RFI-72011518R00010.pdf

KAZAKHSTAN TAJIKISTAN TURKMENISTAN UZBEKISTAN

41 Kazibek Bi Street, Almaty 050010, Kazakhstan

Request for Information (RFI)/Draft Statement of Work/Statement of Objectives

Subject: USAID/Central Asia RFI-72011518R00010: Enterprises, Employment, and Enabling Environments (E4)

Issued: August 29, 2018

Due Date: September 13, 2018, 09:00 AM Almaty Time

The United States Government, represented by the U.S. Agency for International Development (USAID)/Central Asia, is seeking input from interested organizations and individuals who may provide comments, opinions and recommendations in response to the proposed Statement of Work (SOW) and Statement of Objectives (SOO) included in this request. The SOW is intended to be an incorporated into a subsequent Request for Proposals (RFP) for a single-award IDIQ contract with the SOO acting as the first task order under this IDIQ. Both the IDIQ and the task order are anticipated to have a five-year period of performance.

This Request for Information (RFI) notice is issued to obtain input related to interest, capabilities, and market information from potential Offerors. Responses to this notice are not considered a proposal and proposals will not be accepted or evaluated by the Government as a result of this RFI. Only responses with the information requested in this RFI will be reviewed.

Responses received may be used for planning and design purposes. The full RFI can be viewed and downloaded at www.fbo.gov.

In accordance with FAR 15.201(e), release of this RFI in no way obligates the United States Government or USAID to release a solicitation for this proposed activity, nor are either responsible for any costs incurred in preparing responses to this RFI. FAR Provision 52.215-3, Request for Information of Solicitation for Planning Purposes (Oct 1997) is hereby incorporated into this RFI.

Responses must be submitted electronically to AlmatyAASolicitations@usaid.gov under the title:

RFI-72011518R00010 E4 USAID/Central Asia. The submitted information must not exceed 2 pages, including annexes/attachments. Submissions will receive an electronic confirmation acknowledging receipt. USAID will not provide feedback or responses to questions submitted in response to this RFI and no applications or resumes will be accepted or considered. Your responses will not be made public. Thank you for your interest in this Request for Information.

Sincerely, /s/ Jonathan Chappell Contracting Officer

Attachments:

I. Statement of Work (IDIQ) II. Statement of Objectives (Task Order) III. How to submit Responses mailto:AlmatyAASolicitations@usaid.gov

USAID/Central Asia

RFI-72011518R00010

Enterprises, Employment, and Enabling Environments (E4)

Attachment I. Statement of Work (IDIQ)

C.1 PURPOSE

The purpose of this Statement of Work (SOW) is to obtain services specified here in Section C for USAID/Central Asia’s Enterprises, Employment, and Enabling Environments (E4) mechanism. E4 will directly support the Mission’s RDCS Development Objective (DO) 1:

Expanded, diverse and competitive trade and markets. A single award IDIQ to a Contractor in order to obtain services stated here within. The Contractor will provide activities that support specific work, as needed, under Task Orders across the five countries of Central Asia. USAID Contracting Officers will request the work through the issuance of Task Orders during the ordering period as specified in Section F of the Contract.

The goal of E4 is to increase employment and jobs through increased private productivity and competitiveness. The theory of change is as follows: “For the number of jobs to increase, businesses must grow; and for businesses to grow, constraints preventing growth must be removed.” Following this logic, E4 will focus on removing obstacles to growth at the firm level.

E4 will work with individuals to develop skills identified by employers or develop entrepreneurial expertise. When appropriate, E4 will work to address legal and regulatory constraints, if they are determined to be significant inhibitors of firm growth. These efforts will result in creation of new firms, the growth of existing firms, and new job creation. These results are firmly in the interest of the United States, as they will contribute to a more stable and prosperous Central Asia that offers new opportunities for American firms.

E4 will seek to address country-specific barriers to firm growth and job creation by taking a bottom-up approach to development. The bottom-up approach will begin by addressing the needs of small, medium, and large enterprises and the unique challenges of male and female entrepreneurs in their specific local context of the country where the work will be performed. By first identifying barriers to business growth, which vary by firm, sector, and country, USAID will be better able to inform and contribute to its own efforts at the national and regional levels.

USAID/Central Asia’s Country Offices will play a key role in E4, working alongside the Mission’s Economic Development Office (EDO) to develop tailored approaches and identify country-specific opportunities for engagement that will coalesce with the broader regional objectives for E4 and for the Mission more broadly.

E4 will be developed around the central theme of fostering employment and incomes in Central Asia. These efforts will seek to impact broad swathes of the target population in each country.

Specific needs as well as the opportunities for engagement will vary by country, depending upon the intricacies of each situation. Tailored approaches will be required since a one-size fits all approach will be difficult to apply in a region as vast and varied as Central Asia. However, E4 will seek to leverage resources (technical and funding) across countries by focusing on three key components of enterprises, employment, and enabling environments, each intended to further support job creation. E4 will advance U.S. foreign policy by fostering global opportunities and new markets for U.S. firms, harnessing the power of the private sector, and supporting broad-based growth that supports stability in the region.

In 2015, the U.S. joined the five countries of Central Asia in creating the C5+1 diplomatic platform. This platform is intended to increase dialogue and cooperation among the partner countries in areas of mutual importance. In support of C5+1, USAID received funding to implement four projects, two of which are relevant to E4: Central Asia Business Competitiveness (horticulture), and Transport Corridor Development. These projects are currently implemented through USAID’s Competitiveness, Trade and Jobs activity. However, depending upon the progress of C5+1, and the availability of future funding, E4 may eventually serve as a mechanism for carrying out these or other related efforts under the C5+1 platform.

C.2 BACKGROUND

The five countries of Central Asia are diverse, dynamic, rapidly developing, and strategically important. The region’s population of 70 million people, is growing quickly with a large population of youth and young adults who are or will soon enter the labor force. Economic growth rates are generally high, but employment opportunities have not kept pace, and many Central Asians have been excluded from the economic benefits accruing to the countries as a whole. The Kyrgyz Republic and Tajikistan lack the natural resources of their wealthier neighbors, face high rates of poverty, and are largely dependent on the agriculture sector for employment. Men and women often have distinct and unequal employment opportunities and access to the resources necessary to start and grow businesses.

Another key defining feature of the region is the large migrant labor force and, particularly for the Kyrgyz Republic and Tajikistan, reliance on remittance payments from abroad for substantial portions of household disposable income. In 2016, remittances payments to the Kyrgyz Republic and Tajikistan were equivalent to 30.5% and 26.9% of GDP, respectively1. The primary reason for individuals to migrate abroad is the pursuit economic opportunities and high wages that are lacking in their home countries.

Recent terror attacks in the U.S., Sweden, Russia, and Turkey, carried out by Central Asians, highlight the growing concern of laborers migrating abroad where they are potential targets for recruitment by extremist organizations. The lack of economic opportunities in these countries has become a critical political and national security threat that extends far beyond the borders of Central Asia. For this reason, national security is seen as a secondary outcome of the direct economic and employment outcomes resulting from E4.

A lack of skills needed by private sector employers leaves many individuals unable to obtain employment in their home countries, even when opportunities exist. Employers lack qualified workers, but also themselves lack the skills and knowledge to access new markets, increase revenue, and employ more members of the communities where they operate. Many governments in the region also impose self-defeating regulations that serve as a disincentive for firms to grow and become greater employers and drivers of broad-based economic growth.

While Central Asian nations share a common past as former Soviet States, the current status of these countries varies widely with differing levels of economic development, human and natural resources, and political will to undertake needed reforms. Given the variation in Central Asian economies, blanket solutions are not appropriate for all countries and contexts, and instead, 1 (https://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1199807908806/4549025- 1450455807487/Factbookpart1.pdf) development activities must be tailored to each country individually. The uniqueness of each of the five countries is briefly described below.

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

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

Economic diversification is critical for the continued growth of the economy and to mitigate the risks posed by the volatility of world oil and natural gas prices. In particular, Kazakhstan lacks competitiveness in tradable goods outside of the extractives sector.

Kyrgyz Republic The Kyrgyz Republic has benefited from high economic growth rates in recent years, but it remains the second poorest of the Central Asian Republics and faces significant employment challenges in the near future. Like its neighbor Tajikistan, many Kyrgyz households rely on remittance payments from migrant labor, particularly in Russia, since many Kyrgyz workers are attracted to better employment prospects and higher wages abroad. Economic growth is good on aggregate, but job growth has significantly lagged behind overall economic growth, raising distributional concerns. One reason for lagging labor demand is that growth and productivity gains are concentrated in a small handful of large firms, and the growth has not been broad-based or inclusive of many sectors. The economy as a whole has seen a general breakdown between productivity and wages. Furthermore, a high population growth rate means more jobs must be created to absorb the youth bulge as young men and women enter the labor force. Training programs must be careful to keep skills in the country and not result in trainees taking their skills abroad in search of higher wages.

Tajikistan Tajikistan is the poorest of the Commonwealth of Independent States, with 19.5 percent of the population living on less than USD 1.90 a day and 56.6 percent subsisting on less than USD 3.10 a day.2 Despite having only 7 percent arable land, agriculture is a cornerstone of the economy and accounts for 25 percent of gross domestic product and employs 53 percent of the labor force in Tajikistan.3 Moving the agriculture sector from agrarian to agro-industrial in Tajikistan offers a solid foundation for economic development. Of approximately 8 million Tajiks, over 70 percent live in rural, agricultural areas.4 Tajikistan has achieved relatively high growth rates since the end of its civil war in 1997, but employment has not kept pace with the gains in national wealth. Between 2003 and 2013, the World Bank calculates that GDP grew by an average of 7.2% per year while employment only grew at a rate of 2.1% per year. The Tajik economy is an outlier in many respects: the population is not urbanizing as rapidly as other Central Asian countries, remittance payments from migrant labor remain among the highest in the world, and, despite an emphasis within the Tajikistan National Development Strategy on increasing exports and shifting to an agricultural industrial, Tajikistan has struggled to modernize its agriculture sector as a source of economic growth.

2 World Bank World Development Indicators 3 Ibid.

4 Ibid.

Turkmenistan Turkmenistan has used its vast oil and natural gas resources to generate high rates of economic growth despite a lack of free market reforms. Much of the economy remains under the control of government monopolies and state-owned enterprises, and the market is highly restricted and insular outside of the extractives sector, which makes up 92% of total exports. Serious policy reforms are needed in order for the private sector take root and expand.

Uzbekistan The Uzbek economy has grown at a high and steady rate with GDP per capita growth frequently exceeding 6% per year over the past 15 years. However, much of that growth is the result of aggressive government industrial policy and subsidization of key industries, which raises concerns about sustainability and competitiveness in the long run. Many State Owned Enterprises (SOEs) will need to be privatized and new business creation and entrepreneurship encouraged as the economy continues to liberalize and open up to new markets. Over the past year, Uzbekistan has demonstrated increased interest in market-based reforms, such as the liberalization of its currency exchange system in September 2017, the abolishment of the horticulture export monopoly, UzAgroExport, in June 2017, the issuance of a draft presidential decree in August 2017 on improving business conditions for entrepreneurs. Such reforms offer promise for new business opportunities and private sector growth.

Development Challenge Central Asia faces numerous challenges to economic growth, and prioritizing the constraints to growth is a difficult task. The geography of Central Asia is an obvious constraint with countries landlocked (and double landlocked), markets separated by vast distances, and mountainous terrain that minimizes arable land and increases costs of transportation. But these natural features are a reality and can be overcome. However, the issues most constraining to economic growth are man-made: governance, policy, regulation, and enforcement are generally poor.

Economic opportunity is not always equal between men and women. These issues limit the development of the private sector as well as their ability to serve as creators of meaningful employment. Much of the road and electrical infrastructure is of poor quality and perennially underfunded. The costs to import and export are among the highest in the world, which is partly a result of geography, but is also reflective of bureaucratic hurdles, inefficient border crossings, regulatory requirements, and a lack of regional standards. These are just a few of many examples of the constraints to economic growth in the region.

There is no single binding economic constraint that is consistent across all five Central Asian countries, which further highlights the need for country-specific solutions under the task orders.

Fortunately, the World Bank, the Asian Development Bank (ADB), and USAID have conducted a number of detailed economic growth and labor market studies in Central Asia, much of it within the past few years using the most recently available data. Many of the constraints identified in these studies can be addressed through the scope of work of the E4 IDIQ and its task orders.

In Kazakhstan, the World Bank presented preliminary findings of its Strategic Country Diagnostic at the 2017 Astana Economic Forum. The report identified four main challenges to economic development in Kazakhstan: the advancement of the private sector and reduced state control of business activity, particularly in the extractive industries; a lack of regional integration; poor human capital, particularly the poor quality of the education system; and a lack of economic diversification.

In Kyrgyzstan, the constraints are primarily in governance, finance, infrastructure, and firm competitiveness. Recent economic research includes the World Bank jobs diagnostic (2015), the ADB growth diagnostic (2013), and the GIZ labor market study (2013). A number of common themes arose from these studies with political and governance issues being at the top. Political instability, corruption, and the poor quality of government institutions are major deterrents to private sector growth. Other common themes include the high cost of trading across borders (on both the import and export side), a lack of available financing, inconsistent electricity access, and the overall low productivity of firms, much of it driven by small and medium firms operating in the informal sector. As a remittance-dependent economy, Kyrgyzstan also faces a unique macroeconomic constraint from the fact that the substantial inflow of foreign currency into the country puts upward pressure on the value of local currency and reduces export competitiveness.

Tajikistan also faces a long list of constraints that donors must prioritize. USAID’s 2016 jobs diagnostic identified tax rates and tax administration as the most binding constraint with secondary issues being access to electricity, access to finance, crowding out from low-productivity SOEs, and the high cost of export. The ADB growth diagnostic identified similar issues to growth: access to finance, access to electricity, transport infrastructure, rule of law, and export concentration. The alleviation of these constraints are expected to help modernize the agricultural sector and help people transition from agricultural day labor to better, higher-paying jobs in agribusiness and non-agricultural sectors.

In Uzbekistan, diagnostic research has been limited by a lack of data and low levels of transparency from government institutions. With an understanding of these limitations, the World Bank Strategic Country Diagnostic identified the following as the major constraints to inclusive growth: strengthening allocative efficiency and competition by removing market distortions; establishing a high-quality regulatory environment for firms; promoting reallocation of land towards more productive uses; modernizing public infrastructure; addressing labor market weaknesses; mitigating spatial inequities in access to social services, especially drinking water and sanitation services; and promoting the sustainable use and management of natural resources.

Notable Diagnostic Research Studies by Country Regional OECD Enhancing Competitiveness in Central Asia (2018)

Kazakhstan World Bank Systematic Country Diagnostic (2017)

Kyrgyz Republic World Bank Jobs Diagnostic (2015) ADB Growth Diagnostic (2013) GIZ Labor Market Study (2013)

Tajikistan World Bank Jobs Diagnostic (2016) USAID Jobs Diagnostic (2016; not public) ETF Labour Market Review (2010) ADB Country Diagnostic (2016)

Turkmenistan None

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

C.3 CURRENT AND RECENT PARTNERSHIPS AND PROGRAMS

Competitiveness, Trade, and Jobs (CTJ – 2016 – 2021):

USAID Competitiveness, Trade, and Jobs Activity in Central Asia (CTJ) aims to facilitate exports and employment in horticulture and strengthen transport and logistics services across the five Central Asian economies. CTJ and USAID recently agreed to add a third focus sector, which will be tourism. By incentivizing firms to become more regionally competitive and by addressing cross-border impediments to trade, USAID helps to develop a more diverse and competitive private sector and generate export-driven growth. CTJ is a five-year project running from October 2016 through September 2021. There are three main components to the CTJ project:

Component 1: Facilitating Trade

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

● Improving customs and border management

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

Component 2: Partnering for Innovation

● Competitively selecting firms to co-finance the innovation and expansion of exports and jobs for horticulture, transport & logistics, skills development, and entrepreneurship Component 3: Expanding Employment in Key Sectors

● Developing business skills

● Fostering entrepreneurship

Component 3 of CTJ, which focuses on employment, is by far the smallest CTJ component, with no in-country presence outside of Kazakhstan. CTJ will provided a limited number of training seminars in conjunction with other international organizations focusing on workforce development. This approach differs starkly from the type of robust, on the ground support that is envisioned under E4.

With the incorporation of the C5+1 initiative, a diplomatic platform involving the five Central Asian nations and the United States, CTJ has taken on a very heavy regional focus, with only a modest amount of bilateral programming. This top-down approach is centered around the idea of fostering regional connectivity. Conversely, E4 has been developed with tailored, country-specific approaches in mind.

Uzbekistan: Agricultural Value Chain Activity (AVC – 2015 - 2020) AVC is the third in a series of horticulture activities funded by USAID in Uzbekistan. It builds on the accomplishments of previous activities to address the standard and quality issues needed to increase access to high end local and export markets, improve production and post-harvest practices, expand investments in agro-processing, expand production of certified planting material, and build efficient extension services through privatized agro input dealers. AVC has a strong private sector orientation and market-driven approach. It focuses primarily on post-harvest issues and markets for fresh fruit and vegetable production.

Kyrgyz Republic: USAID’s Agro Horizons Activity (2014 – 2019) Agro Horizons seeks to raise the incomes of smallholder farmers by making selected value chains more productive through: a) increasing the productivity of agricultural producers and linking them to markets, including potential markets in Eastern Europe, China and the Middle East; b) increasing productivity and markets for agribusinesses; c) improving the enabling environment for horticulture sector growth; and, d) improving the nutritional status of women and children. Agro Horizons will work with vegetables, fresh fruit, egg production, and dairy as well as the value added businesses of dried and canned fruit, sour milk, and yoghurt.

Agro Horizons will strengthen other value-chain actors such as larger-scale farmers, agricultural advisory service providers, and market intermediaries, both to expand markets of agricultural goods and to strengthen links to agricultural producers. The activity will also explore ways to address the problem of farm size through, for example, contract and out-grower arrangements, bulking and aggregation of produce from small farms, and partnering small farms with larger nucleus farms. It will support internationally recognized quality management and certification systems where appropriate, improved access to inputs (including their finance), and B2B networking. A unique feature of Agro Horizons in the region is its support for the development of financial services geared to the needs of the horticulture sector.

Kyrgyz Republic: USAID’s Business Growth Initiative (2014 – 2018) The Business Growth Initiative works with individual firms and stakeholders in the apparel, tourism, and construction materials sectors to improve access to markets and increase sales, expand product offerings, and improve productivity, quality controls and financial management, as well as build other critical capacities to make them competitive in both domestic and international markets. It also seeks to improve access to working capital and equipment finance for value chain firms and provides matching capital to help private-sector partners invest in their businesses by upgrading their production equipment and facilities, management capacities, and product and service offerings.

Kyrgy Republic: USAID’s Enterprise Competitiveness Project (ECP – 2018 – 2021) ECP increases sales and jobs at Kyrgyz small and medium enterprises (SMEs) through inclusive, market-led growth that fosters a system to (1) increase market access and competitiveness, (2) catalyzes investment, (3) unlock opportunities for women and youth, and (4) builds skills, and encourages a more enabling environment. This includes ECP providing support for SMEs to create new jobs, generate additional sales, and lay foundations for systemic change.

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

Tajikistan: Agribusiness Competitiveness Activity in Tajikistan (ACAT – 2018 – 2023) The USAID Agribusiness Competitiveness Activity in Tajikistan (ACAT) strengthens Tajikistan’s economic growth through interventions that improve the competitiveness of Tajikistan’s agribusiness enterprises, leading to increased economic development, employment, and livelihoods. ACAT is improving the economic viability of the agriculture sector so it creates both on and off-farm employment and encourages investment in supportive infrastructure and services in rural areas.

Program Coordination The E4 implementer will need to closely coordinate its efforts, not only with the above mentioned USAID programs, but also with other international organizations working in Central Asia in order to avoid duplication and maximize development impact. The E4 program should partner with other programs whenever feasible and should build upon the gains of previous development efforts.

C.4 STATEMENT OF WORK

The Contractor will carry out work in task orders consistent with the goals and objectives in section C.4a and the program components described in section C5.

C.4a GOALS AND OBJECTIVES

USAID/Central Asia will support a new E4 IDIQ with the Program Goal: Increase employment and incomes through improved private sector competitiveness. Activities performed under this IDIQ will contribute to RDCS Development Objective (DO) 1: Expanded, diverse and competitive trade and markets. E4 will emphasize IR 1.1: a more diverse and competitive private sector.

C.4b PROGRAM COMPONENTS

Work performed under the E4 IDIQ is divided into three components:

Component 1: Enterprises – Fostering Competitive Industries Component 2: Employment – Developing a Capable Workforce and Entrepreneurship Component 3: Enabling Environments – Creating Conditions for Jobs and Investment

C.4c GEOGRAPHIC COVERAGE

Activities performed under this IDIQ will cover the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, Turkmenistan, and the Republic of Uzbekistan. Task Orders will specify the specific geographic coverage of activities, which may be bilateral or regional in nature, covering one or more of the countries listed above. Task Orders may support connectivity with nearby countries of South Asia, including Afghanistan.

C5. SPECIFIC TECHNICAL REQUIREMENTS

The components outlined below are used for demonstrating the breadth of possible activities under E4. Each Task order will use its own combination of these components, depending on the regional or country context and the specific issues that are being addressed.

COMPONENT 1 – ENTERPRISES – Fostering Competitive Industries USAID will work to strengthen the firm-level competitiveness of target industries by taking a sector and/or economic corridor approach in the region. These sectors may include horticulture, livestock, transport and logistics, and tourism, but may also include others with the potential for achieving the greatest impact. Feeding into work being done by other donors, particularly under the Central Asia Regional Economic Cooperation (CAREC) initiative, the activity will use an economic corridor approach, which will allow USAID to maintain a flexible, demand-driven approach to focus on geographic areas that have both the desired population targets and the greatest economic potential.

E4 will seek to understand the demands of both domestic and international buyers, while assisting targeted firms in meeting these requirements including international quantity, quality, safety, and employment standards. E4 will support firms at various stages of development, including agricultural processors, storage operators, packagers, and traders. Efforts will also seek to assist firms in meeting their workforce development needs, so that they are directly developing the skills of their employees and addressing barriers to growing their workforce. E4 may work to increase access to finance for firms of any size that are looking to expand into new markets, invest in new technologies, and hire more workers. This assistance may seek to match businesses with lending institutions, provide training to increase financial literacy, as well as other activities that reduce the risk and transaction cost to lending institutions.

E4 is agnostic to firm size, and the most appropriate firms to engage may vary significantly by country. Work performed under E4 will engage small, medium, or large firms depending on their job creation potential. E4 is particularly interested in working with firms that would like to expand but are unable to for reasons including, but not limited to, regulatory policy, tax policy, market linkages, technical knowledge, workforce recruitment, and access to finance. E4 should consider gender-based constraints to the engagement of women in targeted sectors, seeking to address those constraints where appropriate. Consideration should also be given toward engaging in women dominated sectors to strengthen their capacity and relevance to the overall economy.

The key determinant for firm selection is interest in and potential for firm expansion.

Illustrative Activities Illustrative activities may include assisting firms with product development and design, processing and production, marketing, access to finance, accounting, and navigating legal and regulatory barriers.

COMPONENT 2 – EMPLOYMENT – Developing a Capable Workforce and Entrepreneurship

E4 will begin by working at the firm level (Component 1) to understand constraints to growth and job creation. A lack of a skilled workforce may be one of the current constraints or a future one as businesses expand. With this is mind, Component 2 will support economic opportunity for individuals to tap into and contribute to growing markets. E4 will help individuals to develop skills that are in demand by the private sector, helping them to find employment or create new firms in promising sectors.

Sectors or economic corridors will depend upon country-specific opportunities. USAID has a history of supporting the horticulture sector in Central Asia, and a confluence of factors have supported USAID’s interest in the sector, including: a long history of horticultural production in the region, existing capacities and market linkages (not starting from scratch), and the fact that horticulture is primarily private-sector led with minimal government involvement. USAID has also had more limited involvement in other sectors including livestock, transport and logistics, and tourism. All of these sectors offer additional potential for creating meaningful jobs in Central Asia, which will reduce the need for migration abroad. Additional sectors such as textiles, manufacturing, and information technology also provide interesting opportunities for exploration. The above-mentioned sectors are notional, as new activities will not be prescriptive from the outset. Specific interventions may vary by country, but all interventions will be targeted at directly or indirectly influencing livelihoods for large segments of the population.

E4 will work directly with individuals to assess and develop their skills in order to match them with potential employers or develop their entrepreneurial expertise. E4 will also support educational institutions including schools, technical colleges, and universities to improve education that will be connected with real-world employment opportunities. Likewise, E4 will engage with firms (Component 1) to ensure the region’s developing workforce can meet their needs. E4 will work with small enterprises such as smallholder farmers and other micro-enterprises to develop their skills and build collaborative groups or associations that can achieve economies of scale for dealing with larger buyers and input suppliers. Interventions will specifically target assistance toward youth, or other groups seen as being susceptible to recruitment for violent extremism. Returning migrants, particularly those “blacklisted” from destination countries, may also be appropriate targets for programming. Women, minority groups, and other disadvantaged populations may also be targeted for assistance under E4.

Illustrative Activities Illustrative activities may include workforce skills development to meet industry needs, internships and other on-the-job learning, small-producer association development, building connections to financial services, and entrepreneurship training.

COMPONENT 3 – ENABLING ENVIRONMENTS – Creating Conditions for Jobs and Investment

Utilizing information gathered from work under Components 1 and 2, existing evidence from growth diagnostics, USAID’s current research efforts under CTJ, as well as other analytical assessments, E4 will seek to address constraints to broad-based growth that are most impacting business growth and job creation, are politically feasible, and in line with the priorities of partner governments. Support will seek to strengthen the ability of governments to effectively implement policy, focusing primarily on implementation/enforcement of existing laws and regulations rather than drafting new ones. Activities may include legislative support on issues such as accession to the World Trade Organization (WTO) and post-accession implementation, negotiation and implementation of Trade Facilitation Agreements (TFAs), or participation in other international agreements when determined to have a positive impact on job growth.

E4 will seek to address partner-government priorities in key areas that are expected to support job creation, such as establishing special economic zones, currency liberalization, opening new trade routes, strengthening property rights, addressing restrictions to female employment in certain sectors, and other job creating reforms. Support may also address significant labor-related issues such as changes to taxation policies, social fund contributions, or other issues that inhibit business growth. Support may also address constraints to domestic and foreign investment at a policy level. Regional-level efforts will seek to ensure that countries in Central Asia are cooperating on issues of mutual concern that affect job creation and private sector growth.

Regional efforts will help to ensure a cohesive approach among USAID’s programs in different countries, will support region-wide solutions to supporting investment and job creation, and will leverage resources and technical expertise where appropriate.

Illustrative Activities Illustrative activities may include Macroeconomic policy support including financial sector reform, tax reform, and reducing regulations. Other efforts may include WTO and post-WTO accession assistance as well as developing national investment promotion strategies.

IMPLEMENTATION

E4 will take a bottom-up approach in the way that interventions are developed by USAID.

USAID Country Offices will determine the specific opportunities and needs on the ground, and will develop their country-specific interventions. EDO will ensure that interventions (throughout implementation) remain in-line with regional objectives and complement existing efforts without duplication. While an initial intervention has been developed at the regional level in conjunction with this SOW, future activities may be developed at a later date. Planned and Illustrative activities include:

Future Growth Initiative (Planned) An initial Task order, the Future Growth Initiative (FGI) will support high-growth industries that can provide jobs and incomes for Central Asia’s growing workforce. FGI will serve as the base activity under E4, enabling a jumping off point for future Task Orders under E4 so that they can quickly begin operations as needed.

Uzbekistan (Illustrative) Macroeconomic policy support: Macroeconomic policy support, particularly on currency convertibility and financial sector reform to encourage investment critical for job creation.

Investment climate reform: A focus on the investment climate will facilitate private investment, both domestic and foreign. USAID can also explore the GoU’s willingness to engage at the sub-national level given its emphasis on ensuring competitiveness and job creation in the regions.

Small business development in targeted sectors: Small business development in emerging sectors (e.g. tourism, technology, etc.) could be an opportunity to facilitate growth and technology transfer. In the later years, horticulture sector assistance, currently carried out by existing activities could be incorporated into E4.

Targeted Interventions (Illustrative) Assessments: E4 may periodically be used to conduct technical assessments related to E4’s goals on an as needed basis. These assessments may include activities such as sectoral assessments, studies related to incomes and job creation, and other related needs.

Technical Support: As needed, E4 may be requested to provide technical support such as advising at the firm-level, assisting partner governments with reform initiatives, and other efforts as needed.

The E4 mechanism will accommodate Task Orders that use Central Asia regional funding, funding from any of the five Central Asian Republics, or a combination of any of these funding streams. The estimated distribution of activities under E4 is as follows:

Regional Funding: 45% Country Office Funding: 45% Targeted Interventions (Regional or Country-Level): 10%

The abovementioned figures are merely illustrative estimates, and the actual funding of E4 could vary significantly.

C.6 CROSS-CUTTING CONSIDERATIONS

All task orders under this IDIQ must consider and take into account the following cross-cutting themes:

Fostering global opportunities and new markets for U.S. economic interests: Economic growth is not a zero-sum game. The increased prosperity and wealth resulting from E4 activities will benefit the U.S. economy as well as the economies of the direct beneficiary countries.

Private sector growth in the region will provide new customers, business partnerships, and export opportunities for American businesses looking to expand into markets in developing middle-income economies like those in Central Asia.

Harnessing the power of the private sector: Long-term, sustainable economic growth is best facilitated through the establishment of a competitive, market-driven economy with a fair and transparent business environment protected by effective governing institutions. Donors and governments should work to foster an enabling environment that provides the space for private sector firms and entrepreneurs to make rational, market-based business decisions that account for each firm’s desired expected return and tolerance for risk.

Maximizing the impact of every dollar: It is critical for publicly-funded donor activities to achieve the highest possible return and create the most impact for every dollar invested in the development of our partner countries. The Contractor must demonstrate a comprehensive understanding of the principles of cost-benefit analysis and be prepared to provide rigorous, quantitative, and peer-reviewable evidence of program effectiveness. E4 will make use of data-driven approaches such as cost-benefit analysis and cost-effectiveness analysis, where appropriate, to make the most informed and impactful programming decisions.

Partnerships: E4 task orders will seek opportunities to leverage the resources of other partners to maximize development impact. Partner organizations may include other USAID programs, bilateral and multilateral donors, other USG agencies, private sector companies, universities, and bank and non-bank financial institutions, among others. On an ongoing basis, the Contractor must identify opportunities and promote leveraging of resources from other organizations in order to further the impact of near- and long-term interventions, and identify opportunities for coordination or co-funding.

Inclusive Growth: Program success is not determined solely by improvement in aggregate outputs and outcomes. Rather, economic gains must be inclusive of broad populations of society and not biased against any gender, geographic region, or socio-economic group. Preference will be given toward activities that demonstrate the ability to benefit many segments of society and in particular those segments currently disadvantaged or otherwise excluded from the opportunities presented by private sector economic growth, job creation, and entrepreneurship.

Gender Equality and Female Empowerment: The RDCS for USAID/CA identifies gender integration as a priority rooted in the evidence that women’s increasing participation in the economy will boost economic growth. As such, the Contractor must integrate activities into each component of the work plan that measurably promote gender equality and female empowerment.

Interventions implemented by the Contractor must be responsive to gender considerations, and seek to ensure that the assistance provided and the results achieved are beneficial to both genders.

As appropriate, impact and indicators must be disaggregated by gender. If applicable, the Contractor must incorporate standard gender indicators into the M&E Plan. None of the interventions must inhibit the active participation of either men or women. Men and women must be treated as equal partners in their role as clients, entrepreneurs, businesspeople, and partners of

USAID.

Recommended F Standard Gender Indicators to report on include:

GNDR-2: Percentage of female participants in USG-assisted programs designed to increase access to productive economic resources (assets, credit, income or employment)

GNDR-8: Number of persons trained with USG assistance to advance outcomes consistent with gender equality or female empowerment through their roles in public or private sector institutions or organizations

Legal Parameters: Interventions proposed by the contractor/offeror must be carried out within the legal parameters that are applicable to USAID and its implementing organizations. These parameters include statutory restrictions pertaining to adverse economic impact upon the United

States such as providing incentives to U.S. business located in the U.S. to relocate causing impact on U.S. jobs, production of surplus commodities causing substantial injury to U.S.

producers and growth and production of agricultural commodities for export which would compete with a similar commodity grown or produced in the U.S.

Environmental Compliance: The Foreign Assistance Act of 1961, as amended, Section 117 requires that the impact of USAID’s activities on the environment be considered and that USAID include environmental sustainability as a central consideration in designing and carrying out its development programs. This mandate is codified in Federal Regulations (22 CFR 216) and in USAID’s Automated Directives System (ADS), Chapter 201.3.4.5 and Chapter 204 (https://www.usaid.gov/ads/policy/200/204) which, in part, require that the potential environmental impacts of USAID-financed activities are identified prior to a final decision to proceed and that appropriate environmental safeguards are adopted for all activities.

In addition, the Contractor must comply with host country environmental regulations unless otherwise directed in writing by USAID. In case of conflict between host country and USAID regulations, the latter shall govern.

C.7 RESULTS

The results of E4 implementation will be measured according to the specific guidance provided in each individual task order.

Attachment II. Statement of Objectives (Task Order)

C.1 PURPOSE

The Future Growth Initiative (FGI) Statement of Objectives is intended to support high-growth industries that will provide jobs and incomes for Central Asia’s growing workforce. FGI will serve as the initial task order under USAID/Central Asia’s Enterprises, Employment, and Enabling Environments (E4) mechanism.

Recent terror attacks in the U.S., Sweden, Russia, and Turkey, carried out by Central Asians, highlight the growing concern of migrant laborers from the region traveling abroad for economic opportunities where they are potential targets for recruitment by extremist organizations. The lack of economic opportunities at home has become a critical threat to stability and security that extends far beyond Central Asia.

However, jobs alone are not sufficient for supporting stability in the region. Incomes must also increase significantly if domestic jobs are to truly serve as a disincentive to migration abroad. By supporting emerging industries, USAID hopes to foster strong firms that can serve as drivers of economic growth. These firms will in turn create more jobs that will provide adequate incomes and serve as a hedge against outward migration. The growth of emerging industries will also help to support income growth more broadly, through a lifting effect on the entire economy. By supporting broad-based growth and employment in Central Asia, USAID will also contribute to efforts to stabilize Afghanistan and support broader regional connectivity.

C.2 PERIOD AND PLACE OF PERFORMANCE

The expected period of performance for the FGI activity is five years. FGI will be implemented throughout Central Asia. Regional efforts will focus on the five countries of Central Asia:

Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan. The activity should have a Central Asian-base office in Almaty, with no more than two additional field offices, located in Tashkent and Dushanbe. Limited staffing could be possible in other locations, depending upon the proposed approach and sectors assisted. The table below shows the estimated level of effort for FGI based on USAID’s current division of planned priorities between Uzbekistan bilateral and Central Asia regional activities.

Estimated Level of Effort

Location Year 1 Year 2 Year 3 Year 4 Year 5

Regional 65% 65% 100% 100% 100%

Uzbekistan 35% 35%

The activity should be engaged throughout Central Asia and should seek to build connections among emerging industries and firms from throughout the region and beyond. While the activity will not work in Afghanistan, the activity will be encouraged to support connectivity with Afghanistan and to connect with other USAID programs so that Afghan beneficiaries can be included when appropriate. Within each country, offerors should consider working in regions with the potential to create significant jobs and increased incomes among targeted populations / sectors.

C.3 BACKGROUND AND RELATED ACTIVITIES

FGI will need to coordinate its efforts closely with existing USAID projects, other donor efforts, and partner governments. The background of the activity and the list of USAID funded programs mentioned in the IDIQ Award are not intended to be comprehensive, but merely to detail some of the existing programs already taking place in the region.