Attachement_J._5a_Asia_11-132_EG_IQC_IEE_AMND__1.doc

DCN: Asia 11-132 Approved 8/12/11 ENVIRONMENTAL COMPLIANCE FACESHEET & AMENDMENT #1 TO THE REQUEST FOR CATEGORICAL EXCLUSION (INITIAL ENVIRONMENTAL EXAMINATION) Objective:

Objective 4/ Economic Growth Program / Project Title:

The USAID CAR/EG IQC consisting of two (2) components:

The USAID Macroeconomic Foundations for Growth IQC

(EG MACRO)

The USAID Microeconomic Foundations for Growth IQC (EG MICRO)

Program Areas:

1. Macroeconomic Foundation for Growth

2. Trade and Investment

3. Financial Sector

6. Private Sector Competitiveness

Program Elements:

1.1 Fiscal Policy

2.1 Trade and Investment Enabling Environment

3.1 Financial Sector Enabling Environment

6.1 Business Enabling Environment

Country/Region:

Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan ) and Afghanistan Funding Period:

FY2011 – FY2019

Resource Levels/Amount(s):

$100 million (2 ceilings of $50 million each) Statement Prepared by:

Gulzada Azhetova, Project Management Specialist, Economic Development Office IEE Amendment? Yes No FORMCHECKBOX

Environmental Media and/or Human Health Potentially Impacted (check all that apply):

None FORMCHECKBOX

Air FORMCHECKBOX Water FORMCHECKBOX

Land FORMCHECKBOX

Biodiversity FORMCHECKBOX Human health FORMCHECKBOX Other FORMCHECKBOX

Environmental Action(s) Recommended (check all that apply):

FORMCHECKBOX

Categorical Exclusion(s)

FORMCHECKBOX

Initial Environmental Examination:

FORMCHECKBOX

Negative Determination: no significant adverse effects expected regarding the proposed activities, which are well defined over life of activity. IEE prepared:

FORMCHECKBOX

With conditions: no special mitigation measures needed; normal good practices will be used. For the possible limited procurement of equipment, including electric and electronic equipment (computers, printers, etc.) as described in Table 2, Section II, the proposed action is that the Implementer should provide evidence that equipment is procured from certified retailers; environmental safety and quality certificates conforming with national and/or international standards are available; it’s used in an environmentally sound and safe manner, and properly disposed of, when applicable, at the end of its useful life in a manner consistent with best management practices according to USG, European Union or equivalent standards acceptable to USAID.

FORMCHECKBOX

With conditions (special mitigation measures specified to prevent unintended impact for activities listed in Table 2, Section III).

Summary of Findings:

This Amendment #1 fully supersedes the RCE for all Micro and Macro Economic Growth IQC (EG IQC) activities approved by BEO on 2/15/11( DCN: Asia 11-51). It adds more diverse types of activities within same budget and length of projects and properly reflects on the nature and the SOW of activities as identified by country and technical offices.

Table 1 characterizes main types of EG IQC activities that are/can be proposed under current and any future EG Macro and Micro IQC task orders.

Table 1. Main types of Economic Growth IQC activities under different task orders (based on activities description in the IEE Section 1)

Regional Economic Integration Macroeconomic Project in Kazakhstan and Turkmenistan

Strategies, policies, action plans assessments, reforms, analyses of regulatory reform, education, trainings, workshops, researches, grants and other activities that support private-sector-led growth; human and institutional capacity development, rebuilding the economy under the crisis assistance and stabilization and other activities as described in the IEE Section 1. It is anticipated that procurement of commodities, electric and electronic equipment (computers, projectors, etc) and small scale construction or renovation activities may occur in many EG MACRO IQC projects.

-Economic reforms to improve trade & investment climate;

-Fiscal reforms to stabilize and support growth of KG economy;

-Governance reforms to support economic policy and fiscal reforms -Help export partnership groups developed under legacy projects;

-Assist Kazakhstan and Tajikistan in WTO accession, and related trade facilitation and trade policy development activities throughout Central Asia;

-Improve transport corridor performance in Central Asia;

-Evaluate export potential of Central Asian firms and industries through market research;

-Test the barriers to export through facilitating sales to the US Department of Defense for use in Afghanistan -To assist the Government of Kazakhstan and Turkmenistan to develop and implement sound fiscal management policies, improve regulatory processes, and support enterprise development;

-Ensure effective institutional capacity at key regulatory, oversight and legislative institutions to promote competitive private sector development and stimulate investment;

-Increase transparency, predictability and certainty in the trading environment

Technical assistance and leadership in the areas of:

-Small and medium enterprise development -Microenterprise development -Support to agribusiness and agriproducers -Stabilization – crisis assistance, and other activities as described in the IEE Section 1.

It is anticipated that procurement of commodities, electric and electronic equipment (computers, projectors, etc) and small scale construction or renovation activities may occur in many projects in support of the EG MICRO IQC activities.

Table 2 presents results of environmental screening and recommends threshold determinations for main types of activities under all current and future IQC task orders.

Table 2. Environmental Screening of the Objective 4 Activities

This includes: education, technical assistance, training programs except to the extent such programs include activities directly affecting the environment (such as construction of facilities, etc.); consultations, participant training, document transfers and information dissemination, analysis, studies, conferences workshops, study tours, curriculum development working with training programs, developing information networks, etc.

No effect

Categorical Exclusion, no actions required

a)procurement of commodities, materials, electric and electronic equipment including computers .

b)facilitating finances, financing facilities, such as revolving funds, capitalization of MFIs, guarantee programs, equity, and other forms of financing

Insignificant effect

Negative Determination with conditions.

a)The implementer is required to ensure that equipment, commodities (also see ADS 312,) and materials are procured from certified retailers; environmental safety and quality certificates conforming with national and/or international standards are available; equipment and materials are used in an environmentally sound and safe manner, properly disposed of when applicable at the end of their useful life in a manner consistent with best management practices according to USG, European Union or equivalent standards acceptable to USAID.

b)The implementer is required to review the adequacy of the environmental capabilities of the financial institutions to be involved. Implementer will ensure that appropriate environmental standards are developed (e.g. Environmental Review Manual) and followed by the financial institutions in issuing loans with the use of USAID-supported guarantee or capital funding.

a) -set-up of small scale demonstration plots and pilots. This might involve agroprocessing, improved water supply, procurement of inputs, facilitating sales, testing food supply under NDN;

-infrastructure improvements, and small-scale rehabilitation and construction as part of rebuilding the economy of a town, city or region devastated by ethnic violence or natural disaster; construction and rehabilitation of facilities, infrastuctural improvement

-procurement of equipment and machinery, technologies, materials, services that may have a potential for hazardous environmental impact;

-all other activities and actions having a similar effect on the environment b)The development of strategies, policies, action plans, economic plans, prognoses, regulatory and other documents, implementation of which may have negative direct or indirect socio-economic and environmental impacts

Potential for a significant adverse effect of one or more activities

Negative Determination with conditions; Positive Determination a)EDD in form of Environmental Review and Assessment Checklist (Annex 1) is required to identify environmental effects, develop Environmental Manual and Mitigation and Monitoring Plans when applicable, confirm /neglect and mitigate a potentially significant adverse effect. If confirmed, a Scoping Statement (SS) and Environmental Assessment (EA) shall be conducted by the implementer prior to start of activities. SOW/Terms of Reference (TOR) for Scoping Statement and EA Report must be reviewed by MEO and approved by Asia BEO.

For references please see Section “ Implementer procedures” b)The Implementer should ensure that SOW for related procurements is reviewed and concurred to by the MEO

EDD - Environmental Due Diligence Review

a) Recommended Action: Categorical Exclusion (90% of funding)

Pursuant to 22 CFR 216.2(c)(2)(i), the originator of the activities has determined that all of Activities consist of types of interventions entirely within the categories listed in paragraph (c)(2), “Categorical Exclusions,” of Section 216.2, “Applicability of Procedures,” of Title 22 CFR Part 216, “AID Environmental Procedures”, and therefore are categorically excluded from any further environmental review requirements. The originator of the proposed action has further determined that the proposed activities are fully within the following classes of actions:

a. Education, technical assistance, or training programs except to the extent such program includes activities directly affecting the environment (such as construction of facilities, etc.) [22 CFR 216.2(c)(2)(i)];

b. Analyses, studies, academic or research workshops and meetings. [22 CFR 216.2(c)(2)(iii)];

c. Document and information transfers. [22 CFR 216.2(c)(2)(v)]; and

d. Studies, projects or programs intended to develop the capability of recipient countries to engage in development planning, except to the extent designed to result in activities directly affecting the environment (such as construction of facilities, etc.) [22 CFR 216.2(c)(2)(xiv)].

b) Recommended Action: Negative Determination with conditions (5% of funding) For activities as specified in Table 2, Section III above. All these activities could have a potential for moderate adverse impact on the natural or physical environment. For each of these types of activities the implementer will: 1) prepare Environmental Due Diligence (EDD) review and based on its findings will document in Environmental Review and Assessment Checklist (EAL) existing environmental concerns and foreseeable environmental effects resulting from the activity; and 2) develop an Environmental Manual (EM) and Framework Environmental Mitigation and Monitoring Plan (FEMMP) when applicable. These EM and FEMMP will then be approved by the MEO, in consultation with the Regional Environmental Advisor for Asia (REA/Asia), adapted to a specific site before the activity implementation, and incorporated into the project design. The Standard Conditions List in Annex 3 and Table 2 of this IEE may be used as a guide in developing of FEMMP.

c) Recommended Action: Negative Determination with conditions (5% of funding). For the possible limited procurement of commodities, materials and equipment, including electric and electronic equipment (computers, telephones etc.) (Table 2, Section II), no special mitigation measures needed; normal good practices will be used. The proposed action required is that the Implementer should provide evidence that equipment is procured from certified retailers; environmental safety and quality certificates conforming with national and/or international standards are available; recipient of the equipment is following all applicable national and international laws to ensure that it’s used in an environmentally sound and safe manner, and properly disposed of (when applicable) at the end of their useful life in a manner consistent with best management practices according to USG, European Union or equivalent standards.

Implementer Procedures:

· All program activities will seek to raise environmental awareness, promote regional and national environmentally and socially sustainable development, biodiversity conservation, adaptation to climate change, foster the culture of environmental compliance and governance, in accordance with The UNECE Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters with reference to it: http://www.unece.org/env/pp/welcome.html

· The Implementer will include environment compliance considerations into all aspects of the program implementation and will promote and train local counterparts on environmental requirements and standards across all of the program’s activities. Such proposed activities will be included into annual work plans, and results will be reported in annual reports.

· Each activity should be conducted in a manner consistent with good design and implementation practices described in USAID Environmental Guidelines for Small-Scale Activities in Africa, 2nd edition as provided at: http://www.encapafrica.org/egssaa.htm; IFC Environmental, Health and Safety Guidelines as provided at: http://www.ifc.org/ifcext/sustainability.nsf/Content/EnvironmentalGuidelines, and the World Bank 1999 Pollution Prevention and Abatement Handbook(PPAH) as provided at: http://www- wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000094946_99040905052283 and http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/06/03/000094946_99040905052283/Rendered/PDF/multi0page; and Standard Conditions for Small-Scale Construction, Small-Scale Road Rehabilitation, Small- Scale Water and Wastewater Activities, and Small-Scale Irrigation Projects attached to this IEE.

· The Implementer will use the Environmental Review and Assessment Checklist (EAL) (Annex 1) and Leopold Matrix (Annex 2) as a main reporting document for each activity having an adverse environmental impact.

· Prior to the launch of each activity including small grants, the Implementer will conduct an Environmental Due Diligence (EDD) review as an inherent part of the EAL for each type/class of activities that may have a potential for moderate and high adverse environmental impact (e.g. small-scale construction; small road rehabilitation , rehabilitation of potable and irrigation facilities; etc) to document existing environmental concerns and foreseeable environmental effects resulting from such types of activities. If the EDD results in a finding of potential significant environmental impact, a Scoping Statement (SS) and Environmental Assessment (EA) will be done by the implementer prior to start of activities. Terms of Reference (TOR) for Scoping Statement and EA Report must be reviewed by MEO and approved by Asia BEO.

· Based on EDD results and mitigation measures from Environmental Guidelines for Small-scale Activities, IFC EHS Guidelines, World Bank PPAH, etc. as referenced above, implementer will develop Environmental Manual (EM) and Framework Environmental Mitigation and Monitoring Plan (FEMMP) for each type/class of expected activities when applicable. EM will establish criteria for eligibility, selection and screening against potential environmental risk (low, moderate, and high). EM and FEMMP might be done per implementing partner (IP) or the whole program and then adapted as needed for different IPs. These documentation will then be approved by the MEO, in consultation with the Regional Environmental Advisor for Asia (REA/Asia), incorporated in project design and FEMMP will be adapted to a specific site prior to the activity implementation (EMMP).

· The implementer will have a qualified, MEO-approved environmental impact professional(s) (EIP) who will assess and recommend environmental actions to be taken by the program and will coordinate implementation of mitigation measures, monitoring, and reporting. EIP will conduct environmental reviews and will identify: 1) activity category in consultation with the MEO); 2) potential environmental impacts (based on EAL, EDD, Leopold Matrix, and his/her technical knowledge of the local, U.S., and international environmental standards, guidelines, requirements, and practices; and 3) mitigation and monitoring measures needed. Should EIP lack any special technical knowledge to identify any special environmental impact, the Implementer will consult with a specialist in the relevant area.

· Host country Environmental, Occupational Health and Safety (OHS) and other relevant laws and regulations, standards, norms and best practices for environmental protection and management will be followed in implementing the activities. Implementer will ensure compliance by its staff, subcontractors, and subgrantees with USAID regulations, policies, procedures and acceptable best practice as well as compliance with applicable international environmental obligations.

· For activities categorized as “potential risks”' or “definite risks” of adverse environmental impact, the Implementer will be required to obtain a letter from the local or regional office for environmental protection stating that the office: a) has been contacted by the Implementer concerning the project activities; b) will maintain contact with the project; and c) will be aware of the potential environmental impacts of the project to help ensure that no detrimental impact will result from this project.

· For such activities prior to their implementation the Implementer will conduct public consultations and will seek concurrence from the national duly authorized environmental agency on FEMMPs and EMMPs.

· Monitoring will be conducted during the project (beginning with baseline conditions) to determine the environmental impact (positive and/or negative) of project activities. The Implementer shall use only qualified staff for overseeing the mitigation and monitoring work. Monitoring shall occur on an as-needed basis. The Implementer will ensure that the environmental procedures are implemented, potential impacts mitigated, and indirect and cumulative effects are considered for each activity. If negative environmental impacts are discovered through regular monitoring and evaluation of project activities, immediate actions will be taken to rectify the situation.

Resource Allocation, Training and Reporting requirements:

The contract with the Implementer will include a requirement to follow all recommendations of this IEE. The Implementer will be responsible for training his staff, grantees, subcontractors, and counterparts on the contract’s environmental requirements and for ensuring their compliance with these requirements.

Implementer shall have sufficient permanent staff with expertise in an environmental field and compliance and resources to implement and report on the expected scope of environmental compliance work.

The Mission will provide for environmental training for the Implementer(s) EIP(s) by the REA/Asia and/or the USAID/CAR Mission Environmental Officer prior to the start of the activity implementation.

The Implementer will have the following documentation and reporting requirements associated with the environmental compliance:

· Annual Work Plans will have a section on the planned activities related to environmental compliance.

· EM and FEMMP, EALs, EDD reports and EMMPs as described above will be developed by the Implementer and approved by USAID prior to the launch of each activity having an adverse impact on physical and natural environment including small grants.

· Progress Reports will have a section on the status of activities related to environmental compliance and results, including project summaries along with environmental impacts, success or failure of mitigation measures being implemented, results of environmental monitoring, and any major modifications/revisions to the project. If the activities implemented do not have any negative impact on the environment, this should be documented as well.

· For activities having adverse environmental impact, progress reports should include Environmental Review Reports in form of EALs for each activity and affected site (including site specific EMMPs and Monitoring Plans at the outset of the activity and upon activity completion).

· Implementer’s annual report will include an annex containing a table indicating the title, date of award, and category of each grant activity, and status of mitigation measures and monitoring results, when applicable.

· Final Report will have a section that will summarize program’s activities related to environmental compliance and will describe results, including information on any positive or negative environmental effects of program activities.

· Grant specific Mitigation and Monitoring Reports will be submitted to USAID at the completion of each relevant activity at every affected project site, and not on an annual basis. Reporting will include photographic documentation and site visit reports which fully document that all proposed mitigation procedures were followed throughout implementation of the subject work including quantification of mitigation. All such reports and documentation will be submitted to the Agreement/ Contracting Officer’s Technical Representative (AOTR/COTR) and Mission Environmental Officer (MEO).

Limitations of the IEE

This IEE does not cover activities involving:

· Assistance for the procurement (including payment in kind, donations, guarantees of credit) or use (including handling, transport, fuel for transport, storage, mixing, loading, application, clean- up of spray equipment, and disposal) of pesticides or activities involving procurement, transport, use, storage, or disposal of toxic materials. Pesticides cover all insecticides, fungicides, rodenticides, etc. covered under FIFRA - ‘Federal Insecticide, Fungicide, and Rodenticide Act’. Note that the activities affected cannot go forward until a Pesticide Evaluation Report and Safe Use Action Plan (PERSUAP) is approved by the Bureau Environmental Officer.

· Activities involving support to wood processing, agro-processing, industrial enterprises, and regulatory permitting.

· Procurement or use of genetically modified organisms (GMOs).

· DCA or GDA programs.

· Procurement or use of Asbestos Containing Materials (ACM) (i.e. piping, roofing, etc), Polychlorinated Biphenyls (PCB) or other toxic/hazardous materials prohibited by US EPA as provided at: http://www.epa.gov/asbestos and/or under international environmental agreements and conventions, e.g. Stockholm Convention on Persistent Organic Pollutants as provided at: http://chm.pops.int.

Any of these actions would require an amendment to the IEE duly approved by the ANE BEO.

Revisions

Pursuant to 22 CFR 216.3(a)(9), if new information becomes available which indicates that activities to be funded by the Project might be "major" and the Program’s effect "significant", this determination will be reviewed and revised by the originator of the project and submitted to the Asia Bureau Environmental Officer for approval and, if appropriate, an environmental assessment will be prepared.

USAID APPROVAL OF ENVIRONMENTAL ACTION(S) RECOMMENDED:

Clearance:

Acting Mission Director:

Date: ________

Glenn Anders

EDO office Director:

Date: ________

Geoff Minott

Mission Environmental Officer:

Date: ________

Nina Kavetskaya

Regional Environmental Advisor for Asia and OAPA:

concurred by e-mail Date: 7/18/2011 Andrei Barannik

Concurrence:

ANE Bureau Environmental Officer

Date: ________

Robert Macleod

Approved:

Disapproved:

INITIAL ENVIRONMENTAL EXAMINATION

Objective:

Objective 4/ Economic Growth Country/Region:

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Afghanistan Program Areas:

1. Macroeconomic Foundation for Growth

2. Trade and Investment

3. Financial Sector

6. Private Sector Competitiveness

Program Elements:

1.1 Fiscal Policy

2.1 Trade and Investment Enabling Environment

3.1 Financial Sector Enabling Environment

6.1 Business Enabling Environment

1.

BACKGROUND AND ACTIVITY DESCRIPTION

The following activity descriptions cover all activities to be implemented during FY2012 - FY2019, under the EG IQC:

PROJECT GOALS, OBJECTIVES AND DELIVERABLES – EG MACRO

The objective of EG MACRO is to facilitate USAID/CAR’s continued engagement in macroeconomic reform, improvement of the business environment and public sector capacity, and trade facilitation through a structured procurement process. EG MACRO will build on previous USAID-funded efforts in addressing these areas.

USAID/CAR/EG’s primary program objectives focus on devising and implementing robust activities that promote real economic growth, reduce poverty, graduate transitional countries from aid to trade, promote open competitive markets, develop the private sector, and mobilize private financing sources to supplement and eventually replace development assistance. These activities should seek to enhance regional economic integration where it is mutually beneficial to Central Asian nations.

Macroeconomic refers to the complex of government strategies, objectives, and actions intended to affect aggregate or sectoral economic variables.

EG MACRO will provide assistance, advice and leadership in the broad technical areas of:

(a) Legal and institutional reform

(b) Financial sector and macro-economic reform and expansion

(c) Economic policy and institutions

(d) Trade and investment

(e) Stabilization

1) Legal and institutional reform, comprising:

a) Competition policy

i) Policy, laws, institutions, enforcement

ii) Control of and enforcement against private anti-competitive behavior

iii) Antitrust provisions, monopolies, cartel issues, other general restrictions on competition

b) Commercial code(s)

i) Company law, registries

ii) New business entry - policy and process

iii) Incentives for small and micro-enterprise

c) Intellectual property

i) Protection and patent processes

ii) Copyrights, trademarks, enforcement

d) Contracts enforcement, dispute resolution methods

i) Petition rights and private rights to assert complaints seeking enforceable redress

ii) Arbitration and mediation

e) Transparency of public sector procedure and process

f) Bankruptcy and methods to allow redeployment of business assets in alternative functions

2) Financial sector reform and expansion, comprising:

a) Capital and credit market sources of funds for business growth and municipal finance availabilities

b) Foreign direct investment flows

c) Advice to development credit programs supplied by international donors

d) Technical assistance and support to other financial sector functions and institutions that support entrepreneurial drive, initiative, and risk-taking such as liquidity funds, investment funds, "enterprise" funds, seed-level venture capital funds and structures, and alternative financing media for small, medium and micro-enterprises

e) Pension funds and insurance funds

f) Technical assistance to monetary and tax policies that affect business growth

g) Tracking funds and money flows for financial system integrity and security

h) Alternative financial instruments, such as convertible bonds, asset-backed securities, basic hedge options, and other risk management instruments

3) Economic policy and institutions development comprising:

a) Reform of policies, regulations, and support institutions in order to identify and address barriers to business formation, operation, growth, change, and dissolution

b) Monetary policy, banking and central bank operation

c) Fiscal policy, and tax and customs administration

d) Trade and exchange rate policy

e) National income accounting and strategic development planning

f) Macroeconomic policy coordination/integration

g) Poverty reduction programs

h) Labor analysis and policy

i) Sectoral policy analysis

j) Technical assistance regarding the privatization of public sector functions and infrastructure to increase efficiency

k) Transparency of government procedures and processes

l) Communication and linkage between government entities and between government entities and the private sector

m) Capacity Building for State Officials – Human Institutional Capacity Development

n) Development of think tanks and NGOS focused on government policies and transparency

4) Trade and investment, comprising:

a) Trade and investment related laws and infrastructure

b) Intra-country, regional, and international trade

c) WTO accession assistance

d) Customs capacity building

f) Foreign direct investment

g) Absorption and exploitation of foreign technology

h) Domestic investment expansion incentives

i) Incentives for private risk-taking and innovation

j) Risk sharing and risk-mitigation methods

k) Regional trade associations

5) Stabilization

a) Crisis assistance to assist Central Asian Republics in dealing with shocks that decrease economic activity and require rapid, corrective intervention Deliverables:

The following represents general categories of illustrative deliverables that The USAID CAR/EG IQC could provide under its MACRO component:

1. Strategies, assessments, and analyses for macroeconomic growth, institutional capacity, regulatory reform, and other support functions that support private-sector-led growth,

2. Business environment changes that provide positive support for private sector led trade, investment, and entrepreneurial initiative,

3. Changes in fiscal and monetary regime conditions that increase the flow of funds to the private sector for business expansion, increased trade, and investment,

4. Institutional development and regulatory policies that support new business formation and operation, trade, and investment,

5. Government, private business, and higher education partnerships

6. Fostering access to and active membership in regional and international organizations

7. Assessing macroeconomic context of CARs and designing strategies and implementing programs of technical assistance to address that context

8. Knowledge management and dissemination activities, such as websites, databases, publications and other documentation,

9. Initiatives which, in conjunction with (1) to (8) above, assist in poverty reduction at the national, sub-national, and sector levels and increase the participation of the poor in the national political economy,

10. As a result of a sudden shift in political power a new government requires quick and varied technical assistance with various economic policy questions.

Currently planned MACRO IQC task orders:

MACROECONOMIC PROJECT IN KAZAKHSTAN AND TURKMENISTAN

LOP: FY2012 – FY2013 with $5mln. in Kazakhstan

FY2012 – FY2016 with $8mln. in Turkmenistan Macroeconomic Project (MEP) is to provide assistance in Kazakhstan and Turkmenistan to strengthen the sustainable institutional capacity of government bodies and improve regulatory oversight to provide a foundation for competitive private sector development, investment, and trade. It includes components to strengthen institutional capacity for fiscal management and development of economic strategies and policies on public finance, public audit, financial reporting, budget and microeconomic policy and 2) to strengthen regulatory and oversight capacity and legislation to promote private sector development and stimulate investment in financial sector, strengthen business regulatory environment and private sector competitiveness, licensing and permitting system reform, state inspections reform, reforms measured by international indices and monitoring, legal drafting and advocacy. It is also planned to help diverse counterparts adopt and/or implement policies, regulations, processes, and laws that facilitate trade.

REGIONAL ECONOMIC INTEGRATION

LOP: FY2011-FY2013

LOP BUDGET: $2.3mln

COUNTRIES: Central Asian Republics + Afghanistan The project will be committed to improve the environment for cross-border trade among Central Asian countries, Afghanistan and larger trading partners of these countries such as China and Russia. The activities will aim to help export partnership groups developed under legacy projects, assist Kazakhstan and Tajikistan in WTO accession, and related trade facilitation and trade policy development activities throughout Central Asia, improve transport corridor performance, evaluate export potential of Central Asian firms, test the barriers to export through facilitating sales to the US Department of Defense for use in Afghanistan. The illustrative results of this project can be formed export partnership groups, or these groups’ capability increased. Focus groups will be based on interest in textiles, organic agricultural products and exporting them to Afghanistan.

ECONOMIC POLICY REFORM PROJECT IN KYRGYZSTAN

LOP: FY2011 – FY2014

LOP BUDGET: $10mln.

The project is designed to work on economic reforms to improve trade and investment climate, fiscal reforms to stabilize and support growth of Kyrgyzstan’s economy and governance reforms to support economic policy and fiscal reforms. The project also plans to work with the institutions, and through employing both formal and informal human and institutional capacity mechanisms, build in-country capacity for economic policy reforms concerning the development of strategic priorities, analysis of best approaches to reform. The project will be also integrating a human and institutional capacity development approach with a focus on select government agencies responsible for the economic policy reform formulation and implementation, business associations and other local counterparts. Subcontracting with local organizations will be one of the approaches the project will be using to buy services or procure limited commodities. These may include office computer, and other electronic equipment, office furniture, means of communication, IT software, and/or materials for office renovation.

PROJECT GOALS, OBJECTIVES AND DELIVERABLES – EG MICRO

The objective of the EG MICRO IQC is to remove impediments to entrepreneurial initiative, output, productivity, and trade with a focus on private enterprise growth and small and medium sized enterprises as well as micro-enterprise development and expansion. Microeconomics refers to the branch of economics that analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on patterns of supply and demand and the determination of price and output in individual markets.

The Contractor shall undertake targeted interventions to address these constraints and to create conditions for sustained productivity and growth at the enterprise, value chain, industry, and sector levels. Illustrative activities include:

The EG MICRO will provide technical assistance and leadership in the areas of:

(a) Small and medium enterprise development

(b) Microenterprise development

(c) Support to agribusiness and agri-producers

(d) Stabilization – crisis assistance

1) Small and medium enterprise development initiatives that address:

a) Support for entrepreneurship and risk-taking

b) Incentives schemes for risk-taking behavior in pursuit of profit

i) Access to risk-sharing/mitigation vehicles

ii) Business insurance

iii) Appraisal and valuation

iv) Business strategy and market tactics

v) Organization management, finance, marketing, and operations

c) Governance

d) Linkages to buyers and/or suppliers

e) Value chain strengthening and optimizing

f) Innovation in product and service markets

g) Integration with local, regional and global markets

h) Linkages to foreign brokers, buyers, and suppliers

i) New business formation

i) Facilitating new entry

ii) Decreasing time, cost, complexity of operations and access to services

j) Business support and promotion services

k) Increased access to improved factor conditions:

i) Seed capital, later-stage equity, debt financing

ii) Reduction in labor rigidity

iii) Land markets formalized

l) Professional education and certification

m) Transition from informal to formal operations

n) Domestic and foreign business promotion and support organizations

o) Improving institutional support

ii) Association development

iii) Other strategic working groups

2) Micro-enterprise initiatives that address:

a) Fostering entrepreneurial initiative

b) New business formation

c) Institutional support development

d) Business development services

e) Private sector driven policy and regulatory reform

f) Training

g) Development of market linkages

h) Assessments, evaluations, and analyses

i) Credit and other financial support

3) Support to agribusiness and agriproducers

a) Alleviation of constraints to agricultural sector growth

i) Increasing market access

ii) Advice on new product and agro-services development

iii) Targeting input marketing constraints

iv) Market information systems and firm/cluster networking

v) Facilitating transactions

b) Agribusiness enterprise development

i) Private sector driven regulatory reform for agribusiness enterprise

ii) Rural infrastructure assessments

iii) Land reform assessment

iv) Trade and investment development

v) Institutional support expansion

Vi) Value chain analyses

vii) identification of financial support mechanisms

c) Agrifinancing

d) Cooperative development organizations and other member-owned businesses

e) Modernizing on-farm technologies

f) Crop diversification

4) Stabilization

a) Crisis assistance to assist the Central Asian Republics in dealing with shocks that decrease economic activity and require rapid, corrective intervention.

Deliverables:

The following represents general categories of illustrative deliverables that The USAID CAR/EG IQC could provide under its MICRO component:

1. Strategies, assessments, and analyses for micro-economic productivity, institutional capacity and other functions that support private-sector-led growth.

2. Competitiveness and business productivity initiatives at the national, sub-national, regional, value chain, cluster, and enterprise levels.

3. Trade expansion and promotion efforts at the national, regional, and global levels, and facilitation of trade organization membership.

4. Public/private dialog and partnerships on business, trade, investment, entrepreneurship, and productivity.

5. Private investment encouragement initiatives at the regional, national, sub-national, sector, and firm levels.

6. Knowledge management and dissemination activities.

7. Initiatives that expand SMEs capacity to meet local content requirements.

8. Initiatives that seek to increase SMEs use of new technology and ability to innovate.

9. Initiatives that provide technical assistance to government programs to promote SME development.

10. Quick responses to rebuild the economy of a town, city or region devastated by ethnic violence or natural disaster.

2.

COUNTRY AND ENVIRONMENTAL INFORMATION (BASELINE INFORMATION)

The five Central Asian Republics together have a combined population of 55 million, a land mass greater than Western Europe and a significant share of the world’s oil and gas reserves. Surrounded by Russia, China, Iran and Afghanistan, they are adjacent to and affected by some of the contemporary world’s most pressing ideological, political and economic struggles. These landlocked nations have a history of flux and conquest, with historically limited access to world markets and ideas. The region’s circumstances and prospects still, long after the breakup of the USSR, appear fluid and uncertain. Other than in the hydrocarbon fuels industry in Kazakhstan, the countries of Central Asia suffer from limited investment and isolation from major world markets. Despite potentially vast energy assets and other resources, the Central Asian countries are generally very poor and there is considerable poverty and income inequality.

Although since 2000, the economies of Central Asia have moved into new stages in their broader transition to market economies within the global system. During this period, significant differences in performance have appeared as a result of varying degrees of effectiveness in establishing and maintaining macroeconomic stability and of differing resource endowments and country-specific political developments. Although each of the Central Asian Republics (CARs) has achieved the basic level of macroeconomic stability required as the foundation for sustained economic growth, each still faces significant challenges in order to ensure efficient and flexible institutional processes to manage economic policy in ways that will promote competitive private sector development and stimulate investment. While specific issues and details differ by country, each has need for strengthened institutional capacity in the government agencies, regulatory bodies and legislature to develop and implement more effective policies related to generating revenue and managing expenditure, to ensuring financial stability, to promoting and regulating competition, and to strengthening effective fiscal decentralization so that they can enhance enterprise development and competitiveness.

Also the improved performance of transport corridors will help spur economic growth and align the economic interests of Central Asia and Afghanistan. Sustained economic development is critical to ending conflict in Afghanistan. As a landlocked country with undeveloped extractive industries and few sources of inputs, Afghanistan can only achieve sustained economic growth through increased trade and transport linkages with its neighbors. Central Asia can emerge as the commercial lifeline for Afghanistan, as a natural hub and transit point for roads, railroads, pipelines and electric lines. For this to happen, Central Asian firms need to trade increasingly across borders. Increased cross-border trade will also spur development of small and medium-sized businesses (SME) which is critical if Central Asian Republics are to diversify their economies.

3. EVALUATION OF PROGRAM ISSUES WITH RESPECT TO ENVIRONMENTAL IMPACT POTENTIAL

As described in Table 2, Section 1 above, all of the specific activities consisting of technical assistance, training, analysis, policy advice and information sharing, are not anticipated to pose any environmental risks and qualify for a Categorical Exclusion.

Some projects will purchase office equipment, electric and electronic equipment, and commodities (Section II of Table 2) for which no significant adverse effect is anticipated, and therefore Mitigation and Monitoring Plan is not required provided that normal good practices, engineering methods and standard instructions are followed in their procurement, storage, transportation, installation and use. However, these activities are qualified as Negatively Determinated with conditions, because: 1) the implementer is required to ensure that equipment, commodities, and materials are procured from certified retailers; 2) environmental safety and quality certificates conforming with national and/or international standards are available; 3)equipment and materials are used in an environmentally sound and safe manner, properly disposed of when applicable at the end of their useful life in a manner consistent with best management practices according to USG, European Union or equivalent standards. Electronic devices, including audio-visual components (televisions, VCRs, stereo equipment), mobile phones and other hand-held devices, and computer components, contain valuable elements and substances, are suitable for reclamation, including lead, copper, and gold, if treated properly; however if not treated properly they are a major source of toxins and carcinogens. They also contain a plethora of toxic substances, such as dioxins, PCBs, cadmium, chromium, radioactive isotopes, and mercury. Additionally, the processing required to reclaim the precious substances (including incineration and acid treatments) release, generate and synthesize further toxic by-products.

Facilitating finances, financing facilities, such as revolving funds, capitalization of MFIs, guarantee programs, equity, and other forms of financing require that the Implementer review the adequacy of the environmental capabilities of the financial institutions to be involved, therefore these activities are also qualified as a Negative Determination with conditions. Implementer will ensure that appropriate environmental standards are developed (e.g. Environmental Review Manual) and followed by the financial institutions in issuing loans with the use of USAID-supported guarantee or capital funding (Table 2, Section II b).

Activities such as renovations or small-scale infrastructure qualify for a Negative Determination with conditions and require screening, monitoring, evaluation, and reporting to USAID as described in Table 2, Section III a) and Implementer Procedures.

The development of strategies, policies, action plans, economic prognoses, regulatory and other documents implementation of which may have negative environmental impact, are mandatory for environmental impact assessment. They qualify as a Negatively Determinated with a condition that Implementer should ensure that SOW for related procurements is reviewed and concurred to by the MEO (Table 2, Section III b).

4. RECOMMENDED MITIGATION MEASURES (INCLUDING SCREENING, MONITORING AND EVALUATION) For the limited procurements of electric and electronic equipment the implementer will include a requirement in the equipment transfer letter that a recipient will use the equipment in an environmentally sound and safe manner and will properly dispose it of at the end of its useful life in a manner consistent with best management practices according to European Union, USA, or equivalent standards. In order to provide information on best management practices to the recipient, the implementer will: 1)approach the vendor, who might be an authorized dealer for an equipment producing company regarding their corporate policies on how to collect & where to dispose/recycle certain products and these should be consistent with the aforementioned standards and directives; 2) if a vendor does not have capacity to collect and dispose the equipment, then the implementer will approach relevant national authorities, (i.e. the Ministry of Environment) to seek their guidance on how this can be accomplished in accordance with the law. The implementer is also required to ascertain where the certified waste recycling/processing companies with capacity to deal with certain types of equipment may be found in the country as well.

Small scale infrastructure and/or rehabilitation are likely and have the potential for adverse impact on the natural or physical environment. For each of these types of activities the implementer will conduct an Environmental Due Diligence (EDD) review to document existing environmental concerns and foreseeable environmental effects resulting from the activity and develop an Environmental Manual and Framework Environmental Mitigation and Monitoring Plan (FEMMP). This framework FEMMP will then be approved by the MEO, in consultation with the Asia Regional Environmental Advisor (REA), adapted to a specific site before the activity implementation, and incorporated into the project design. The Standard Conditions List in Annex 3 and Table 2 of this IEE may be used as a guide in developing of the FEMMP.

Table 1: Illustrative Environmental Effects and Mitigation Measures for Potential Activities

Obsolete computers are a valuable source for secondary raw materials, if treated properly. However if not treated properly they are a major source of toxic and carcinogenic substances, such as dioxins, Polychloninated Byphenils (PCBs), cadmium, chromium, radioactive isotopes, and mercury.

Implementer should provide evidence that equipment and materials are procured from certified retailers; environmental safety and quality certificates conforming with national and/or international standards are available; equipment and materials are used in an environmentally sound and safe manner.

Implementer will include a requirement in the equipment transfer letter that a recipient will use the equipment in an environmentally sound and safe manner and will properly dispose it of at the end of its useful life in a manner consistent with best management practices according to European Union, USA, or equivalent standards..

Small-scale Construction Activities (Rehabilitation/renovation of community centers, schools, or the like)

Potential for significant adverse effect of one or more activities.

Improperly conducted small construction activities may result in a wide variety of negative environmental and cultural effects. Site selection, particularly for new construction, is sensitive and may result in loss of places with historical and cultural importance, damage to sources of water, damage to forests, and damage to…