USAID Economic Security Program Quarterly Report

USAID Economic Security Program – Contract No. 72011419C00001

(FY20 Q3: April - June 2020)

DO Number and Name: DO2 – Inclusive and sustainable economic growth Activity Start and End Dates: April 17, 2019 – April 16, 2024 AOR/COR/Activity Manager Name & Office: David Tsiklauri, USAID/Georgia Economic Growth Implemented by: DAI Global

Subcontractors: Solimar, PMCG

Submission Date: July 15, 2020 1

USAID Economic Security Program – Contract No. 72011419C00001

Table of Contents

List of Abbreviations ...... 3

List of Annexes ...... 5

I. SUMMARY OF PROGRESS AND CHALLENGES ...... 6

II. PROGRAMMATIC TRENDS ...... 10

III. UNRESOLVED BUREAUCRATIC/ADMINISTRATIVE CONST……..11

IV. STATUS OF WORKPLAN COMPLETION ...... 11

V. STATUS OF PERFORMANCE INDICATORS ...... 46

VI. SUMMARY OF GRANT ACTIVITIES ...... 53

VII. ENVIRONMENTAL MANAGEMENT AND MONITORING...... 55

VIII. FINANCIAL ANALYSIS ...... 55

IX. ANNEXES ...... 55

USAID Economic Security Program – Contract No. 72011419C00001

LIST OF ABBREVIATIONS

ADS Association Design Georgia AMCHAM American Chamber of Commerce APA Agency of Protected Areas APS Annual Program Statement ATSU Akaki Tsereteli State University A2F Access to Finance B2B Business to Business BA Business Association BAG Business Association of Georgia BDS Business Development Services BPM Business Process Management BPO Business Process Outsourcing BSO Business Support Organizations C&W Cushman & Wakefield COP Chief of Party COVID-19 Corona Virus 2019 CU Caucuses University D&G Democracy and Governance DFC Development Finance corporation DMO Destination Management Organization EBRD European Bank for Reconstruction and Development EDA Export development association EG Economic Growth EOI Expression of interest FDI Foreign direct investment G4G USAID Governing for Growth GDA Global Development Alliance GDP Gross domestic product GEOSTAT Georgia Office of Statistics GHCA Georgian Heritage Crafts Association GITA Georgia Innovation and Technology Agency GITOA Georgian Incoming Tour Operators Association GIZ German Development Agency GMGA Georgian Mountain Guides Association GNCC Georgian National Communications Commission GNTA Georgia National Tourism Agency GOG Government of Georgia GPA Georgian Packaging Association GTA Georgian Tourism Association GTIA Georgian Tourism Industry Alliance GTG Green Team Global GWU The George Washington University ICT Information/Communications Technology ISET International School of Economics at Tbilisi ISO International Standardization Organization KMS Key Management Solutions LEPL Legal entity of public law MoESD Ministry of Economy and Sustainable Development MOU Memorandum of Understanding MRDI Ministry of Regional Development and Infrastructure MRDC Mountain Resorts Development Company MSME Medium, Small, and Micro Enterprises

USAID Economic Security Program – Contract No. 72011419C00001

NACHP National Agency for Cultural Heritage Preservation NASP National Agency for State Property NGO Non-Governmental Organization OCAP Organizational Customized Assistance Program PDF Partnership Development Fund PMAG Packaging Manufacturing Association of Georgia PMCG Policy and Management Consulting Group PPD Public Private Dialogue PPP Public-Private Partnerships RFA Request for application RFP Request for proposal SME Small and medium-sized enterprises SOE State of Emergency STTA Short-Term Technical Assistance T4L Training for Life TVET Technical and Vocational Education Training UAG United Airports of Georgia UNDP United Nations Development Programme UNWTO United Nations World Tourism Organization US MAC US Market Access Center VC Value chain WWT WG Women Who Tech Working Group

USAID Economic Security Program – Contract No. 72011419C00001

LIST OF ANNEXES

1. PARTNERSHIP OPPORTUNITY PIPELINE 2. C&W FEASIBILITY STUDY

USAID Economic Security Program – Contract No. 72011419C00001

I. SUMMARY OF PROGRESS AND CHALLENGES

Quarterly Highlights

The USAID Economic Security Program’s traction this quarter continued despite two months of lockdown and continued restrictions due to the COVID-19 pandemic. The Program was able to quickly pivot its work environment and activities to embrace the challenges caused by the lockdown and therefore was able to provide on-time and effective programming that focuses on addressing the economic realities of the pandemic as well as in queuing up post-recovery initiatives to re-establish economic growth in its target sectors and value chains. This quarterly report, therefore, reflects continued progress toward the Program’s impact targets and it is anticipated that this project will continue in future quarters as long as it has the flexibility to move programming in the direction necessary to embrace the new economic reality that will engulf Georgia (as well as the world).

The Program’s trajectory will be positively influenced by the modification of its contract that was finalized this quarter and added $5.2 million in funding to address economic growth in new and expanded sectors and value chains. Solid Waste Management (SWM) and Recycling was added as a new target sector and significant expansion is expected in the areas of e-commerce and Information and Communications Technology (ICT). New value chains were added as well, including construction materials and Personal Protective Equipment (PPE) under light manufacturing. Wooden educational toys were added as an expanded business activity under the furniture value chain. These new and expanded sectors and value chains offer a plethora of opportunities for inter and intra-sectoral linkages that are already being explored and that will be discussed later in this report.

In terms of e-commerce and ICT, the Program launched major initiatives in both areas during this quarter, one of which was the initiation of a partnership with the global e-commerce website for artisans, Etsy, that was facilitated through collaboration with the USAID-funded E-Trade Alliance. Through this partnership, the Program worked directly with the Etsy team to launch a pilot project that allowed for the creation of two initial e-shops on the platform. Georgian artisans Saini and Silkroom were selected from 22 nominations to be integrated into the platform. After the pilot project’s success, Etsy and the Program expanded the partnership to include the onboarding of between 100-150 Georgian artisans onto the platform over the next two months. These artisans, which will be identified by the Program’s artisan association partners, will receive direct technical assistance from the Etsy team on how best to utilize the platform, as well as how to market their artisan products to a target demographic of discerning, high-income customers around the world.

The Program also facilitated the creation of e-commerce opportunities for Georgian Medium, Small, and Micro Enterprises (MSMEs) whose traditional methods of sales were interrupted by the COVID-19 pandemic, thereby creating a new reality that will likely include a blend of both online and conventional customer outreach in the future. Through a grant to the E-Commerce

USAID Economic Security Program – Contract No. 72011419C00001

Association/Georgia, the Program provided vital information to MSMEs on key topics related to e-commerce, including the development of online shops and/or customer platforms.

The Program was privileged this quarter to highlight its strategy and impending initiatives in Shida Kartli through facilitation of a visit by U.S. Ambassador Kelly C. Degnan. On Ambassador Degnan’s first site visit since the onset of travel restrictions related to the pandemic, she toured Gori Fortress and was briefed on the Program’s partnership with the Shida Kartli Governor’s Office, Gori Municipality, and the National Agency for Cultural Heritage Preservation of Georgia (NACHP). During the site visit, the Program discussed its tourism initiatives within the region and highlighted the positioning of Gori Fortress as a primary attraction to draw high-value tourists. This will occur through its transformation into a living history and high-tech interpretive museum that highlights its iconic status within the country’s cultural heritage. The Program also showcased activities in agri- business, gastronomy, and artisans by highlighting beneficiaries of the USAID Zrda Activity and the USAID Agriculture Program.

The Program’s support of the tourism sector remained robust, with both the continuation of prior activities and the initiation of pivot activities to assist the sector both during the pandemic and in the recovery period. Green Team Global (GTG), one of the Program’s subcontractors, worked with agencies under the Ministry of Economy and Sustainable Development (MoESD) to develop specific tourism products aimed at both domestic and international audiences. This work resulted in the identification of 24 (six per agency) potential products and the short-listing of 12 (three per agency). GTG then initiated a survey and focus group that resulted in the selection of four “finalists” products, for which feasibility studies will be conducted in the next quarter.

In addition, the Program pioneered the first-ever e-learning platform for Destination Management Organization (DMO) development. This platform, which wad created by the Program’s subcontractor Solimar International, is providing DMO Directors and representatives of the Georgian National Tourism Administration (GNTA), the Adjara Tourism Administration (ATA), et al. with practical, hands-on instruction into the intricacies of regional tourism promotion. The goal is to build DMO sustainability by providing the building blocks to success, which are governance, programming, membership marketing, and other critical interventions. The e- learning platform will also be used for other e-learning courses (regardless of sector/value chain) that will be designed in the future and will thus become the cornerstone of the Program’s recalibration of its training and capacity building approach. The Program’s video series, in conjunction with GNTA and the Gastronomic Association of Georgia, was developed to highlight Georgia’s regional wine and culinary assets, along with its cultural heritage and natural beauty. Six

USAID Economic Security Program – Contract No. 72011419C00001

of these videos were produced during this quarter and are in post-production. An additional two videos will be produced during the next quarter.

Another highlight in the quarter was the Program’s support for specific initiatives to address the challenges caused by the COVID-19 pandemic. This included the launch of a Wednesday Webinar series to provide informational opportunities for stakeholders on issues of critical importance. The Program also funded the training of volunteers through a partnership with the 1anoba Foundation to provide health/safety support to businesses throughout the country. In addition, the Program partnered with GNTA and the United Nations Development Programme (UNDP) on a series of health/safety videos that provide information for staff and visitors at to Government of Georgia (GoG)-required processes to combat COVID-19. Specifically, the Program funded two of the videos in the series, one that outlines health and safety requirements for the staff and passengers at Georgia’s national airports and the other focused on hotel staff and guests. These two videos will highlight USAID’s support for Georgia’s anti-COVID measures to hundreds of thousands of domestic tourists and international visitors.

The Program’s Public-Private Dialogue (PPD) initiative to support the development of policy papers in its key sectors and value chains continued this quarter, with initial policy reports and working groups developed for the tourism sector and for the anti-piracy/intellectual property area of creative industries. This activity will be expanded over upcoming quarters to other Program priority sectors and value chains.

Another key milestone in this quarter was the Program’s facilitation of the creation of a Women Who Tech Working Group (WWT WG) that includes representatives from the ICT sector as well as donor organizations, NGOs, and GoG. This important step punctuates the Program’s commitment to diversity by providing women in the technology industry a strong networking and empowerment platform designed to address core issues and bring parity to income disparities in the sector.

The penultimate highlight of this quarter is the continued impact the Program achieved even during the period of a lockdown. The Program finalized its first four workforce skills development grants under its Annual Program Statement mechanism, which totaled $63,486. Ten (10) additional grants are already in the pipeline, with cost share totaling $701,972. It is anticipated that other opportunities entering the grant pipeline over the last quarter will enable the Program to achieve its impact targets for Year One. The Program has far exceeded its Year One employment targets with the creation of 196 jobs for year-to-date.. Job growth this quarter was stunted somewhat by the COVID-19 virus, but initiatives are now moving forward that will ensure a strong finish to the program year. . Sales/revenue increases facilitated by the Program’s work stand at $3,215,554 cumulative for year one, with $724,000 in increases coming in this quarter alone. Investment remained at $853,401 for the year, but new partnerships that are on track to be finalized in the fourth quarter will ensure that achievement of the annual impact target. These calculations highlight direct impact, with indirect impact in each area likely to be more than double due to Georgia-specific multipliers that are currently being developed for each area of economic growth. The Program will report indirect impact once the multipliers and methodology are approved by USAID.

USAID Economic Security Program – Contract No. 72011419C00001

In addition to the investment, employment increases, and sales revenues finalized this quarter, the current partnership opportunities within the pipeline are expected to produce 470 new high value jobs, $18,932,405 in investment1, and $31,485,008 in sales and revenues over the Program’s performance period due to its interventions. This is a strong indicator of the strength of these opportunities as while the timeline for some were impacted because of the crisis (e.g. Radio City), only three have been cancelled to date. Additional opportunities, such as Etsy were added to the pipeline this quarter, highlighting that potential partnerships exist even in light of the pandemic’s challenges. The current Partnership Opportunities Pipeline is included in Annex 1.

Potential Challenges

The COVID-19 pandemic created a challenge not only for the USAID Economic Security Program, but for all of USAID Georgia’s implementing partners. These challenges fell within the following primary categories:

Physical Disruption: As of March 17th, the USAID Economic Security Program began a voluntary work-from-home system, which became mandatory with the GoG’s State of Emergency (SOE) order on March 21st. The State of Emergency was lifted in late May and the Program initiated a phased re-entry to its office beginning May 27th. The re-entry created the challenge of social distancing and ensuring that health standards were met, in addition to facilitating efficient operations with part of the team in the office and part working remotely. Much of the team returned to the office on a permanent basis on June 22nd, but the Program still has a liberal work-from-home policy. The real challenge in physical disruption, however, has not been the ability of the team to accomplish its work in remote or blended settings (as the impact this quarter highlights), but rather has been the inability to engage deeply with stakeholders, both public and private, that has been an ongoing issue. While technology has ensured ongoing connectivity with stakeholders, there are many initiatives, such as partnerships, which cannot be finalized remotely. They require personal engagement, trust-building, and comprehensive analysis to matriculate, and thus the physical disruption caused by COVID-19 has slowed the partnership development process among others. Delayed Activities: Due to the global and country-specific restrictions imposed by the GOG, some of the Program’s activities were postponed. Specifically, these restrictions not only impacted the timeline for field visits, but also for campaigns/activities such as 50 Best Explores Georgia, A Digital Day in the Life of Georgia, the Tourism Co-Creation Workshop, and the Creative Industries Familiarization Tour with Universal Pictures (the latter of which was scheduled to begin on April 29th). All these initiatives have been re- scheduled for fall 2020, but the postponements created challenges in terms of timing and availability of participants. In addition, the Program’s grant activities have been impacted by delays due to COVID-19 because short-listed applicants failed to respond with

1 This reflects only the amount of investment that can be linked directly to Program interventions, not the overall investment from which Georgia will benefit from these opportunities. The overall impact of the investment through opportunities currently in the pipeline is more than $80 million.

USAID Economic Security Program – Contract No. 72011419C00001

required information on time, and some potential grantees could not apply due to uncertainty about their economic futures. Travel Interruption: This presents both a challenge and an opportunity for Georgia and for the Program. While the loss of revenue from both international and domestic tourism from mid-March through mid-June was profound and economically devastating, it did provide the Program and its stakeholders the ability to design a strategy to support domestic tourism and position Georgia as a safe and healthy destination for both Georgians and international tourists. The latter, however, has created a challenge in that the GOG has not unveiled a clear plan that sets a timeline for the recurrence of international tourism (e.g. opening of borders and resumption of international flights). This creates a significant economic challenge for the tourism sector in general (with a ripple effect to all sectors), as well as puts Georgia at a disadvantage with the other countries that are in the process of facilitating the emergence of international tourism. Many of the Program’s partnership initiatives require on-site presence of international delegations with a waiver of quarantine restrictions. This has not yet been clarified by GOG and thus could create further postponement of activities if the decision is not made in a timely manner.

II. PROGRAMMATIC TRENDS While the Program’s Year 1 work plan focused on practical initiatives to achieve specific objectives, the COVID-19 pandemic created a new paradigm for global commerce, which of course significantly affected Georgia. The country’s Increasing Employment for Youth and relative size and global positioning, combined with its Women heavy focus on imports, high levels of youth and ■ Youth and women comprise a high women unemployment (see box), and preponderance preponderance of employment in the tourism sector, but wage discrepancies continue to of GDP coming from tourism revenues (approximately exist. The Program works with its 21 percent), exacerbates the potential impact of stakeholders to promote women and youth COVID-19.2 To address the health issues linked to the employment at rates that are comparable to male counterparts and higher than average pandemic, GOG was forced to make a choice between wage rates in the sector and country. As of two unsavory options, namely enforcing a tight this quarter, 36% of program beneficiaries lockdown to prevent illness or continuing with have been women and 49% have been youth, which is far ahead of the Program’s commercial activities with fewer restrictions. It chose year one targets. the former option, as did virtually every country in the world, and thus most commercial activities in the country were suspended beginning in mid- March 2020. While the global lockdowns are affecting every country’s economy, it is especially challenging to Georgia because of its heavy dependence on tourism as a source of revenue, as well as its nascent e-commerce and information and communications technology (ICT) capabilities. Even with the lockdown beginning to ease, the GOG continues to face difficult choices on how to re-inflate its economy in the “new normal” of the post COVID-19 reality.

The Program has continued its momentum throughout the COVID-19 pandemic, even in the face of a State of Emergency that disrupted office operations, restricted movement, and delayed some

2 Source: TBC Bank

USAID Economic Security Program – Contract No. 72011419C00001

planned activities. It has done so by focusing on activities that while addressing the economic issues in its sectors and value chains caused by the crisis, also provides a solid foundation for traction during the post-COVID-19 recovery period. Viewing the crisis as an opportunity for innovation, the Program pivoted toward actions in the shared intellectual services (ICT), creative industries (e-commerce), light manufacturing, and tourism that offered the most support to businesses in mitigating the crisis’ effects. Building on this foundation, the newly approved Amendment to the Statement of Work will allow the Program to expand current and planned interventions and include additional subsectors to mitigate and address economic impacts of COVID-19 in the country of Georgia.

III. UNRESOLVED BUREAUCRATIC/ADMINISTRATIVE CONSTRAINTS There were no significant bureaucratic and/or administrative constraints this quarter that impacted the implementation of the Program’s initiatives. An additional approval process for COVID-19 related programming instituted by USAID/Washington remained in place but did not significantly alter implementation.

IV. STATUS OF WORKPLAN COMPLETION While there were challenges in terms of timing of interventions due to the restrictions caused by COVID-19, the Program’s ability to maintain momentum and focus on specific opportunities ensured the continuation of its traction.

After assessing the scope of the pandemic on its implementation, the Program audited its delivery mechanisms and activity timeline to maintain momentum. This included pivoting training programs such as the DMO Development Course and tourism skills development initiative to online or blended formats, embracing emerging opportunities that were created or prioritized due to the pandemic (such as its escalation of e-commerce and ICT opportunities), and providing direct assistance during the crisis and recovery period.

Due to the Program’s diligence in embracing new opportunities and/or recalibrating existing ones, momentum in the sales/revenue and job creation areas remained robust. In fact, its initiatives this quarter contributed significantly to sales and revenue increases and employment as described in the Quarterly Highlights. This could only have been achieved by playing the “long game,” using the restrictions caused by the pandemic to focus on innovation and disruption that could result in additional short, medium, and long-term opportunities. For instance, the Program embraced emerging opportunities in e-commerce, ICT, and shared intellectual services that likely would not have matriculated in a timely manner in a non-COVID environment.

The Program heightened its focus in this quarter on inter and intra-sector/value chain collaboration, such as in supporting packaging companies to participate in the delivery of PPE

USAID Economic Security Program – Contract No. 72011419C00001

materials (face masks) around the country. In addition, the Program embraced opportunities to link the creative industries and tourism sectors (through the gastronomic video series) to create both visibility and commercial appeal, while also linking logistics and payment mechanisms to e- commerce opportunities to boost on-time delivery and secure transaction opportunities.

The common thread within the Program’s implementation strategy is to connect activities to create systematic and sustainable growth, as well as to enhance institutional capacity and promote market dynamics. As such, its strategy remains the same as it has been since the day of its launch, namely the promotion of interventions within its priority sectors and value chains to create and/or transform systems that will promote competitiveness throughout the country, thus increasing investment, promoting high(er)-value job creation, and increasing sales/revenues. The activities outlined below, therefore, were initiated simply as “parts of a whole” designed to promote the journey to self-reliance.

Activities by Component

The Program’s components continue to produce significant impact even in light of the challenges caused by the COVID-19 pandemic. By quickly embracing a digital environment during the lockdown and by pivoting activities toward short, medium, and long-term interventions, the Program was able to navigate this quarter with a great deal of traction and success. A comprehensive overview of the Program’s activities this quarter is as follows:

Component 1: Strengthen Cooperation in Targeted Sectors

During the third quarter, the Program continued solid traction in its establishment of market linkages, PPD, and the capacity development of Business Support Organizations (BSOs) that are enablers for its target sectors and value chains. The following is an overview of activities during this quarter that link to the Program’s approved year one workplan:

1.1 Support the Development of Sector Associations: As part of the Organizational Customized Assistance Program (CAP) initiative, the Program team completed the assessment of two associations involved in the CAP initiative, the Georgian Tourism Association (GTA) and the Georgian Heritage Crafts Association (GHCA). The assessments both had a common theme, namely that these associations, despite years of support through grants from a number of different donors, lack the institutional capacity to become sustainable. The assessments focused on their relative strength in comparison to high- capacity peer organizations around the world, which reflected endemic institutional, governance, and operational deficiencies that erode competitiveness and impede movement toward sustainability. Once the assessments were conducted, the Program provided each association with a comprehensive list of recommendations to strengthen their developmental areas and build on their strengths. These recommendations will become the cornerstone of customized sustainability plans that each association will prepare and implement with the Program’s guidance. A lesson learned this quarter was the magnitude of the assessment process. Evaluation of each organization requires multiple hours of preparation, followed by the assessments

USAID Economic Security Program – Contract No. 72011419C00001

themselves which required days or weeks to conduct due to the detail involved. This being the case, the Program developed a new delivery approach to conduct assessments for the more than 20 remaining BSOs within the CAP by developing a Request for Applications (RFA-003) entitled "Building the Organizational Capacity of Target Business Associations, Chambers of Commerce, Clusters and Business Support Organizations (BSOs)". The RFA’s objective is to invite local NGOs to apply for a cost-share grant to build the organizational capacity of target BSOs, which would include conducting the remaining assessments under the supervision of the Program’s PPD Specialist. The application deadline for this RFA is July 20, 2020 which will lead to a robust focus on BSO assessments in the next quarter.

Once completed, the assessments will provide the clearest picture to date of the capacity development of Georgia’s BSOs. In addition, it will provide a clear and customized path to sustainability for participating BSOs by highlighting inputs, which will be used to develop customized strategies for organizational growth. These strategies will be developed within the CAP initiative’s second phase. Illustration 1 outlines the CAP initiatives phases:

Table 1: Phases of the CAP Initiative Phase 1 (2019-2020) Phase 2 (2020-2021) Phase 3 (2020-2021) ■ Identification of potential ■ Conduct capacity assessments: In ■ Implementation of customized CAP members: Complete Progress sustainability strategies: In Progress ■ CAP Launch: Complete ■ Development of capacity ■ Launch of BSO grant program reports/recommendations: In to assist with implementation: Progress August 2020 ■ Development of curriculum ■ Development of Customized ■ Regional CAP Institute: and capacity assessment Sustainability Strategies: Next September-October 2020 materials: Complete Quarter ■ Initiation of CAP Institute: Complete

The Program also began the conceptual design of the next phase of the CAP Institute, which will focus on regional BSOs. The first week-long CAP Institute was completed during the last quarter and was highly successful in terms of providing practical capacity-building input to the CAP participants. This Institute will be replicated for regional BSOs utilizing the Program’s e-learning platform, which was developed this quarter. This will exponentially expand the amount of information and collaboration that can take place between the participating organizations, as well as drastically reduce the cost of delivery be alleviating the need for international travel, expenses for conference facilities, et al.

The Program also facilitated collaborative alliances with other USAID implementing partners in building the capacity of BSOs. For instance, the Program collaborated with the USAID Economic Governance Program and the USAID Zrda Activity to provide guidance to the newly-created Georgian Tourism Industry Alliance (GTIA). Specifically, the Program provided GTIA with input on its tourism sector recovery policy package that it developed with support from the USAID Economic Governance Program. This led to the development of an approach to promulgate the positions for a tourism recovery package in front of the appropriate government officials, including Minister of Economy and Sustainable

USAID Economic Security Program – Contract No. 72011419C00001

Development, Natia Turnava. The Program and the other USAID implementing partners will continue to work with the Alliance to assist it in developing increased capacity. The Program’s primary goal will be to involve the Alliance (both collectively and as individual associations) in the CAP in order for it to become a strong and effective organizational advocate for the tourism sector.

The Program also assisted the Business Association of Georgia (BAG), one of the largest and most influential BSOs in the country, develop concepts for new initiatives to support COVID-19 recovery, especially among SMEs. One of the concepts will allow Georgian businesses (members and non-members of BAG) to transform their business activities in the post COVID-19 environment by creating a new product or service(s) or expanding existing ones. This will allow for optimization of processes and integration of structural changes to assist companies stabilize operations and reduce staff displacement. The other concept focuses on BAG’s design and management of a competition to attract foreign direct investment (FDI). This activity focuses on creating high-value employment by boosting the SMEs’ sales/revenue. In this competition, BAG will invite entrepreneurs and company officials in a variety of sectors to share their strategies for FDI attraction. The BAG will provide financial and non-financial assistance to the ones that offer the most potential for FDI attraction.

The Program’s involvement with BAG in developing these concepts is another strategy within the CAP, as it provides the organization with increased visibility and connection with the private sector. In addition, services like this build the organization’s brand and thus attract additional membership revenues.

1.2 Facilitate Public Private Dialogue: Building on its engagement with USAID Economic Growth and Democracy and Governance (D&G) partners in the last quarter, the Program continued its collaborative PPD work to assist the GOG and political parties in building economic agendas. While providing the government and political parties with the analytical information to address economic issues, the PPD initiative is designed to increase constructive dialogue between public and private sector leaders. Salient to the PPD initiative is its focus on the Program’s target sectors and value chains, which will provide the government and political parties with potential policy inputs to facilitate high-value job creation, investment, and sales/revenue increases for SMEs. The initiative’s output will be four policy papers that provide empirical analysis of key economic policies/recommendations that will benefit the Program’s four target sectors. Once the papers are developed, the USAID D&G partners will work with the GOG and political parties to facilitate their consideration into wider economic policy platforms. In this quarter, the Program’s subcontractor, PMCG, consulted with private and public sector stakeholders, as well as NGOs representatives and donor organizations, to develop comprehensive reports in the creative industries and tourism sectors. With agreement from stakeholders, the focus of the creative industries analysis was anti-piracy and intellectual property, which are two of the most critical issues in the sector’s future growth and two that have been among the most problematic in terms of regulation and enforcement.

USAID Economic Security Program – Contract No. 72011419C00001

As part of the Program activity “Developing policy working groups, creating policy briefs and conducting PPDs in selected sectors and value chains”, the Program’s subcontractor PMCG continued working on creative industries and tourism policy papers. In the reporting quarter, the Program together with PMCG organized two working group meetings on creative industries. Initially, the team planned for the policy paper to tackle issues related to anti- piracy and intellectual property rights and filming incentives. Due to delay of Cash Rebate Decree caused by COVID-19, the team concentrated efforts on the first subject while putting the filming incentives issue on hold. Another key issue for creative industries, the renewal/institutionalization of the cash rebate program for film and television production, was not addressed this quarter because additional groundwork is needed to ensure full understanding and cooperation in terms of this mechanism. Once the report on anti-piracy and intellectual property was completed, a 24-person working group was formed to analyze the data and prioritize recommendations for the creation of a policy paper. The following were the members of the working group on anti-piracy and intellectual property:

Table 2: List of PPD Working Group Participants in Anti-Piracy and Intellectual Property

Name Posi�on Organiza�on 1 Giorgi Papava Consultant PMCG 2 Ketevan Babiashvili Consultant PMCG 3 Noshre Chkhaidze Board Member Film Cluster Executive Director & Board Member; Film Cluster; Georgian National Film 4 David Vashadze Film Commissioner Center Ketie Danelia 5 Producer “And Then We Danced” Film

6 Zurab Bezhashvili Founder & Executive Director Anti-Piracy Center of Georgia 7 Ivane Makharadze Head of Audio-Visual Media Services Regulation Department at GNCC 8 Levan Maisuradze Legal Advisor GNCC 9 Zaza Shengelia President Bravo Record 10 Guga Guntsadze CEO Bravo Record Anti-Piracy Center of Georgia; Cavea 11 Otar Bubashvili Founder & Chairman; Director Cinema 12 Ketevan Shengelia Head of Creative Europe Desk Creative Europe Sector Economy and Economic Policy 13 Elene Cheishvili Lead Specialist Committee, Parliament 14 Sophio Chantadze Deputy Head of Legal Department Ministry of Culture and Sports of Georgia 15 George Darchia Component 1 Lead DAI 16 Tamar Kaphianidze PPD Specialist DAI 17 David Lezhava Public Policy Sector Director PMCG 18 Eka Gvinjilia Project Manager PMCG 19 Giorgi Khishtovani Director PMC RC 20 Mikheil Skhiereli Consultant PMCG 21 Natia Katsiashvili PPD Expert 22 Sopho Basilidze Researcher PMC RC 23 Nika Kapanadze Researcher PMC RC 24 Nutsa Bezhuashvili Project Officer PMCG 25 Mariam Khubashvili Project Officer PMCG

USAID Economic Security Program – Contract No. 72011419C00001

The working group met twice during the quarter and discussed the growth in popularity of illegal online content due to the lockdown precipitated by the COVID-19 pandemic and the proliferation of sites in Georgia that routinely offer pirated content. Some group members noted that growth in popularity of pirated content is the result of a lack of platforms to offer a vast selection of legal audio-visual content. Representatives of the private sector exposited on how piracy hurts the film industry and its revenues and how it is important to raise awareness of media and population on the negative impact of piracy on the creative industry ecosystem. The public sector highlighted the role and activities carried out by the Georgian National Communications Commission and National Intellectual Property Center of Georgia to support the anti-piracy legal reforms. The meeting was a step toward the development of a policy paper that will be reviewed by the sub-group and eventually provided for consideration to the appropriate decision makers.

The PPD initiative also focused on the tourism sector, with PMCG creating a high-level statistical report on the current state-of-the-sector and the policy interventions that may be the most important to its recovery and future growth. PMCG developed the report with input from dozens of public, private, NGO, and donor stakeholders and it contains both quantitative and qualitative analysis of trends and issues. In addition to drafting the report, PMCG facilitated the creation of a 36-member working group consisting of public, private, and NGO leaders in the sector to discuss a plethora of policy issues surrounding the sector before and after the COVID-19 crisis. The members of the working group are as follows:

Table 3: List of PPD Working Group Participants in Tourism

Name Position Organization 1 Maia Sidamonidze Owner Hotel Terrace 2 John Wurdeman Owner Lost Ridge Inn and Living Roots 3 Valeri Chekheria Chief Executive Officer Adjara Group 4 Otar Berishvili General Manager Rooms Hotel Tbilisi 5 Nana Tsertsvadze Deputy CEO BAG Georgian Hotel, Restaurant, and 6 Shalva Alaverdashvili Founder Café Federation Gastronomic Association of 7 Levan Qoqiashvili Executive Director Georgia 8 Nata Kvachantiradze Chairperson GTA 9 Ia Tabagari Director GITOA 10 Mariam Shakarashvili Manager GITOA 11 George Welton Executive Director AMCHAM 12 Nini Kapanadze Communication Officer AMCHAM Program Expert, Cluster Development, 13 Tinatin Gvenetadze GIZ Tourism 14 Tengo Gogotishvili Urban Development Specialist World Bank 15 Ketevan Tchumburidze Deputy Chief of Party USAID Zrda 16 Brian King Chief of Party USAID Zrda 17 Rusudan Mamatsashvili Deputy Director GNTA 18 Giorgi Bregadze Head of Analytical Department GNTA

USAID Economic Security Program – Contract No. 72011419C00001

Name Position Organization Head of Marketing and Communications Agency for Protected Area 19 Niko Tevdorashvili Unit Development Deputy Head, International Relations Mountain Resorts Development 20 Miranda Aghapishvili and Analytical Department Company 21 Levan Tsulaia Executive Director Samegrelo-Zemo Svaneti DMO 22 Tina Khanjaliashvili Executive Director Kakheti DMO Quality Control and Sustainable Tourism 23 Manana Inashvili Kakheti DMO Manager 24 Archil Tsintsadze Technical Leader Adventure Tourism School Caucasus Travel / Georgian 25 Nene Samniashvili Representative Hospitality Group 26 Charlotte Emborg Program Manager Caucasus Travel 27 Nick Erkomaishvili Founder/Director Explore Georgia 28 Guram Klibadze Representative Explore Georgia Mountain Resort Development 29 Irakli Chirakadze Director Company 30 Tamuna Guledani CEO M2 Hospitality 31 Elene Otarashvili General Manager Tsinandali Collection USAID Economic Governance 32 Nino Chokheli Deputy Chief of Party Program Jordi Kuijt (or Georgian Silk Road Hospitality; Georgia 33 CEO; Chair Representative) Business Tourism Association 34 Paata Shaniashvili In-Country Coordinator Department of Interior ITAP 35 Nikoloz Antidze Director Cultural Heritage Agency (NACHP) 36 Tamar Archuadze Director General UAG Head of International Relations and 37 Keti Chukhua Enterprise Georgia / MoESD Donor Coordination DepartmenT 38 Tornike Zirakishvili Deputy Director Enterprise Georgia / MoESD 39 Lina Jikia Legal and Public Policy Director AMCHAM 40 Mariam Kuchuloria Executive Director European Business Association 41 Nino Ushikishvili Legal and Policy Officer European Business Association

The working group members met to determine priority recommendations to increase the sector’s economic capacity. This will be followed up by a high-level event on July 22nd that will be attended by top-level public, private, and NGO stakeholders in the tourism sector during which the tourism report will be presented and recommendations finalized that will form the foundational elements of the policy paper.

Once finalized over the next quarters, the policy papers in creative industries, tourism, light manufacturing, and shared intellectual services will be forwarded to USAID’s Democracy and Governance partners and the USAID Economic Governance Program who will facilitate discussions with political party and government representatives on their potential integration into broader economic growth agendas.

Throughout the PPD initiative, the Program has collaborated with the USAID Zrda Activity and the USAID Economic Governance Program to ensure strong coordination of activities, as well as to utilize their vast knowledge in many areas of focus. One such area is the development of a revenue-generation mechanism for DMOs that will utilize municipally-

USAID Economic Security Program – Contract No. 72011419C00001

generated taxes and fees to provide a sustainable income source to promote regional tourism. The Program’s major support for this concept will come through its consultative PPD process, which includes the tourism taxes/fee issue as a recommendation.

1.3 Increase and Strengthen Market Linkages: The Program’s 1:1 market linkages program continued to expand during this quarter, with the initiation of robust partnerships and practical assistance mechanisms. The Program began its partnership with Etsy, the global e- commerce platform for artisans with a pilot project to open two shops for Georgian artisans that were selected from 22 candidates nominated by Program’s partner associations. The two online shops, Saini and Silkroom, went live on Etsy in early May. After the successful pilot, the Program’s partnership with Etsy took another step forward as the Program and signed an agreement with the company under which it agreed to provide training and promotional support at no cost to the Program for up to 120 Georgian artisans to join the platform over the next two months. In addition, Etsy agreed to provide each artisan with 20 free listings and the 50 best seller artisans will receive a $50 credit for promotion to increase the visibility of their shops on the platform. This partnership, which came through collaboration with the USAID-funded E-Trade Alliance, is a potential game- changer for Georgian artisans in terms of assisting them in accessing global markets. Through Program’s partnership with Etsy, the artisans have access to individual training by Etsy representatives, which consists of two 2-hour online sessions. The first training focuses on onboarding the artisan to the Etsy website and helping them to set up their shops, while second training session consists of a one-time individual consultation call to help the seller optimize his/her content.

In order to select and prepare the artisans, the Program collaborated with Georgian BSOs in the creative industries value chain. In June, the Program began work with Association Design Georgia and Georgian Heritage Crafts Association to assist in the onboarding of Georgian artisans onto the Etsy platform. The BSOs are responsible for a) selecting of up to 120 artisans that have the potential to join the platform during the period of the partnership, b) providing support and preparing their member artisans to open e-shops on the Etsy site, and c) conducting follow up to provide artisans with the best opportunity to gain value from their presence on Etsy. This collaboration provides a new service for these BSOs, which will increase their capacity to recruit paid membership and thus bolster their financial sustainability. As such, it links directly to the Program’s CAP initiative, as the creation of new programs and services is part-and-parcel of the Program’s approach in assisting BSOs in achieving sustainability. The two BSOs have already selected 120 artisans and have assisted all the artisans to complete all the preparatory/preliminary works for the trainings. Etsy and association representatives began individual calls with the artisans in late June, which will

USAID Economic Security Program – Contract No. 72011419C00001

continue into August. Once the calls are completed, the BSOs will follow up with the artisans to ensure that they have written and uploaded all necessary material according to Etsy’s requirements. The Program plans to complete onboarding Georgian artisans on Etsy within the next quarter.

This initiative will increase the sales/revenues of Georgian artisans by providing them a platform to reach high net-worth international customers who are interested in purchasing unique items that have a story behind them. For this reason, the focus of the Program’s effort in terms of the Etsy collaboration is not traditional handicraft producers, but rather high-value, highly skilled artisans that provide one-of-a-kind products to discerning customers. This will provide them with a market that has heretofore been inaccessible other than through exhibitions (held mostly in Georgia) where visitors and locals alike can purchase artisan products. The initiative has also introduced new payment mechanisms and potential collaborative alliances onto the Georgian market. For instance, because of the Etsy partnership, more artisans are using PayPal and other secure transaction mechanisms and the Program is actively pursuing partnerships in logistics and shipping that will reduce global delivery time and increase efficiency of shipping. In addition, as mentioned above, this partnership will significantly build the capacity of the Georgian BSOs that work with artisans.

Other market linkages activities this quarter focus on assisting companies in identifying and embracing regional and global opportunities despite restrictions imposed by the ongoing pandemic. One such initiative is the Market Acceleration Program through which the Program partners with the Georgian Innovation and Technology Agency (GITA) to promote innovation and the scaling of startups (and micro-enterprises) within its target sectors and value chains. During this quarter, the Program selected three new GITA grantees to receive technical assistance and networking services by visiting a Silicon Valley accelerator program. The Program’s evaluation committee selected the following startups after viewing their pitches, conducting due diligence, and conducting interviews:

Dataninja is an advertisement analytics, tracking and management platform that offers a one-click solution to launch and manage advertisements in any given advertising network, with an all-in-one solution of landing pages management, creating lead generation forms and communication flow. Multifunctional Self-cleaning Windows assembles and sells “smart windows” equipped with ventilation systems, integrated internal space ionizing devices, carbon monoxide (CO), temperature, and air pollution sensors. Wenu is a mobile application that serves as a virtual alternative to paper menus for restaurants and cafes. With the help of Wenu’s QR code and application, a customer can order food without talking to the waiter. These three startups are also strategic given the Program’s pivot toward the ICT sector in the post-COVID recovery period. GITA supports the accelerator program by paying the grantees’ travel costs, while the Program pays the tuition and fees of the accelerator program to ensure a customized intervention for participants.

USAID Economic Security Program – Contract No. 72011419C00001

In addition, the Program continued to build out its partnership with GITA by co-designing a hackathon that focuses on the nexus of waste management/recycling and packaging. Through this hackathon, entrepreneurs and business owners/managers will have the opportunity to present concepts as how to develop bio-degradable packaging to replace plastic and other disposable waste. It will also reduce the waste stream that is flowing into Georgian landfills, thus having a positive effect on the environment. Finally, it will benefit the hotel, restaurant and café (HORECA) sector by providing affordable alternatives to plastic packaging. The hackathon will take place in the next quarter.

Another aspect of the Program’s market linkages effort focuses on introduction of potential investors to the Georgian market. Two activities were designed this quarter to address this important aspect of market linkages. The first is a Site Locators Familiarization Tour, which the Program designed in collaboration with Enterprise Georgia. During this quarter the Minister of Economy and Sustainable Development, Natia Turnava, sent official letters of invitation to 45 global site location professionals3, inviting them to Georgia from September 7-10, 2020. The purpose of this tour is to highlight Georgia’s investment value proposition in key high-value sectors that align with the Program’s objectives. To date, 10 site locators have accepted Minister Turnava’s invitation and others are considering the request. These represent some of the largest and most prestigious site location firms in the world, including (but not limited to) Deloitte, Cushman & Wakefield, and Colliers International. While they will not be able to participate in the tour because of travel restrictions, principals of the Wadley-Donovan Group (a major site location firm in New Jersey) had a conference call with Enterprise Georgia staff to explore opportunities. The call went extremely well, establishing a relationship with the firm that may lead to investment opportunities at a later date. The Program’s Chief of Party facilitated Enterprise Georgia’s access to the Wadley-Donovan Group (WDG) and other site location firms as he worked extensively with them in the past.

The second activity involves Universal Pictures and providing market linkages for Georgian creative industries firms. A new date was set for the Creative Industries Familiarization Tour (originally it was planned for late May 2020). Seven Universal executives including producers, senior location scouts, production managers, and publicists have agreed to participate in the tour, which will now be held from September 14-18, 2020. During the tour, the participants will learn more about the country’s creative industries value proposition as well as tour potential product locations. They will also conduct master classes in creative industries. The tour will be led by Universal Pictures Vice President of Physical Production, James Lin, under the behest of Jeff LePlante, the company’s President of Physical Production. The Creative Industries Familiarization Tour is being conducted in collaboration with Enterprise Georgia, the Georgian Film Commission, and the Georgian Film Cluster.

These tours are just another step in the Program’s strategy to facilitate market linkages through introducing Georgia’s value proposition to potential investors.

3 Site location professionals are consultants that work with companies around the world to identify potential locations for new or expanded investment. As of 2019, nearly 63% of all international corporate investment came through site location firms as an initial step toward identifying investment opportunities.

USAID Economic Security Program – Contract No. 72011419C00001

1.4 Support Sector Stakeholders to Identify, Prioritize, and Access Finance/Investment: One of the Program’s mechanisms for building economic growth within its target sectors and value chains is to improve MSME access to finance for enhancing productivity and growth. As a part of these efforts, the Program developed an Access to Finance Guidebook in the previous quarter to provide a thorough description of the supply of financial products and services as well as outline financial government and donor institutions’ programs that provide access to MSME financing. The guidebook is available in an updatable PDF format and provides information on: a) the institutions and programs available to provide financing, b) the criteria for financing through these programs, and c) the loan/grant amounts of each financing program. To enhance the guidebook’s use and sustainability, the Program transferred its ownership to the Ministry of Economy and Sustainable Development (MoESD), which will be responsible for coordination of supply-side stakeholders to update its content on an ongoing basis. To make the guidebook more sustainable, however, the Program agreed with Enterprise Georgia and the MoESD to transform the PDF version into an web platform that has the capability to provide both information and interactive features to MSMEs (demand side stakeholders) in real time. This led to collaboration with the USAID Agriculture Program, implemented by CNFA, which is working with the same stakeholders on the creation of an online platform to unite all major government economic support programs, making them easily accessible to the private sector. Together, the Access to Finance Platform (supported by the USAID Economic Security Program) and the Combined Government Assistance Portal (supported by the USAID Agriculture Program) will provide businesses and entrepreneurs with seamless and current support to access vital government services and generate increased capital flow.

The two programs (implemented by CNFA and DAI) signed a memorandum of understanding on April 21, 2020 to formalize this collaboration. The MOU outlines the Programs’ a) support to Enterprise Georgia in the development of an e-platform to provide information on the programs and services offered by GOG agencies to support beneficiaries to start up or expand business operations and b) support the MoESD and Enterprise Georgia to develop/create an interactive access to finance e-platform that will serve as an online catalogue for businesses to access information on financial products and services provided by commercial banks, microfinance institutions, leasing and insurance companies, and investment & private equity funds, along with grants and financial support mechanisms provided by international financial institutions and donor organizations/programs. The platforms will link to provide one-stop service for businesses and entrepreneurs that are seeking government assistance or any type of financing. Enterprise Georgia was heavily involved in the development of scopes of work for both platforms and will be engaged throughout the process.

It should be noted that based on MoESD and Enterprise Georgia’s request, the Program’s A2F platform will not concentrate just on the Program’s priority sectors (tourism, shared intellectual services, creative industries, light manufacturing). Instead, it will serve businesses and entrepreneurs representing all major sectors of Georgian economy.

USAID Economic Security Program – Contract No. 72011419C00001

The status for Component 1 activities under the year one workplan is included in the following table:

Table 4: Component 1 Workplan Activity Status

Task Start End Deliverable/Milestone Status Continuation of Business Capacity Assessment Association Capacity October 2019 December 2020 Ongoing Reports Assessments Facilitating the Preparation of Business Association Customized Capacity Building December 2019 February 2020 Complete Development Guidebook Strategies Launch of Business Association Agenda, Resource Institute2 and Initiation of First March 2020 September 2020 Complete Manual Course Implementation of Customized Capacity Building Strategies March 2020 December 2020 Framework Document Ongoing for BAs Technical Assistance to Technical Assistance Government Organizations/ Plans; Agencies to Assist in October 2019 September 2020 Ongoing Implementation Reports; Building Competitiveness in Metrics Target Sectors/VCs Creation or Building the List of Participants in Capacity of Existing October 2019 September 2020 Coordination Councils; Ongoing Coordination Councils Minutes of Meetings Identification of Key Policy List of Laws/Regulations; Issues and Development of November 2019 September 2020 Published Report with Ongoing Recommendations to Address Recommendations Them Provision of Advice and Expertise to USAID D&G Implementing Partners to Engage GOG and Political November 2019 September 2020 Policy Briefs Parties in the Development of Ongoing Economic Platforms (Through Facilitation of an Economic Working Group) Launch of Initial Market List of Companies; Linkages Activity (10-15 January 2020 November 2020 Customized Interventions; Planned Companies) Results Metrics for Fall 2020 Conduct First “Expanding

Markets and Customers Course Syllabus; List of January 2020 September 2020 Planned Course” for Pilot Initiative Participants for Fall 2020 Participants Launch of Second Market List of Companies; Linkages Activity (30-40 August 2020 February 2021 Customized Interventions; Not Yet Started Companies) Results Metrics Conduct Second “Expanding Markets and Course Syllabus; List of August 2020 November 2021 Not Yet Started Customers Course” for Pilot Participants Initiative Participants Continue Mapping of Investment and Market October 2019 Ongoing Mapping Report Ongoing Opportunities through 1:1 Approach Business Plans; Facilitate New Product September 2020 Ongoing Promotional Materials; Ongoing Development Deal Notes

USAID Economic Security Program – Contract No. 72011419C00001

Task Start End Deliverable/Milestone Status Gap analysis of companies involved in the Market Linkages October 2019 February 2020 Analysis Report Complete activity in terms of access to finance, productivity, et al. Capacity Building of Local Materials; Metrics; Stakeholders to Support November 2019 September 2020 Reports on Interventions Ongoing Competitiveness Enablers Continue Identification of List of Participating Participating Financial October 2019 January 2020 Institutions/ Programs Complete Institutions and Programs Implement TA Plans for Market Linkage Initiative Participants to December 2019 May 2020 Customized TA Plans Ongoing Access Financing (If Needed) Develop Concept to Engage with US Development and Finance Company to Design and October 2019 September 2020 DCA Facility Ongoing Extend a New DCA Facility to Other Banks or Financial Institutions Put on hold after Work with Financial Institutions discussions Report on to Promote Buy-In of GOG for with supply side January 2020 June 2020 Recommendations for Leasing and Factoring stakeholders Legislation Legislation who felt this is not a priority at this time.

Component 2: Support Enterprises4 to Improve Productivity, Sales, Quality, and to Develop New Products and Services

Component 2 focuses heavily on supporting enterprises to increase markets, products/services, and revenues, as well as to improve the overall process that will lay the foundation for investment and high(er)-value job creation. The Program generated solid traction this quarter in key areas in response to COVID-19 in addition to establishing a foundation for economic recovery. The following activities will be finalized or initiated during the period covered by this quarterly report:

2.1 Improve Firm-Level Operations: This quarter, the Program engaged with stakeholders to identify the primary challenges faced by firms in priority sectors and value chains. The main purpose of this intervention was to identify potential opportunities that will enhance economic growth and sector/value chain competitiveness. The Program team’s focus this quarter was on the light manufacturing value chains of furniture/packaging and e-commerce platform development. A foundational element of providing firm-level assistance in target sectors and value chains is to gain an understanding of the stakeholders and their needs. To do this, the Program initiated a mapping exercise for the furniture value chain during which an expert consultant conducted the interviews/field trips with more than 60 private companies in Georgia’s five regions over

4 The term ‘enterprises’ is used throughout this document to refer to those of all sizes, though in the Georgian context a great majority of the firms assisted will be micro and small and medium-sized enterprises (MSMEs) by international standards.the

USAID Economic Security Program – Contract No. 72011419C00001

a two-month time period. Interviews were also conducted with associations, NGOs, business service providers and financial institutions that support the value chain. This led to the creation of a report that mapped the location, contact information, products/services, et al. of 50 furniture companies, most of them SMEs. In addition to mapping the demographics of each company, the report included in-depth analysis of the challenges that create barriers for the private sector in improving firm level operations. The report also contained a list of recommendations (both on macro and business operations levels) related to the specific set of activities which support the MSME development in the furniture value chain. Finally, it highlighted potential linkages between the furniture and other value chains to promote cross- sector/value chain collaboration in promoting economic growth. The Program also escalated its involvement in e-commerce in cooperation with the sectorial associations and the private sector. This included support for a series of webinars that focused on different aspects of e-commerce, such as a) selling products online, b) selling services online, c) marketing products and services, d) technological platforms for on-line sales, e) technological platforms for on-line sales, and f) the logistics of supply chain management for e-commerce. Initially, the plan was to conduct three webinars, but due to high demand and interest from the stakeholders, the Program leveraged additional financial resources from TBC Bank which enabled the Program to conduct five online webinars this quarter. In total, 1,363 registrations were received across the series of webinars, out of which 711 people participated. The Program will use similar methodology and approach to implement the e- commerce capacity development webinars to facilitate the linkages among the Program’s target value chains.

The Program also designed, implemented, or supported activities that focused on COVID- 19, such as an activity with the Packaging Manufacturing Association of Georgia (PMAG), private sector and technical experts to design activities to facilitate the recovery of the packaging value chain. These discussions led to the launch of a grant RFA entitled, “Developing New Products, Services and E-Commerce Service Technologies,” the purpose of which is to support MSMEs to develop new products/services that will increase sales and improve the financial performance. In addition to this grant solicitation, the Program will work with the MSMEs to diversify the sales channels by introducing opportunities for digitalization and e- commerce.

2.2. Improve Firm Productivity, Production Capacity and Product Quality: The Program actively explored partnerships with the private sector to facilitate increased productivity, production capacity, and product quality. This included assisting MSMEs in the light manufacturing sector to improve productivity and establish functional business process management (BPM) systems. Lack of access to modern technology is one of the most critical challenges facing light manufacturing companies. As a result, the production capacity of most Georgian furniture production and packaging companies is low, which is an impediment both to serving the local market and to exporting. Most companies in the value chains also do not possess BPM systems that allow for efficient operations. To address this challenge, the Program continued working on the grant RFA entitled "Improving Firm Productivity, Productive Capacity and Business Process Management,” to improve existing or establish new production lines and/or to implement effective BPM systems to to lay the foundation for

USAID Economic Security Program – Contract No. 72011419C00001

increased sales and/or employment. In total 14 companies from furniture and packaging value chains submitted the applications under this RFA, of which the grant selection committee selected three for further consideration due to their technical merit. Currently, the Program is working with the selected companies to finalize the budget, conduct due diligence and agree on and implementation timeline.

The Program continued its work with the National Agency for State Property (NASP) to facilitate the creation of a full investment package (feasibility study, economic model, and business plan) for a pilot development project in Kutaisi. This activity will also increase NASP’s capacity to conduct such analysis on its own in the future, focusing on hundreds of state- owned properties around the country. Last quarter in late March, the Program announced an RFP to provide these services to NASP and finalized the process in May with the selected firm was Cushman & Wakefield (C&W), an international property development and real estate firm. C&W began implementation of activities in May and on June 25th it submitted the draft version of the first deliverable, the feasibility study. NASP’s team was very pleased with the detailed level of analysis that went into determining the feasibility of developing the pilot property into a multi-use entertainment and hospitality complex. C&W is now focusing on the remaining deliverables and the training of the NASP team and Kutaisi municipal representatives. The NASP team has also been involved in the entire process in a “learning- by-doing” approach that is the nexus of the Program’s capacity building strategy. The final deadline for all deliverables is the end of August 2020. C&W’s feasibility study is included in Annex 2.

In addition to its other productivity-oriented activities, the Program organized a series of meetings with relevant public, private, NGO, and BSO stakeholders in the Solid Waste Management/Recycling sector. These meetings were designed to provide the Program team with insight into challenges and opportunities within the sector that either create the impetus for or impediments to its development. For example, the Program met with one of the biggest waste management companies, LTD Sanitary, and discussed what type of activities the Program can design and/or to buoy growth within the sector. In addition, Program team members met with counterparts from the Caucasus Environmental NGO Network (CENN) and the Georgian Waste Management Association (GWMA) to discuss policy level interventions that can improve the sector’s competitiveness. During the next two months Program will continue meeting with stakeholders, conduct field trips to MSMEs and design a sector mapping exercise that will be a foundational element to its strategy in its year two workplan.

2.3 Improve Ability to Meet International Production Standards5: The Program continued its focus on assisting MSMEs in meeting international standards necessary for embracing global export opportunities and/or increased production for the domestic market. While the focus was primarily on companies involved in the 1:1 Market Linkages initiative, the Program took the broadest possible approach to this objective and thus included as many companies as possible. In doing so, it utilized a number of collaborative alliances, such as cooperating with the Bank of Georgia (BoG) to increase the technical skills of MSMEs the

5 The term “standards” in this document means international standards, certifications, licenses, and/or best practices. In encompasses any process- oriented mechanisms needed to make Georgian firms more competitive.

USAID Economic Security Program – Contract No. 72011419C00001

adoption and utilization of e-commerce. BoG has for some time cooperated with international e-commerce platforms such as Amazon, eBay, and Alibaba to facilitate market linkages with Georgian MSMEs. With this in mind, the Program began the co-creation of a partnership with BoG to increase the involvement of firms within its targets sectors and value chains. The Program will finalize a cooperation agreement with BoG in July to scale the breadth and reach of its e-commerce outreach to include an increasing number of MSMEs, as well as to increase their standards to benefit from participation in international platforms.

2.4 Continue Support to Enhance the Tourism Sector: The Program continued its involvement with various tourism stakeholders to ensure sustainable development Georgian tourism. The Program worked intensively with its primary government counterpart in tourism, the GNTA both, within ongoing activities as well as new ones that focused on mitigating the effects of COVID-19. This resulted in a clear and efficient strategy to address the crisis and the recovery period. The primary objective of the COVID-19 Tourism Strategy is to a) ensure that Georgia retains its brand as a leisure tourism destination in its target markets, b) assist Georgian tour operators and other tourism stakeholders that may be suffering economic losses during this time and c) ensure that the Georgian tourism industry will be ready to respond to pent-up demand that will surface when the COVID-19 crisis ends. A key part of the Program’s support for this strategy came through its subcontractor GTG, which assisted GNTA develop messaging, photos, and social media outreach to promote Georgia as a safe and health tourism destination. GNTA began utilizing the content and sharing it on their social media platform (the post on Instagram can be viewed by following this link).

GTG’s inputs into the broader “Georgia Tourism 2020 Strategy and Marketing Action Plan” resulted in the development of a brochure of content focused on four creative directions (aligned with respective MoESD agencies that are involved in tourism), online video classes, and other support mechanisms. In addition, the plan includes the production of eight short “Georgia is People” storytelling videos that feature Georgian influencers sharing their views on their favorite places in the country. To view three of these videos, please follow: Georgia is People - Aidan; Georgia is People - Zuka and Georgia is People – Nika.

The Program’s contention from the onset of the pandemic was that Georgia could not lose sight of its long-term strategy in terms of tourism development, which includes focus on specific international markets and demographics. The emerging opportunity, however, is in the scaling of domestic tourism, which provides tourism enterprises a way to earn income during the pandemic recovery period when borders are still closed. This being the case, the Program’s work with GNTA and other tourism stakeholders focused heavily on messages and products that would resonate both with domestic and international tourists.

As part of its long-term strategy for marketing and communications, GTG continued its work with four agencies within the MoESD that have linkages to tourism, namely United Airports of Georgia (UAG), the National Agency for Cultural Heritage Preservation (NACHP), the Mountain Resorts Development Company (MRDC), and Agency for Protected Areas (APA). In doing so, through a consultative process it assisted the agencies in first identifying 24 potential tourism products that could build the sector’s economy. Another consultative

USAID Economic Security Program – Contract No. 72011419C00001

process narrowed this list of potential products to 12 and finally to four finalists, on which feasibility studies will be developed. This consultative product development process represents the first time these agencies and GNTA have cooperated to develop specific initiatives that enjoy grassroots support and that are under a unified brand. It is also the first time the both primary and secondary attractions along with different tourism value chains have been connected to form specific product offerings.

Once the feasibility studies have been finalized, the next step will be to conduct a familiarization tour for local and international tour operators that highlight the four final products. GNTA has agreed to financially support this familiarization tour, which will likely be conducted as part of the Georgia Tourism Exposition, since the event will draw both international and domestic tourism enterprises.

The Program’s involvement in the messaging, branding, and marketing of Georgian tourism, while critical, must fall within the country’s overall strategy for tourism development. As such, the Program continued providing technical assistance to GNTA in this quarter to update the action plan for the country’s 2025 Tourism Strategy. Initially, the Action Plan focused on activities aligned with the National Strategy’s eight strategic objectives. However, to reflect on the impacts of the COVID-19 pandemic, the decision was made to add draft “Strategic Objective 9,” which reflects the emergency measures and guidelines recommended for the post COVID-19 recovery period. “Objective 9” was produced with GNTA and tourism stakeholders.

Also as part of its ongoing support for Georgia’s tourism sector, the Program ramped up its partnership with the Shida Kartli Governor’s Office and Gori Municipality to support: a) linking regional tourism attractions to extend the stays and economic impact of tourists in the region and b) developing Gori Fortress as a hub for this effort by transforming it into a living history exhibit and model for historical interpretation. With the support from the Governor’s Office, Program team members traveled extensively within the region to map potential attractions, which is the first step in development of a tourism route, and linked tourism product. This partnership grew out of necessity, as despite Shida Kartli’s apparent advantages in terms of location, attractions, and historical significance, on average, international tourists spend less than two hours in the region. Often, Gori Fortress even though it is a significant historical site, is not even included on the tour operators’ itineraries. This is likely due to its current status as a static attraction, offering little interpretation and virtually no historical context. The Program therefore focused on linking Gori Fortress with existing primary attractions such as the Stalin Museum and the Uplistsikhe Caves (sites receiving over 300,000 visitors annually) and a plethora of secondary attractions to form a tourism route that will increase visitor stays in boost income potential for regional tourism enterprises.

In this quarter, the Program worked with its subcontractor Solimar International to tap expertise from one of the world’s leading historical design and interpretation firms, Bucy Associates, to develop an interpretive site plan to transform the fortress into a living history center. The plan will include recommendations for interpretive indoor and outdoor signage, visitor trail planning, improved amenities (e.g. restrooms, et al.), and the conversion of a

USAID Economic Security Program – Contract No. 72011419C00001

recently renovated Soviet-era water tank located on the top of the fortress into a digital interpretive experience.

In addition to developing an interpretive plan for the fortress, the expert consultant will also support the development of a solicitation/procurement packet to build out the interpretive exhibit as well as the infrastructure improvements. All of this will be done in a collaborative way so that the NACHP, Gori Municipality, and Governor’s Office teams are fully involved in the process as a capacity building exercise. Dr. David Bucy, the expert consultant and CEO of Bucy Associates, began off-site work during this quarter and will come on site as soon as international travel resumes.

In parallel to Dr. Bucy’s efforts, Solimar International also fielded one of the foremost cultural heritage and adventure consultants in the region, Dr. Olaf Malver, to a) analyze all potential tourist attractions in Shida Kartli, b) develop a “route structure” that links them into an overall visitor experience, including history, culture, gastronomy, and adventure; and c) develop recommendations as to commercialization, marketing/promotion and product development. Dr. Malver has extensive knowledge of the country as he has lived in Georgia for many years, this provides him with a unique perspective on developing an overall tourism product in Shida Kartli that will be a magnate for high-value tourists. Dr. Malver will do similar work for the Samegrelo Region, using Dadiani Palace, the newly-created Botanical Garden, and mountain/adventure attractions as the nexus for an interconnected route of attractions. Both, Shida Kartli and Samegrelo regions are often seen as the “pass through/transit” destinations, therefore it is crucial for the economic development of the regions to attract high-value tourists and increase the average nights’ stay. The tourism stakeholders from these areas have requested assistance to help develop attractive tourism packages that can be introduced to Georgian tour operators, who in turn can market them to international outbound operators and increase tourism revenues in these regions. The intervention in Samegrelo will support the local DMO and the region in Zugdidi’s development into the regional hub for visitors. During this quarter, Dr. Malver began data gathering and field work, focusing first on the Shida Kartli region. As part of this effort, the Program will also scale the USAID Zrda Activity’s interventions in these regions. Dr. Malver’s and Bucy Associates work are being done in parallel and final deliverables are expected in the first quarter of 2021.

The Program’s product development in tourism extended beyond just two regions, however, as it also supported the development the Freeride World Tour qualifier in partnership with MRDC. The Program received proposals this quarter and will evaluate them and begin implementation in the next quarter, weather conditions permitting.

While important, product development would not be sufficient without its connection to ongoing marketing efforts. As such, the Program supported a video series entitled, “Discover Georgian Gastronomy,” where the Gastronomic Association of Georgia highlighted the country’s culinary attractions in six regions (Samegrelo, Svaneti, Adjara, Samtskhe-Javakheti, Imereti and Kakheti). Production of the beta versions of all six videos was completed within this quarter. The gastronomic videos focus on the convergence of culinary/wine, cultural, and mountain/adventure tourism and are especially focused on promoting domestic travel. In each

USAID Economic Security Program – Contract No. 72011419C00001

video, a famous Georgian chef interacts with local cooks and tourism leaders to highlight the best assets the region has to offer. The DMOs from each region were heavily involved in both the planning and promotion of the videos, which will in the early stages promote local tourism and facilitate capacity development of the DMOs. The videos will also be promoted by GNTA through paid social media channels, ensuring that they reach wider audiences. This will aid in the country’s tourism recovery. Moreover, the videos will lay the foundation for the “50 Best Explores Georgia” campaign that will feature some of the world’s top chefs working alongside noted Georgian counterparts. “50 Best Explores Georgia” will be held during the fall of 2020 and will provide an international marketing campaign for Georgia during a most critical period of the COVID-19 recovery. The campaign will position the country as a leading destination for gastronomy tourism and as a safe destination, thus positioning Georgia favorably to recapture key tourism markets and demographics.

Capacity building for tourism sector entities is also critical to the country’s development. During this quarter, the Program launched its long-awaited e-learning (DMO) Development Course. The course features practical instruction, networking, and global best practices for five Georgian DMO leaders and their teams, as well as representatives of the Adjara Tourism Administration and regional/municipal governments. The course is part of the Program’s strategy to assist DMOs become sustainable and to forge partnerships with the regional and local administrations. The Program is co-hosting the course with GNTA and it is partnering with international organizations such as the Sedona Chamber of Commerce and Industry and others to provide mentorship and support to the Georgian participants. The DMO Development Course also includes participation by global DMO experts who are providing information and mentorship to their Georgian counterparts. In addition, as part of the course, each DMO has a local intern and support from international interns that assist them with elements of the course and coordinate follow up. This course is one part of the Program’s goal of promoting regional tourism by creating strong institutions, linked attractions, and commercial appeal. The course’s topics focus on the most critical elements of regional tourism promotion, as well as institutional development for the DMOs.

To ensure that the course is tailored to, and addresses particular needs of each DMO, the Program’s subcontractor, Solimar International held one-to-one meetings with each DMO to assess their needs and challenges. In total, 33 participants registered on the e-learning platform and thus have access to its customized content on Destination Management and Development. Other stakeholders such as: NACHP, Regional Municipality representatives, donor organizations, et al. also expressed interest in the program and have registered to participate and/or access the programs content. The DMO Development Course can be viewed by following this link and registering as a participant.

USAID Economic Security Program – Contract No. 72011419C00001

The Program quickly responded to assist the private sector during the COVID-19 lockdown by undertaking a number of initiatives, including partnering with the ErtianobaFoundation to mobilize and train volunteers to provide much needed support for businesses and individuals throughout the country. The project provided support for the Program’s partners and addressed the magnitude of the COVID-19 crisis both on the tourism sector and on the vulnerable population in Georgia’s regions. By providing health and safety trainings to 58 female and 42 male volunteers, the Program a) allowed GNTA to redirect its efforts to tourism messaging, content and strategy instead of handling quarantine issues, b) provided other agencies/institutions with the support needed to address urgent current needs, c) ensured the safety and security of individuals, d) provided some level of logistical support for communities outside of Tbilisi, including multi-ethic, multi- religious minority communities, e) slowed the spread of the COVID-19 virus, f) provided training/experience to volunteers in crisis/disaster management, and g) supported the hospitality and other industries that were affected by the current crisis. Due to the restrictions on travel during the lockdown, the trainings were conducted online. A brief promotional video of the trainings can be viewed here.

As the lockdown eased, the Program supported GNTA in launching health and safety videos for accommodation providers and airports. The videos focus on new health/safety standards that are aligned with the government’s COVID-safe destination policy. The videos can be viewed at following these links: airports and accommodation providers. Within a week, the video regarding health and safety standards at airports gained more than 28,000 views and combined with 25,000 views for the accommodation standards video. The videos will help Georgian accommodation providers and airport personnel better understand the regulations and prepare for the both international and local visitors, ensuring safety and compliance with government regulations. The video developed for airports will also be featured in all Georgian airports and thus will be viewed by potentially millions of arriving and departing passengers, promoting the country as a healthy option for travel, leisure, and business.

The Program also harnessed international resources to facilitate the sector’s visibility and viability during the COVID-19 recovery period. One such resource was collaboration with Steller to host a webinar on May 12th, “Getting Back to the Business of Tourism.” The webinar, which was done in a live format, featured Expedia.com co-founder Richard Bangs and Steller CEO Peter Bryant. The live webinar featured Steller CEO Peter Bryant who discussed practical actions for tourism agencies and enterprises to tell their stories, during

USAID Economic Security Program – Contract No. 72011419C00001

and after COVID-19 recovery period. The Steller mobile application is the world’s number one travel storytelling application and the webinar’s focus was on utilizing it to drive messaging that Georgia’s tourism remains alive and well. The live event was a second in a series of Meetup events designed to link global practitioners to networking opportunities and to share best practices. The webinar also provided practical information on global strategies to regain tourism visibility and access to high-value customers and laid the groundwork for Steller’s “Digital Day in the Life of Georgia” campaign, which will take place in the fall of 2020. The webinar drew a live audience of 120 participants, which is the maximum allowed by the platform utilized, and participants represented a number of countries in addition to Georgia.

All of the activities conducted within Component 2 during this quarter are tied to initiatives and/or goals in the Program’s other components, thereby ensuring a complex approach to implementation. The foundation for these activities was built on information obtained during site visits to the regions, as well as engagement with GNTA as the lead marketing entity in tourism.

The status for Component 2 activities under the year one workplan is included in the following table:

Table 5: Component 2 Workplan Activity Status

Task Start End Deliverable/Milestone Status Support Market Linkage Pilot January July 2020 List of Enterprises Ongoing Initiative 2020 Initiate “Export Road Map” List of Enterprises; Curriculum; List of March Activity for Market Linkage July 2020 New Export Partnerships and Volume Ongoing 2020 Participants of Exports Support Market Linkage August Not Yet May 2021 List of Enterprises Second Initiative 2020 Started Initiate “Export Road Map” List of Enterprises; Curriculum; List of September January Not Yet Activity for Market Linkage New Export Partnerships and Volume 2020 2021 Started Participants of Exports Mapping of Regional Economic October September Potential and Program Strategy; Action Plan Ongoing 2019 2020 Interventions Review, Revision, Expansion, January September Content; Portal Design; Marketing and/or Marketing of Creative Ongoing 2020 2020 Plan Industries Platform List of Companies Involved; List of Furniture Production Standards March September Production Standards to be Ongoing Activity 2020 2020 Upgraded; Customized Action Plans for Each Company

USAID Economic Security Program – Contract No. 72011419C00001

Task Start End Deliverable/Milestone Status Integration of DMOs and October September Recommendations for Sustainability Development of Sustainability Ongoing 2019 2020 of DMOs Enablers Creation and Operationalization December List of Group Members and Actions of Informal Technical Working Ongoing Ongoing 2019 Taken Groups Targeted Marketing to Potential New/Expanded Markets for October September Market Analysis Report Ongoing Georgian Products and 2019 2020 Services Potential scaling of Selected Zrda Activities that are January September Consistent with the Program’s List of Initiatives; Collateral Ongoing 2020 2020 Approach (See granulated Activities in Above Narrative) Continued Technical Assistance to GNTA in the Continued Development and October September Action Plan Ongoing Update of an Action Plan to 2019 2020 Operationalize the 2025 Tourism Strategy

Component 3: Industry-Led Workforce Development

Component 3 focuses heavily on the alignment of education and workforce skills to support industry needs and lay the foundation for investment, high(er)-value job creation, and revenue increases. Its foundational element is the development of sustainable skills-development systems that will generate a pipeline of highly-trained and well-paid labor in support of priority sectors and value chains. The following activities were initiated during this quarter:

3.1 Strengthen Linkages Between Industry, Government, and Educational Institutions: During this quarter, the Program awarded a grant to Akaki Tsereteli State University (ATSU) to facilitate German language training-for-employment in conjunction with shared intellectual services providers as well as hospitality companies. ATSU’s project entitled, “German Language for Successful Career” focuses on upgrading the German language skills of up to 40 individuals from Imereti and surrounding regions to meet C1 level standards, which is the minimum threshold needed for most shared intellectual services positions as well as employment in internationally-branded hotels. The training, which commences in July 2020, will provide a pathway to employment for students, as well as establish a systematic training regime that will be continued by ATSU.

USAID Economic Security Program – Contract No. 72011419C00001

The Program partnered with another higher education institution, Caucasus University (CU), to a) provide technical support for obtaining United Nations World Tourism Organization (UNWTO) TedQual certification for its bachelors’ and masters’ degree programs to ensure the continual improvement of tourism education, training and research programs offered by the university, b) identify and initiate contact with potential partners for development of collaborative graduate degree program for Hospitality Management, c) identify and initiate contact with United States universities to lay the groundwork for the creation of dual degree or professional certification programs in tourism and hospitality management, and d) initiate partnership with the George Washington University to implement an International Consulting Practicum. This collaboration was finalized through the signing of a Memorandum of Understanding between the CU and the th Program June 25 . Work has already begun on the TedQual certification, utilizing technical expertise supported by the Program, and negotiations commenced with U.S. universities in terms of collaboration.

3.2 Support Business to Create On-the-Job Learning Opportunities: During this quarter, the Program published an RFA that focused on designing internship opportunities for university students to provide strategy, marketing, and technological support for MSMEs during the COVID-19 recovery period. Under this RFA, a grant will be awarded to an association that will recruit, train, and place the volunteers with local businesses that meet pre-set criteria and that are willing to provide a cost-share match in terms of a stipend to the interns. The #Go4It internship initiative will not only ensure provision of practical on- the-job learning environment for university students but will also set a precedent for future on-the-job training programs. The Program hosted an informational session on June 30th for organizations interested in applying for the grant. The deadline for submission of applications is July 22, 2020.

Internships are a value the Program holds in high esteem and thus it requires all grantees to host at least one intern. Two of its grantees, Key Management Solutions and the Georgia ICT Cluster recruited three interns who are assigned to fulfill the tasks related to project administration and coordination, communication and data analyses. Other Program’s grantees to date (PMAG, the E-Commerce Association of Georgia, and ATSU) are committed to employ up to 15 interns starting in July 2020.

Over coming quarters, the Program will continue to work with businesses individually and through its BSO partners to promote internships that lead to full-time employment.

3.3 Develop Training Programs for Targeted Sectors: In response to the second round of the Annual Program Statement (APS), focusing on Training for Life (T4L) Industry- Led Workforce Development, 13 BSOs, NGOs, public entities, educational institutions and

USAID Economic Security Program – Contract No. 72011419C00001

MSMEs submitted concept notes. The Program’s evaluation committee selected three concepts to move to the full application process. All selected concepts will ensure creation of new industry-driven skills and knowledge, as well as facilitate improvement of efficiency of business processes within the companies. This will lead to increased competitiveness of MSMEs, by expanding their productivity, export potential, and ability to create high-value jobs across the Program’s priority sectors. The applications will be submitted to USAID for review and approval in July 2020.

Also in this quarter, the Program signed a grant agreement with the Georgian ICT Cluster to foster integration of digital technologies into key areas of business operations of MSMEs. This activity was designed to facilitate digital transformation among MSMEs in order to assist them in operating efficiently in either virtual (work-from-home) or blended (combination of work-from-home and static) environments. The ICT Cluster distributed a survey to determine the interest of MSMEs in transitioning to a digital or partially digital environment. Six BSOs involved in the CAP initiative (Association Design Georgia, Georgian Incoming Tour Operators Association, Georgian Eco-tourism Association, ELKANA Biological Farming Association, Georgian Tourism Association, and the Association of Communication Agencies of Georgia) also participated in the survey. The ICT Cluster analyzed 33 MSME survey respondents and selected 10 to support in terms of facilitating digital transformation through the creation and implementation of technical solutions for virtual work, including integration of hardware, software, and training. This laid the groundwork for future interventions as a plethora of MSMEs continue to pursue digital or partial digital transformation.

3.4 Upgrade Quality and Safety Standards of Education Service Providers: The Program’s evaluation committee selected two applications for shortlisting under its RFA entitled, “Introduction of Quality and Safety Management for International Certification and Standardization of Systems.” The RFA’s objective was to assist interested companies in introducing and implementing quality and safety management standards and systems that will enable them to increase sales/revenues and/or facilitate creation of high(er)-value employment. Activities described under the both selected applications will serve to improve the companies’ overall performance and business operations, as well as optimization of their resources, establishment of new market linkages, and increase of their export potential. This RFA was linked to the 1:1 Market Linkages initiative as companies involved in this effort were able to submit concept notes to implement their customized strategies were not guaranteed a grant award. The applications will be submitted to USAID for review and approval in July 2020.

3.5 Link Graduates with Entrepreneurial and Employment Opportunities: During this quarter, the Program supported Key Management Solutions (KMS) to translate and customize a training program for those wishing to enter the hospitality industry. This included training programs certified by the American Hotel and Lodging Educational Institute (AHLEI) for four different professions, including: Hospitality Maintenance Employee, Culinary Course, Workplace Safety, and Hospitality Supervisory Skills. Furthermore, KMS developed two more courses on General Service and Hospitality Basics, as well as English for Tourism.

USAID Economic Security Program – Contract No. 72011419C00001

To ensure interest from citizens in Adjara and its neighboring regions, Key Management Solutions Utilized used various media channels (Adjara TV Channel, the online daily portal Batumelebi.ge, and Facebook posts to disseminate information about the certification training courses and the opportunity potential employment. Furthermore, the Adjara Tourism Administration actively supported the distribution of information and enrollment of potential training participants into KMS’ training program. As of June 30th, 120 participants had registered for the different certification training courses. The announcement will remain open until the end of July.

On June 29th, KMS launched its training program in Hospitality Maintenance, with 25 individuals participating. Upon successful completion of the AHLEI certification training course, KMS partner the Alliance Group plans to employee at least 15 of the graduates at one of its internationally-branded hotels in Batumi.

The Program’s T4L workforce initiative also expanded this quarter through a grant to the PMAG. The purpose of the grant is to facilitate improvement of workforce skills of those engaged in Georgia’s packaging value chain. The activity is being initiated in conjunction with the Georgian Technical Training Center (GTTC). Within the framework of the partnership between the private sector and educational organization, PMAG will facilitate development of two short-term certification training courses on Mechanical Engineering and Electrical Engineering. The activity will allow 48 employees of PMAG member companies and 48 new students to gain industry-specific skills in packaging. At least 80 % of the graduates will obtain high-value job opportunities in PMAG member companies. PMAG has already started training needs assessment and face-to-face interviews with the packaging companies to identify the specific skills and knowledge the companies require. The courses will be designed to address these requirements and thus prepare graduates for successful careers in the packaging industry.

3.6 Design Sustainable Workforce Development Program: Due to COVID-19, the Program’s contracted service provider, INTERAVIA Training Center of Ukraine, had to suspend its comprehensive training program for Kutaisi International Airport ground handling staff. The training courses will be re-launched upon lifting of the ban on flights between Georgia and Ukraine.

The Program also awarded a grant to the E-commerce Association of Georgia to facilitate development of digital business skills and capacities of 50 MSMEs operating in its priority sectors and value chains. In addition to digital skills enhancement, this grant activity will provide an opportunity for MSMEs to benefit from either the development of or integration onto e-commerce platforms. The E-Commerce Association disseminated information about the activity through various channels, including the jobs.ge, marketer.ge and Facebook. In response to the announcement, 82 MSMEs expressed interest in participating in the activity. As a result of a careful screening based on pre-set criteria, 56 MSMEs, operating in education, training, tourism, gastronomic and artisan value chains, were selected to receive assistance. From June 24-26th, the ICT Association hosted online digital marketing training for the participants, which was comprised of both theoretical and practical sessions. The participants provided positive feedback on the training, admitting that practical and hands-on information,

USAID Economic Security Program – Contract No. 72011419C00001

provided during the workshop enabled them to refine understanding about the tools, advantages and benefits of digital marketing.

The status of Component 3 activities under the year one workplan is included in the following table:

Table 6: Component 3 Workplan Activity Status

Task Start End Deliverable / Milestone Status Create or Facilitate Informal Ongoing – October February IAB Structure and Industry-Led Skills Development continually done 2019 2020 Participant List Mechanisms on ongoing basis Outreach to Establish Internships October Compendium of and other On-the-Job Ongoing Ongoing 2019 Opportunities Opportunities Campaign Marketing January Initiation of #Go4It Campaign Ongoing Materials and List of Ongoing 2020 Participants Development of T4L Initiative Focusing on Skills Development List of Participating December September Assistance Linked to Target Institutions; Curriculum; Ongoing 2019 2020 Sectors/VCs (See Specific Program Overview Initiatives in WP Narrative) Launch 1:1 Initiative on List of Relevant Education Increasing Standards and Safety Institutions and Programs; to Include Firms in the Market October November List and Overview of Ongoing Linkages Initiative that have the 2019 2019 Applicable Standards; Will and Financial Capability to Workplan to Integrate Achieve the Standards Standards October November Ongoing – delays Select Participating Firms List of Participating Firms 2019 2019 due to COVID-19 Co-Design of Customized Safety October Customized Plans for Ongoing – delays and Security Standards Program April 2020 2019 Achieving Standards due to COVID-19 with Participating Firms Increase the Worker Understanding of and Ability to October December Licenses and Certifications Ongoing – delays Achieve Quality and Safety 2019 2019 for Workers due to COVID-19 Standards Delayed until Awarding of 10-15 Standards and December January Summer Due to Grant Award Documents Certifications Grant 2019 2020 Late Release of RFA Develop APS Grant Mechanism List of Employment and October November to Link Workforce Training to Job Career Counseling Completed 2019 2019 Opportunities (T4L) Services Part of awards completed, part of Awarding of 10-15 Skills December January Grant Award Documents the proposals are Development Grants 2019 2020 in the process of approval Identification of Companies/ Organizations that will Partner to Provide Direct Linkages to October List of Companies and Ongoing Ongoing Employment or that will 2019 Types of Opportunities Contribute to Strengthening the Value Chain

USAID Economic Security Program – Contract No. 72011419C00001

Component 4: Building Public-Private Partnerships

Component 4 focuses heavily on transactions that will enhance investment, high(er)-value job creation, and revenue increases. the Program’s Value Chain Assessments included a comprehensive mapping of industry leaders, investment funds and potential private sector, GOG and donor partners that can be engaged to increase the impact of Program interventions in targeted value chains. The following activities were initiated this quarter to lay the foundation for success in partnership development:

4.1 Co-Creation Workshops in Each Sector to Identify Partnership Development Fund Opportunities: A second tourism co-creation workshop was designed during this quarter and scheduled for March 10th with over 150 participants expected but was postponed until August 5th due to the onset of the COVID-19 crisis. This will be the first of four co- creation events that are designed to promote investment linkages that lead to high-value employment and increased sales/revenues. If travel restrictions relative to COVID-19 are not lifted in time for the event to be held in “live” form on August 5th, it will be reconfigured into an e-conference format that focuses on actions to aid the recovery of Georgia’s tourism sector. 4.2 Outreach to International Partnership Networks: Component 4 facilitated outreach to a number of international organizations in terms of exploration of partnerships. This included Universal Pictures (creative industries), the E-Commerce Alliance/Etsy (ICT and e- commerce); Steller (Tourism); and 50 Best, among others. The Program is also planning a second iteration of master classes with Universal Pictures for Georgian creative industries professionals. Other partnerships are in various stages of finalization in terms of the pipeline. 4.3 Identifying and Supporting Partnership Opportunities: To date, the Program has initiated $853,401 in partnership leverage (see Section V). While COVID-19 delayed some partnership opportunities, it opened the door for others that are being considered. There were no new partnerships finalized for this quarter, but to date the Program is well ahead of its planned impact in terms of initiation of Public-Private Partnerships (PPPs) and Global Development Alliances (GDAs). This pipeline does not include revenue-increasing opportunities based on the Program’s support for GNTA’s re-alignment of target markets and demographics. It also includes only direct impact. Indirect impact will be assessed according to the multipliers that were finalized this quarter by the International School of Economics of Tbilisi State University. The multipliers will be presented to USAID, representatives of local think tanks, and appropriate government agencies in the fourth quarter.

4.4 Monitor Investment and Deal Outcomes: During this quarter, the International School of Economics of Tbilisi State University (ISET) developed methodology for the creation of indirect impact multipliers that will be used by the Program, Enterprise Georgia, and others to determine the overall impact of their economic assistance. The Program’s leadership approved the methodology, which is based on input-output theory, and the multipliers will be finalized by the end of July 2020.

USAID Economic Security Program – Contract No. 72011419C00001

Even in the midst of the pandemic, the Program continued to pursue opportunities for investment, reaching out to both local and international partners. Its partnership with Enterprise Georgia deepened in order to lay the foundation for investment opportunities during the mid-late recovery period. The status for Component 4 activities under the initial workplan is included in the following table:

Table 7: Component 4 Workplan Activity Status

Task Start End Deliverable / Milestone Status Overview of Co- Implement Four Co-Creation October September Creation Workshop; Ongoing Workshops 2019 2020 Agenda; Materials Cancelled Due to Change in PPP Provide Technical Support to December September Type of Support; Leadership and PPP Agency 2019 2020 Reports Abolishment of the Agency by the GOG Design and Lay the Contact List and Profiles Foundation for Launch of Site October September of Site Locators/ Firms Locators Familiarization Tour Ongoing 2019 2020 and Potential Investors; in Conjunction with Enterprise Program for FAM Tour Georgia Continued Outreach to Georgian Embassies, November September Outreach Materials; Ongoing Diaspora, and Commercial 2019 2020 Briefing Materials Organizations Contact List of Georgian Reception for Diaspora Postponed due to the July 2020 July 2020 Diaspora with Interest in Investors COVID-19 pandemic Investment Development of Fitness Test October October Template for Deal Notes Completed for Potential Opportunities 2019 2019 Approval of Courtyard by October October Deal Note Completed Marriott Kutaisi Opportunity 2019 2019 Design and Implementation of

Training and Market Linkages

Mechanisms for Courtyard by October September Program Design and Completed Kutaisi Opportunity 2019 2020 Materials Development of Additional

Opportunities for Investment, December September Job Creation, and Revenue Deal Note(s) Ongoing Increases 2019 2020 Integration of Additional October September Opportunities into the 2019 2020 Investment Pipeline Deal Notes Ongoing

Gender and Youth Engagement

During this quarter, the Program continued its effort to successfully implement its Youth and Gender Engagement work plan activities. One such effort focused on the attraction of new partners and the design of capacity building initiatives to promote diversity and gender. This allowed the Program to raise awareness on the issues of diversity, with the specific focus on women’s economic empowerment.

USAID Economic Security Program – Contract No. 72011419C00001

At the onset of the quarter, the Program’s Gender and Youth Specialist refined the draft Tourism Action Plan, the Program developed in partnership with the Solimar International to ensure the it adequately addresses gender inequalities and the needs of diverse groups, particularly women, youth, and people with disabilities. The Gender and Youth Specialist took special care to ensure that gender was integrated into the Plan’s objectives, activities, budgeting and indicators. She did this by offering recommendations for inclusion of specific interventions focused on women and youth and on ways to make the Plan’s branding and marketing more focused on diversity. The Program’s Gender and Youth Specialist also provided input in shaping targeted initiatives fostering multi-stakeholder dialogue on diversity to ensure that the next phase of the Plan is better aligned with Georgia’s gender and youth priorities.

A significant step toward the economic empowerment of women came in this quarter, with the Program’s support for the creation of a Women Who Tech Working Group (WWT WG). This working group will provide networking, informational opportunities, and support for Georgian women working in the technology industry with special focus on closing the wage gap between male and female technology workers. Initially, the Program identified the main stakeholders from public and private sector, international organizations, and NGOs that support gender equality and women’s empowerment in the ICT sector. It then organized online orientation meetings with some of the stakeholders after which the Program’s Gender and Youth Specialist sent a formal invitation letter to each potential member outlining their roles and responsibilities. This initiative received positive feedback from stakeholders as to date 29 organizations expressed their willingness to participate in the working group. A list of founding members is noted in the following table:

Table 8: Women Who Tech Working Group Members Name Organization 1 Ketevan Khutsishvili EU (Delegation of the European Union to Georgia) 2 Nino Esakia EU4Digital 3 Ekaterina Meskhidze GIZ Georgia 4 Tamara Taliashvili COE Georgia (Council of Europe) 5 Irina Yegorova UNRGID (United Nations Department of Political and Peacebuilding Affairs) 6 Ana Pashalishvili UN Women 7 Elene Gabelaia UN Women 8 Lela Merabishvili UN Women 9 Lela Maisuradze Action Against Hunger 10 Naia Begashvili Action Against Hunger 11 Marika Kurdadze NDI (National Democracy Institute) 12 Ida Bakhturidze UNFPA Georgia (United Nations Population Fund) 13 Nino Dolidze WECF Georgia (Women in Europe for Common Future) 14 Ellen Wichmann IRI (International Republican Institute) 15 Salome Chagelishvili British Embassy 16 Maiko Grdzelishvili Women Fund in Georgia 17 Natya Ghvinashvili Taso Foundation 18 Keti Patsatsia NALA (National Association of Local Authorities of Georgia) 19 lana labadze Association of Young Economists of Georgia 20 Tamar Khutsishvili GeoLab 21 Nino Bigvava KREBA 22 Naino Kashibadze FINCA

USAID Economic Security Program – Contract No. 72011419C00001

Name Organization 23 Anatoly Motkin Wandio 24 Nino Nanitashvili StrategEast 25 Natia Tavartkiladze GoogleTechMakers 26 Zurab Pertaia AltaSoft 27 David Bolkvadze IT Academy 28 Pati Tsereteli Greentest 29 Ketevan Ebanoidze Innovative Education Foundation 30 Sesili Verdzadze Impact Hub Tbilisi 31 Ana Vashakmadze SDA (Public Service Development Agency) 32 Nana Dikhaminjia GITA (Georgia’s Innovation and Information Agency)

Given the composition of the working group, the Program is confident that it will provide a forum for organizations working on empowering women in the sector to share ideas, discuss challenges, and develop strategies for advancement.

The Program also continued its integration of gender and diversity issues into the CAP and grant initiatives by conducted a a) gender and disability mainstreaming capacity mapping process for the participating BSOs and b) coaching grantees on diversity-sensitive implementation of their activities.

Specific to grantees, the Program’s Gender and Youth Specialist reviewed the four approved grants for their adherence to the principles of diversity. After doing so, she provided practical and comprehensive recommendations on how diversity elements could be incorporated into each. The recommendations varied from providing the guidelines on how to plan trainings, select the participants, collect data, to helping them identifying strategies for implementing gender and diversity inclusive communication campaigns. Following the initial grant kick-off meeting, the Gender and Youth Specialist held one-hour long tailored seminars for each grantee, thereby ensuring their understanding of the Program’s expectations with regard to diversity.

The Program requires an analysis of all its strategies and reports through the lens of diversity and thus the Gender and Youth Specialist devoted significant time to this review. Specifically, the Program integrated gender and diversity considerations within the Partnership Development Fund Manual so that this funding mechanism fully includes principles of gender equality. In the same vein, she worked closely with the Component Leads in the process of developing the RFAs and Scopes of Work (SOWs), providing specific recommendations to ensuring that ongoing grant opportunities contribute to empowerment of vulnerable groups and their equal access to the Programs’ products/services. Integrating youth and gender consideration at the initial, application stage is a well-tested and effective approach to assist applicants in designing initiatives with diversity in mind. For example, as a result of these interventions, special measures were put in place to ensure the health and safety of volunteers that were part of the Program’s support for the COVID-19 response.

The Program conducted a highly-effective and popular Wednesday Webinar on “Promoting Women in Leadership Positions.” With over 550 views on YouTube and many more on other mediums, the webinar obviously resonated with stakeholders.

USAID Economic Security Program – Contract No. 72011419C00001

During the next quarter, the Program will continue its efforts to ensure that youth, women, and marginalized groups are included in its programming, monitoring and evaluation efforts, and operations. In addition, it will organize its first Women Who Tech working group meeting, as well as continue to work with BSOs and grantees to use the newly developed Guide to Gender and Disability Mainstreaming as a capacity mapping tool, allowing them to develop strategies for supporting diverse economic growth.

Table 9: Youth and Gender Workplan Activity Status

Program Youth & Gender- Component Focused Action Start End Output/Outcome Status Program Level Review all October 2019 December -List of recommendations Completed existing 2019 and comments documents (workplan, MEL, et al.) to ensure gender and youth inclusion Augment the October 2019 September -List of specific actions to Ongoing implementation of 2020 assist in strategy the GOG Gender implementation and Social -Informed team members Inclusion Strategy -Gender responsive by identifying project activities specific interventions, which the Program can initiate to provide employment opportunities for youth and women. Consult members October 2019 September -Recommendations and Ongoing from business, 2020 content for gender policymaking, and sensitization training the NGO -Informed team members community as -Gender responsive part of the youth project activities and gender analysis and ongoing efforts to integrate gender into the strategic approach Develop and January 2020 September -Informed team members Planned for conduct gender 2020 -Regular dialogue on Q4 and social gender inclusion training among project staff as a pilot and refine for stakeholders Participation in October 2020 Ongoing -Share information on Ongoing UN Women’s women’s empowerment Gender Team activities and ensure Group coordination Participation in January 2020 Ongoing -Share information on Ongoing IRI’s Youth youth engagement and

USAID Economic Security Program – Contract No. 72011419C00001

Program Youth & Gender- Component Focused Action Start End Output/Outcome Status Leadership ensure integration into Working Group programming Develop metrics October 2019 Ongoing Structural controls for Ongoing for tracking the monitoring success of Program’s impact gender and youth on youth and interventions women Component 1 Assess the % of November Ongoing Understanding of youth Ongoing youth and women 2019 and women involvement involved in in business activities business development, export, and other programming Conduct gender February 2020 Ongoing Informed counterpart Completed and social inclusion training with business associations, Chambers of Commerce, clusters, and other stakeholders Assess the % of December Ongoing Gender equality Ongoing organizational, 2019 considerations included cluster, Chamber in all activities and other stakeholder staff that employee youth and women in key leadership positions Engage with December Ongoing Inclusive project activities Ongoing youth and 2019 women’s associations to devise innovative interventions for engagement of youth and women into Program activities Component 2 Assess number of November Ongoing Insure inclusive activities Ongoing female and youth 2019 owned-managed enterprises involved in Program activities Under the ICT February 2020 Ongoing List of participants Ongoing Cluster, develop a “Women Who Tech” working group to identify and overcome obstacles for women in the ICT, BPO, and creative industries value chains.

USAID Economic Security Program – Contract No. 72011419C00001

Program Youth & Gender- Component Focused Action Start End Output/Outcome Status Component 3 Promote and January 2020 Ongoing Gender equity and Ongoing facilitate the T4L diversity of thought and #Go4It incorporated into core initiatives as project activity vehicle conduits for youth Inclusive practices and women to demonstrated to all have access to counterparts increased skills and high(er)-value employment

Publicize success January 2020 Ongoing Published success Ongoing stories from the stories support women T4L and #Go4It and youth empowerment initiatives that focus empowerment of youth and women Explore and October 2019 Ongoing Database of best Ongoing advise practices and educational opportunities for women institutions and and youth training providers Increased opportunities on innovative for women and youth academic and skills- development programs that link youth and women with potential job creation opportunities Target female January 2020 Ongoing Diverse student body Ongoing youth for inclusion Development of inclusive in T4L and #Go4It pool for job initiatives candidates/workforce Component 4 Develop and January 2020 Ongoing Strengthened capacity of Ongoing implement female and youth innovative workers workforce and More diverse, inclusive, skills and sustainable supply development chain for targeted sectors programs that prepare female workers for employment in targeted sectors and value chains

Communications and Outreach

To address the COVID-19 crises in Georgia, the Program’s Communication Specialist developed a strategy that focused on promoting Program’s critical and immediate response in support of businesses, government agencies, and BSOs as they navigated the pandemic’s uncharted waters. The response included partnership with the 1anoba Foundation to mobilize volunteers across the country, as well as support for e-commerce and digitalization through the E-Commerce Association of Georgia and the Georgia ICT Cluster. The Program publicized its COVID-19

USAID Economic Security Program – Contract No. 72011419C00001

response in a variety of ways, both through social media and taped/live events such as the Wednesday Webinars and Meetup Series. In terms of the latter, the Program hosted live webinars that focused on “Getting back to the Business for Tourism” in conjunction with Steller and a “Global Entrepreneurship Meetup” in conjunction with GITA. While both live webinars were successful, the tourism event drew more than 130 people participants. On May 7th, DAI’s entrepreneurship experts Zaki Raheem and Doug McLean unveiled practical tips for entrepreneurs in navigating the COVID-19 crisis, drawing a live audience of approximately 135.

The Program was also integrally involved in promoting USAID’s support for other COVID-19 initiatives such as the creation of animated health and safety videos to promulgate the “Georgia Safe” brand.

The Communications Specialist also worked with the grants team to ensure appropriate publicity and communication during informational sessions, two of which were held on June 25th and 30th this quarter, on the Program’s various RFAs. In addition, she worked with grantees to ensure their compliance with USAID branding and communications requirements.

The Communications Specialist was also heavily involved in designing the video series entitled “Explore Georgian Gastronomy,” which was implemented in partnership with the Gastronomic Association of Georgia. The project was promoted by Imedi TV. At the studio visit, the guests discussed the activity’s main themes and highlighted the Program’s support. Recently, Rustavi 2 also reported on the initiative and underscored the Program’s involvement. During this quarter, the Program moved forward with the implementation of its communications strategy for social networks. This included a total of 48 posts on the Program’s official Facebook page, 12 posts on Instagram and 11 video stories on its YouTube channel. During this quarter, the Facebook page gained a total of 153,031 views. Since the last quarterly report, the number of “likes” on Facebook has increased from 2,094 to 2,663.

USAID Economic Security Program – Contract No. 72011419C00001

In addition, the Program initiated and promoted the “Wednesday Webinar” series, launched on April 15, 2020, which focused on providing a global audience with access to expertise from top business, community, and government leaders from around the world. Ten videos were produced as part of the Wednesday Webinars series. The table below highlights the dates, topics, and people views for each session:

Table 10: Wednesday Webinar Dates, Topics and Coverage Date Topic Speaker # of Views 10 Things You Need to April 15, 2020 Know About Crisis Hugh Hough and Alice Michele, Green Team 513 Communications for the Global Tourism Sector 10 Things You Need to April 20, 2020 Susan Saksa, Former CEO, Leadership Know About Grant Proposal 25,078 Pikes Peak, Colorado USA Writing April 29, 2020 10 Things You Need to Mark McCord, COP, USAID Economic 16,644 Know About Leadership Security Program How to Retool Your Hiring Process During COVID19: May 6, 2020 Claire McTaggart, CEO, SquarePegs 23,810 Recruiting Opportunities and Best Practice Negotiation Skills/Everybody Lies: The Mark McCord, COP, USAID Economic May 13, 2020 681 Good, Bad, and Ugly of Security Program Negotiations Ten Things You Need to May 20, 2020 Imran Vaghoo, American Higher Education Know About Motivating 14,620 Consulting Teams in a Virtual Setting Ten Things You Need to Jeri Bisbee, Owner, Keys to Lead, LLC May 27, 2020 647 Know About Women in Executive Director, John Maxwell Team

Leadership Certified DISC Consultant Mariam Kobalia, Gender and Youth June 17, 2020 Ten Ways To Promote Specialist, USAID Economic Security 19,382 Woman in Leadership Program Where Do We Go From July 1, 2020 Here: Tourism After COVID Miguel Baca, Project Director, DAI 200 – 19

USAID Economic Security Program – Contract No. 72011419C00001

In terms of content on Facebook, the most viewed post from the “Wednesday Webinar” series was on “10 Things You Need to Know About Grant Proposal Writing,” by international grant writing expert Susan Saksa. It reached 25,078 views in total.

The Communications Specialist also oversaw the production of the Program’s second quarterly newsletter, which will be distributed in July to more than 300 beneficiaries and stakeholders. The e-newsletter highlights the Program’s personal impact on the lives and livelihoods of Georgians.

Finally, the Program’s Communications Specialist developed a separate publication for the USAID EDGE program’s weekly update, highlighting the Program’s work on e-commerce activities.

V. STATUS OF PERFORMANCE INDICATORS During the reporting period, the Program achieved impact relative to its performance indicators. The following table highlights the impact-to-date:

Table 11: Performance Indicators Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target Result: 4 organizations

■ E-Commerce Association of Georgia; 1. Number of recipient ■ ICT Cluster Georgia; organizations that receive 25 120 cost-sharing grants ■ Packaging Manufacturers Association of Georgia; ■ Akaki Tsereteli State University

Result: $63,486

■ E-Commerce Association of Georgia - 2. Dollar value of cost- $14,849; share leveraged from grant ■ ICT Cluster Georgia - $11,943; $0.9 million $4.8 million recipient organizations ■ Packaging Manufacturers Association of Georgia - $27,039; ■ Akaki Tsereteli State University - $9,655

Result: 488 organizations6

■ GNTA, MRDC, Enkeny Films, Natura Film, Majorel, KMS, Gastronomic Association, Steller; GITA, Enterprise Georgia and NASP are receiving various technical assistance under MOUs; 3. Number of organizations ■ 3 businesses were assisted by USMAC; that receive technical 90 612 ■ 27 business associations received assistance assistance from the CAP Institute program; ■ 16 organizations attended masterclass on Film Making Skills with Gale Hurd, Batumi, (the project with Natura Film); ■ 8 organizations attended masterclass on Film Making Skills with Paul Thiltges, Tbilisi (the project with Natura Film);

6 If the organization receives several types of the different assistance it is counted several times.

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target ■ 7 organizations attended masterclass on Challenges for Women Filmmakers in Fundraising and Marketing with Elizabeth Dell; ■ Personnel at United Airports of Georgia (UAG) were trained on various issues through series of the trainings, February- March 2020; ■ Guides from 25 organizations were trained in the culture/wine guiding, 25-29 January 2020; ■ 15 wine cellar owners/workers were trained, February 1-5, 2020; ■ 141 organizations through assistance with ‘Access to Finance Forum’, February 12, 2020 and ‘Access to Finance Guidebook’; ■ 216 businesses were trained in e- commerce development, March-May 2020; ■ 5 DMOs and Administration of Adjara Government were assisted in building their capacity; ■ 2 artisan businesses opened their online shops on Etsy’s platform; ■ Health/Safety Videos were developed for GNTA and 5 Airports; ■ Gastronomic Tourism Video was developed for Gastronomic Association of Georgia and GNTA; ■ 4 organizations received grant financing

Result: 7,434 p/h (5,160 p/h males; 2,274 p/h females)

■ Strategy and Action Planning Workshop for Tourism Sector, July 25, 2019, (184 p/h: 68 p/h males; 116 p/h females); ■ Creative workshop for digital marketing and branding, July 19, 2019, (60 p/h: 60 p/h 4. EG.2-1 Person hours of females); USG-supported training ■ Workshop with GNTA creative team on 100 780 completed in trade and Marketing Issues, November 19-21, 2019, investment (48 p/h: 40 p/h males; 8 p/h females); ■ Workshop on Tourism Strategy Action Plan Validation, February 2-7, 2020, (40 p/h: 12 p/h males; 28 p/h females); ■ Training program on e-commerce capacity building implemented by E-Commerce Association, March-May, 2020, (7200 p/h: 5040 p/h males; 2160 females)

Result: 36%

5. GNDR-2 Percentage of ■ Enkeny Films trained and employed 40 female participants in USG- persons during FF9 film making process; assisted programs 16 men, 24 women; 15% 35% designed to increase ■ Majorel selected and employed 14 persons; access to productive 1 man, 13 women; economic resources ■ Trainings for the culture/wine guides from Adjara Region in Kakheti (25 persons: 7 Men, 18 Women), 25-29 January 2020;

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target ■ Training program for wine cellar owners/workers operating in Adjara (15 persons: 13 Men, 2 Women), February 1-5, 2020; ■ Aircraft Servicing Training: De/anti-icing training for Kutaisi International Airport staff, (26 persons: 26 men), February 18-20, 2020; ■ Aircraft Headset Communication/Aircraft Marshalling / Aircraft Pushback and Towing Procedures Trainings, (16 persons: 16 men), February 24-27, 2020; ■ First Aid Training (118 persons: 82 men, 36 women), March 9-13, 2020

Result: 3 6. STIR-10 Number of innovations supported The Program selected and financed 3 innovative 3 42 through USG assistance startup businesses for participation in USMAC program 7. STIR-11 - Number of innovations supported through USG assistance N/A (the results will be reported by the end of 1 13 with demonstrated uptake the year) by the public and/or private sector 8. EG.2.2-2 - Number of firms receiving USG assistance that have obtained certification with 0 0 18 (an) international quality control institution(s) in meeting minimum product standards Result: 49%

■ Enkeny Films trained and employed 40 persons during FF9 film making process; 10 below age 30; ■ Majorel selected and employed 14 persons; 13 below age 30; ■ Trainings for the culture/wine guides from Adjara Region in Kakheti (25 persons: 3 9. Youth 3 – Percentage of below age 20), 25-29 January 2020; participants in USG- ■ Training program for wine cellar assisted programs owners/workers operating in Adjara (15 designed to increase persons: 4 below age 30), February 1-5, 8% 15% access to productive 2020; economic resources who ■ Aircraft Servicing Training: De/anti-icing are youth training for Kutaisi International Airport staff, (26 persons: 15 below age 30), February 18-20, 2020; ■ Aircraft Headset Communication/Aircraft Marshalling / Aircraft Pushback and Towing Procedures Trainings, (16 persons: 7 below age 30), February 24-27, 2020; ■ First Aid Training (118 persons: 63 below age 30), March 9-13, 2020

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target Result: 3

10. Number of new ■ E-Commerce Association of Georgia e- programs/services offered commerce initiative by sectoral/business 1 10 ■ ICT Cluster digitalization activity; associations to benefit new members ■ ADS and GHCA training for potential Etsy (and other artisan e-commerce platform) beneficiaries Result: 196

■ Majorel selected and employed 14 persons; ■ Enkeny Films employed 40 persons for 1.5 months that is equivalent to 5 full-time employment; 11. New full-time ■ Estimated that 167 jobs were created in equivalent jobs created by 150 4,800 September 2019 - February 2020 as the program beneficiaries result of the revenues increase in the tourism sector following the Program’s TA to GNTA on the marketing issues; ■ 10 jobs were created in Phubber after the assistance through USMAC; ■ 1 job was created in VTOL Raven Phubber after the assistance through USMAC 12. EG.5-2 Full time equivalent employment of N/A (the results will be reported by the end of 300 9,600 firms receiving USG- the year) assistance Result: $3,215,554

■ Estimated that the revenues in the tourism sector were increased by $2,491,554 in September 2019 - February 2020 period as the result of the Program’s technical assistance to GNTA on the marketing 13. Increase in sales by issues; $2 million $60 million assisted enterprises ■ Phubber increased its sales by $232,000 after the assistance through USMAC in business acceleration; ■ Grigalati Plus (facemask company) generated about $322,000 additional sales after the Program’s assistance; ■ Majorel’s increase in sales by $170,000 is attributable to the Program assistance 14. EG.5-1 USD sales of N/A (the results will be reported at the end of the firms receiving USG- $4 million $120 million year) funded assistance 15. EG.5-2.2 Number of private sector firms that have improved N/A (the results will be reported by the end of 40 276 management practices or the year) technologies as a result of USG-assistance 16. Number of enterprises that have increased sales N/A (the results will be reported by the end of or become financially self- 10 228 the year) sufficient with USG assistance

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target Result: 261

■ The Program selected and financed 3 businesses (all of them are microenterprises) for participation in USMAC accelerator program; ■ Guides from 25 microenterprises were 17. EG.5-3 - Number of trained in the culture/wine guiding, 25-29 microenterprises supported January 2020; 20 180 by USG assistance ■ 15 microenterprises (wine cellar owners/workers) were trained, February 1- 5, 2020. ■ 216 microenterprises were trained in e- commerce development, March-May 2020; ■ 2 artisan businesses opened their online shops on Etsy’s platform

Result: 432

■ Enkeny Films, USMAC, KMS, Gastronomic Association, Steller; ■ 3 firms assisted by USMAC; ■ 16 firms attended masterclass on Film Making Skills with Gale Anne, Batumi, (the project with Natura Film), September 20, 2019; ■ 8 firms attended masterclass on Film Making Skills with Paul Thiltges, Tbilisi (the project with Natura Film), September 24-25, 18. EG.5.2-1 - Number of 2019; firms receiving USG- ■ 7 firms attended masterclass on Challenges funded technical for Women Filmmakers in Fundraising and 70 456 assistance for improving Marketing with Elizabeth Dell, Tbilisi (the business performance project with Natura Film), October 23, 2019; ■ Guides from 25 firms were trained in the culture/wine guiding, 25-29 January 2020; ■ 15 wine cellar owners/workers were trained, February 1-5, 2020; ■ 134 firms through assistance with ‘Access to Finance Forum’, February 12, 2020 and ‘Access to Finance Guidebook’; ■ 216 firms were trained in e-commerce development, March - May 2020; ■ 2 artisan businesses opened their online shops on Etsy’s platform

Result: 4

■ Training Program on ‘Institute of Associations’, December 2019 – ongoing; 19. Number of training and ■ Series of the trainings for the Airport staff, educational programs February-March 2020; 1 12 created or significantly ■ Series of the trainings for wine guides and improved cellar owners, January-February 2020; ■ Training program on e-commerce capacity building developed by E-Commerce Association, March-May 2020

20. Number of individuals Result: 960 80 2,400 who graduate from

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target supported educational ■ Trained by Enkeny Films during FF9 film programs making, (40 persons: 16 men, 24 women), June-September 2019 ■ Series of the trainings for the Airport staff: 1) Aircraft Servicing Training: De/anti- icing training for Kutaisi International Airport staff, (26 persons: 26 men), February 18-20, 2020; 2) Aircraft Headset Communication/Aircraft Marshalling / Aircraft Pushback and Towing Procedures Trainings, (16 persons: 16 men), February 24-27, 2020; 3) First Aid Training (118 persons: 82 men, 36 women), March 9-13, 2020 ■ Series of the trainings for wine guides and cellar owners: 1) Training for the culture/wine guides from Adjara Region in Kakheti (25 persons: 7 Men, 18 Women), 25-29 January 2020; 2) Training program for wine cellar owners/workers operating in Adjara (15 persons: 13 Men, 2 Women), February 1-5, 2020; ■ Training program on e-commerce capacity building implemented by E-Commerce Association, (720 persons: 504 men, 216 women), March-May 2020

Result: 92%

■ 40 persons out of 40 started training, trained by Enkeny Films during FF9 film making, June - September 2019; ■ 26 persons out of 26 started training, Aircraft Servicing Training: De/anti-icing training for Kutaisi International Airport staff, February 18-20, 2020; ■ 16 persons out of 16 started training, Aircraft Headset Communication/Aircraft Marshalling / Aircraft Pushback and Towing 21. EG. 6-14 Percent of Procedures Trainings, February 24-27, individuals who complete 2020; 80% 90% USG-assisted workforce ■ 118 persons out of 118 started training, development programs First Aid Training, March 9-13, 2020. ■ 25 persons out of 25 started training, training for the culture/wine guides from Adjara Region in Kakheti, 25-29 January 2020; ■ 15 persons out of 15 started training, training program for wine cellar owners/workers operating in Adjara, February 1-5, 2020; ■ 720 persons out of 800 started training, training program on e-commerce capacity building developed by E-Commerce Association, March-May 2020. 22. EG. 6-13 Percent of

individuals with improved Result: 100% 60% 80%

soft skills following

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target participation in USG- ■ All people trained since October 2019 (the assisted workforce period when the Program adopted this development programs indicator) and were questioned related to the soft skills improvement, evidenced that they improved the training specific soft skills (it is proved with the specific soft skills assessment questionnaires). 23. Percentage of Result: 100% individuals who graduate

from supported educational ■ Enkeny Films trained and employed 40 programs that find 80% 80% persons during FF9 film making; employment, self- employment, or better ■ All the other trainees were already employment employed prior to the training Result: 100%

24. EG.6-12 Percent of individuals with new ■ Enkeny Films trained and employed 40 employment following persons during FF9 film making, all these 70% 70% participation in USG- employments were new for the trained assisted workforce persons; development programs ■ All the other trainees were already employed prior to the training.

25. EG. 6-15 Percent of individuals with better employment following N/A (the results will be reported by the end of 40% 40% participation in USG- the year). assisted workforce development programs Result: 45

■ 5 DMOs based on the provided support by 26. Number of businesses the Program are offering currently offering new or enhanced 25 240 internships; internship opportunities ■ 40 businesses based on the provided support by the Program offered internships related to the COVID-19 assistance Result: 4 GDAs ■ FF9: Enkeny Films 27. Number of GDAs ■ Master Classes in Filmmaking: Natura funded by the Partnership Films7 0 6 Development Fund ■ BPO Workforce Development: Majorel8 ■ Hospitality Skills Development: KMS

Result: $853,4019

■ FF9 - $274,441 28.Total dollar value of ■ Master Classes, Filmmaking - $15,300 private sector, other donor, ■ BPO WFD - $84,000 and/or GoG investment for $1 million $18 million ■ Hospitality Skills Development – $65,450 partnerships leveraged through PPPs ■ Business Accelerator Program - $70,000 ■ 50 Best – $241,114 ■ Digital Day - $103,096

7 GDA not funded by the PDF 8 GDA not funded by the PDF 9 Some of these activities are delayed due to the COVID-19 crisis.

USAID Economic Security Program – Contract No. 72011419C00001

Life of Indicator Year 1 to Date (April 2019 – June 2020) Year 1 Target Program Target Result: 3 PPPs ■ Business Accelerator Program: USMAC 29. Number of PPPs and GITA established to develop 1 17 ■ 50 Best: Gastronomic Association and target sectors GNTA ■ Digital Day: Steller and GNTA

VI. SUMMARY OF GRANT ACTIVITIES

During this quarter, the Program announced 4 Requests for Applications, namely RFA-003 “Building Organizational Capacity of Target Business Support Organizations”, RFA-004 “Facilitation of Internship and On-the-Job Learning Opportunity for Students”, RFA-005 “Developing New Products, Services and E-Commerce Service Technologies”, RFA-006 “Tourism Product Development and Improvement of Quality of Services”.

The objective of RFA-003 “Building Organizational Capacity of Target Business Support Organizations” is to invite applications from interested NGOs, seeking co-funding opportunities to initiate phases one and two of the CAP initiative, specifically diagnosing the organizational capacity of target BSOs and assisting them in the development of a customized strategy that will improve their effectiveness and efficiency as well as establish them as strong and sustainable enablers of economic growth in their sectors. In particular, the grantee will conduct an assessment of 21 organizations using methodology provided by the USAID Economic Security Program to evaluate their level of development in ten critical areas.

The objective of RFA-004 “Facilitation of Internship and On-the-Job Learning Opportunity for Students” is to provide financial support for creation and implementation of an internship program for undergraduate and graduate students of higher education institutions and vocational education and training colleges (VET). The internship program will provide youth with practical training and experiential learning opportunities. The grantee will explore internship opportunities for the diverse groups of students (female, male, students with special needs, ethnic, religious minorities, etc.) and graduates within the companies operating in the Program’s target sectors and value chains.

The Program intends to award multiple grants under the RFA-005 “Developing New Products, Services and E-Commerce Service Technologies” to MSMEs to provide financial support for improving productivity, increasing productive capacity and improving firm level operations.

It also intends to award multiple grants under this RFA-006 “Tourism Product Development and Improvement of Quality of Services” to MSMEs and tourism industry associations to provide financial support for improving product and service quality in tourism sector, introducing new unique propositions, and improving health safety standards.

USAID Economic Security Program – Contract No. 72011419C00001

To increase awareness and facilitate solicitation of applications, the Program organized online information sessions for RFAs-003 and 004 on June 25th and 30th respectively. Participants from different organizations attended online information sessions using WebEx platform, between both info sessions, the Program estimates around 50 attendees. Both info sessions were highly interactive. Program staff provided comprehensive information and responses to the questions raised by to the audience. Information sessions for RFAs-005 and 006 are planned for the 7th of July.

The Program also made its first grant awards this quarter under its APS-001 “Training for Life (T4L) Industry-Led Workforce Development” mechanism. The following are the grant activities funded:

“Developing Digital Business Skills, Capabilities and Activities of Georgian Individuals” E- Commerce Association of Georgia “Cross Field Digital Transformation for Micro, Small and Medium Enterprises” Georgia ICT Cluster “Improving Work Skills of the Georgian Packaging Industry” Packaging Manufacturers Association of Georgia “German Language for Successful Career” Akaki Tsereli State University

Total amount of grant awards that quarter was $146,495 and the cost share contribution was $63,486. Two more applications from the first round of APS-001 are in the finalization process and will be reported in next quarter if approved.

Including the grantees and potential grantees listed above, plus those that have been shortlisted under the Program’s APS-001 (2nd round), RFA-001 “Introduction of Quality and Safety Management/International Certification & Standardization Systems,” and RFA-002 “Improving Firm Productivity, Productive Capacity and Business Process Management,” the current pipeline of potential grantees for Program year one stands at 14 (10 pending plus 4 approved) and $701,972 in cost share from beneficiaries. It is anticipated that 11 additional grants will be awarded prior to the year end, bring the total for Year One to 25, though this will depend on the applicants’ ability to meet USAID requirements and timelines. The COVID-19 pandemic slowed the grant process because of uncertainty due to the lockdown, but the Program’s grants team continues to work hard to process impactful and timely grants for the benefit of Georgian citizens.

USAID Economic Security Program – Contract No. 72011419C00001

VII. ENVIRONMENTAL MANAGEMENT AND MONITORING

This quarter, the Program hired a local short-term technical expert in environmental compliance who will provide advice to the grants, technical, and operations teams to ensure the Program’s compliance with USAID environmental regulations. The environmental expert reports to the DCOP. She has already completed Environmental Review Checklists for major technical procurements and has determined no environmental management/monitoring issues for the activities listed as follows:

KMS – “Hospitality Training” Prinoth – “Snow Park” Steller – “Digital Day in the Life of Georgia” Gastronomic Association of Georgia – “50 Best Visits Georgia” Interavia – “Training for Kutaisi Airport Staff”

The expert also completed Environmental Review Checklists for the Program’s proposed grant activities and found no environmental management/monitoring issues.

VIII. FINANCIAL ANALYSIS The following is the Program’s quarterly financial report for FY 2020 Quarter 3 (the current quarter). There are no anticipated issues relative to burn rate.

IX. ANNEXES Annexes are included under a separate cover.

Annex 1 Partnership Opportunity Pipeline Annex 2 Cushman & Wakefield Feasibility Study (NASP)