women lack access to land and frequently work in the family business, limiting their control over their working conditions and benefits.

Another key defining feature of the region is the large migrant labor force and, particularly for the Kyrgyz Republic and Tajikistan, reliance on remittance payments from abroad for substantial portions of household disposable income. In 2019, remittances payments to the Kyrgyz Republic and Tajikistan were equivalent to 28.5 percent and 28.61 percent of GDP, respectively. The primary reason for individuals to migrate abroad is the pursuit of economic opportunities and higher wages that are lacking in their home countries.

The region encountered another hurdle to economic growth in 2020 as the worldwide COVID-19 pandemic struck, leading most governments to impose measures that brought commerce to a halt. Central Asia was doubly stricken when many migrant workers were sent back home due to similar restrictions in their host countries, resulting in the loss of remittance income. The resulting effects on economic growth and employment have been devastating. For instance, in the six months of 2020 the amount of remittances to Tajikistan decreased by 14.8 percent or $195 million compared to the same period of the previous year.

Extremist attacks in the United States, Sweden, Russia, and Turkey have been carried out by Central Asians in the relatively recent past. These triggered growing concern about laborers migrating abroad where they are potential targets for recruitment by extremist organizations.

The lack of economic opportunities in Central Asian countries has become a critical political and national security threat that extends far beyond the borders of the region.

Kazakhstan

Kazakhstan is the wealthiest of the Central Asian countries and has achieved upper-middle income status, but wealth is primarily driven by the development of the hydrocarbon sector.

Substantial revenues from oil and gas and readily-available foreign direct investment for these industries have generated large increases in real GDP per capita and good job prospects for many Kazakhstanis, but the gains are not evenly distributed and have led to significant income inequality.

Kyrgyz Republic

The Kyrgyz Republic has benefited from high economic growth rates in recent years, but it remains the second poorest of the Central Asian countries. Like those in its neighbor Tajikistan, many Kyrgyz households rely on remittance payments from migrant labor, particularly in Russia.

Economic growth is good on aggregate, but there are distributional concerns. Furthermore, a high population growth rate means economic growth is needed to create more jobs to absorb the youth bulge as young men and women enter the labor force.

Tajikistan

Tajikistan is the poorest among the Commonwealth of Independent States, with 19.5 percent of the population living on less than USD 1.90 a day and 56.6 percent subsisting on less than USD

3.10 a day. Despite having only 7 percent arable land, agriculture is a cornerstone of the economy and accounts for 25 percent of gross domestic product and employs 53 percent of the labor force in Tajikistan. Of approximately 8 million Tajiks, over 70 percent live in rural, agricultural areas. Tajikistan has achieved relatively high growth rates since the end of its civil war in 1997, but employment has not kept pace with the gains in national wealth. Between 2003 and 2013, the World Bank calculates that GDP grew by an average of 7.2 percent per year while employment only grew at a rate of 2.1 percent per year.

Turkmenistan

Turkmenistan has used its vast oil and natural gas resources to generate high rates of economic growth despite a lack of free market reforms. Much of the economy remains under the control of government monopolies and state-owned enterprises, and the market is highly restricted and insular outside of the extractives sector, which makes up 92 percent of total exports. Limited reporting suggests that the country has been going through a severe economic crisis since the drop of world hydrocarbon prices in 2014. In response, the Government of Turkmenistan has pushed for diversification of its foreign cash sources by promoting private sector exports. It also has also promoted import substitution measures to reduce foreign currency spendings. It has made limited attempts at economic reforms, including obtaining WTO observer status in 2020 and negotiations with Fitch Credit Rating to get Turkmenistan into the ranking list. But serious policy reforms are needed in order for the private sector to take root and expand.

Uzbekistan

The Uzbek economy has grown at a high and steady rate with GDP per capita growth frequently exceeding 6 percent per year over the past 15 years. However, much of that growth is the result of aggressive government industrial policy and subsidization of key industries, which raises concerns about sustainability and competitiveness in the long run. Many state-owned enterprises (SOEs) will need to be privatized and new business creation and entrepreneurship encouraged as the economy continues to liberalize and open up to new markets. Over the past year, Uzbekistan has demonstrated increased interest in market-based reforms, such as the liberalization of its currency exchange system in September 2017, the abolishment of the horticulture export monopoly, UzAgroExport, in June 2017, the issuance of a draft presidential decree in August 2017 on improving business conditions for entrepreneurs, and significant cuts to tax rates for both firms and individuals since January 2019. The Government of Uzbekistan is now pursuing membership in the World Trade Organization and is updating its laws pertaining to venture capital. Such reforms offer promise for new business opportunities, private sector growth, and increased trade flows.

4. PROBLEM STATEMENT

The lack of trade connectivity in Central Asia leaves countries susceptible to malign influence from regional powers, while limiting the region’s ability to serve as a stabilizing force for Afghanistan. This lack of effective trade integration reduces the interest of international investors as well as the region’s ability to serve as a transit link between major global markets.

Inefficient trade practices inhibit economic growth for the region as a whole as well as for each of the individual Central Asian states.

Central Asia faces numerous challenges to enhancing regional connectivity, particularly trade connectivity among Central Asian countries and with neighboring regions. The geography of Central Asia is an obvious constraint with countries landlocked, markets separated by vast distances, and mountainous terrain that minimizes arable land and increases costs of transportation. But these natural features are a reality and can be overcome. However, the issues most constraining to trade connectivity are man-made: governance, policy, regulation, and enforcement are generally poor. Economic opportunity is not always equal between men and women. The costs to import and export are among the highest in the world, which is partly a result of geography, but is also reflective of bureaucratic hurdles, inefficient border crossings, regulatory requirements, and a lack of regional standards. In fact, the four Central Asian Countries covered by the World Bank’s Doing Business Europe and CA1 report, along with Russia, occupy the bottom five rankings in the Trading Across Borders section of the report.

These issues limit the development of the private sector as well as their ability to serve as creators of meaningful employment.

However, the incentives for taking action are great. The OECD estimates that for low-income and lower-middle income countries, fully implementing the WTO Trade Facilitation Agreement (TFA) would lead to a reduction of trade costs by 16.5 to 17.4 percent. And even implementing the bare minimum that the TFA requires would lead to a 12.6 to 13.7 percent reduction2.

According to the World Bank, “Regional and global connectivity have been a tremendous “convergence machine,” raising living standards in lower-income countries to those of wealthier middle- to high-income countries.3” Fortunately, the World Bank, the Asian Development Bank (ADB), the OECD, USAID, and other international organizations have conducted several trade studies and analyses in Central Asia within the past few years using the most recently available

1 https://www.worldbank.org/en/news/press-release/2019/10/24/doing-business-2020-europe-and-central-asia-economies-including-croatia-accelerate-business-climate-improvements Note: Turkmenistan is not included in this report 2 Implementation of the WTO Trade Facilitation Agreement: The Potential Impact on Trade Costs, May 2018.

https://issuu.com/oecd.publishing/docs/implementation_of_the_wto_trade_fac 3 Critical Connections: Promoting Economic Growth and Resilience in Europe and Central Asia, September 2018.

https://elibrary.worldbank.org/doi/pdf/10.1596/978-1-4648-1157-9 data. The constraints described therein that affect the region as a whole are those that this activity should address.

Notable Diagnostic Research Studies by Country Regional ADBI The Impact Of Infrastructure On Trade In Central Asia (2020)

ADBI Trade Impact Of Reducing Time And Costs At Borders In The Central Asia Regional Economic Cooperation Region (2020) CAREC Integrated Trade Agenda 2030 Issues Papers (2018) UN-ESCAP Strengthening Trade And Economic Ties Between Afghanistan And Neighbouring Countries In Central Asia (2015) World Bank/UN Improving Trade and Transport for Landlocked Developing Countries (2014) IMF Regional Economic Outlook Middle East And Central Asia (2020) OECD Enhancing Competitiveness in Central Asia (2018)

Kazakhstan World Bank Systematic Country Diagnostic (2017)

Kyrgyz Republic

WTO Trade Policy Review - Report By The Secretariat - Kyrgyz Republic (2013) ADB Growth Diagnostic (2013)

Tajikistan ADB Country Diagnostic (2016)

Turkmenistan None

Uzbekistan World Bank Systematic Country Diagnostic (2016) ADB Private Sector Assessment for 2012-2016 World Bank Country Partnership Framework 2016-2020

Others Afghanistan Transport Sector Master Plan Update (2017–2036)

5. THEORY OF CHANGE

If:

harmful barriers to trade within the Central Asia region as well as between the CA region and other economies are reduced, and regional trade legislation and policies are harmonized, Then:

the region will become more economically interconnected and economic growth and attendant job growth will increase, contributing to prosperity, sovereignty, and self-reliance in Central Asia and Afghanistan.

Broad-based economic growth that outpaces population growth is necessary to provide jobs and raise living standards in Central Asia. Strong economic growth can enable the states of Central Asia to chart their own course and serve as a stabilizing force on Afghanistan’s northern borders. Following the logic of the above theory of change, one important step all the countries in the region can take to boost growth, create jobs, and increase government revenues is to reduce the barriers, or constraints, to trade within the region and with the rest of the world. If all the countries in Central Asia took these steps, the entire region would experience greater interconnectedness as trade flows increased within the region.

The USAID Trade Central Asia activity will focus on removing these barriers to trade and harmonizing trade practices throughout the region. The activity will prioritize interventions that will lead to the: largest increases to the region’s competitiveness; largest reductions in times and costs in the movement of goods. When appropriate, the activity will work to address legal and regulatory constraints. These results are firmly in the interest of the United States, as they will contribute to a more stable and prosperous Central Asia that offers new opportunities for American firms.

This theory of change assumes the following:

● Assumption: Regional governments’ current positive outlook towards trade reform will continue or potentially improve.

● Assumption: Regional economic growth will rebound as a vaccine for COVID-19 becomes available

The following risks must also be acknowledged:

● Risk: geopolitical considerations could result in regional governments losing appetite for cooperation with each other or the United States, or for meeting their international obligations under the WTO (for those who are members)

● Risk: the economic downturn caused by the COVID-19 pandemic could be more severe than expected, leaving governments without the resources to invest in the area of trade facilitation

6. PROGRAM AREAS OF FOCUS, RESULTS, AND ILLUSTRATIVE ACTIVITIES

The goal of USAID’s Trade Central Asia activity is to improve region-wide trade connectivity and harmonization to accelerate economic growth and increase economic opportunity in Central Asia (and Afghanistan). The activity will provide a broad range of technical assistance to meet the objectives described below.

Performance Objective 1: Customs and border procedures harmonized

USAID aims to help the Central Asian region’s governments to meet international standards, reform laws and regulations, and take advantage of trade preference programs. Where the political will exists, its Trade Central Asia activity should supply technical assistance to help regional governments eliminate existing barriers to trade.

For example, implementing the reforms envisioned in the World Trade Organization’s Trade Facilitation Agreement (TFA) would benefit CA countries (whether WTO members or not). The TFA aims to speed up customs procedures; make trade easier, faster and cheaper; provide clarity, efficiency, and transparency; reduce bureaucracy and corruption; and use technological advances. For the governments involved, improvements in a country’s trade facilitation environment have been found to correspond to larger increases in foreign direct investment4.

Anticipated results

● Consistent adoption of international trade best practices throughout the region

● Authorized traders, truck weights, etc., are recognized by customs authorities of regional countries based on Mutual Recognition Agreements (MRA)

● Authorized Economic Operators (AEO) program expanded within Central Asia

● Customs officials of Central Asian republics are updated on AEO-related treaties, standards and procedures.

● Time to complete customs procedures reduced

Illustrative activities

● Assistance developing cross-border trade facilitation activities such as the Free

Economic Zone in Termez, or other efforts intended to enhance trade cooperation

● Training to develop customs officials’ skills

● Develop proposed legislative and regulatory updates for use by regional governments

● Facilitation of legislative and institutional reforms that are necessary for proper implementation of AEO programs in Central Asian republics.

● Technical assistance to increase understanding of the benefits of an AEO program

● Organizing C5+1 Expert-level meetings to gain consensus and develop plans for trade policy alignment

● Technical assistance to improve implementation of provisions of international treaties and standards.

● Arrange inter-regional knowledge-sharing visits by Central Asian customs officials to share successes and lessons learned

● Arrange international visits from governments that have implemented like reforms

Illustrative Indicators

● The number of authorized economic operators in the region (increase)

● Number of targeted international trade best-practices proposed, adopted, or implemented with U.S. assistance

● Number of firms receiving U.S. assistance that have obtained certification with (an) international quality control institution(s) in meeting minimum product standards

● No of briefings/inputs on gender dimensions in trade discussed as part of (preparation for) negotiations

● No of reforms/accompanying documents reviewed to integrate trade-related gender concerns

● Customs and border laws and regulations adopted to simplify trade as a result of U.S.

assistance

● Average time (in hours) to trade goods along trade corridor receiving U.S. assistance

4 https://www.tradefacilitation.org/global-alliance-publications/can-trade-facilitation-drive-manufacturing-fdi/

● (Decrease in) Number of hours/days to clear goods, by m/f, informal/formal traders – m/f, SMEs – m/f, non-motorized traders – m/f

Performance Objective 2: Public-private dialog on regional trade and investment increased

Implementation of trade facilitation reforms have to go hand in hand with the engagement of the private sector. USAID seeks to assist the private sector as it increases its capacity to effectively engage the governments of the region on issues that impact trade. Efforts should focus on developing fora for public/private dialogue, particularly between the trading community and border control agencies if trade facilitation reforms are to be successful and have commercial impact.

Anticipated results

● Increased regional dialogue in support of multi-country alignment of trade policies

● Opportunities developed for showcasing U.S. Government leadership on trade (e.g., the

Central Asia Trade Forum) and/or other activities.

● Private sector actors are more capable of engaging the government for reforms that benefit trade

● Private sector actors are able to produce, provide, and access real-time information about bottlenecks and hindrances to smooth movements of goods, including corruption

Illustrative activities

● Organizing forums where the private sector and government can exchange views on needed changes

● Technical assistance to sustainably strengthen private sector associations, which can advocate for reforms

Illustrative Indicators

● The number of Public-private sector networking events hosted, facilitated, or supported with U.S. assistance

● Increase (%) of male/female owned businesses who believe their concerns are adequately addressed in public-private dialogue mechanisms

● In x PPDs gender-relevant issues are discussed and relevant action points drawn and submitted to x (public political trade entity)

Performance Objective 3: Cross-border firm-to-firm connectivity increased

The United States Government’s engagement with the Central Asian region is carried out in accordance with the “United States Strategy for Central Asia: Advancing Sovereignty and Economic Prosperity.” The main diplomatic vehicle for engagement with the governments of the region in pursuit of the strategic goals therein is the C5+1 diplomatic platform. Under the C5+1 umbrella, USAID’s support for transport corridor development has been among the most prominent U.S. Government interventions. Efforts have sought to reduce the time and cost of trading across borders in the region. By becoming a better integrated, seamless region of trading partners, Central Asia can increase internal economic growth while providing trading opportunities for its neighbors in Afghanistan and South Asia.

Anticipated results

● Women’s empowerment: more women participating in trade and more of those already involved have equal business opportunities to men.

● Firms involved in cross-border trade report reduced corruption

● Private sector firms involved in trade report increased availability of easily understandable information about laws, regulations, and procedures pertaining to international trade

● Regional private sector actors have improved ability to locate potential business partners and make deals w/in the region and outside of the region, and the volume of commerce is increased

● Necessary private sector services sustainably developed, through consultants or associations, and exist without project support at the end of the activity as well as after the activity

Illustrative activities

● Creation or enhancement of trade information portal(s) where the private sector can list their services, report conditions, and access transparent information on rules and regulations

● Opportunities developed for regional business to meet and do business (e.g., the Central Asia Trade Forum, trade missions, etc.)

● Training in eCommerce to improve business to business commerce

Indicators

● Value of annual cross-border sales of firms receiving U.S. assistance

● Number of cross-border transactions with firms receiving U.S. assistance

● x% of male, x% of female representatives of (M)SMEs state improvement of trade opportunities

Division of funding and effort

The table below shows the estimated level of effort for the activity based on USAID’s current division of planned regional and bilateral funding. However, these figures are estimates and are subject to change. USAID will need to have flexibility to adjust to changing priorities and fluctuations in funding among regional and bilateral efforts.

Estimated Level of Funding by Country Regional* 69% Uzbekistan** 12% Tajikistan 12% Turkmenistan 7%

*Regional funding will also be used for supporting connectivity with Afghanistan.

**Given Uzbekistan’s current reform agenda and significance to regional trade connectivity, it is expected that some portion of regional funding will be utilized for supporting Uzbekistan’s connectivity with neighboring countries.

7. CROSS-CUTTING THEMES

The offeror must consider and take into account the following cross-cutting issues:

● Utilization of Local Entities: USAID encourages the offeror to maximize the use of local entities in the implementation of this activity.

● Connectivity with Afghanistan: Trade Central Asia should support mutually beneficial trade with Afghanistan, seeking opportunities to increase business ties while addressing the barriers that inhibit trade.

● Development Finance Corporation (DFC) and Blue Dot Network (BDN):

Throughout implementation, Trade Central Asia should look for opportunities to leverage the resources of high-priority U.S. Government efforts such as the BDN and those of the DFC.

● Private Sector Engagement: Engaging the private sector will be essential for ensuring Trade Central Asia’s long term impact. The activity should partner with private sector actors (both local and international) in shaping its interventions in order to leverage private sector investments in support of USAID’s regional objectives.

● Gender Equality and Inclusivity with Marginalized Groups. USAID requires the offeror to support gender equality, women’s empowerment and inclusiveness of marginalized people throughout the life of the activity in all Central Asian countries.

As noted in USAID/Central Asia’s RDCS, ensuring opportunities for women’s participation and leadership in decision-making at all levels of society has not been fully realized. Women often lack access to financial resources, new technologies and market information. Due to these technological and financial disparities, men and women may face different barriers to entering into business activities and taking part in trade. Recognizing that women face unique challenges is important to increasing their participation in trade. The offeror must promote women’s participation and work to empower women in decision-making processes to ensure maximum opportunities to gain access to information, benefits, and reforms that can bring strategic changes to their status, exploring how women participate in trade as entrepreneurs, traders or workers. The offeror must also develop and implement a gender and development action agenda that describes its objectives, gender parity entry points, and interventions to ensure sustainable access to resources and equal access to participation in clean energy sub-activities by both men and women. Interventions implemented by the offeror must be responsive to gender considerations, and seek to ensure that the assistance provided and the results achieved are beneficial to both genders. As appropriate, impact and indicators must be disaggregated by gender. If applicable, the offeror must incorporate standard gender indicators into the M&E Plan. None of the interventions must inhibit the active participation of either men or women. Men and women must be treated as equal partners in their roles in business and government, and as partners of USAID.

● Youth Engagement. Central Asia’s economic growth is also inhibited by the failure to fully integrate its youth population. Demographically, Central Asia is young with 50 percent of the population of the Kyrgyz Republic, Tajikistan, and Uzbekistan; 49 percent of Kazakhstan; and 40 percent of Turkmenistan under 25. Recent figures show that the share of youth not in education, employment or training for example in Kazakhstan is around 9.5 percent, while it is slightly more than 20 percent in Kyrgyz Republic. A generational opportunity may be lost if the region’s governments fail to integrate young Central Asians into a 21st century economy and civil society.

Therefore, the offeror must show how its approach increases opportunities for the region’s youth.

8. LANDSCAPE OF OTHER DONOR PROJECTS AND RELATED USAID ACTIVITIES

USAID/Central Asia is guided by lessons learned from the ongoing and previous activities, other donors’ experiences, the intersection of U.S. policy and USAID’s value add to U.S. policy, and how best to align regional activities with bilateral efforts. USAID/Central Asia’s role in the region is to implement activities that address issues that are regional in nature, achieve shared regional goals and objectives, and uniquely complement bilateral efforts.

USAID/Central Asia is one of many organizations aiding countries in their quest to streamline trade in Central Asia. International Financial Institutions (IFIs) and other donors are active in the region providing millions of dollars for infrastructure, equipment and/or technical assistance programs.

USAID Economic Growth Activities

USAID/Central Asia has several complementary activities to TCA, which are described below.

The USAID Trade Central Asia activity will build upon efforts of USAID’s Competitiveness, Trade and Jobs (CTJ) activity and Future Growth Initiative (FGI).

While USAID’s Trade Central Asia activity will succeed the CTJ activity, it should not necessarily be thought of as a follow-on activity. There are some key differences worth noting at the outset.

First of all, Trade Central Asia will have greater focus on supporting regional trade connectivity.

With two new USAID missions in the region, the activity will need to focus on those interventions which are truly regional in nature. Secondly, Trade Central Asia is not intended to focus on tourism development, given that this is covered by USAID’s Future Growth Initiative. Similarly, the activity is not expected to devote extensive effort to agriculture, firm-level competitiveness, or non-trade business environment improvements, with the possible exception of in

Turkmenistan. Turkmenistan does not have a bilateral USAID program and modest support for competitiveness or the agricultural sector may help Turkmenistan to better align with work that USAID is supporting elsewhere in the region. Trade Central Asia will likely continue CTJ’s support for the transport and logistics sectors, given their direct relevance to regional trade connectivity.

The relevant activities are:

USAID’s Competitiveness, Trade, and Jobs activity (CTJ – 2016 - 2021):

USAID’s Competitiveness, Trade, and Jobs activity aims to facilitate exports and employment in horticulture and strengthen transport and logistics services across the five Central Asian economies. The activity also added a third focus sector, tourism. By incentivizing firms to become more regionally competitive and by addressing cross-border impediments to trade, USAID helps to develop a more diverse and competitive private sector and generate export-driven growth. USAID’s Competitiveness, Trade, and Jobs is a five-year project running from October 2016 through December 2021. The activity has three main components:

Component 1: Facilitating Trade

● Partnering with key actors to assess and implement solutions to expand exports and transport and logistics services

● Improving customs and border management

● Organizing the Central Asia Trade Forum, a flagship regional event now in its tenth year that draws over 500 participants from the private sector, government, and civil society from countries across Central and South Asia and Europe.

Component 2: Partnering for Innovation

● Competitively selecting firms to co-finance the innovation and expansion of exports and jobs for horticulture, transport & logistics, skills development, and entrepreneurship

Component 3: Expanding Employment in Key Sectors

● Developing business skills

● Fostering entrepreneurship

Component 3 of CTJ, which focuses on employment, is by far the smallest CTJ component, with no in-country presence outside of Kazakhstan. CTJ will provide a limited number of training seminars in conjunction with other international organizations focusing on workforce development. This approach differs starkly from the type of robust, on the ground support that is envisioned under TCA.

With the incorporation of the C5+1 initiative, a diplomatic platform involving the five Central Asian nations and the United States, CTJ has taken on a very heavy regional focus, with only a modest amount of bilateral programming. This top-down approach is centered around the idea of fostering regional connectivity. Conversely, TCA has been developed with tailored, country-specific approaches in mind.

USAID Future Growth Initiative (FGI – 2019 - 2024):

USAID Future Growth Initiative is designed to spur productive economic activity across Central Asia. The main goal of the project is to increase local competitiveness, create new jobs, improve incomes for Central Asia’s growing workforce, and advance the region toward self-reliance.

Activity has three components which are:

• Component 1: Enterprises – Fostering competitive industries through expansion to new target markets (regionally or globally) to increase sales and exports, while attracting local and international investment.

• Component 2: Employment – Developing a capable workforce and entrepreneurship through targeted trainings to create new jobs or improve current ones.

• Component 3: Enabling Environment – Creating conditions for jobs and investment by supporting policy change through public-private dialogue, analysis, and application of global standards.

Uzbekistan: USAID’s Agricultural Value Chain Activity (AVC – 2015 - 2020)

AVC is the third in a series of horticulture activities funded by USAID in Uzbekistan. It builds on the accomplishments of previous activities to address the standard and quality issues needed to increase access to high end local and export markets, improve production and post-harvest practices, expand investments in agro-processing, expand production of certified planting material, and build efficient extension services through privatized agro input dealers. AVC has a strong private sector orientation and market-driven approach. It focuses primarily on post-harvest issues and markets for fresh fruit and vegetable production.

Tajikistan: Feed the Future (FTF) Activities

Feed the Future (FTF) focuses its activities in the southwestern Khatlon Province, a key region for agricultural production that also has some of the highest rates of undernutrition and poverty in the country. Coordinating with the Government of Tajikistan FTF is implementing land and water reforms. The portfolio also works directly with farmers and agricultural entrepreneurs to introduce and scale new technologies to increase agricultural productivity and crop diversity, strengthen value chains, and expand markets for fruits (including orchard crops), vegetables, and dairy products. The flagship Feed the Future Tajikistan Agriculture and Land Governance activity plays a key role in scaling new technologies which include new crops, improved seed and tree varieties, integrated pest management, greenhouses, pruning and grafting, fruit drying technology, and improved feed and silage production among others. Through increased harvests, greater crop diversity, and higher quality products, FTF activities are expanding economic potential by increasing incomes and creating jobs. Like Agro Horizons and AVC, TAWA also partners with local entrepreneurs to improve agricultural value chains by developing cold storage and other facilities and is working to improve public and private agricultural extension services.

Kyrgyz Republic: USAID Enterprise Competitiveness Project (ECP – 2018 - 2023)

The USAID Enterprise Competitiveness Project is a five-year initiative that increases the income levels of Kyrgyzstani households through the creation of jobs and livelihood opportunities among small and medium enterprises (SMEs). By accelerating inclusive, market-led growth, the project increases Kyrgyzstani SME competitiveness, facilitates their access to markets, catalyzes investments, builds opportunities for women and youth, and improves the business environment.

The USAID Enterprise Competitiveness Project works across the Kyrgyz Republic with a focus on regions with more poor and unemployed people. The project prioritizes sectors with the highest potential for growth, job creation, and inclusion of women and youth. These sectors include but are not limited to agriculture, manufacturing, tourism, and technology.

Other Donors’ Programs

GIZ: Trade Facilitation in Central Asia program (2020-2022)

EBRD: Trade Facilitation Program (1999-present)

EU: Border Management Programme in Central Asia (BOMCA) (2003-Present)

EU: Ready4 Trade Central Asia (2020–2024)

EU: Central Asia Invest Programme (2020-2023)

World Bank Group: Trade Facilitation Support Program (January 2016-December 2021).

World Bank Group: Central Asia Regional Links Program (July 2020-October 2026).

JICA: SME promotion seminars for Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

CAREC supports CA through the Transport and Trade Facilitation Strategy (TTFS).

The Government of Switzerland: Provides low-interest credit, training, and advisory services to SMEs, especially in the Kyrgyz Republic and Tajikistan.

Organization for Security and Cooperation in Europe supports state customs service of Kyrgyzstan and the NTFCs of Kazakhstan, Kyrgyzstan, and Tajikistan

Program Coordination

The Trade Central Asia contractor will need to closely coordinate its efforts, not only with the above-mentioned USAID programs, but also with other international organizations working in Central Asia in order to avoid duplication and maximize development impact. The TCA program will partner with other programs whenever feasible and will demonstrate how this program leverages past and current resources to maximize results.

9. RELATIONSHIP TO REGIONAL DEVELOPMENT COOPERATION STRATEGY (RDCS)

AND OTHER USAID AND USG PRIORITIES

TCA will directly support the Mission’s RDCS Development Objective 1: Regional Connectivity Strengthened, including with Afghanistan, IR 1.1: Barriers to Trade Reduced.

USAID’s Journey to Self-Reliance. As partners on this journey, USAID is empowering host country governments and partners to achieve locally sustained results, helping countries mobilize public and private revenues, strengthening local capacities, and accelerating enterprise-driven development. This approach fosters stable, resilient, and prosperous countries that are more self-reliant, and prioritizes enduring partnerships. TCA will provide significant capacity building and knowledge transfer to key stakeholders in Central Asia with a goal of equipping them with tools and knowledge from all TCA activities by the end of the project.

USAID Policy For Trade Capacity Building focuses on implementing trade agreements, facilitating trade flows and enhancing economic responsiveness. However, the world has changed and the nature of trade has evolved and so the policy takes into account the changing environment that includes the e-commerce boom, expansion of trade in services and the dispersion of production across multiple countries with integrated Global Value Chains.

The U.S. Government’s C5+1 Platform is a format for dialogue and a platform for joint efforts to address common challenges faced by the United States and the five Central Asian states. It complements bilateral relationships in the region, particularly in issue areas where regional approaches may provide a comparative advantage. Specifically, for increased regional connectivity and transition to, adoption, and scale up of low emission and advanced energy solutions.

Women's Entrepreneurship and Economic Empowerment Act of 2018 (WEEE Act), PL 115-428 (01/09/2019). The WEEE Act states that it shall be the international development cooperation policy of the United States to: reduce gender disparities; strive to eliminate GBV and its harmful effects; support activities that secure private property rights & land tenure for women in developing countries; increase capability of women & girls to fully exercise their rights; and improve the access of women & girls to education. The USAID Trade Central Asia activity will focus on ensuring that women have access to the benefits of trade, which will reduce gender disparities that currently exist in the Central Asian business environment.

USAID Policy on Youth in Development. The goal of this USAID policy is to improve the capacities and enable the aspirations of youth so that they can contribute to and benefit from more stable, democratic, and prosperous communities and nations. Its two objectives are to strengthen youth programming, participation and partnership in support of Agency development objectives; and to mainstream and integrate youth issues and engage young people across Agency initiatives and operations. The USAID Trade Central Asia activity will contribute to youth being better able to access economic and social opportunities and share in economic growth by ensuring that work with firms seeking cross-border trade opportunities does not exclude firms started and run by younger people. The activity will follow the policy’s principles of pursuing gender equality; and embracing innovation and technology by and for youth. Younger people are well placed to lead the way towards technologically enabled regional business-to-business cross-border commerce.

USAID Private Sector Engagement (PSE) Initiative. Private sector engagement (PSE) is a strategic approach to planning and programming through which USAID consults, strategizes, aligns, collaborates, and implements with the private sector for greater scale, sustainability, and effectiveness of development or humanitarian outcomes. Through leveraging additional funds, as well as intellectual, technological, advocacy for good governance, innovation and other in-kind resources to TCA, PSE can increase impact and scale up outcomes of this project.

USAID Digital Strategy works to improve the efficiency and effectiveness of foreign assistance through the consistent and responsible use of digital technology in the development and humanitarian programming. Now more than ever, as the global development community works to deliver life-saving assistance and relay crucial information in the face of the pandemic of COVID-19, the role of digital technology is undeniable. TCA will work to strengthen the enabling environment and policy commitment to digital ecosystems that enable sustainable growth in a digital age.

CAREC Transport Strategy 2030 will emphasize increasing sustainability and network quality, in addition to construction and rehabilitation of transport corridors. Going forward, more emphasis will be placed on multimodal connectivity, road asset management, road safety, and performance-based maintenance goals. Knowledge work in these areas will be actively translated into policy actions in the CAREC countries through demand-based approaches.

10. GUIDING PRINCIPLES

Legal Parameters

Interventions proposed by the contractor/offeror must be carried out within the legal parameters that are applicable to USAID and its implementing organizations. These parameters include statutory restrictions pertaining to adverse economic impact upon the United States such as providing incentives to U.S. business located in the U.S. to relocate causing impact on U.S.

jobs, production of surplus commodities causing substantial injury to U.S. producers and growth and production of agricultural commodities for export which would compete with a similar commodity grown or produced in the U.S.

Environmental Compliance

The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs.

This mandate is codified in Federal Regulations (22 CFR 216) and in USAID’s Automated Directives System (ADS), Chapter 201.3.4.5 and Chapter 204 (http://www.usaid.gov/who-we-are/agency-policy/series-200) which, in part, requires that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities. The offeror’s environmental compliance obligations under these regulations and procedures are specified in the following paragraphs in this solicitation. In addition, the offeror must comply with host country environmental regulations unless otherwise directed in writing by USAID. In case of conflict between host country and USAID regulations, the latter shall govern.

http://www.usaid.gov/who-we-are/agency-policy/series-200 http://www.usaid.gov/who-we-are/agency-policy/series-200

Division of funding and effort