USAID-RDMA_RDCS.pdf

Regional Development Cooperation Strategy for Asia 2014-2018

CONTENTS

Executive Summary .................................................................................................................................................................... iv Abbreviations and Acronyms ....................................................................................................................................................... v Development Context, Challenges, and Opportunities

Introduction

Asia’s Development Challenges

Asia’s Development Opportunities

Analyses, Assessments, and Consultations

RDMA’s Focus, Selectivity, and Comparative Advantage

Geographic Focus and Selectivity Comparative Advantage

RDMA’s Strategic Approach and Smart Development Screens

Science and Technology Partnerships Gender Equality and Female Empowerment Eradicating Extreme Poverty and Promoting Resilient Societies: Achieving the Agency’s Mission through RDMA’s Strategy

Results Framework RDCS Goal

Figure 1: Results Framework for All RDCS Development Objectives Development Objective 1: Regional Institutions’ Ability to Promote Sustainable and Inclusive Growth Increased

Figure 2: Results Framework for DO 1 Intermediate Result 1.1: Improved Management of Natural Capital Intermediate Result 1.2: Regional Integration Strengthened Intermediate Result 1.3: Good Governance Strengthened

Development Objective 2: Vulnerable Populations More Able to Address Risks that Transcend Borders

Figure 3: Results Framework for DO 2 Intermediate Result 2.1: Enhanced Capacity to Mitigate Public Health Threats Intermediate Result 2.2: Rights of Specific Vulnerable People Enhanced Intermediate Result 2.3: Ability to Adapt to Climate Change Strengthened

Support Objective: U.S. Development Assistance Efficiency and Effectiveness in Asia Advanced

Intermediate Result S.1: USAID Missions and Non-Presence Countries Supported Figure 4: Results Framework for Support Objective Intermediate Result S.2: Development Partnerships Advanced Intermediate Result S.3: Innovative and Evidence-based Solutions Fostered

Monitoring, Evaluation, and Learning ii

Monitoring and Evaluation

Learning

Evaluations

Development Outreach and Communications Program Resources and Priorities

Program Close-outs

Management Requirements

References iii

EXECUTIVE SUMMARY

In recent decades, Asia’s tremendous economic growth has lifted millions of people out of poverty, malnutrition, and disease at rates unprecedented in human history. Yet, Asia’s growth model relies heavily on an unsustainable use of resources and has created growing inequalities that undermine the region’s future economic growth. Climate change and dense urban populations place additional pressures on Asia’s capacity to produce goods and energy, and weak institutional frameworks and services for vulnerable populations mean that many people do not participate fully in Asia’s growth.

USAID’s Regional Development Mission for Asia (RDMA) is uniquely positioned to help connect, convene, and catalyze Asia’s expertise and capital to find solutions to these substantial development challenges. RDMA will concentrate on transboundary problems that cannot be solved at the national level, with a primary focus on the countries of the Lower Mekong, where disparities are greatest.

The overall goal of RDMA’s five-year strategy (2014-2018) is “A More Sustainable, Inclusive, and Prosperous Asia, with Particular Emphasis on Southeast Asia.” To help Asia achieve this goal, RDMA will increase regional institutions’ abilities to promote sustainable and inclusive growth, and enable vulnerable populations to help address and adapt to risks that transcend borders. Development programs will strengthen the region’s management of natural capital (environment), regional integration, good governance, capacity to mitigate public health threats, rights of specific vulnerable populations, and people’s ability to adapt to climate change. Throughout all of the programs, RDMA will apply three Smart Development Screens—science and technology, partnering, and gender equality and female empowerment—to increase the effectiveness of development interventions.

In addition to the development objectives and more traditional regional programs, RDMA will strengthen its role as the Agency’s premier regional learning and support platform to advance partnerships and promote greater use of evidence-based and innovative approaches.

RDMA will contribute to the Agency’s mission to “partner to end extreme poverty and promote resilient, democratic societies” through its focus on inclusive growth and vulnerable populations (including human rights).

iv

ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank AEC ASEAN Economic Community APEC Asia-Pacific Economic Cooperation ARTC Asia Regional Training Center ASEAN Association of South East Asian Nations ASIA/SPO Office of Strategy, Program, and Operations, Asia Bureau, USAID ASIA/TS Office of Technical Support, Asia Bureau, USAID AusAID former Australian Agency for International Development, now Australian Aid; see DFAT below CIDA former Canadian International Development Agency; see FATDC below CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora DCA Development Credit Authority DFAT Australian Government Department of Foreign Affairs and Trade DFID Department for International Development DO Development Objective EAP East Asia and the Pacific EST Ecosystems and Trade FAO Food and Agriculture Organization of the UN FATDC Foreign Affairs, Trade and Development Canada FTF Feed the Future GHG Greenhouse Gas GMS Greater Mekong Subregion G2G Government-to-Government HESN Higher Education Solutions Network IPCC Intergovernmental Panel on Climate Change IMF International Monetary Fund IR Intermediate Result LGBT Lesbian, Gay, Bisexual, and Transgender LEDS Low Emission Development Strategy LMI Lower Mekong Initiative M&E Monitoring and Evaluation MDG Millennium Development Goal MOU Memorandum of Understanding NASA National Aeronautic and Space Administration NGO Nongovernmental Organization NOAA National Oceanic and Atmospheric Administration NSF National Science Foundation PMP Performance Management Plan QDDR Quadrennial Diplomacy and Development Review REDD+ Reducing Emissions from Deforestation and Forest Degradation RDMA Regional Development Mission for Asia S&T Science and Technology SME Small and Medium-Sized Enterprise SO Support Objective STIP Science, Technology, Innovation, and Partnerships TAG Technical Advisory Group UNDP UN Development Programme UNESCAP UN Economic and Social Commission for Asia and the Pacific USG U.S. Government v

DEVELOPMENT CONTEXT, CHALLENGES, AND OPPORTUNITIES

INTRODUCTION

“This is the future we seek in the Asia Pacific—security, prosperity and dignity for all... the United States of America is all in.” (President Obama during his visit to Canberra, Australia, 2011)

In less than a generation, Asia’s population of over four billion has become more prosperous, healthier, better educated, and better connected through innovations in communications, infrastructure and regional trade. Asia is more urban and has greater access than other parts of the world to, and higher expectations of, electricity, safe water and quality consumer goods. The region boasts significant natural resources and extraordinary biological diversity as well as burgeoning human capital, economic growth, and innovation and entrepreneurship potential. However, Asia also faces significant development issues that must be addressed to continue on this positive course. The United States Agency for International Development (USAID) Regional Development Mission for Asia (RDMA) will work to support the region’s positive trends by connecting development stakeholders across Asia, sharing knowledge, and promoting a sustainable growth trajectory.

ASIA’S DEVELOPMENT CHALLENGES

Three mega-issues threaten to undermine Asia’s future economic growth: over-reliance on unsustainable use of resources, growing inequalities, and weak institutional frameworks and services for vulnerable populations. Although Asia has experienced rapid improvements in economic and human development indicators, these improvements have been uneven across the region, and gaping inequalities persist within and between countries.

Unsustainable Growth: Asia’s growth in GDP and consumption has come at great cost to the region’s natural resources, the global climate, and ultimately the region’s ability to sustain broad-based development over the long-term. The degradation of land, water, and other resources undermines long-term sustainable economic growth, food security, and water availability, as well as increases the risk of public health threats and disasters. In addition, global climate change will continue to strain the resiliency of vulnerable communities throughout the region.

Projected greenhouse gas (GHG) emissions for the Asia region are alarmingly high. Based on current trends, by the year 2030 Asian countries (in particular China and India) are expected to produce between 45 and 52 percent of global GHG emissions from energy, transportation and industrial sources. 1 Rapidly increasing energy demand to fuel growing economies and cities across the Asia region is the principal driver behind increasing GHG emissions, and Asia’s energy demand is growing faster than any other region in the world. Under business-as-usual conditions, the Asia-Pacific region as a whole will require a cumulative investment of about $11.7 trillion in the energy sector between 2010 and 2035.2 Rapid urbanization remains a core driver of energy demand and associated emissions. Annual deaths worldwide from air pollution now surpass malaria and HIV/AIDS death rates combined, and several of Asia’s cities are among the world leaders in air pollution levels.

Climate change is shifting the fundamental rules of city planning and administration. The density of people, economic activity in the coastal areas, and increasing frequency and severity of weather events make cities especially vulnerable to

1 The range of estimated emissions growth was extrapolated based on analysis by USAID of emission trends from energy completed in 2011 and on updated emissions totals for 2010 from World Bank Development Indicators.

2 Asia-Pacific Economic Cooperation and Asian Development Bank, “Energy Outlook for Asia and the Pacific,” October 2013.

climate change. The extreme weather events in the Asia region have caused not only extensive damage to human life and infrastructure losses, but have also generated significant economic disruptions. Cities must learn to adapt to these changes and become more resilient. Once their vulnerabilities are identified, they need to work together with the development community to better manage change and reduce overall risk levels.

In the Lower Mekong Basin, capture fisheries valued at up to $3.9 billion each year provide more than 60 million people with their main source of protein. Hydropower dams on the Mekong River and its tributaries could cause more than 80 percent loss of fish catch by 2030, and dams proposed for the mainstream could cause an additional 70 percent loss of the remaining fish catch. Resulting losses in fish catch, and in the production of staple crops such as rice, threaten to worsen food security throughout the Lower Mekong Basin. Disagreement among Mekong countries on use and exploitation of the Mekong is an important source of friction in the region.

As these ecosystems essential for economic development shrink, communities that directly rely on these resources will lose valuable sources of income and food security. Experts estimate that an investment of $45 billion in conservation efforts in the Asia region alone would result in the protection of ecosystem services worth $5 trillion globally. Sustainable management of these natural assets can also help alleviate poverty and help poor, vulnerable populations to better cope with natural disasters and the impacts of climate change.

Growing Income Disparities and Inequality: Research indicates that in addition to health and education, inequality has a negative impact on the ability of communities to adjust to the changes in the region involving urbanization, disease patterns, climate change, and natural hazards. These stressors can have a negative impact on lives, livelihoods and assets, often pushing those on the margins into poverty or the poor into extreme poverty. As Asia grows in population and economically, increasing disparities pose a number of potential challenges to the region’s inclusive and sustainable development. Asia’s disparities are keenly reflected in the uneven distribution of disease, gender inequalities, child mortality, and the marginalization of vulnerable populations such as minorities and migrants. The Asian Development Bank (ADB) reports that income disparities within individual countries continue to widen throughout the region. This rising inequality can dampen the poverty-reducing impacts of economic growth. Asia’s Gini coefficient--a measure of income inequality--increased dramatically from 39 to 46 in less than 20 years, resulting in the conclusion that “Asia is getting less poor, but more unequal.”3 Inefficient trade policies and economic regulations limit participation in emerging economic opportunities. The lack of inclusive legal and policy frameworks perpetuate gender inequalities regarding access to and control of economic opportunities. In addition, gender inequalities regarding access to justice and political participation are also important to inclusive growth and stability. As Asia advances its regional economic integration agenda, this trend toward greater income inequality could accelerate further unless specific efforts are made to enable broader participation in emerging economic opportunities. This mega-issue has major implications for growth in Asia, which still houses over 770 million people living below $1.25 per day.4

Weak institutional frameworks and services for vulnerable populations: Despite Asia’s improving economic outlook, the progress of “rights-based” development, inclusion and service provision for vulnerable and marginalized populations is still lagging. Institutional and legal frameworks to protect and ensure their access to information and services are underdeveloped or not fully implemented. Economic and demographic differences among countries in the Greater Mekong

3 John Larkin, “The Wealth Gap,” Development Asia (Asia Development Bank, April 2013, p. 16).

4 World Bank Development Indicators, 2008-2012. Estimated number based on available data for all countries in Asia for poverty headcount ratio at $1.25 a day (PPP).

Subregion (GMS) have resulted in the movement of low-skilled migrants to areas with better employment prospects. Risks of exposure to and spread of infectious diseases can occur while traveling within and across national boundaries. Women and children continue to suffer from a range of inequalities, including gender-based violence and limited opportunities to benefit from regional economic growth. Considerable numbers of migrant workers, despite contributing to economic growth as they work in neighboring countries, suffer from prejudice and discrimination. They also face difficulty in accessing essential health and legal services in host countries, especially those who are undocumented and fear engaging with government institutions. Regional and subregional platforms for collaboration beyond economic pillars are being developed but still function in an ad-hoc manner. Although sexual minorities, including gay, lesbian and transgender persons, are tolerated in some Asian countries, weak human rights context and stigma are important factors conditioning the HIV response and service uptake in mainstream services. In spite of high HIV infection rates among men who have sex with men, effective HIV services for this particular vulnerable group remain limited. Civil society organizations representing the voices of vulnerable groups are mostly in early developmental stages, although these initial efforts are essential for promoting resilient and inclusive democratic societies.

ASIA’S DEVELOPMENT OPPORTUNITIES

A number of important aspects of Asia’s economic growth can be leveraged to increase the region’s focus on the sustainability of its growth trajectory and are described briefly below.

Strong Private Sector: Asia’s positive economic growth, with an active and engaged private sector, and often with a healthy mix of corporations and small and medium-sized enterprises (SMEs), is driving the economy, albeit with significant regional variance. There is a strong entrepreneurial culture and growing interest on the part of Asian governments to pursue “green growth.”

Rich technology and innovation: Asia has the highest number of researchers and internet users worldwide, and offers platforms for innovation to help large numbers of poor. This experience and know-how can be harnessed to address unsustainable practices that undermine long-term prosperity for Asia.

Urbanization: By 2025, nearly 2.5 billion Asians will live in cities, accounting for almost 54 percent of the world’s urban population.5 This urban growth represents both an opportunity and a challenge as statistics for the past 20 years have shown that urbanization corresponds to reduced poverty and inequality.6

Governance and Civil Society: In some parts of Asia there is an expanding civil society and growing commitment to freedom and democracy; for example, Burma’s opening. A regional approach can provide opportunities to connect civil society and governments across the region to share and adapt practices that allow a greater voice for all Asians in the development of their region.

Increasing interconnectivity: Asia has become more connected economically, politically, and socially, and there is growing support for transnational cooperation. Regional institutions, such as the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC), offer platforms for broader integration which have the potential to bring

5 Dobbs, Richard and Sankhe, Shirish, “Comparing Urbanization in China and India.” Insights & Publications, McKinsey & Company, June 2010.

6 Chen, S., Ravallion, M., Sangraula, P. “New Evidence on the Urbanization of Global Poverty.” Development Research Group, World Bank, 2008.

about many social, economic and non-economic gains including employment and business opportunities as well as greater choices of quality goods and services. Greater and more efficient intra-Asian trade and investment will enable countries to extend their markets, reap efficiency gains from specialization and economies of scale, move up the value chain, and maximize growth potential. Trade and investment flows could be significantly increased with harmonized standards and trade regulations that are more predictable, transparent, and rules-based. Furthermore, these institutions provide a platform for dialogue and agreement on a host of important topics such as regional environmental standards and/or protocols; improved disaster preparation, mitigation and response; and cooperation on development of regional science, technology and human resources.

ASEAN Economic Community 2015: As member states prepare for the ASEAN Economic Community (AEC) in 2015, there are concerns about “winners and losers” that could result from integration. ASEAN can also be a forum for addressing problems of inequality through regional cooperation and increased sharing of knowledge.

ANALYSES, ASSESSMENTS, AND CONSULTATIONS

The Mission conducted substantial consultations and analyses with a broad range of stakeholders, cross-cutting analysts, and sectoral experts. Analyses by ADB, World Bank, International Monetary Fund (IMF), UN Development Programme (UNDP), UN Economic and Social Commission for Asia and the Pacific (UNESCAP), the Australian Government Department of Foreign Affairs and Trade (DFAT), the United Kingdom’s Department for International Development (DFID), and the Canadian Foreign Affairs, Trade and Development provided information on Asia’s top development challenges. Studies analyzing poverty and inequality trends in East Asia, the Pacific, and South Asia, helped guide RDMA in understanding how urbanization, women’s participation in the workforce, health, and food production contribute to poverty reduction. RDMA also assessed development gaps based on data from over 20 sources for five strategic sectors over the past decade.

Additionally, RDMA commissioned a regional gender analysis of the Asia-Pacific region in February 2013 and a biodiversity and tropical forest assessment of the Asia region in May 2012 in support of developing the strategy.

RDMA’S FOCUS, SELECTIVITY, AND COMPARATIVE ADVANTAGE

Given limited USAID resources relative to the vast flows of foreign direct investment and host-country government budgets, it is imperative that USAID be strategic in selecting how and where we invest. RDMA will focus on regional aspects of cross-boundary and common challenges in Asia through regional programs and partnerships with regional institutions and will also continue to support missions through institutionalizing USAID Forward reforms and providing knowledge sharing through more traditional technical assistance. RDMA’s comparative advantage among USAID missions in Asia is the ability to focus on issues that cannot be addressed effectively through bilateral programs and, where regional programing offers unique entry-points, the ability to work on topics and issues that may be untenable at the national level.

GEOGRAPHIC FOCUS AND SELECTIVITY

As discussed above, concern over the growing economic gaps between developing and developed Asia motivates RDMA to focus on the much poorer countries of the Lower Mekong region—Burma, Cambodia, Laos, and Vietnam (with some activities leveraging Thailand). RDMA’s geographic focus will therefore be defined by a series of concentric geographic circles starting with the Lower Mekong as the core, telescoping out to Southeast Asia, and including targeted areas of Central and South Asia and China. There are times when RDMA’s geographic focus will extend beyond the Lower Mekong region when the source of a particular, globally important transboundary challenge—whether food security, wildlife trafficking, global climate change, infectious diseases or coral reef and fisheries protection—or its solution, is located well beyond RDMA's or any single bilateral mission’s immediate area of focus. In that case, RDMA will have to make trade-offs between adhering to the principal geographic focus and extending beyond to respond to and have an impact on an important issue (e.g., urban resilience). As RDMA works in close collaboration with bilateral missions to achieve the RDCS goals, RDMA will implement its development objectives in collaboration with the bilateral missions and the development objectives outlined in their Country Development Cooperation Strategies (CDCS).

The criteria that USAID uses to determine a specific focus on urban and transboundary contexts are related to what the data reveal about the “prevalence” of the problem or challenge. For example, RDMA focuses infectious disease resources on cross-border areas because the epidemiological evidence describes this as the area of critical need—where migrants from high-disease burden countries cross borders and present a real threat of disease transmission. This is the case for other cross-border challenges, such as targeting investments to maximize impact on improved management of natural resources at risk in the Lower Mekong Basin. In addition, RDMA can also serve as a platform to connect cities, sharing knowledge and practices on urban climate resilience and adaptation through collaboration with regional multilateral development partners (e.g., ADB), or using geospatial tools and, eventually, satellite imagery from the SERVIR Hub in the Mekong region to provide this decision-making data.

COMPARATIVE ADVANTAGE

Stakeholders from science and technology, civil society, and the private sector revealed that one key comparative advantage for RDMA is its ability to convene traditional and nontraditional development actors across sectors (public and private) throughout the region. Stakeholders emphasized that USAID, serving as a regional thought leader, could link organizations across the Asia region to increase connectivity, share best practices, and increase development impacts. For example, during RDMA’s public-private partnership consultations with the U.S.-ASEAN Business Council in Singapore, U.S.

companies spoke of opportunities and challenges in the region, in particular the lack of standardization and harmonization of regulations, processes and licensing.

RDMA must be strategic in deciding how and where to invest. RDMA will focus on two major areas where USAID can work most effectively from a regional platform: (a) as a catalyst to encourage regional thought leadership, knowledge sharing, and stakeholder connectivity; and (b) as an efficient and cost-effective provider of regional programs and services. We will only focus on regional aspects of cross-boundary and common challenges in our regional programs since RDMA’s comparative advantage among USAID missions in Asia is focusing on issues that cannot be addressed effectively through bilateral programs.

This RDCS is founded on RDMA’s unique capabilities to effectively support and complement the efforts of several USAID missions in the Asia region and to work closely with Asia Bureau’s Office of Technical Support (ASIA/TS), Office of Strategic Planning and Operations (ASIA/SPO) and other Agency Bureau counterparts, in particular the new Global Development Lab, to ensure that priority mission needs for technical, administrative, and operational support are met. RDMA will actively coordinate with ASIA/TS and ASIA/SPO on responses to technical support requests, and will also coordinate with USAID “hubs” such as Central Asia, India, and the Philippines. It should be noted that compared to Washington-based service provision options, RDMA benefits from being able to provide support to missions in “real time” and in a cost-effective manner given Bangkok’s central location within the region. RDMA established Coordination Procedures between RDMA and Bilateral Missions for Regional Project Design and Implementation to maximize synergies and shape RDMA’s regional programs through better field-level knowledge and insights provided by bilateral missions. This informs and sustains RDMA’s thought leadership on how regional issues may affect bilateral challenges and opportunities.

RDMA’S STRATEGIC APPROACH AND SMART DEVELOPMENT SCREENS

USAID can make enormous gains in Asia by facilitating civil society organizations (CSOs), the private sector, and governments in collaborating regionally. RDMA will continue to be a platform to connect Asia’s different development stakeholders to one another, and remain a catalyst for partnering, networking and leveraging, including regionally focused non-governmental organizations (NGOs), science and technology (S&T) leaders, universities, and other donors.

RDMA’s strategic approach includes three Smart Development Screens that will improve the impact of all regional projects and services.

SCIENCE AND TECHNOLOGY

All RDMA programs will accelerate current positive efforts to look for opportunities to use the best science and emerging technologies, including mobile technology and geospatial technologies, to magnify the impact of our investments. The potential of the mobile internet to transform society is the product of both its scale and its boundless versatility: by transforming how people interact, mobile technology can empower civil society and increase their engagement with government. Geospatial technologies enable integration of diverse data into maps that can be used to visualize patterns and trends over space and time, enabling a sound basis for decision-making. USAID will also partner with U.S. and Asian universities and research institutes, as well as other U.S. Government (USG) agencies, including the National Science Foundation (NSF), National Oceanic and Atmospheric Administration (NOAA), and National Aeronautic and Space Administration (NASA), and support research to fill critical knowledge gaps to address problems such as global climate change, food security, biodiversity conservation, and global health.

PARTNERSHIPS

RDMA will mobilize outside resources at a ratio of at least 2:1 by bringing new partners to the table, including trilateral aid arrangements with both long-term and emerging donors; government-to-government (G2G) commitments; joint funding with other USAID missions, USG agencies, or other partners (e.g., universities); and partnerships with the private sector. For example, USAID partnered with MTV EXIT and achieved 11:1 leveraging over the life of the project for private sector contributions, as well as a 1:1 match with AusAID (now the Department of Foreign Affairs and Trade). Together, the partnerships have reached over 500 million people in Asia to counter trafficking in persons. RDMA will create more innovative partnerships that leverage outside resources, including advancing the other Smart Development Screens.

RDMA’s recent meetings with regional private sector representatives suggest strong and growing interest in partnering.

GENDER EQUALITY AND FEMALE EMPOWERMENT

Asia’s exceptional growth has helped to close the gender gap on health and survival, educational attainment, and political empowerment; however, ensuring opportunities for women’s participation and leadership in decision-making at all levels of society has not been fully realized. A recent U.N. study estimated that limits to women‘s economic participation cost the Asia-Pacific region nearly $90 billion in lost productivity each year. In addition, the high social and economic costs of gender-based violence must be addressed by development programming to ensure inclusive and sustainable development.

RDMA will analyze and address gender inequalities across development outcomes. Through partnerships, promotion of innovative and evidence-based practices, and regional networking we will deliberately enhance programming that ensures women’s access to economic opportunities, fosters their leadership at all levels of decision-making, and provides greater opportunities to address gender-based violence prevention and response for survivors.

ERADICATING EXTREME POVERTY AND PROMOTING RESILIENT SOCIETIES: ACHIEVING THE AGENCY’S MISSION

THROUGH RDMA’S STRATEGY

“Progress in the most impoverished parts of our world enriches us all. In many places, people live on little more than a dollar a day. So the United States will join with our allies to eradicate such extreme poverty in the next two decades: by connecting more people to the global economy and empowering women; by giving our young and brightest minds new opportunities to serve and helping communities to feed, power, and educate themselves.”

(President Obama, State of the Union, 2013).

In January 2014, Administrator Rajiv Shah announced the Agency’s new mission: “We partner to end extreme poverty and promote resilient, democratic societies while advancing our security and prosperity.” In late 2013, when Dr. Shah convened a panel of experts to discuss the possibility of ending extreme poverty by 2030, he emphasized the idea that "extreme poverty is not just a measure of income, but a denial of basic rights and dignity."

RDMA’s five-year strategy is structured to support the two complementary and intrinsically linked goals of USAID’s mission statement: ending extreme poverty, which requires enabling inclusive, sustainable growth; and resilient, democratic societies, which requires effective, legitimate governments that connect with civil society and support all citizens, including the poorest and most vulnerable.

Worldwide, 1.2 billion people (21% of total population) live in extreme poverty defined as less than $1.25/day. Extreme poverty in the East Asia and Pacific (EAP) region declined from 27.6 percent in 2002 to 12.5 percent in 2010. EAP poverty remains relatively high in selected countries that receive RDMA support, namely Timor Leste (37%), Laos (34%), Cambodia (19%), Indonesia (18%), and Philippines (18%).7

As one of two countries in Southeast Asia to have successfully eradicated extreme poverty, 8 Thailand is one of Asia’s success stories. ADB economists credit Thailand’s success to its strong economic recovery and growth, decades of government policy focused on development and poverty reduction, social safety net programs including universal healthcare, and rising agricultural prices that benefited farmers.9 Thailand, despite strong political polarization and a military coup on May 22, 2014, still provides a relatively stable policy environment for the economy. The political crisis that began in the fall of 2013, however, demonstrates that political uncertainty can serve as a deterrent to foreign investors and international tourists who are major contributors to Thailand’s economy.

Rapid and sustained economic growth, especially in the agricultural sector, is widely considered as the most effective way to reduce extreme poverty. In addition to increasing economic growth, governments and regional institutions in East Asia and the Pacific must enact policies that ensure that this growth is broad-based and reduce economic risk for the region’s vulnerable populations.

Eradicating extreme poverty requires a sustained country-level focus that bilateral missions are well-placed to support, although RDMA will also apply its regional tools and comparative advantage to support the Agency’s mission to end extreme poverty and strengthen resilient, democratic societies. By partnering with a variety of regional institutions, host governments, and the private sector, RDMA will boost inclusive regional trade and broad-based economic growth, improve sustainable development outcomes, and enhance the economic opportunities for specific vulnerable populations living in extreme poverty.

RDMA will support ASEAN, APEC and host country institutions to increase trade and regional integration while giving special attention to natural capital management, inclusive growth policies, and participation in economic decision-making.

7 The Multidimensional Poverty Index, developed in 2010 by Oxford Poverty & Human Development Initiative and the UNDP, uses different factors to determine poverty beyond income-based lists. According to this index of acute multidimensional poverty, Cambodia, Laos, and Timor-Leste have the highest extreme poverty numbers and intensity for Asia.

8 According to the World Bank (2012), “Vietnam has successfully eradicated extreme poverty and hunger in all but a few isolated regions.”

9 Eradication means less than 3 percent of the total population live in extreme poverty.

Stronger regional institutions contribute to faster and more sustained growth, especially in the agricultural sector.

Cambodia, Laos, Burma, and Vietnam will benefit the most from increased ASEAN economic integration due to gains in efficiency and competitiveness, greater access to technology (including improved agricultural technologies), and investment. Several nations in Southeast Asia have resource-based economies, and RDMA’s focus on economic transparency and inclusion will also promote more broad-based and equitable economic growth.

RDMA’s regional approach will apply science and technology to improve public health outcomes in the region. This application is critical because Asian populations suffer from the damaging impact of transborder infectious diseases, including HIV/AIDS, avian influenza, malaria, and tuberculosis (TB). Rural populations, in particular, are susceptible to new diseases and drug resistant strains of tuberculosis and malaria. Disease ecology is an important root of extreme poverty, and RDMA has helped to slow the spread of HIV/AIDS, drug resistant malaria, and tuberculosis. RDMA is also strengthening the ability of countries to detect and contain emerging infectious diseases, especially in transborder areas with large numbers of migrant laborers.

Finally, RDMA will help to make vulnerable populations in Asia more able to address and adapt to climate change effects, natural disasters, and a variety of cross-border threats. These threats disrupt lives and economies, and can tip people into extreme poverty. RDMA helps mitigate these risks by providing targeted services and improved information, and by building resilient and capable regional institutions that understand the trends and vulnerabilities and can develop effective remediation and adaptation strategies. RDMA will help improve regional governance and respect for human rights in order to increase economic participation among vulnerable groups, engage both civil society and the private sector, and help selected vulnerable groups that are most likely to live in extreme poverty.

RESULTS FRAMEWORK

RDCS GOAL

The United States has a unique opportunity to influence the choices at the crossroads–in the interest of the people of Asia and the United States. (Annex 1 describes linkages between the RDCS and the State-USAID strategy. Annex 2 describes linkages between the RDCS and approved CDCSs throughout Asia.) With a firm focus on democratic transformation, the sustainability of Asia’s growth trajectory, and the goals of the Presidential Initiatives in food security, global health, and global climate change, RDMA will pursue the following goal for 2014-2018:

A More Sustainable, Inclusive, and Prosperous Asia, with Particular Emphasis on Southeast Asia

DEFINITIONS

Sustainable: When the social, economic, and environmental needs of the present are met without compromising the ability of future generations to meet their own needs.10

Inclusive: Broad-based benefits shared across all socio-economic levels, with special attention to women, vulnerable and marginalized populations, and the extreme poor.

Prosperous: Improved standards of living, which are linked through trade with increasing the prosperity of the American people.

In pursuing this goal, RDMA envisions progress across the following high-level indicators:

• Regional ecosystem vitality and environmental health as measured by the Environmental Performance Index (Yale Center for Environmental Law & Policy, and the Center for International Earth Science Information Network at Columbia University)

• Asia’s continued progress on eradicating extreme poverty (and improving Asian standards of living, which is mutually beneficial for the American people, per the UNDP’s Inequality-Adjusted Human Development Index) 11

• Per capita GDP of the Lower Mekong countries

10Rephrased from the Brundtland Commission’s report, “Our Common Future” (Oxford: Oxford University Press, 1987).

11 Because the Multidimensional Poverty Index (Oxford Poverty & Human Development Initiative and UNDP) is not updated annually for all countries, RDMA will use the MDI as a supplementary context indicator but not as an annual tracking tool.

FIGURE 1: RESULTS FRAMEWORK FOR ALL RDCS DEVELOPMENT OBJECTIVES

Goal: A More Sustainable, Inclusive, and Prosperous Asia, with Particular Emphasis on Southeast Asia

DO 1: Regional Institutions’ Ability to Promote Sustainable and Inclusive Growth

Increased

IR 1.1:

Improved Manage-ment of Natural Capital

IR 1.2:

Regional

Integration Strength-ened

IR 1.3:

Good

Govern-ance

Strength-ened

DO 2: Vulnerable Populations More Able to Address Risks that

Transcend Borders

IR 2.1:

Enhanced

Capacity to Mitigate

Public Health Threats

IR 2.2:

Rights of Specific

Vulnerable People

Enhanced

IR 2.3:

Ability to Adapt to Climate Change

Strength-ened

Support Objective: U.S.

Development Assistance

Efficiency and Effectiveness in Asia

Advanced

IR S.1:

USAID

Missions and Non- Presence Countries Supported

IR S.2:

Develop-ment Partner-ships Advanced

IR S.3:

Innovative and Evidence-based Solutions Fostered

Smart Development Screens: Science & Technology, Partnerships, Gender

To achieve this goal, RDMA proposes to focus on two development objectives (DO) and one support objective (SO):

• DO 1: Regional Institutions’ Ability to Promote Sustainable and Inclusive Regional Growth Increased

• DO 2: Vulnerable Populations More Able to Address Risks that Transcend Borders

• SO: U.S. Development Assistance Efficiency and Effectiveness in Asia Advanced

Development Hypothesis: If Asia’s regional institutions are better prepared to promote sustainable and inclusive growth (DO 1), vulnerable populations are more able to address transnational risks (DO 2), and development assistance in Asia is increasingly effective (SO), then Asia’s growth will be more sustainable and inclusive.

Assumptions

• The Asia-Pacific region will experience relatively robust, but uneven economic growth. China will remain a dominant economic power in the Asia-Pacific.

• The region remains free of major armed conflict, and internal conflicts do not threaten macrostability at the country or subregional level.

• The frequency and, potentially, the intensity of climate-related events will continue to increase, affecting Asia’s susceptibility to natural disasters and climate change.

• RDMA’s major development initiatives will continue to receive high levels of diplomatic support and provide opportunities to take a “whole of government” approach on select regional development issues.

DEVELOPMENT OBJECTIVE 1: REGIONAL INSTITUTIONS’ ABILITY TO PROMOTE SUSTAINABLE AND

INCLUSIVE GROWTH INCREASED

Despite poverty reduction and the other important benefits it delivers, Asia’s growth comes at great expense to the region’s natural resources and the global climate. These environmental costs serve to exacerbate disaster risk and income disparities, and ultimately affect the region’s ability to sustain broad-based development over the long-term. Asia has a uniquely resource-intensive economy, accounting for well over half of global resource use.

Much of Asia’s economic growth has been fueled by regional demand for food, energy and commodities. Current economic policies, such as the goal of full ASEAN economic integration in 2015, promote greater regional economic harmonization and a reduction in trade barriers. Foreign direct investments (FDI) are now flowing into the subregion at unprecedented rates, providing crucial sources of development finance.

New investments, especially in large-scale industrialization, urbanization, infrastructure, and agriculture, however, are having significant social, environmental and economic impacts over the short and long term. Tied to this growth, Asia’s economies are now contributing a large and rapidly growing proportion of GHG emissions, and addressing these emissions will be at the center of any global solution to addressing climate change. Although Southeast Asia is not considered a major contributor to global GHG emissions, the region's population and economic growth rates, combined with increasing foreign direct investment, make it imperative that regional partners and host country governments make substantive changes in their development policies in order to curb future emissions.

Increasingly, high-impact infrastructure development projects are having regional impacts. Both the source of financing and the demand for energy and resources behind these projects are increasingly originating from within Asia—primarily, although not exclusively, from China. Similarly, many of the social, economic, and environmental impacts of the projects, especially in the case of hydropower, are felt transnationally. When possible, we should encourage risk-informed investments to minimize negative consequences in the future.

Asia’s natural capital is being eroded rapidly, and levels of consumption are outstripping the rate at which natural systems can regenerate, resulting in natural capital depletion. The ecosystem services that are essential for economic development are decreasing, adversely impacting communities that directly rely on these resources (often the poor and vulnerable) and reducing sustainable growth potential over the long-term. The sustainable management of these natural assets can also help to alleviate poverty, and can help poor, vulnerable populations to better cope with natural disasters and the impacts of climate change.

Many of the development decisions with significant social and environmental impacts on populations in Lower Mekong countries are made without the input and agreement of the most affected stakeholders, such as local communities. As a result, decisions can be unduly influenced by vested interests, do not adequately take into account and mitigate the environmental and social risks, and ultimately fail to promote sustainable development in the subregion. There is tremendous opportunity to build regional capacity for cooperation on transnational challenges, and also to enhance civil society’s ability to engage with government decision makers.

Regional cooperation (including integration) will cement the region‘s hard-won economic gains in the face of vulnerabilities to global shocks, help reduce cross-country disparities in income and opportunities, and contribute to Asia‘s long-term stability and peace. The ADB describes regional cooperation as “critical for Asia‘s march toward prosperity;” necessary to make economic growth more sustainable; and enables Asia to tackle tough transboundary challenges such as human trafficking, climate change, and infectious disease.

DEFINITIONS

Institution: Any structure or mechanism of social order and cooperation governing the behavior of a set of individuals within a given community. For the RDCS, the term “regional institutions” includes regional associations like ASEAN, APEC, and networks of CSOs.

Sustainable: When the social, economic, and environmental needs of the present are met without compromising the ability of future generations to meet their own needs. In USAID’s new Project Design Guidance, sustainability is achieved when host country partners and beneficiaries are empowered to take ownership of development processes, including financing, and maintain project results and impacts beyond the life of the USAID project (USAID Sustainability Analysis Tool).

Inclusive: Growth that provides opportunity for every citizen without regard to gender or sexual orientation/gender identity and expression, socio-economic status or physical ability, ethnicity, religion or location.

Illustrative Indicators

• Number of action-oriented agendas adopted by targeted regional institutions to promote sustainable and inclusive integration (includes instituted regulations, standards and programs that foster integration though adoption of sustainable practices and that allow for broad-based participation in economic and civil society related opportunities)

• Number of national laws, policies, procedures, protocols adopted by ASEAN countries that implement regional institution policy directives

Development Hypothesis: If communities and governments improve their ability to sustainably manage natural capital (IR 1.1), regional integration is strengthened (IR 1.2), and good governance is strengthened (IR 1.3), then Asia’s institutions will be more able to promote sustainable and inclusive growth (DO 1). This DO will focus on building the connectivity among countries, NGOs, universities, other donors, think tanks, and the private sector; strengthening these regional institutions https://en.wikipedia.org/wiki/Social_structure https://en.wikipedia.org/wiki/Social_mechanism https://en.wikipedia.org/wiki/Social_order https://en.wikipedia.org/wiki/Cooperation https://en.wikipedia.org/wiki/Behaviour https://en.wikipedia.org/wiki/Individual and actors and expanding their ability to engage constructively with various counterparts; and helping communities and governments to better manage their resources and economic growth.

DO 1: Regional Institutions’ Ability to Promote Sustainable and Inclusive Regional Growth Increased

Illustrative Indicators: -Number of action-oriented agendas adopted by targeted reional institutions to promote sustainable and inclusive integration (includes instituted regulations, standards and programs that foster integration though adoption of sustainable practices and that allow for broad-based participation in economic and civil society related opportunities) -Number of national laws, policies, procedures, protocols adopted by ASEAN countries that implement regional institution policy directives

IR 1.1: Improved Management of Natural Capital

Sub-IRs:

- Mobilization of public and private sector for Low Emission Development Strategies increased

- Regional cooperation for sustainable and legal management and trade of natural resources strengthened

- Environmentally and socially sound infrastructure investments promoted

Illustrative Indicators:

- Quantity of GHG emissions, measured in metric tons of CO2 emissions, reduced or sequestered as a result of USG assistance

- Living Planet Index

- Number of hectares of biological significance and/or natural resources under improved natural resource management

IR 1.2: Regional Integration

Strengthened Sub-IRs:

- Enhanced Economic Connectivity

- Enhanced Social, Scientific, and Political Connectivity

Illustrative Indicators:

- Trade volumes/values occurring through ASEAN Single Window,

- Number of laws, policies, procedures or programs developed and/or adopted that promote integration and resiliency as well as economic , social, and gender inclusion

IR 1.3: Good Governance

Strengthened Sub-IRs:

- Governments Have Increased Capacity to Engage with Non-State Actors

- Civil Society More Able to Effectively and Constructively Engage and Influence State Institutions

Illustrative Indicators:

-Voice and Accountability

- Level of capacity of regional, national, or subnational institutions to engage citizens in…