RFI USAID Georgia Resilient Communities Activity.pdf

29, Georgian-American Friendship Avenue

Tbilisi 0131, Georgia

Tel: (995 32) 254 4000

Fax: (995 32) 254 4145 georgia.usaid.gov

SUBJECT: Request for Information: USAID/Georgia’s Resilient Communities

Activity

ISSUANCE DATE: July 30, 2021

CLOSING DATE: August 19, 2021

CLOSING TIME: 10 a.m. Tbilisi Time

DOCUMENT NUMBER: 72011421RFI00002 – USAID/Georgia’s Resilient Communities

TO: General Public

The purpose of this Request for Information (RFI) is to conduct market research, determine the interest of capable organizations to provide USAID/Georgia with technical and advisory services and request comments and recommendations from stakeholders to identify ways we can work together to address resilience in target communities in Georgia over the next 5 years. The Mission also seeks feedback on its approach to better shape the activity for a potential future solicitation and estimates for what the requirements might cost.

This is an RFI, not a Solicitation or Request for Proposals. It is not to be construed as a commitment by the U.S. Government to issue any solicitation or ultimately award a contract on the basis of this

RFI, not to pay for any information submitted as a result of this request, nor does it commit the

Government to pay for costs incurred in the preparation and submission of any comments.

Any funding proposals submitted in response to this request will not be considered. Responses to this notice must be received no later than the due date and time stated above in this notice. All materials submitted will become the property of the U.S. Agency for International Development (USAID) and will not be returned. USAID reserves the right to use information provided by respondents for

USAID’s own purposes. While it is not the intention to make public any response to this RFI, proprietary and sensitive information must not be sent.

It should be noted that responding to this RFI will not give any advantage to any organization in any subsequent procurement. Only responses in English will be accepted.

//s//

Robert Claussen

Regional Contracting Officer, USAID/Caucasus

Request for Information #72011421RFI00002 – USAID/Georgia’s Resilient Communities Activity

Draft Documents for Informational Purposes Only This is not a solicitation or Request for Proposals

Response Considerations

Responses should include the following:

1. Cover page not to exceed one (1) page including:

a. Organization name and address;

b. Point of contact name, telephone number and e-mail address;

c. A brief statement of interest that indicates the role the organization envisions playing in a potential USAID award to support USAID/Georgia’s Resilient Communities Activity. If a team, coalition, or consortium envisaged, please provide the names and contact information of the potential partner organization(s) as well;

d. Organization Business Status.

2. Comments and questions on the draft Statement of Work not to exceed five (5) pages.

USAID/Georgia welcomes general comments on the above draft SOW and its feasibility. Other question and comments are also welcome. This is not a formal question period; therefore, USAID will not be providing responses. The USAID design team will review all comments and question and use them the inform the development of the SOW.

No other documents or information are requested at this time. USAID asks respondents not to send any additional information other than what is requested above and to adhere to the page limits mentioned.

USAID also welcomes recommendations regarding the best mode of implementation to maximize impact. This is not a request for Proposals. Please do not submit proposals or statements of qualifications in response to this request.

USAID seeks your input, comments, and recommendations on any or all of the following questions:

1. What are the current strengths of rural communities in the ABL and how can those strengths be reinforced? What are the opportunities to promote more community cohesion?

2. What organizations exist that focus on disaster risk reduction and disaster response? Are these entities active at the municipal level? If so, how can these organizations be strengthened in the areas of preparedness and response?

3. Are there proven methods for assessing a community’s capacity for resilience to shocks and stress?

4. Have you utilized a market systems framework in the past? If so, what was your experience with it? How could the market systems framework be applied to communities in the ABL?

5. Are the work requirements, objectives, and results in the proposed SOW achievable and/or realistic? If not, why?

6. What type of interventions have been most effective for socio-economic resiliency in rural communities? Are there interventions that have proven effective in other communities/countries that have demonstrated the type of successes in resilience that we are targeting here?

7. USAID wants to have a very strong engagement with the private sector. Are there any suggestions you have to increase the quality and scale of private sector engagement and increase investment?

8. What incentives can USAID or GOG use to encourage larger private sector players to invest in target communities?

9. What are some ways to overcome the challenges in Private Sector Engagement that the Covid

19 pandemic caused?

10. Are there additional objectives that you feel would make this SOW more effective in achieving its stated goal of strengthening target communities’ ability to be resilient and counter threats to their socio-economic wellbeing? If so, please describe and provide justification.

11. Do you have any recommendations on the feasibility and/or effectiveness of the illustrative results and top-level objectives provided in the SOW?

12. Are there other non-ABL communities in Georgia that are vulnerable to external malign influence that might benefit from being included in the target population?

13. Given the Biden Administration’s interest in climate change adaptation, are there opportunities for climate smart interventions that would also meet the overarching goals for inclusive development of resilient communities?

14. How active are civil society associations in the target communities?

3. Additional Notes/ Instructions

Submit responses to this RFI to:

yadelberg@usaid.gov and RCOcaucasus@usaid.gov , no later than August 19, 2021.

about:blank about:blank

BACKGROUND

USAID/Georgia’s Resilient Communities Activity (the Activity) will strengthen the resilience1 capacity of at-risk Georgian communities, improving their economic conditions and ability to mitigate economic shocks and malign influence. Targeted communities will include those along the

Administrative Boundary Line (ABL) with Georgia’s occupied regions of Abkhazia and South Ossetia, and may also include additional communities in other regions that USAID or the Activity deem as being especially at risk.

It will do this through increased socio-economic engagement within and between target communities and the wider country. The Activity will provide the foundation for inclusive, sustained, and private sector-led socioeconomic development, support of market systems linked to regional and national markets, and improved and diversified employment opportunities, especially among women and youth.

When taken together, these activities will result in strengthening target communities’ ability to be resilient and counter threats to their socioeconomic well being.

To strengthen the resilience of target communities, the Activity will employ systems-based approaches to analyze and propose inclusive development through four objectives:

1. Build the capacity of communities to lead their own socio-economic development, including building their own ability to mitigate, adapt to, and recover from stresses and shocks.

2. Strengthen micro, and small enterprises in preparation for improved market opportunities.

3. Integrate enterprises in target communities into wider Georgian markets and potentially international market systems;

4. Attract investments in or near target communities to accelerate MSME growth and to diversify the economy.

The Activity must contribute to Georgia’s country-wide development objectives of building trade relationships with more stable, higher-value markets and ensuring gender equality, women’s empowerment, and youth employment.

To counter malign influence, USAID’s Resilient Communities Activity will strategically work with the

Georgian government to increase positive engagement with the people living in communities administered by the Georgian Government along the occupied territories. The following will provide brief background information on the specific challenges this Activity will address: smallholder and

MSME market exclusion; limited public and private investment; and limited local capacity to adapt to and recover from shocks.

US Government and Government of Georgia Priorities

The US Government’s foreign policy priorities are to advance Georgia’s Euro-Atlantic integration;

1 For USAID, resilience is the ability of people, households, communities, countries, and systems to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates inclusive growth.

https://www.usaid.gov/sites/default/files/documents/1870/USAIDResiliencePolicyGuid anceDocument.pdf support Georgia in protecting itself from external malign influence; and help Georgian citizens benefit from improved employment opportunities. The Georgian Government's National Development

Strategy, as well as the SME Development Strategy, the Rural Development Activity, and the Regional

Development Strategy, underline the need to introduce economic reforms to stimulate the growth of

SMEs and to enhance trade as a means to address poverty and unemployment in rural areas. However, the attraction of investments in export-oriented or import-substitution sectors, including manufacturing and agriculture, have remained flat and far below the country’s potential.2

According to the Association Agreement between Georgia and the EU, Georgia has an obligation to ensure agricultural and rural development practices comply with EU best practices. The GOG has adopted an integrated approach to rural development, which requires the involvement of a wide array of stakeholders in the decision-making process, including the increased use of a citizen-centered, bottom-up approach. This approach requires increased authorities and responsibilities for local authorities, the civil sector, local unions, and active citizens. However, the capacity and readiness of local stakeholders to jointly plan and address rural development interventions and challenges and to engage in a meaningful dialogue with each other need substantial improvement.

Georgia has achieved impressive development progress over the last decade and a half. However, the combination of Georgia’s precarious geopolitical situation, jeopardized territorial integrity, and constant Russian threats to its sovereignty complicate and challenge the country’s progress toward

Euro-Atlantic integration.

Vulnerabilities to External Malign Influence

Russia continues to occupy the Georgian territories of Abkhazia and South Ossetia in violation of its ceasefire obligations. Kremlin disinformation actively feeds the narrative that the occupied territories need Russia’s protection from the rest of Georgia, which is portrayed as an enemy.

The Russian military also supports “borderization” efforts that threaten the rights and well-being of people living along the ABLs between the occupied territories and Tbilisi-administered territory. These barriers often alienate and divide civilians from their property located in the occupied territories. In

2018 alone, the State Security Service of Georgia registered more than 130 instances of illegal detention in the areas alongside the ABLs.

Protracted malign influence threatens public and private investments in ABL villages, leaving communities marginalized from Georgia’s economic development. Furthermore, encroaching Russian occupation threatens livelihoods, resulting in outmigration and depopulation of villages, which in turn creates favorable conditions for further borderization. These actions continue to hinder socio-economic development on both sides of the ABL, fostering a dependence on Russia and cutting these communities off from Georgia and the rest of the international community.

Rural depression and outmigration

USAID/Georgia has long recognized that armed conflict, closed and moving boundaries, and restricted movement create substantial challenges to socio-economic development of communities alongside the

ABL. These communities, once on trade routes, are now remote and poorly integrated into growing markets on the regional and national level. Constant security threats and moving boundaries hinder

2 OECD Investment Policy Assessment, 2020 investments, economic development and diversification. Limited employment opportunities result in youth outmigration from these communities. GeoStat demographic data indicates that, on average, Georgia’s rural regions have lost 25% of their population since 2011. While the Shida Kartli region has seen population growth, its communities alongside the ABL have been depopulated.3 In fact, the regions alongside the country’s northern border have the highest out migration rates. In addition, female youth migrate twice as frequently as males, and almost all migration is from rural to urban areas.4

The World Bank’s country social analysis5 identified place of residence, specifically mountainous and remote rural areas, as an important social exclusion factor.6 The same study identified ability, opportunity, and dignity as defining social inclusion factors. These inclusion drivers are manipulated by malign interests in ABL communities.

Limited investment and linkages to regional and national markets

The constant security threats and “borderization” deter public and private investment resulting in the marginalization of ABL communities. In effect, there are mostly micro, and few small and medium-sized enterprises (MSMEs) operating in the area and those that do exist, lack linkages to regional and national markets. The lack of supply chain infrastructure, such as consolidation centers, and post-harvest handling and processing facilities, poses further challenges to the area’s integration in value chains and market systems.

Limited investment and weak integration in the larger economy have hindered ABL communities from benefiting from Georgia’s growth. It has also constrained their ability to take advantage of economic opportunities associated with European Union (EU) alignment including access to high-value markets under the Deep and Comprehensive Free Trade Agreement (DCFTA).

COVID-19

The adverse economic consequences of the COVID-19 pandemic are likely to negatively affect the ability of both local and international players to make new investments. It is therefore critically important for USAID to join forces with the private sector and GOG to offer a robust set of incentives to attract private investment in the ABL communities and mobilize resources needed for their resilience.

The Activity will be implemented in the context of the COVID-19 pandemic, which triggered a recession in the Georgian economy. The development of a number of economic sectors, businesses, and households has been reversed and stunted. This once again underlines the importance of resilience to shocks for the whole economy, and much more so for the communities alongside the ABL.

3 GeoStat 2015 data;

4 USAID/Georgia CDCS Gender Analysis, 2019, p. 10.

5 “A country’s Social Analysis. Social exclusion and inclusion in Georgia”, the

World Bank, 2017

6 Social exclusion implies that certain members of society may face complex barriers and, due to them, have persistently lower outcomes—e.g., access to quality education, health, employment, and income—relative to the rest of society, thus not achieving their full potential.

Limited participation of micro enterprises in market systems

Root causes of low economic productivity in ABL communities are manifold. The main economic activity for communities alongside the ABL is agriculture.

Land fragmentation, insufficient aggregation and collective action, combined with dependency on low-value crops and obsolete agriculture practices, represent key barriers to improving agricultural productivity. Despite substantial investments by donors and the GOG, there is a lack of access to and adoption of new technologies, skills, financial resources and other inputs for smallholder farmers and startup enterprises.

Through its programming, the GoG, and donors including USAID, prioritized the transfer of new varieties, modern agricultural technologies and practices to farmers, improvement of extension services, increasing access to finance, and strengthening critical value-chain players. While substantial gains have been reached and documented, communities alongside the ABL are still far from sustained economic growth that benefits the majority of the population. A systemic approach is needed to promote cooperation among smallholder farmers and link them to markets in which they can commercialize their operations and become viable market players. Further, efforts are needed to help communities diversify away from agriculture into new sectors and value chains (e.g. services).

Smallholder farmers are risk-averse in introducing new varieties and technologies, and they lack resources to grow and meet market needs in terms of quantity and quality of their produce. While the area is dominated by agriculture, non-agricultural sectors contribute significantly to the communities and their development. These sectors include, but are not limited to, hospitality/tourism, handicrafts, and small-scale services. Across all sectors, smallholders and microenterprises have limited bargaining power with suppliers and customers, face higher costs of market integration, and remain highly vulnerable to any type of shock.

Weak capacity of communities and local institutions to lead development and adapt to and recover from shocks

The brittleness of local communities and institutions, combined with dilapidated public infrastructure, make communities even more vulnerable to borderization, natural and human-made disasters, and other shocks. This in turn results in frequent disruption of development and impedes local socio-economic growth. Institutional capacity in the regions is generally weak. Regional and local authorities and other social partners (i.e., business, NGOs, citizens’ organizations) do not cooperate to effectively manage regional development issues, while municipal services remain underdeveloped. The GoG has recently adopted a new Decentralization Strategy, however regional authorities and other stakeholders lack experience in planning, resourcing, and implementing development projects.

Gender Impact on Outmigration and Vulnerability

Programming should also address the multiple gender-related disparities that prevail in Georgia’s rural areas, which are more starkly pronounced in the target communities due to their marginalization and vulnerability to external threats. Some of these disparities include: (a) women’s limited decision-making power within households and in economic activities; (b) the asset gender gap7,8 which gives

7 Men owning and disposing of larger shares of almost all types of assets such as real estate, land, and large equipment 8 Geostat, Women and Men, 2020, p.77.

men a greater say within households and micro-enterprises; (c) land ownership: a review of third-party data on land ownership by sex point to only a slightly disproportional ownership; however, considering land size, women are in a disadvantaged position, which is also reflected in the economic inactivity in villages;9 (d) rural women’s ‘time poverty’, which refers to their disproportionate role in the production of goods and services for the family, caring responsibilities, and parenting; although, women themselves rarely consider this work because it is not paid and is considered part of their gender responsibilities;10 and (e) rural women’s contribution to agricultural production being invisible and under-recognized because women hired in the agricultural sector are clustered at the lower end of the value chains, occupying jobs that tend to be the most labor-intensive and lowest paying. This makes them less likely to be involved in the production of high-value commodities.

It is important to note that women have limited access to large, more profitable, and wholesale markets in Georgia’s rural areas, including the ABL communities. Wholesale marketing is mostly associated with men while retail and small marketing is associated with women. Women have weaker access to means of transportation, including trucks, which limits their access to local markets. In addition, women’s access to information, innovation and knowledge, new technologies, machinery, and agricultural inputs is lower compared to men.11

In many rural communities, rigid gender-based roles assigned to men negatively impact their ability to meaningfully participate in the activities of the communities and institutions coping with shocks. Men in Georgia are stereotypically expected to be the main breadwinners, providers, and protectors of women and the family. These restrictive gender roles put pressure on men, leading to frustration when social expectations are not fulfilled. Many men’s loss of status and position as a provider as unemployment rises has led to increased mental health problems and higher rates of suicide as well as higher rates of violence against women.12

Note on measuring resilience13:

• Resilience is not an outcome, but a capacity that influences outcomes.

• Resilience as a capacity exists and must be measured at multiple levels, not just at the household level.

• Resilience as a capacity and its relation to outcomes are realized in relation to shocks and stresses.

• Resilience as a capacity must be measured in relation to outcomes of interest.

• External malign influences and location in the ABL creates stresses and potential shocks.

• For this Activity, resilience as a capacity will be measured in relation to socio-economic outcomes.

9 UN Women, Country Gender Equality Profile of Georgia, 2020, p. 74.

10 FAO, Gender, Agriculture and Rural Development in Georgia, 2018.

11 FAO, Gender, Agriculture and Rural Development in Georgia, 2018.

12 ibid.

https://www.fsnnetwork.org/sites/default/files/resilience_measurement_in_usaid

.pdf https://www.fsnnetwork.org/sites/default/files/resilience_measurement_in_usaid.pdf https://www.fsnnetwork.org/sites/default/files/resilience_measurement_in_usaid.pdf

DRAFT SCOPE OF WORK

The purpose of USAID’s Resilient Communities Activity is to have resilient target communities that pursue and benefit from inclusive and sustainable socio-economic development and are capable of countering protracted malign influence.

The primary focus of the Activity is to strengthen the resilience of up to 93 communities alongside the

ABL (all GOG-administered territories adjacent to ABL, excluding occupied communities) and potentially other communities of the country that are vulnerable to external malign influence. The list of primary target communities is attached in Annex A of this scope of work. The program will use a market-systems approach to address the root causes of vulnerability in target communities through increased market linkages, investment, and community strengthening. The Activity will not prescribe any sector or type of activity. Rather the Activity must take a broad approach to resolve the wide range of economic, and social challenges for improved resiliency.

Theory of Change:

“If people living in and along the Occupied Territories are positively engaged; if economic exposure to external malign influence is reduced; if vulnerable key infrastructures are cyber-hardened; and if the impact of disinformation is mitigated, then Georgia’s resilience to external malign influence will be strengthened.”14

This activity will contribute to positive engagement with people living in and along the occupied territories and reducing economic exposure to external malign influence.

Detailed Work Requirements

The Activity has four objectives. These objectives are interrelated and will complement each other, driving sustainable and systematic changes and resulting in more resilient communities linked to growing markets. The approaches to each objective must deploy strategies for private sector-led economic transformation, harnessing systems change, catalyzing investments, and building the capacity and resilience of local institutions.

Objective 1. Targeted communities have increased cohesion and increased resilience to economic, social, and environmental shocks.

Illustrative Tasks under this Objective:

● Build the capacity of target communities in economic planning and in risk identification, mitigation, and response.

● Improve service delivery at the community and municipal level.

● Improve local economic infrastructure.

The aim of Objective 1 is to build the capacity of target communities in economic planning and in risk identification, mitigation, and response. It will support the improvement of services at the community and municipal level, and will sustainably build local productive economic infrastructure. The

14 https://www.usaid.gov/sites/default/files/documents/CDCS-Georgia-MAY-2025.pdf contractor must design and implement activities that can be adapted to reflect a changing development context and improve the ability of people, businesses, households, communities, and municipalities in and near the ABL to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates their ability to lead their own development.

The Contractor will design specific interventions to support community led economic planning and advocacy efforts with governing institutions to improve public service delivery; strengthen community-based organizations (CBOs), associations, and groups to build community cohesion;

increase youth and women’s participation; and support community groups to establish linkages with national civil, business or professional associations.

The Activity must catalyze investments from central and local governments, businesses, and communities to improve critical infrastructure and services in target communities. The Activity must prioritize investments with high visibility and impact on socio-economic development and risk readiness. Specific interventions benefiting wider communities, such as the rehabilitation of productive economic infrastructure, improvement of public and economic services, building disaster risk reduction and readiness capabilities and related infrastructure, and introducing climate-sensitive actions, may all be supported. These interventions must deliver sustained improvements in the quality of life and economic well-being of people living in target communities. Priority must be given to creating opportunities for youth, women, and the poor, supporting the diversification of the rural economy and employment.

The Activity must work closely with the Ministry of Regional Development and Infrastructure

(MRDI), Ministry of Economy and Sustainable Development (MoESD), and the Ministry of

Environmental Protection and Agriculture (MEPA) and their respective agencies, regional administrations, and municipal governments, as well as with the EU and other donors, to ensure that all supported activities are consistent with the priorities of development strategies at the country and regional levels. The Contractor must strive for complementarity with regional and municipal development plans, and seek contributions from communities to leverage additional resources for their development. A combination of TA and matching grants must be used to build the capacity of local institutions, both public and private, to better provide services, improve infrastructure, resolve bottlenecks and remove barriers to attract investments, improve environmental protection, and sustainably manage community resources. Furthermore, the results of this Component must connect and add value to the interventions of Objectives 2, 3 and 4.

Objective 2. Improved Productivity of Micro and Small Enterprises (MSE)

Illustrative Tasks under this objective:

● Identify sectors and crops most suitable to the area and most capable of providing the inter-community and inter-regional linkages that are sought by this program, in addition to opportunities for increased productivity and profitability ;

● Improve productivity and increase revenues for selected micro- and small- enterprises.

● Prepare MSEs for increased market integration.

The Activity’s resources can be used to improve productive capacity and productivity to meet product quality requirements, and certification standards, adopt improved technologies, improve marketing and branding at different levels of value-chains, build logistics, facilitate purchase agreements to expand linkages with the producer clusters from the target communities, and facilitate access to national, and potentially international markets. This support can be for existing micro and small enterprises as well as start up businesses.

The COVID-19 pandemic lessons must be considered while prioritizing value-chain and market interventions.

Reasonableness of investments must be considered for increased resiliency of selected markets/value-chain improvements.

Objective 3. Increased integration of MSMEs in targeted communities into the regional and national markets

Illustrative Tasks under this objective:

● Identify existing commercially viable sector clusters. Where no such clusters exist, organize small producers into commercially viable clusters;

● Link new and existing clusters to other value-chain players (e.g. suppliers, buyers)

● Increase trade between the target communities and other regions of Georgia

Under this Component, the Contractor must design interventions that create opportunities for enterprises in the target area to engage in market systems sustainably and profitably as well as address market systems gaps, such as lack of storage facilities and supply chain problems. The Contractor must design and implement an integrated set of interventions that increase the potential for enduring linkages within and between target communities and the greater Georgian territory.

The Contractor must engage a wide-range of private sector entities across industries in co-creating market-based solutions to attract investment in target communities and facilitate linkages to sustained, resilient markets.15 .

Furthermore, the Contractor must utilize Private Sector Engagement (PSE) approaches and create incentives to attract investment in value chains and build linkages to regional and national markets.

The Contractor must make catalytic use of resources to build linkages to viable markets including but not limited to: competitive matching grants, technical assistance, consultations, or any other interventions to improve and address market system’s gaps, shortcomings or failures by supporting value-chain players and resolving systemic challenges in their interaction. The Activity must consult, strategize, and collaborate with the private sector, direct and indirect beneficiaries, and other market system stakeholders.

This Component will target the value-chain players within the target communities or within the municipalities and regions. The value-chain players operating outside the target communities must either already have demonstrated economic engagement with target communities or develop such engagement as part of the Activity.

Objective 4. Increased private investment in or near ABL communities to accelerate Small and

Medium Enterprises’ growth and diversify the economy.

Illustrative Tasks under this objective:

15 “Market systems perspective on resilience emphasizes that the well-being of the population depends heavily on whether markets can continue to function through periods of shock and stress.”, USAID Economic Growth Policy.

● attract and mobilize private and public investment and partnerships that advance enterprise-driven development in target areas.

● establish the Rural Development Fund to engage with and incentivize institutional investors (e.g., public and private investment funds, foundations, financial institutions, multinational corporations) and other private sector resource partners to provide catalytic capital support for economic development and diversification and ensure resilient enterprise-driven growth.

● engage a wide-range of private sector entities across industries in co-creating market-based solutions to attract investment in target communities and facilitate linkages to sustained, resilient markets.16

The purpose of this objective is to attract and mobilize private and public investment and partnerships that advance enterprise-driven development in target areas. The Contractor must make catalytic use of

Activity resources to attract investment in the target communities. including: creation of new and/or expansion of existing SMEs; incentivizing private enterprises to introduce innovation, best practices, and technology that enhance firm-level productivity, improve backward linkages with target communities, and strengthen selected market systems. The Contractor must engage a wide-range of private sector entities across industries in co-creating market-based solutions to attract investment in target communities and facilitate linkages to sustained, resilient markets.17

Windows of Opportunity - Given the dynamic, fluid nature of this work, USAID recognizes that new opportunities may arise during implementation. This program allows the contractor to be flexible and creative in areas that will support the integration of MSMEs into broader markets and attract investments in a manner that facilitates economic growth, even if not well defined in other parts of this

SOW. Constant analysis and learning is a key feature of inclusive market systems approach.

Opportunities may not be apparent at the outset of an intervention, but often emerge as market system changes begin to take hold. 18 Furthermore, activities may be adapted to reflect a changing development context and improve the ability of people, enterprises, and communities to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces vulnerability.

If new opportunities arise, the contractor will propose actions to USAID who will approve the action..

If no new window of opportunity activities are presented, funds allocated for this component will be distributed into the four objectives.

Approach to Providing Cost-Share Grants

This activity includes a cost-share grants program. Below are the requirements and parameters for the implementation of the cost-share grants program.

The Contractor must design and implement a competitive cost-share grants program for each objective.

16 “Market systems perspective on resilience emphasizes that the well-being of the periods of shock and stress.”, USAID Economic Growth Policy.

17 “Market systems perspective on resilience emphasizes that the well-being of the population depends heavily on whether markets can continue to function through

18 A Framework for Inclusive Market System Development.

The cost-share grants program must be designed to achieve program objectives, and be based on the following principles:

⮚ Enable partners to become self-reliant;

⮚ Prioritize inclusion, sustainability, and resilience, ⮚ Be systematic and catalytic;

⮚ Be cost-effective.

The Contractor must design the Grants Manual describing the grants process and establishing transparent grant selection criteria. Gant process, as well as grant selection criteria will be different for

Objectives. The Grants Manual will be approved by the USAID.

Eligible organizations for the cost-share grants: MSMEs, cooperatives, service/extension providers, associations, and NGOs legally registered in Georgia. Assistance to Governmental organizations must comply with requirements mandated by the U.S. Government Federal Regulations and USAID’s

Automated Directives System.

Rural Development Fund

The Contractor must establish the Rural Development Fund to engage with and incentivize institutional investors (e.g., public and private investment funds, foundations, financial institutions, multinational corporations) and other private sector resource partners to provide catalytic capital support for economic development and diversification and ensure resilient enterprise-driven growth.

Funds mobilized through the Rural Development Fund can be used to reduce the high transaction costs and risks for SMEs to start or expand business in the Activity’s target locations. Funds must be used to promote investments in target areas and to support establishment of new SMEs, either through supporting the establishment of start-ups, or attracting existing value chain players into the target areas. The program must prioritize investments that benefit large groups of beneficiaries, diversify the economy, offer innovation, and provide employment for youth from the target communities.

The Activity must co-design the modalities of partnerships with the partner institutional investors and enter into MOUs with them. The terms of engagement with different Partners might be different and will stem from the results of co-creation. MOUs will clearly identify the value brought by the partner to program objectives, roles, terms, and responsibilities of all parties. The MoUs with potential partners will require USAID approval.

USAID has already identified Start-Up Georgia as one such partner. This partnership is specifically focused on the diversification of employment opportunities and economy and bringing innovation to the target localities through supporting start-ups in target locations. The Contractor must negotiate the details of this partnership with the Start-Up Georgia with close participation of USAID.

The Rural Development Fund will be up to $X million. The Fund must mobilize 1:1 matching investment from USAID vs. the resource partner. The selection criteria for approving projects under the Fund must prioritize high-impact, high-value partnerships, bringing innovation and employment diversification to the target area. The Fund will take steps to encourage participation of women who are traditionally clustering at the lower end of the value chains.

Contract Deliverables

USAID is committed to quantifiable results. Through the four contract Objectives, during its life the

Activity must achieve the results listed below:

No Result Contract Year Minimum expected total 1 2 3 4 5

Across all objectives

1 New full-time equivalent jobs created TBD TBD TBD TBD TBD TBD

2 Number of persons with improved employment

TBD TBD TBD TBD TBD TBD

3 Amount of sales by assisted beneficiaries

TBD TBD TBD TBD TBD TBD

4 Dollar value of cost-share mobilized by the Activity, and grantees

TBD TBD TBD TBD TBD TBD

5 Number of women with improved access to productive economic resources (employment, assets, credit, income)

TBD TBD TBD TBD TBD TBD

6 Number of micro and small enterprises from target communities generating new sales from improved market integration

Number of micro and small enterprises using improved practices in their production and marketing

Number of households benefiting from improved infrastructure

Number of businesses benefiting from improved services and infrastructure

Number of local government and non-government organizations, professional and business associations, CBOs, groups providing improved services and supporting target communities;

Value of funding mobilized for infrastructure projects

TBD

TDB

Number of targeted communities included in municipal DRR plans

Number of targeted communities that benefit from implemented municipal

DDR plans.

Number of civil society associations strengthened

TBE

Number of MSMEs who improved their practices as a result of the

Number of new SMEs established in target municipalities

TBD TBD TBD TBD TBD TBD

Technical Approach

STEP ONE: REQUIRED ANALYSES:

● Within the first 90 days of the Activity, the Contractor must identify the sectors, and one or several value-chains within each sector, with the highest potential of development for the communities and respective Municipalities.

● Furthermore, within 120 days from the start of the Activity, the Contractor must produce a

Market Systems Analysis (MSA) for selected value-chains in targeted locations. The objective of the MSA is to understand the market structure and relationships within the market system.

The MSA must identify constraints and opportunities for development, and it must assess relationships, behaviors, risks, incentives, and trade-offs for value-chain players in market-based investments.

● Assessment of community capacity for resilience to shocks and opportunities for improvement.

STEP TWO: FLEXIBLE PLAN

● Based on the results of these analyses, the Contractor must propose a detailed workplan, where interventions under the Activity Objectives will complement each other to result in inclusive markets systems development and improved resiliency in targeted communities.

● The Contractor must use and build on the experience of USAID/Zrda, USAID work with interested actors (including but not limited to Startup Georgia, the Partnership Fund), as well as other programs implemented by USAID, and other donors in Georgia, as well as international best practices, to design initiatives to be implemented under the Activity Objectives.

● The efforts must be focused and tailored, must be based on the findings of the MSA, and must address causal factors of economic vulnerability, including but not limited to economic linkages.

STEP THREE: IMPLEMENTATION

Following the analyses, the Contractor will design specific interventions to support community engagement in economic planning and advocacy efforts with governing institutions to improve public service delivery and disaster risk reduction; strengthen community-based organizations (CBOs), associations, and actions to build community cohesion; increase youth and women’s participation; and support community groups to establish linkages with national civil, business or professional associations.

The Activity must catalyze investments from central and local governments, businesses, and communities to address identified gaps in target communities. The Activity must prioritize investments with high visibility and impact on socio-economic development and risk readiness. Specific interventions benefiting wider communities, such as the rehabilitation of productive economic infrastructure, improvement of public and economic services, building disaster risk reduction and readiness capabilities and related infrastructure, and introducing climate-sensitive actions, may all be supported. These interventions must deliver sustained improvements in the quality of life and economic well-being of people living in target communities. Priority must be given to creating opportunities for youth, women, and the poor, supporting the diversification of the rural economy and employment.

Technical Approach Principles:

● The Contractor must propose innovative ways of using competitive grants, technical assistance, consultations, networking support, and other opportunities to resolve the identified challenges to rural communities' resilience to economic shocks and malign influence.

● The contractor must propose ways to identify and motivate local agents to be advocates for positive change.

● The Contractor must make catalytic use of Activity resources and PSE approaches to attract investment in the target communities, value chains and build linkages to regional and national markets.

● The Contractor must engage a wide-range of private sector entities across industries in co-creating market-based solutions to attract investment in target communities and facilitate linkages to sustained, resilient markets.19

● The program must prioritize investments that benefit large groups of beneficiaries, diversify the economy, offer innovation, and provide employment for the target communities.

● The Activity must co-design the modalities of partnerships with the partner institutional investors and enter into MOUs with them. The terms of engagement with different Partners might be different and will stem from the results of co-creation. MOUs will clearly identify the value brought by the partner to program objectives, roles, terms, and responsibilities of all parties. The

MoUs with potential partners will require USAID approval.

● Contractor must support and encourage diversification of economic activities.

19 “Market systems perspective on resilience emphasizes that the well-being of the

● The Activity must consult, strategize, and collaborate with the private sector, direct and indirect beneficiaries, and other market system stakeholder

● The COVID-19 pandemic lessons must be considered while prioritizing value-chain and market interventions.

● Reasonableness of investments in digital infrastructure, adoption of electronic marketing, sales, and payment platforms must be considered for increased resiliency of selected markets/value-chain improvements.

● Activities target the value-chain players within the target communities or within the municipalities and regions. The value-chain players operating outside the target communities must either already have demonstrated economic engagement with target communities or develop such engagement as part of the Activity.

● The Activity must catalyze investments from central and local governments, businesses, and communities to ADDRESS IDENTIFIED GAPS IN target communities.

● The Activity must prioritize investments with high visibility and impact on socio-economic development and risk readiness.

● Priority must be given to creating opportunities for youth, women, and the poor, supporting the diversification of the rural economy and employment.

Technical Guidelines and Considerations

The Contractor must integrate the following requirements into its implementation approach.

Strategic Focus:

Through this program, USAID aims to strengthen Georgia’s resilience to malign influence while advancing towards Euro-Atlantic integration. The programmatic priorities of integrated socio-economic development, inclusive and enterprise-driven economic growth, and capacity building of local institutions to deliver services effectively and efficiently in the communities alongside the ABL, are all in line with the GOG’s long-term priority to join the EU. The programmatic approach is in line with and supports reforms currently being undertaken by the GOG, such as those related to the Rural

Development Strategy, Regional Development Strategy, and Decentralization Strategy.

The Activity must work closely with the Georgian Government and secure commitments to support implementation and sustain results over the long term. The GOG has recently prioritized new approaches in rural and regional development which are in line with the EU requirements. The

Activity must build on these achievements and on successful models developed by the US, EU, the

WB, and other donors (Switzerland, Austria, and others), and catalyze sustained inclusive socio-economic growth in the communities alongside the ABL to reduce their vulnerability to malign influence. The contractor will be expected to design interventions in ways that maximize the leverage of investments made by the GOG and other donors to ensure burden-sharing.

Donor and Host Country Coordination

While working closely with communities, MSMEs, business groups, and NGOs, the Contractor must coordinate and complement activities closely with government, USAID programs, and other donor-led initiatives designed to enhance rural and regional development, economic growth, employment, and resilience building.

The Contractor must work closely with the Ministry of Regional Development and Infrastructure, the

Ministry of Environmental Protection and Agriculture, the Ministry of Economy and Sustainable

Development, other relevant Ministries, and agencies under them to seek complementarities and leverage resources.

The Contractor must closely follow economic developments in the country, leverage other USAID programs such as Industry-Led Skills Development, Economic Security, USAID Agriculture

Development, Good Governance Initiative, and others to sustainably integrate market systems from target communities into the country's socio-economic and political development and to improve local economic development planning and municipal service provision.

Georgian rural and regional development is extensively supported by donors. The Contractor must leverage their investments and build upon their achievements and lessons learned. The Contractor must ensure the best use of policy changes and legislative improvements, use of best practices and lessons learned from pilots conducted by the EU, SDC, Austrian Development Corporation, the UK

Government, the WB, and others. Furthermore, the Contractor must continue coordination with these, and other relevant donors to ensure complementarity and avoid any duplication of efforts.

Gender Equality and Women's Economic Empowerment

The Activity’s approach to gender equality and women’s economic empowerment is in line with the

National Security Strategy (NSS), which states that the United States “will support efforts to advance women’s equality, protect the rights of women and girls, and promote women and youth empowerment programs.” The NSS clearly identifies women’s equality and empowerment worldwide as both

American values and foreign-policy priorities, noting that, “governments that fail to treat women equally do not allow their societies to reach their potential.” Further, the Joint Strategic Plan of the

U.S. Department of State and USAID for FY 2018-2022 recognizes, “societies that empower women to participate fully in civic…