Request for Information (RFI) SETT Activity 72051421RFI00004.pdf

Subject: Request for Information (RFI) 72051421RFI00004 Posting Date: September 22, 2021 Deadline to submit feedback: October 8, 2021 Anticipated activity title: Sustainable Economic Territorial Transformation (SETT) Anticipated mechanism type: TBD Anticipated timeframe: 5 years, 2023-2028 Anticipated total budget: $40-50 million

To All Interested Parties:

The United States Agency for International Development (USAID) is seeking feedback through this Request for Information (RFI) from entities interested in the attached Draft Concept Paper for the provisionally titled “Sustainable Economic and Territorial Transformation (SETT) Activity.” This Activity will support licit and sustainable economic opportunities and investment in a targeted geography to foster equitable and environmentally sustainable growth, development and peace implementation.

Any interested organizations are invited to provide feedback, comments, opinions, and/or recommendations on the concepts and approaches for the future Activity described in Attachment A. The main purpose of this RFI is to determine the soundness and robustness of the general design, as well as to incorporate new, innovative ideas and feedback from different public, private sector and community organizations and other relevant stakeholders working on economic and rural development in former conflict-affected regions.

Attachment B includes guiding questions, not all of which need to be answered. Incorporation of any feedback is subject to internal Mission discussions and approval.

This is NOT a Request for Proposals/Applications and is NOT to be construed as a commitment by the U.S.

Government to issue any solicitation/notice of funding opportunity or to pay for any cost incurred in the preparation and submission of comments/answers to this RFI. Responding to this RFI will not give any advantage to any firm or organization in any subsequent procurement and will not lead to an organizational conflict of interest. Responses will strictly be held confidential. Potential offerors/applicants should not expect a direct response from the U.S. Government to any of the comments/suggestions.

Please strictly limit any response to the questions included in this RFI and to comments/suggestions about the document. To expedite USAID’s review and be considerate of respondents’ time, responses should be kept to no more than five (5) pages in length. Note that not all questions need to be answered. Responses to the notice must be written in 11-point font and may be submitted in English or Spanish.

Responses to this RFI must be sent by the closing date and time to:

● Paula Cubillos, Senior Acquisition & Assistance Specialist at pcubillos@usaid.gov

● Alba Lucia Roncancio, Acquisition & Assistance Assistant at aroncancio@usaid.gov

Thank you for your interest in USAID/Colombia programs and we look forward to your comments.

Heather Wirick Contracting/Agreement Officer USAID/Colombia List of Attachments:

● Attachment A: Draft Concept Paper for “Sustainable Economic and Territorial Transformation (SETT) Activity.”

● Attachment B: Response Format and Guiding Questions for RFI mailto:anggarcia@usaid.gov mailto:aroncancio@usaid.gov

ATTACHMENT A

USAID/Colombia “Sustainable Economic and Territorial Transformation Activity”

Draft Concept Paper

ANTICIPATED MECHANISM TYPE: TBD

ANTICIPATED TOTAL BUDGET: USD $40-50 million (TBD) ANTICIPATED TIMEFRAME: April 2023-April 2028

I. Justification

USAID has supported the Government of Colombia (GOC) to implement the Peace Agreement since its signing in 2016. The Peace Agreement outlined the need for comprehensive rural reform, and included mechanisms for the “structural transformation of the rurality,” like land access and formalization, economic opportunities, and the provision of public and productive infrastructure.1 USAID has prioritized the GOC’s approach: Territorial Focused Development Plans (PDETs) as the most relevant development guidance to support peace implementation.2 Unfortunately, implementation of the agreement has been slower than expected. As of November 2020, 82 percent of the 104 stipulations3 defined under the Point 1- Comprehensive Rural Reform of the Peace Agreement had not been initiated or at minimum level of implementation.4 Only four percent of these stipulations have been completed and 13 percent of stipulations are at an intermediate implementation stage. Advancing rural reform requires improving PDET implementation and increasing environmental and productive territorial planning. These actions would also help reduce rural poverty and illicit crop production and improve the livelihoods of rural communities.

Poverty and exclusion rates are higher in rural areas of Colombia than in urban areas. In 2018, Colombia’s rural income poverty (46 percent) and rural multidimensional poverty5 (39.9 percent) rates were respectively

1.4 and 2.9 times higher than urban rates.6 The higher gap in the multidimensional poverty index suggests that there is an urban bias in national social policy.7 There was a nationwide reduction in the income and multidimensional poverty levels between 2010 and 2018, but the poverty gap between urban and rural areas increased 2.9 percent during this same period.8 Reduced income poverty rates were likely due to direct government transfers and subsidies, and were not the result of increased rural productive incomes.7 With the COVID-19 pandemic, the levels of income poverty increased in urban areas from 32.3 to 42.4 percent, and rural income poverty decreased from 47.5 to 42.9 percent.9

Agriculture is the main economic sector in rural areas of Colombia, and almost 60 percent of the rural population is employed in agriculture.10 High reliance on agriculture demonstrates the lack of diverse productive activities available to rural community members, and it explains the correlation between the low

1 Acuerdo Final para la terminación del conflicto y la construcción de una paz estable y duradera, Noviembre 2016.

2 USAID Colombia, Country Development Cooperation Strategy , 2020-2025: Peace, Stability and Prosperity.

3 The Final Peace Accord contains 578 stipulations demanded as part of an agreement.

4 Initiative, P. A. M. B., & for International Peace Studies, K. I. (2021). Executive Summary, The Colombian Final Agreement in the Era of COVID-19: Institutional and Citizen Ownership is Key to Implementation. Peace Accords Matrix Barometer Initiative, Kroc Institute for International Peace Studies, Keough School of Global Affairs. https://doi.org/10.7274/r0-cffp-qr07 5 Multidimensional poverty measures social access to basic goods and services.

6 DANE (2019), Boletines Técnicos de Pobreza Monetaria y Multidimensional.

7 Misión para la transformación del campo, El Campo Colombiano: Un camino hacia el bienestar y la paz, 2016.

8 According to the multidimensional technical bulletin (2019), in the period 2010-2018 urban multidimensional poverty fell from

23.5 to 13.8 percent and rural multidimensional poverty fell from 53.1 to 39.9 percent.

9 https://www.dane.gov.co/files/investigaciones/condiciones_vida/pobreza/2020/Comunicado-pobreza-monetaria_2020.pdf 10 Otero-Cortez, Andrea (2019): El mercado laboral rural en Colombia, 2010-2019. Documentos de Trabajo sobre Economía Regional y Urbana No. 281, Banco de la República, Bogotá, Colombia..

agricultural sector competitiveness and high rates of rural poverty.11 12 The agricultural sector’s performance is negatively affected by a myriad of factors including: lack of skilled workforce;13 low added-value in rural areas for final products; inefficient commercialization practices;6 high informality and inadequate labor practices; and lack of productive assets like land, capital, and productive technology. Regarding the lack of skilled workforce, there are not many incentives for rural inhabitants, especially youth, to invest in education.

This is because education’s impact on agricultural workers’ potential income is very low, presumably due to the lack of access to productive factors mentioned above.14 Further, lack of access to productive assets is the result of deficient public investment in public goods and services, like connectivity and road infrastructure needed to access markets.4 Low levels of competitiveness and economic diversification also contribute to limited private sector investment in agriculture. Agricultural producers often try to compensate for low productivity and economic inefficiencies by expanding their crop area. The practice of trying to produce more through expanding plots of cultivated land, rather than improving crop productivity or crop quality on the same plot of land, increases deforestation, soil loss and loss of biodiversity.15

In Colombia’s conflict-affected regions, high poverty rates and the lack of profitable licit economic opportunities fuel an illicit economy, particularly the illegal drug trade.16 As of 2020, Colombia had 245,000 hectares of coca.17 According to the Office of National Drug Control Policy (ONDCP), despite the efforts made by the Government of Colombia, the Country has increased the coca production area 16 percent, in comparison to 2019. Colombia’s annual cocaine yield grew eight percent from 936 metric tons (MTs) to 1,010 MTs during this same period.18 Higher prices for coca and the devaluation of the Colombian peso have contributed to an expanded illegal coca market.19 To effectively and sustainably address the underlying causes of illicit crop cultivation, eradication actions should be complemented with intentional investments in public goods and services, new livelihood opportunities, and actions to improve rural competitiveness.11

There are significant economic opportunities for rural communities to increase their income and improve their livelihoods licitly and sustainably. Colombia’s agricultural sector has the potential to grow, given the great variety of agricultural products grown in Colombia and the possibility of increasing crop efficiency and generating economies of scale.20 There are also important non-agricultural economic opportunities available to communities based on local cultural and natural assets. These non-agricultural opportunities have the potential to diversify rural economies and preserve biodiversity and cultural knowledge. Economic diversification should be a central strategy to improve licit economic opportunities and enhance rural development. This is especially important for women's economic empowerment considering that 73.7 percent of rural women earn income from non-agricultural activities. For economic opportunities to be sustainable and scalable, they should be complemented with actions that contribute to reduced deforestation and

11 Estrategia de política pública para la gestión integral de riesgos agropecuarios en Colombia, World Bank, Ministry of Agriculture and Rural Development (2018).

Parra-Peña et al (2021): Una hoja de ruta para el aumento de la productividad agropecuaria de colombia: desafíos y oportunidades.

Consejo Privado de Competitividad, Fedesarrollo, Bogotá, Colombia.

12 Since 1990 the participation of the agricultural sector in the Gross Domestic Product (GDP) has been decreasing, and the growth productivity rate (0,6%) is one of lowest in Latin America and the Caribbean (1,8%), and is below the world average (1,9%) 13 https://sac.org.co/pleno-empleo-en-el-campo-realidad-o-ficcion/ and Otero (2019).

14 Tenjo, J.; Jaimes, C: “Ingresos y educación en el sector rural colombiano”, Revista de Economía Institucional, 2018.

https://revistas.uexternado.edu.co/index.php/ecoins/article/view/5278/6770#toc 15 Benin, J: Agriculture and Deforestation in the Tropics: A Critical Theoretical and Empirical Review, Ambio Journal Vol. 35, No. 1 (Feb., 2006), pp. 9-16 (8 pages) 16 Davalos, E: “New answers to an old problem: Social investment and coca crops in Colombia”, International Journal of Drug Policy, Vol. 31, pp 121-130 (10 pages) 17 https://co.usembassy.gov/ondcp-releases-data-on-coca-cultivation-and-production-in-the-andean-region/ 18 Ibid 19 https://www.banrep.gov.co/es/estadisticas/trm 20 Hamman, et al. (2019): “Productividad total de los factores y eficiencia en el uso de los recursos productivos en Colombia”, Ensayos sobre política económica No.89, Banco de la República, Bogotá, Colombia.

https://sac.org.co/pleno-empleo-en-el-campo-realidad-o-ficcion/ https://revistas.uexternado.edu.co/index.php/ecoins/article/view/5278/6770#toc https://www.jstor.org/stable/i399725 biodiversity loss, and improved access to public and productive assets,7 15 like infrastructure, needed to revitalize the local economy. 21

The Sustainable Economic Territorial Transformation Activity (SETT) will coordinate and collaborate with communities, public and private actors, and other USAID programs to implement comprehensive rural development interventions in targeted conflict-affected regions. The activity will strengthen local businesses;

support the diversification of the rural economies; and improve local economic competitiveness by catalyzing public and private sector investments in infrastructure, connectivity and other public goods and services.

Years of conflict have impaired trust within communities, and have eroded social norms that facilitate coordination and cooperation to achieve common goals and mutual benefits.22 23 All of these elements are critical to develop healthy social, economic and environmental ecosystems, and building social capital should be an essential component in achieving economic development in rural areas. Working hand-in-hand with local communities through participatory processes, like PDETs, builds trust, encourages citizen participation in local affairs, and supports sustainable and lasting peace.

II. Purpose Statement

The Activity will support licit and sustainable economic opportunities and investment in a targeted geography to foster equitable and environmentally sustainable growth, development and peace implementation.

III. Development Hypothesis

IF there are increased licit economic opportunities, increased investment in public and productive goods and services, and community organizations’ capacities are strengthened, THEN economic, social and environmental conditions in conflict-affected municipalities will be enhanced and these municipalities will have a better foundation for lasting peace.

21 Aschauer, D. A. (1989). Is public expenditure productive? Journal of Monetary Economics, 23(2), 177–200.

Munnell, A. H., & Cook, L. M. (1990). How does public infrastructure affect regional economic performance? New England Economic Review, (September), 11–33.

22 Skaperdas & Arjona in Rubio, Melissa (2014), The Effect of Armed Conflict on Social Capital in Colombia – Gothenburg, Sweden.

23 Putman & Dasgrupta in Rubio, Melissa (2014), The Effect of Armed Conflict on Social Capital in Colombia – Gothenburg, Sweden.

IV. Results Framework

Sustainable Economic Territorial Transformation (SETT) Results Framework

Objective 1:

Increased licit and sustainable economic opportunities through local business and value chain development.

Objective 2:

Improved local economic competitiveness through public and private investment in goods and services.

Objective 3:

Increased community engagement in local development through improved CBO24 performance.

IR 1.1. Local businesses and value chains strengthened.

IR 2.1. Provision of public goods and services improved.

IR 3.1. CBO business performance improved.

IR 1.2. Local job markets strengthened. IR 2.2. Investment in productive goods and services increased.

IR 3.2. CBOs’ participation in public spaces increased.

IR 1.3 Sustainable private sector investment increased.

IR 2.3. Digital connectivity enhanced. IR 3.3 CBOs’ use of digital solutions enhanced

Objective 1: Increased licit and sustainable economic opportunities through business and value chain development.

This objective will increase the provision of licit, profitable, and sustainable economic alternatives to conflict-affected communities. It will do this by strengthening the existing local business and value chains, and by supporting the diversification of rural economies. Economic alternatives developed under this objective will take into account each target region’s natural, cultural and productive potential, and will promote innovation of existing business models. In addition, as a way to help the offeror prioritize value chains and businesses to support under this activity, the design team will conduct an assessment to identify the most relevant economic opportunities in targeted regions.

Alternative development models supported under this objective will be: tailored to community skills and interests; enable the local economic environment; attract private sector investment needed for economic territorial transformation; and contribute to reduced emissions, deforestation and biodiversity loss.

Intermediate Result (IR) 1.1. Local businesses and value chains strengthened.

This IR will strengthen existing local businesses and value chains and will support the development of new licit and environmentally sustainable economic activities. The activity will help establish partnerships between local and national private companies and community based organizations (CBOs), and will strengthen and encourage the formation of micro, small and medium sized enterprises (MSMEs). This combination of interventions will: improve value chain efficiency; strengthen business competitiveness and productivity; increase access to markets; and encourage community engagement in alternative economic

24 For the purpose of this activity, a Community-Based Organization (CBO) refers to any public or private nonprofit organization that is representative of a community or significant segments of a community, which provides relative services to individuals in the community or to the entire community (Wilson, 1990). Further, CBOs are based, formed, funded and managed by community members themselves based on their felt needs and defined mission. CBOs are therefore voluntary, autonomous and democratically controlled institutions with the primary aim of meeting members' social and economic needs (Agnes, 2010). Under this definition, Community Action Boards (JACs in Spanish), producer organizations and cooperatives, communication collectives, women organizations among others, will be considered CBOs.

opportunities that contribute to biodiversity and conservation. SETT will facilitate partnerships between CBOs, the private sector, and local and national governments to strengthen collaboration between producers, purchasers, exporters, and service providers, to overcome economic barriers that hinder rural economic development and expansion.

Illustrative Interventions:

● Identify current and potential economic opportunities in each region, including the cultural and natural assets present.

● Strengthen support-service businesses25 to improve local value chain efficiency.

● Strengthen new, innovative and sustainable agribusiness models and value-chains.

● Support potential alternative development pilots by developing rural economic opportunities.

● Support alternative industries, like creative industries and community-based tourism, that contribute to environmental conservation.

● Identify and support non-timber-forest product (NTFP) value chains.

● Improve logistics and transportation businesses' capacities to support local supply chains.

● Complement other USAID activities.

IR 1.2. Local job markets strengthened.

This IR will increase rural communities’ income and reduce rural poverty, by facilitating profitable employment opportunities as an economic alternative to illicit activities. Interventions supported under IR

1.1. will stimulate growth and expansion of businesses in rural communities, thereby increasing the demand for inclusive and equitable labor to fill new positions. As private sector investment in targeted areas increases, private sector enterprises will also require more workers. The Activity will respond to increased demand for trained workers by supporting customized employment training and services to CBOs’ and other community members, especially youth and women. Training and services supported by this Activity will build workers’ capacities to find jobs and meet local job market demands.

Illustrative Interventions:

● Support vocational training opportunities that complement local and regional business needs.

● Develop on-the-job training programs to respond to local and regional labor demands.

● Work with local businesses to create new internship and job entry programs.

● Cooperate with Chambers of Commerce to identify job opportunities.

● Facilitate businesses’ access to private and public incentives, like tax incentives, to encourage them to hire marginalized populations, like youth.

● Complement efforts made by other USAID activities.

IR 1.3 Sustainable private sector investment increased.

This IR will promote incentive and investment alternatives to engage both small and large private sector companies, and to support the development of socially and environmentally sustainable businesses and value chains. The activity will leverage private sector investment aligned with their core business interests, in multiple forms, including: technology transfer; market knowledge; and business innovation, expansion, and financial contributions. The goal of private sector investment will be to enhance the sustainability of local businesses and processes, and to dynamize the local economic environment. The Activity will promote a shared value approach so that local business partners, including CBOs and rural communities, obtain a direct benefit from investment by becoming reliable private sector partners.26 In addition to core business interest investments, other support through Corporate Social Responsibility (CSR) programs will be welcome, 25 Support services businesses will include, but are not limited to, local education and training, technical assistance and extension services (agriculture), transportation and logistic services, circular economy businesses, etc.

26 Porter, M. et.al: “Creating Shared Value”. Harvard Business Review, 2011.

https://www.lawinsider.com/dictionary/business-support-services especially if those investments relate to public goods and services provision. The activity will also incentivize investment in interventions that mitigate deforestation and promote biodiversity protection through market and tax incentives, like payments for environmental services (PES).

Illustrative Interventions:

● Facilitate shared-risk and shared-value alliances between CBOs and the private sector.

● Support private sector actors’ access to tax rebates and other investment incentives.

● Use market-based incentives, like PES and Rainforest Alliance certifications, to encourage private sector investment in businesses and projects that support reduced deforestation and increased environmental conservation.

● Partner with MSMEs to grow and expand on a commercial basis in the focus territories.

Target 1: 300 businesses engaged in activity interventions in the target geography.

Objective 2: Improved local economic competitiveness through public and private investment in goods and services.

This objective will improve local economic conditions by leveraging and mobilizing public and private sector investment in public goods and services, like roads, and productive goods and services, like storage facilities. Transportation and connectivity infrastructure are public capital investments that make private capital investments more productive and competitive.27 Small-scale infrastructure interventions, like the improvement of tertiary roads and community-owned collection centers, also decrease production costs, improve product quality, enhance market access, and improve business productivity and competitiveness.

Interventions under this objective will complement interventions defined under Objective 1, and will foster the competitiveness of licit economic opportunities developed.

IR 2.1. Provision of public goods and services improved.

This IR will leverage public and private investment in public goods and services like tertiary roads, rural aqueducts and educational training facilities. Investments will be linked to the licit economic opportunities supported under Objective 1, and they will provide benefits to rural communities in general. For instance, tertiary road segments improved under this IR will be selected according to the productive activities supported under Objective 1. Tertiary road interventions will benefit productive activities and will improve the general population’s mobility, transportation costs, and access to other public services like education. In coordination with other USAID activities, like Energy for Peace, this IR will also foster public and private sector investment in clean energy as an input needed for sustainable production and to improve community members’ quality of life. The Activity will promote the active participation of rural communities in defining, implementing and monitoring public goods and services investment opportunities. This will increase local ownership, maintenance and sustainability of the goods and services delivered. USAID experience has demonstrated that engaging communities through a learning-by-doing approach also leads to strengthened local capacities in the long-term, and that communities continue to manage and improve local goods and services once the activity ends.

Illustrative Interventions:

● Facilitate public and private investments in small-scale infrastructure.

● Support physical improvements in educational and vocational training facilities.

● Improve local capacity to operate and maintain small-scale infrastructure.

27 Fox, W., Porca, S.(2000): “Investing in rural infrastructure”. International Regional Science Review.

● Promote the use of, and investment in, clean energy sources to reduce GHG emissions and help communities adapt to climate change.

IR 2.2. Investment in productive goods and services increased.

This IR will support the improvement of productive services and small-scale infrastructure required for the licit economic activities to become more economically efficient and profitable. Productive infrastructure refers to community-owned facilities and equipment used in the local production, collection and value addition processes. As with the public goods and services, the Activity will play a catalytic role to leverage and mobilize private and public investments in productive goods. Interventions under this IR will follow a market-oriented approach and will be linked to existing businesses and value chains. Actions to strengthen the managerial capacities of the CBOs in charge of productive goods and services will complement investments made and will be implemented prior to the construction of new works. Public and private investment will also be used to improve business extension and technical assistance services, which will complement efforts made under IR 1.2.

Illustrative Interventions:

● Improve and maintain small-scale productive and community-owned infrastructure, like collection centers.

● Increase public and private investment in small-scale and community-owned productive infrastructure.

● Enhance the provision of extension and technical assistance services by local service providers, including CBOs, guilds, and other relevant public institutions.

IR 2.3. Digital connectivity enhanced.

This IR will improve rural communities’ use of, and access to, the internet and digital solutions needed to reduce communication barriers from physical isolation and large travel distances. Like the other IRs under Objective 2, this IR will promote public and private investment in digital connectivity interventions.

Improved digital connectivity will increase rural communities’ access to public goods and services, like remote education and government functions (taxes, licenses, etc.), and will improve rural businesses’ access to markets. Digital solutions will also enable businesses to access relevant information like input prices, commercialization channels, and new technology developments needed to increase productivity. Access to financial and technical support services would also be improved through the use of virtual tools.

Interventions under this IR will explore the different connectivity options available like community networks, satellite internet, mobile internet, and Microsoft TV Whitespace technology. Interventions will also be linked to the economic activities supported under Objective 1, the infrastructure activities under Objective 2, and the CBO capacity building under Objective 3.

Illustrative Interventions:

● Develop and implement innovative, digital connectivity solutions like community WiFi networks, TV Whitespace, and satellite internet.

● Establish public and private sector partnerships with entities like Microsoft, Anditel and the Ministry of Technology (MinTic), to leverage digital connectivity investments in targeted areas.

● Encourage community members and MSMEs’ use of digital financial services, in collaboration with the new Resilient and Equitable Finance portfolio of activities.

Target 2: 70% of the funds invested in small-scale public and productive infrastructure activities mobilized from public and private sources.

Objective 3: Increased community engagement in local development through improved CBO performance.

The objective will strengthen the advocacy, business, administrative, and operational capacities of those CBOs participating in Objectives 1 and 2. Strengthened capacities will enable CBOs to better negotiate and develop profitable partnerships and business alliances with public and private sector actors. Strengthened capacities will also enable CBOs to actively participate in the provision and maintenance of public and productive goods and services.

IR 3.1. CBOs’ business performance improved.

This IR will develop CBOs’ capacities to conduct profitable, economically scalable, and sustainable business activities that are connected to the markets. Through this IR, CBOs will develop managerial abilities needed to: strengthen and expand business opportunities; establish market-driven business alliances;

negotiate business terms with private sector partners; and understand and adhere to environmental norms and regulations. Interventions under this IR will also involve assisting CBOs to identify and safeguard natural and cultural assets, and to operate and maintain the public and productive equipment and infrastructure. Interventions under this IR will support the functionality and sustainability of interventions under Objectives 1 and 2, and will enable long-term economic growth in beneficiary communities after this activity ends.

Illustrative Interventions:

● Strengthen CBOs’ organizational, administrative and business-management capacities.

● Encourage CBOs’ to provide business-related services to their members and to the community in general.

● Assist CBOs to develop and promote environmentally sustainable and market-driven alliances with the private sector.

● Improve CBOs’ capacity to operate and maintain productive infrastructure.

● Educate CBOs on the importance of protecting environmental assets for sustained benefits.

IR 3.2. CBOs’ participation in public spaces increased.

This IR will preserve the PDET’s participatory principles in the design and implementation of new rural development interventions.28 Engaging communities in activity design and implementation processes will improve coherence between communities’ needs, local development plans, and the allocation of public funds. This IR will strengthen CBOs’ capacity to actively and effectively participate in the public discussions on rural development, and will promote open dialogues between the CBOs, private sector actors, and local and national governments. This IR will also strengthen CBOs’ capacity to operate and maintain the public goods and services. Capacity building interventions supported under this IR will employ a learning-by-doing approach.

Illustrative Interventions:

● Strengthen CBOs and producers' associations dialogue, negotiations and advocacy skills to leverage public and private investments in public goods and services.

● Encourage CBOs to actively engage in the provision, improvement and maintenance of public goods and services.

● Strengthen community oversight knowledge and capacities to improve transparency.

28 The PDETs were built at the “veredas” level with an active participation of the Community Boards. It required a broad and effective participation of the communities of the municipalities and subregions prioritized.

https://www.renovacionterritorio.gov.co/especiales/especial_PDET/#estrategias

IR 3.3 CBOs’ use of digital solutions enhanced.

This IR will improve CBOs’ capacities to identify and use digital solutions to improve the profitability and sustainability of local economic interventions. Interventions under this IR will complement IR 2.3, and will include training to CBOs to identify the most suitable digital solutions for their organizations. Training provided under this IR will also follow a learning-by-doing approach so that CBOs can experience the benefits of digital solutions as they develop a new skill set, and, in turn, become more willing to seek out and pay for digital tools after the activity ends. If CBOs require basic hardware and software, the activity will explore alternatives to obtain these materials, like access to credit, direct grants, and donations from the private sector. A case-by-case analysis of CBOs will be done prior to implementing interventions under this IR, and interventions will be always accompanied with actions to guarantee appropriate and adequate use of the technology acquired.

Illustrative Interventions:

● Strengthen CBOs and local businesses' digital literacy and capacities.

● Improve CBOs’ access to digital hardware, software and web-based solutions.

● Increase CBOs and local businesses’ use of digital solutions.

Target 3: 600 development proposals presented by CBOs to government actors, like municipal and departmental administrations, for public funding consideration.

V. Geographic and Population Targeting

The SETT Activity will prioritize the PDET municipalities included in USAID/Colombia’s 2020-2025 Country Development Cooperation Strategy (CDCS) with a high prevalence of illicit crop production. This might include municipalities in Antioquia, Cauca, Nariño, Norte de Santander and Putumayo as these were the departments with the highest rates of coca production. Additional criteria to select the final geography for this Activity will include: 1) municipalities that overlap with GOC rural and alternative development strategies; and 2) municipalities where the GOC and USAID have worked together, or are currently working together, through different rural economic development instruments. The Activity will employ a territorial economic approach to its interventions, and may engage some non-PDET municipalities to generate a positive and regional economic impact. SETT’s target population will include rural CBOs, productive and business organizations, and Community Action Boards. Although the Activity will follow a territorial approach rather than a population approach, it will use a highly participatory and inclusive approach that prioritizes the engagement of rural women, youth, migrants, indigenous peoples and Afro-Colombians, and other marginalized populations. The final geography for this Activity should be further discussed keeping in mind the evolution of the criteria discussed above.

VI. Risk and Assumptions

The SETT Activity will be able to implement interventions and achieve the expected objectives under the following assumptions:

● The next GOC administration will support the implementation of the Peace Agreement and the already defined PDET strategy.

● Despite the fiscal deficit, the next GOC administration’s social policy agenda will continue prioritizing investments in priority regions.

● Future coca eradication and substitution strategies will be better coordinated among the local and national public institutions. These strategies will prioritize meaningful inclusion of rural communities and the provision of high quality, and sustained, public goods and services.

● Supported agricultural activities will be conducted in regions with agricultural vocation and the agricultural frontier will not be expanded.

● The next GOC will continue finding USAID’s support as useful and strategic as it has been during the past years.

● The GOC will be able to provide basic and permanent security conditions in targeted regions.

● Targeted CBOs and communities will be willing to collaborate with relevant partners like the GOC, local governments and the private sector.

● Once the GOC’s vaccination process ends, mobility and quarantine restrictions will end and the national economy will start to recover.

● There will be macroeconomic stability with low national levels of inflation and a steady exchange rate.

● Financial institutions will be committed to facilitate financial access in rural areas and for underserved populations.

● There will be an overlap in the targeted geographic corridors with other complementary USAID programs so that collaboration and integration will be achieved.

● The local and national private sector will be willing to invest in the different business initiatives and other competitiveness-related actions such as public goods and services.

The Activity will face the following risks:

● Given the country’s high level of polarization, political changes are unpredictable. This may impact

Peace Agreement implementation and how USAID’s assistance is perceived.

● Given the economic crisis created by the COVID-19 pandemic, local and national governments may not have the adequate level of public funding needed to invest in the required public goods and services.

● The focus on COVID-19 economic reactivation may divert attention and public resources from rural to urban areas.

● Levels of rural poverty may grow, negatively impacting the level of security in targeted destinations.

● There may be poor coordination between public institutions in charge of implementing the rural and alternative development strategies.

● Foreign direct investment may decrease as a result of Colombia’s downgraded investment grade rating

● Colombia’s downgraded investment grade rating may also result in a higher exchange rate.

Although export commodities could benefit from a higher exchange rate, agricultural inputs and imported productive goods would become more expensive.

● Illicit economies may continue concentrating in smaller areas but produce higher yields.

● National purchasing power may be affected by a high inflation rate, which affects sales of offered products and services.

● Strategic value chains may suffer severe price fluctuations affecting the profitability of the supported businesses.

● Once businesses start generating income they may become targets for local extortion.

● Threats against CBOs’ leaders may increase, negatively affecting their ability to participate in activity interventions.

● Communities may not be willing or interested in participating in the activity interventions focused on licit livelihoods.

● A major natural disaster, economic downturn, or other unforeseen event may hamper economic growth.

● Availability of private sector resources may be affected by the economic impact of the COVID pandemic, and could limit private sector engagement.

VII. Adaptive Management

The Activity will adapt its management and implementation strategy to the changing political, economic, and security context described in the risks and assumptions section. For instance, the Activity will continuously monitor the security situation and will coordinate with the GOC, local authorities, communities, the partner liaison security office, and the USAID Security Liaison Specialist to increase or decrease the number or intensity of its interventions in target regions as needed. SETT will not have any specific focus on safety and security of the social leaders, but the activity will participate in the Mission’s Citizen Security Working Group, and will coordinate with Peacebuilding and Governance Office (PGO) activities to provide self-protection and other relevant training to community leaders.

USAID’s previous experience demonstrates that communities’ active participation in the design and implementation of the activities can protect investments from extortion and illegal armed groups. Engaging communities in design processes also improves community ownership and intervention sustainability.29 Strengthening CBOs’ oversight and accountability capacities and mechanisms will mitigate the risk of extortion and corruption, and will increase the level of trust among community members, government actors, and the private sector. Increased communication and collaboration between community, public and private actors will also contribute to leveraging public and private funding to complement USAID’s efforts.

To effectively engage communities, the SETT Activity will build on economic development activities previously supported by USAID and scale-up existing businesses. The activity will also support the diversification of markets and customers, which will mitigate economic risks associated with narrowly defined economic sectors and value chains. SETT will promote dialogue and coordination among local and national public institutions to achieve the activity’s objectives. In case the pandemic restrictions persist, the activity will use virtual means to host meetings and provide technical assistance, and will ensure that remote events also take differentiated needs and access to technology into account especially when working with MSMEs and communities.

VIII. Alignment

The SETT Activity aligns with USAID/Colombia’s 2020-2025 CDCS Development Objective 3, to promote equitable and environmentally sustainable economic growth. Through its three objectives, the Activity will contribute to all IRs under this Development Objective, including: Shared IR 2/3.1 improved management of strategic assets for inclusive economic growth; 3.1 expanded licit livelihood opportunities; and IR 3.2 more competitive licit economies. This activity will also align with USAID/Colombia’s cross-cutting objectives of gender equality, digital technology, environmental protection, and private sector engagement. SETT will play a catalytic role in leveraging public and private sector investments in public goods and services in targeted regions, which will be complemented with CBO strengthening processes to ensure the proper use, maintenance and sustainability of the investments and businesses.

IX. Regional Integration Strategy

The SETT Activity will build upon previous interventions by activities like the Community Development and Licit Opportunities (CDLO), the Producers to Markets Alliance (PMA), and the Consolidation and Enhanced Livelihoods Initiatives (CELIs). It will also build on Environment Office activities that promote sustainable economic alternatives, like Natural Wealth and Paramos and Forests. The Activity will coordinate internet connectivity actions with USAID/Colombia’s Digital Ecosystem Country Assessment’s (DECA) recommendations, and will pursue regional integration opportunities with complementary USAID

29 USAID, 2014: Post-implementation evaluation report: Evaluation of MIDAS and ADAM.

activities including, but not limited to: Energy for Peace; Nature Tourism; Land for Prosperity; Generating Equity; the Equitable and Resilient Finance Portfolio; and Artisanal and Small-Scale Gold Mining.

The Activity will also identify complementary efforts with the Responsive Governance Activity to develop effective coordination related to improved service delivery.30 Finally, in terms of security monitoring and response actions the Activity will seek opportunities to coordinate with other USAID programs like Resilient Communities, Human Rights Activity, USIP, EXO security contract, among others.

Particular attention will be given to the identification and advancement of regional integration opportunities in Mission prioritized geographic areas of Bajo Cauca, Pacífico Nariñense, Caquetá/Guaviare and Catatumbo. This will include holding regular meetings with the implementers and other stakeholders in the prioritized regions to ensure close coordination, facilitate integration and avoid duplication of efforts, while supporting the sequencing strategy through complementary efforts. The Activity will also coordinate closely with mayors and other local authorities, including ethnic communities, and with relevant U.S. government agencies, like the Economics and Political Section and the International Narcotics and Law Enforcement Affairs Section (INL) to support high level dialogue (HLD) in PDETs municipalities. Finally, the activity will contribute to the Basket of Targets with the following indices: (1) Partner Commitment; (2) Partner capacity; (5) State presence; (7) Licit Livelihoods; (8) Inclusive Economic Growth; (11) Environmental Sustainability; and (13) Convening Power.

X. Cross-Cutting Issue Integration

The SETT Activity will work closely with rural and marginalized populations, including youth, women, Afro-Colombians and indigenous communities. To do this, the Activity will follow a territorial and inclusive approach, and will scale-up participatory mechanisms used under previous USAID programs like the CELIs and CDLO. All participatory mechanisms used by SETT will include differential strategies and Do No Harm approaches to address gender and ethnic considerations and the right to prior consultation. To guarantee a high level of representativeness in the public spaces where potential interventions will be discussed, the activity will work to eliminate the specific barriers that impede marginalized groups participation, like adjusting schedules and defining strategic locations for training and discussions. The Activity will also have a special focus on engaging youth to promote CBO’s leadership renewal and business and value chain innovation. As mentioned above, diversification of rural economic activities will be key to support women economic empowerment, and SETT will closely coordinate actions with USAID’s new Generating Equity Activity whenever possible.

SETT will improve rural communities' access to, and use of, digital technologies. It will do this to improve access to individuals and businesses’ technical productive knowledge, support marketing strategies and diversify markets. If the restrictions imposed by the pandemic continue, the Activity will also use digital technologies to facilitate dialogue between actors and implement interventions like technical assistance.

In terms of private sector engagement, opportunities for strategic and long-lasting partnerships will be identified throughout all of the Activity’s objectives. The Activity will engage with private companies to develop and expand their business focus, and will leverage private companies’ corporate social responsibility (CSR) efforts to invest in public goods and services. Private sector actors engaged in this activity may include micro and small businesses, in addition to larger companies.

Finally, the SETT Activity will promote the use of clean energy sources and sustainable practices in all the interventions supported. The Activity will contribute to reduced deforestation and the protection of biodiversity through improved agricultural efficiency, and the promotion of environmentally sustainable development opportunities, like sustainable tourism and silvopastoral models. The Activity will evaluate and

30 As defined in the Regional Integration Strategy mitigate potential environmental impacts of its interventions during the planning process, particularly those environmental impacts related to improved infrastructure and entrepreneurship and business activities.

[END OF ATTACHMENT A]

ATTACHMENT B

Response Format and Guiding Questions for RFI

“Sustainable Economic and Territorial Transformation Activity”

Format for RFI Responses Please strictly limit any response to the questions included in this RFI and to comments/suggestions about the document. To expedite USAID’s review and be considerate of respondents’ time, responses should be kept to no more than five (5) pages in length. Note that not all questions need to be answered. Responses to the notice must be written in 11-point font and may be submitted in English or Spanish.

Guiding Questions:

USAID is seeking feedback on the concept detailed in Attachment A. The purpose of this RFI is to determine the soundness and robustness of the conceptual design. This is a Request for Information (RFI) and not a Request for Proposal (RFP). Please submit your feedback regarding the desired results outlined in the concept (the “what”) rather than describing how your organization would propose to achieve the results (the “how”).

Questions below are guiding questions, and as such, not all questions need to be answered in your feedback.

1. Would your organization be interested in applying to this upcoming opportunity or partnering with another organization to participate? If yes, please provide a description of your organization’s background and experience related to the purpose of the Activity.

2. Which do you consider to be the strengths of the concept?

3. Which do you consider the weaknesses of the concept and why? What suggestions do you have to overcome these weaknesses?

4. Is the proposed results chain (objectives and intermediate results) sufficient to foster equitable and environmentally sustainable economic growth, development and peace implementation in targeted regions? Would you suggest a different intermediate result or objective?

5. Is the proposed results chain (objectives and intermediate results) strategically structured in order to reach the expected impact?