Request for Information_USAID Laos Trade Integration and Competitiveness Activity (signed).pdf

REQUEST FOR INFORMATION

Reference Number: 72043924RFI00001 USAID Laos Trade Integration and Competitiveness Activity

Release Date: September 6, 2024 Response Due Date: September 27, 2024 at 4:00 PM (Bangkok local time)

Dear Prospective Applicants/Offerors:

The United States Agency for International Development, Laos Country Representative Post (USAID Laos) is gathering information for the anticipated new five-year Trade Integration and Competitiveness Activity.

This Request for Information (RFI) intends to:

1. Offer the opportunity for the interested organization(s) to provide feedback on the draft Concept Note as detailed in Attachment A of this RFI.

2. Request for responses from the interested organization(s) to the questions related to the Trade Integration and Competitiveness Activity as detailed in Attachment B of this RFI.

Feedback to the concept note and responses to the questions below will help USAID Laos align our efforts with the Lao government’s priorities and effectively support inclusive economic growth. USAID welcomes any relevant feedback and comments that partners may wish to share.

INSTRUCTIONS FOR SUBMITTING RESPONSES/COMMENTS:

Please send all responses to this RFI via email to Suthicha Chussananalin, Acquisition and Assistance Specialist, at schussananalin@usaid.gov with a copy to Tatiana Ronning, Regional Contracting/Agreement Officer, at tronning@usaid.gov by the date and time indicated above with the title “RFI no. 72043924RFI00001, USAID Laos Trade Integration and Competitiveness Activity”.

You will only receive an electronic confirmation acknowledging receipt of your response but will not receive individualized feedback on any suggestions. No basis for claims against the U.S.

Government shall arise as a result of a response to this request for information or from the Government’s use of such information. Specific questions about this RFI should be directed only to the email addresses identified above.

mailto:schussananalin@usaid.gov mailto:tronning@usaid.gov

The submitted response should include the following information:

Reference Number: RFI no. 72043924RFI00001 USAID Laos Trade Integration and Competitiveness Activity

Date:

Name/Position:

Affiliation/Organization:

Email Address:

This RFI is issued solely for information and planning purposes - it is not a Request for Proposals or Notice of Funding Opportunity or Request for Task Order Proposal. Please note that issuance of this RFI does not constitute an award commitment on the part of the US Government, nor does it commit the Government to pay for any costs incurred in the preparation of the response.

Thank you for your assistance and interest in the USAID program. We look forward to receiving your feedback.

Sincerely, Tatiana Ronning Regional Contracting/Agreement Officer

Attachment A: Draft Concept Note Attachment B: List of Questions

ATTACHMENT A: DRAFT CONCEPT NOTE

USAID Laos Trade Integration and Competitiveness Activity

1. Background

Laos’ economic growth averaged 7.5 percent over the past two decades, primarily driven by large-scale investments in capital-intensive sectors such as mining and hydropower. In 2023, economic growth slowed to an estimated 3.7 percent, with contributions mainly from the service sector (i.e. tourism, transport, and logistics) and mining. However, this growth has not translated into sufficient employment and business opportunities, particularly within micro, small, and medium enterprises (MSMEs), which account for 98 percent of private sector firms.

Economic growth is also uneven geographically and is disproportionately concentrated in urban areas. Approximately 23 percent of the population still lives in poverty, indicating a lack of inclusive growth.

The country's geographic location presents both opportunities and challenges. There are opportunities for closer integration with ASEAN neighbors. Initiatives such as the Laos-China railway and the joint venture for a new transmission backbone open up opportunities for MSME growth as transportation and energy bottlenecks are addressed.

MSMEs face significant obstacles, including a lack of entrepreneurial knowledge, low technology skills, limited access to finance for starting or upgrading their businesses, and insufficient capacity to develop high value goods or services that meet international standards.

Furthermore, there is inadequate interaction between the public and private sectors, especially opportunities for MSME participation in policy reforms, leaving business issues affecting MSMEs unaddressed and creating trade barriers.

The recent sharp currency depreciation has led to increased out-migration and shifts within the domestic labor market. Between June 2023 and February 2024, the number of registered Lao migrants in Thailand rose by 15 percent to 252,000. Concurrently, domestic labor is transitioning from non-tradable service sectors to agriculture and some manufacturing sectors. Workers are also shifting from formal wage jobs and unpaid family work to self-employment and family businesses. These shifts reflect broader economic uncertainties and adjustments in the labor market.

The emerging challenges include limited job creation, environmental costs, geopolitical influences, the labor shortage, and inflation and currency depreciation. Addressing these challenges requires a comprehensive enhancement of the business environment and institutional capacity to ensure sustainable and inclusive economic growth.

The Activity will contribute to the cross cutting programmatic approaches in the USAID/Laos Strategic Framework (2023-2028): digitalization, private sector engagement, gender and inclusive development, and localization.

2. Theory of Change and illustrative Objective of an Activity

Theory of Change:

IF private sector-driven business enabling policies are developed and effectively implemented, AND new and existing firms in targeted value chains become more competitive and access capital for growth in domestic and regional markets, THEN private sector growth will generate more inclusive economic opportunities and contribute to a diversified economy.

Rationale:

The development and implementation of business enabling policies tailored to the needs of the private sector can create a more supportive environment for businesses. When firms improve their competitiveness and access necessary capital, they are better positioned to expand and thrive. This growth not only drives economic development but also helps ensure that the benefits are more widely distributed across different segments of society. As the private sector grows and diversifies, it fosters a more inclusive economy.

3. Goal and illustrative outcomes

Goal: Economic Growth Diversified

Outcome 1: Responsible and sustainable trade and investment environment increased Outcome 2: Sustainable employment creation increased in focused value chains Outcome 3: Regional integration advanced

Outcome 1: Responsible and sustainable trade and investment environment increased

Outcome 1.1: Government of Laos (GOL) policies and procedures more responsive to private sector needs

- Strengthen public private dialogue mechanism and other platforms to foster collaboration between the government and the private sector to collectively address the business obstacles and facilitate private sector growth.

- Support the policy research, development and implementation of policies and procedures, with a focus on a local-level policy and regulatory frameworks, to improve the enabling environment and promote private sector development.

Outcome 1.2: Capacity of business associations to constructively engage GOL and provide inclusive services to members improved

- Build the capacity of national and provincial chambers, private sector associations, and business groups to engage constructively with the government and advocate for growth-enabling policies and regulations.

- Support chambers and business associations in providing sustainable services to their members.

- Support the private sector in identifying common obstacles, conducting evidence-based analyses, and participating in the policy making processes to facilitate their business growth.

Outcome 2: Sustainable employment creation increased in focused value chains

Outcome 2.1: Private sector capacity to access to financial resources increased

- Improve financial literacy and business management capacity of MSMEs to expand operations, invest in innovation, technology adoption, and create employment opportunities.

- Facilitate MSMEs’ access to available funds from government, USAID-supported programs, and other development partners, such as Development Finance Corporation (DFC) loan guarantee and ADB Frontier (Private Sector Investment) Facility, and World Bank Access to Finance.

- Partner with financial service providers in facilitating access to finance for MSMEs.

- Collaborate with the DFC to assist the local banks that enter a loan portfolio guarantee with the DFC to meet international banking standards and requirements.

Outcome 2.2: Informal micro and small enterprises that are transformed into formal competitive firms increased

- Support the government to implement the simplified regulatory procedures and tools for business registration and licensing to facilitate the transition of informal businesses to formal status.

- Enhance business skills of MSMEs through existing entities such as the LNCCI SME Centers and Business Development Service (BDS) providers, including support in developing and improving business plans, operational efficiency, and digital skills.

- Improve the capacity of BDS providers and other platforms to deliver training, technical assistance, mentorship and other services to support the formation, growth, and expansion of MSMEs.

Outcome 3: Regional integration advanced

Outcome 3.1: Regional trade facilitation and management by GOL in targeted sectors increased

- Provide technical assistance to the government officials for trade facilitation, including trade negotiations and digital trade policies and agreements.

- Foster consultative forums between government agencies and private sector to identify trade facilitation priorities, address policy barriers and promote trade facilitation.

Outcome 3.2: Private sector more competitively integrated into ASEAN regional and international value chains

- Support the private sector in improving product development, design, branding, marketing, certifications, and standardization, including service delivery, to meet market requirements.

- Promote export opportunities and market access for the private sector.

- Assist the private sector in accessing and utilizing available trade portals, platforms, and resources to improve product and services, and tab into regional markets, including promoting platforms to improve market information.

- End of ATTACHMENT A: USAID Laos’ Trade Integration and Competitiveness Activity Concept note -

ATTACHMENT B: QUESTIONS

1. What approaches should USAID consider in achieving the above expected goal and outcomes above?

2. Are there other areas or outcomes and additional interventions that USAID should consider for this proposed new activity?

3. What are value chains and sectors in Laos that have high growth potential to access regional markets and can create job opportunities with living wages?

4. What are the specific measures that can potentially promote cross-border collaboration and trade integration among Laos SMEs in the region?

5. What are the operating constraints that can hinder achieving above outcomes? How can the activity mitigate them?

6. What are the key challenges faced by the Government of Laos in implementing regional trade policies, and types of technical assistance are needed to address these challenges?

7. How can business associations better serve their members, and what types of support or services are currently lacking?

8. What are the best practices and/or mechanisms to leverage private sector engagement towards development challenges in Laos?

9. What are the most successful examples of regional and international integration efforts in similar contexts, and what lessons can be applied to the Lao PDR context?

- End of ATTACHMENT B: Questions -

- End of RFI no. 72043924RFI00001 USAID/Laos’s Trade Integration and Competitiveness Activity -