RFI Econ Growth Investment and Trade Project Final.pdf

REQUEST FOR INFORMATION

Date of Issuance: February 25, 2022

Reference No.: Request for Information (RFI) No.

72052022RFI00002

Preliminary Activity Title: USAID/Economic Growth, Investment and

Trade Project

Deadline to Submit Responses: March 25, 2022 5pm (Guatemala time)

Submit Responses to: guatemalaproposals@usaid.gov

Dear Interested Parties:

The United States Government, represented by the Agency for International Development (USAID) in Guatemala through this Request for Information (RFI) offers the opportunity for interested individuals and organizations to provide comments on the design of a new activity with the preliminary title “Economic Growth, Investment and Trade Project.” Through the project, USAID seeks programming to address the root causes of irregular migration, leveraging economic growth and trade to achieve equitable income gains, as further described in Attachment 1.

The instrument type (acquisition or assistance) has not been finalized - therefore, this RFI is being posted on both grants.gov and beta.sam.gov.

All responses must be submitted via email to guatemalaproposals@usaid.gov with subject “RFI: Economic Growth, Investment and Trade Project” no later than the date/time stated above.

Please note that release of this RFI is not to be construed as a commitment by the U.S.

government to issue any notice of funding opportunity or solicitation or ultimately award on the basis of this RFI. USAID is not responsible for any costs incurred in responding to this RFI nor will funding be made available prior to any award. Respondents are responsible for all costs incurred prior to award.

mailto:guatemalaproposals@usaid.gov mailto:guatemalaproposals@usaid.gov

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

Sincerely, Digitally signed by Adam Cox Date: 2022.02.23 13:31:20 -06'00'

Adam Cox Contracting/Agreement Officer USAID/Guatemala

Attachments:

1. Activity Description

Adam Cox

Attachment 1 - Activity Description

1. BACKGROUND

The Economic Growth, Investment and Trade Activity will directly support USAID/Guatemala’s Country Development Cooperation Strategy (CDCS) 2020-2025 which seeks to address the systemic development challenges that underpin Guatemalans’ decisions to emigrate to the United States over the long term, while simultaneously deterring irregular immigration in the short-term.

Core areas that influence the decision to migrate include lack of economic opportunity, insecurity, and inadequate access to basic services. To advance Guatemala’s long-term development, it is imperative that the Guatemalan government address these challenges. USAID will contribute by partnering with stakeholders to increase opportunities for Guatemalans in the geographic areas exhibiting the highest levels of out-migration, which are also the areas with the weakest state presence and lowest levels of economic development.

In addition, the Economic Growth, Investment and Trade Activity will support efforts under Pillar 1 “Addressing Economic Insecurity and Equality” of the U.S. Government’s Root Cause Strategy. Based on the Strategy, there are a number of areas that require structural reforms for successful growth in the countries of Northern Central America. Of these this activity intends to address:

- improved investment climate,

- enhanced economic diversification,

- increased judicial transparency,

- improved governance and transparency,

- expanded access to financial capital for businesses,

- streamlined government procedures to start businesses and pay taxes,

- increased investment in workers, and

- broadened formalization of the economy.

Inclusive growth that increases access to decent work for women and marginalized populations will be critical to creating hope among citizens in the region. Securing commitments from regional governments while working with the private sector, international donors, foundations, international financial institutions (IFIs), and multilateral development banks (MDBs) will be critical to fostering business climate reforms, mobilizing investment, and promoting economic development in the region. Across these efforts, the strategy focuses on empowering women, youth, and indigenous peoples.

2. OBJECTIVES

The objective of the Economic Growth, Investment and Trade Project is to provide technical support to advance equitable and sustainable growth in Guatemala. Components of the project will look to address:

1. Activities working with national and municipal governments to address concerns about the business enabling environment to foster sustained and equitable economic growth

2. Activities to attract and mobilize foreign direct investment (FDI) in both large scale projects as well as small and growing enterprises with the goal of creating employment

3. Trade capacity-building activities in coordination with regional entities, including promotion of existing trade agreements, as well as general export promotion of key value chains https://www.usaid.gov/guatemala/cdcs https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/29/fact-sheet-strategy-to-address-the-root-causes-of-migration-in-central-america/ https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/29/fact-sheet-strategy-to-address-the-root-causes-of-migration-in-central-america/

4. Increased access to financial services and utilization especially in rural areas, with an emphasis on engagement with remittance recipients

USAID is looking for new and innovative approaches to tackle these challenges. Submissions should look to address the following questions:

● How should USAID focus efforts on these four components?

● Are there specific departments or municipalities that would benefit from more tailored and specialized engagement to achieve greater impact?

● What components would your organization prioritize based on the objectives of Pillar 1 of the Root Causes Strategy and what research leads you to this conclusion?

● What activities could most efficiently and effectively address these challenges? What research leads you to this conclusion?

● In support of USAID’s localization strategy, are there local organizations able to address these challenges efficiently and effectively?

● Based on USAID’s Private Sector Engagement Policy, are there private sector partners your organization encourages USAID to partner with?

● Is your organization aware of existing projects that align with these objectives? Are there international partners or donors USAID that should approach in this space?

3. INDICATORS AND ACTIVITIES

The goal of this request for information is to identify targeted activities to address the four components of the Economic Growth, Investment and Trade Project and pinpoint municipalities or departments that will most significantly benefit from the engagement. USAID requests information on activities that would meet the goals and objectives of each component within a 5 year project lifespan. USAID welcomes information on any or all components of the activity and information does not need to address all of the four components. Each of the following sections describe slightly more in depth the overall goals and objectives of each component highlighting possible indicators and activities, but USAID welcomes additional input and ideas to increase economic development in Guatemala at the national and subnational levels.

Component 1: Economic Growth and Business Enabling Environments With a population of 18 million and a GDP of US$77.6 billion in 2020, Guatemala is the largest economy in Central America. Over the last three decades, Guatemala had the least volatile growth among its Central American counterparts. Additionally, public debt and the budget deficit have historically been among the lowest and most stable globally, providing some resilience to external shocks. Measured by GDP per capita (US$4,603 in 2020), Guatemala is an upper middle-income country. However, this continued economic stability has not translated into growth acceleration to close the income gap with rich countries. Furthermore, poverty and inequality in the country are persistently high, with Indigenous Peoples continuing to be particularly disadvantaged.

Through this component, USAID intends to support an enabling environment for business by implementing reforms to address structural impediments to growth, streamlining and digitizing business registration and operations processes, offering legal certainty, reducing opportunities for corruption, enforcing labor and environmental rules, combating insecurity and extortion, and leveling the playing field for international businesses. USAID intends to promote economic growth in a manner that is available to all sectors of society, including women, youth, minorities, indigenous peoples and other marginalized populations.

USAID/ Guatemala is considering the interventions and services like those listed below and is interested in activities to address these issues. Suggestions for additional activities are welcome.

● Provide targeted technical assistance to support policy development and reforms with the Government and with civil society

● Assist GOG in simplified procedures addressing the components of the former World Bank Doing Business indicators or World Bank’s Business Enabling Environment measures

● Provide or support workforce development and job matchmaking services in a sustainable manner with the private sector

● Explore municipal and departmental needs for workforce development and matchmaking and work on the subnational level to establish job creation frameworks

● Lower barriers to digital finance

Success around objective 1 activities will address this non-exhaustive list of indicators:

● Increased number of jobs available

● Improved Procedures, Cost, and Time to Start a Business (sex disaggregated), National and Subnational

● Improved Procedure, Cost, and Time to acquire a construction permit, National and

Subnational

● Improved protection of minority stakeholders

● Increased percentage of adults covered by credit registries and bureaus

● Increased strength in the insolvency framework, National and Subnational

● Increase formalization through digitalization

● Reduction in barriers to setting up and launching mobile money services

Component 2: Attract and mobilize foreign direct investment (FDI) in both large scale projects as well as small and growing enterprises Commercially-driven investment capital is eager to find opportunities in northern Central American economies, and foreign direct investment to developing countries is increasing and far outweighs donor funding. To capitalize on this development opportunity, this component will facilitate private, commercial investment into Guatemala that advances the development priorities of USAID. However, commercial investment in Guatemala is hindered by several factors. For example, investors often lack the awareness or capacity to source and evaluate investment opportunities.

● Due diligence on investment opportunities

● Case studies related to commercial investments with development outcomes

● Legal analysis

● Co-creation and support of development investment funds

● Growth and investment strategy development

● Business advisory services

● Resource alignment (crowding-in other development partners, government resources, Development Finance Institutions, U.S.

Development Finance Corporation (USDFC), credit enhancements, guarantees, etc…)

● Social investment capacity building

● Market research reports

● Value chain analysis

● Investment structuring

● Regulatory navigation and government intermediation

● Policy reform advocacy

● Investor roadshows and convenings

Success around component 2 activities will address this non exhaustive list of indicators:

● Increasing the amount of FDI into Guatemala

● Increasing the amount of private capital invested in small and medium sized enterprises

Component 3: Trade capacity-building activities in coordination with regional entities The goals of trade programming in Guatemala are to deepen regional integration, increase the competitiveness of select value chains, promote two-way trade with the U.S. under the CAFTA- DR (Dominican Republic-Central America Free Trade Agreement), and facilitate investment and technology to drive trade growth intra-regionally and to global markets.

The project achieves these ends by working with the private sector and national and sub-national governments to find practical solutions to overcome trade constraints. It also builds awareness of opportunities for international and U.S. firms to increase trade and expand business partnerships in Guatemala.

● Develop a trade repository

● Support of improved performance of trade corridors and transit systems

● Coordinated Border Management activities designed to maximize trade flows while maintaining security

● Support to customs institutions and border management

● Activities on Pre-Arrival Processing

● Activities on Advanced Rulings1

● Activities to address capacity building needs under the WTO’s Trade Facilitation Agreement

● Activities to increase “nostalgia products” exported to the U.S.

Success around component 3 activities will address this non exhaustive list of indicators:

● Time to export: Border compliance and Document Compliance

● Increasing the volume of exports

● Cost to export: Border compliance (USD) and Document Compliance

● Decreased non-regulatory barriers to trade

Component 4: Increased Access and Utilization of Financial Services in Rural Areas USAID seeks to promote rural economic development in targeted regions through increased access to formal financial services to individuals and micro, small and medium enterprises. USAID envisions that these financial services will support a wide range of rural economic activity, including USAID’s agriculture, livestock, and forestry value chains programs. This project will advance this objective through partnerships with financial institutions to facilitate the development of new channels and new products which are tailor made for producers, rural non-farm enterprises and rural household consumers, including remittance recipients.

Remittances, which play an enormous role in the rural economy (in the Western Highlands more than two of every three individuals (69%) receive remittances), are an important entry point for advancing financial inclusion. Furthermore, remittances, beyond helping households meet current needs, can be better leveraged for investment including in microenterprises, but also housing, 1 ARs are trade facilitation measures in compliance with Article 3 of the Trade Facilitation Agreement. They are binding decisions issued by NBR at the req uest of a trad er, company, or person concerning particulars for a specific item or commodity intended for importation or exportation. An AR brings certainty to an importer and immediate clarity to Customs officials while speeding up Customs clearance.

education, and nutrition, which in turn improve individual earning capacity over a lifetime. 2 As such, the project will place particular emphasis in advancing the objectives of this component through engagement with receivers of remittances.

● Financial literacy education programs

● Technical assistance to financial institutions to address barriers to access, including developing relevant products and services as well as low cost delivery models

● Savings formalization for rural populations with a particular emphasis on remittance recipients

● Business coaching and support for remittance recipients / microenterprises

● Support for non-bank-led remittance innovations (Payment Service Providers, FinTechs, Microfinance Institutions, Money Transfer Operators, Technology Providers)

● Creation of municipal, department or national level diaspora bonds

● Properly constitute a digital ID that provides reliable authentication and enables the delivery of a range of services via the internet or mobile applications that require proof of identity

● Support for the creation of systemic interoperability in mobile money either through transferring money between two different mobile money providers, or between mobile money providers and other financial institutions

Success around Component 3 activities will address this non exhaustive list of indicators:

● Increase in the use of bank accounts and other formal financial products (e.g. insurance, loans), among rural populations/remittances recipients

● Rural enterprises strengthened / formalized

● Rural enterprises, including smallholder farmers, with increased access to credit and other products

● Increase in the percentage of remittances saved

2 Orozco, 2013; Orozcoand Jewers, 2019; Nguyenet al., 2017; Hirstev et al., 2009