Analytical Services in Support of the Economic Resilience Activity

Annual Performance Report

Analytical Services in Support of the Economic Resilience Activity FY 2020 Annual PROGRESS REPORT

(1 October 2019 – 30 September 2020)

Award No: AID-72014118C00005

Prepared for USAID/ C/O American Embassy 4 Igor Sikorsky St., , Ukraine 04112

Prepared by: SSG Advisors, LLC (d/b/a Resonance) 1121 12th St. NW Washington, DC 20005 USA

1 Mill Street, Suite 200 Burlington, VT 05401 USA

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Table of Contents

I. ACRONYMS AND ABBREVIATIONS iii II. EXECUTIVE SUMMARY 1 III. KEY NARRATIVE ACHIEVEMENT 3 Component A 3 Component B 6 Component C 7 Activity Management 7 IV. LESSONS LEARNED 7 Component A 7 Component B 8 Activity Management 8 V. ENVIRONMENTAL MONITORING 8 VI. PROGRESS ON LINKS TO OTHER ACTIVITIES 8 VII. PROGRESS ON LINKS TO HOST GOVERNMENT 8 VIII. PROGRESS ON INCLUSIVE DEVELOPMENT 8 IX. FINANCIAL INFORMATION 9 X. SUB-AWARD DETAILS 9 ANNEX I. Data Dive Example 10 ANNEX II. Key Findings from Annual Survey 12

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I. ACRONYMS AND ABBREVIATIONS AFB Award Fee Board AMELP Activity Monitoring, Evaluation, and Learning Plan ATO Anti-Terrorist Operation COR Contracting Officer’s Representative DQA Data Quality Assessment EG Economic Growth ERA Economic Resilience Activity ERA_AS Analytical Services in Support of the Economic Resilience Activity FY Fiscal Year GCA-D Government-controlled Oblast GCA-L Government-controlled Oblast IEE Initial Environmental Examination IDP Internally Displaced Persons KIIS Kyiv Institute for International Sociology LGBTIQ Lesbian, gay, bisexual, transgender, intersex and queer M&E Monitoring and Evaluation MEL Monitoring, Evaluation and Learning OEG Office of Economic Growth PWD Persons with disabilities SME Small and Medium Enterprises SoA SOW Statement of Work USAID United States Agency for International Development

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II. EXECUTIVE SUMMARY The Analytical Services in Support of the Economic Resilience Activity (ERA_AS) was awarded on August 20, 2018 to SSG Advisors, d/b/a Resonance. In the second year of implementation, Resonance continued its momentum from Year One and expanded services and approaches. What follows is a summary report of activities from October 1, 2019 to September 30, 2020 of Fiscal Year (FY) 2020. ERA_AS, an innovative, adaptive, and learning centric mechanism, provides support to the United States Agency for International Development (USAID) Ukraine’s Office of Economic Growth (OEG), specifically related to the implementation of the Economic Resilience Activity (ERA). ERA_AS’s Statement of Work (SOW) has three components: • Component A: Ongoing Monitoring and Evaluation of USAID ERA • Component B: Award Fee Implementation • Component C: Evaluation In Fiscal Year 2020, Resonance provided the following deliverables based on the ERA_AS Year Two workplan and Section F of the ERA_AS contract.

Date of Deliverable Component Description of Deliverable Deliverable Submission An outline of the second-year tasks and Draft Year Two Admin deliverables and approach to September 13, 2019 Work Plan implementation. A brief summary report of the Activity’s progress against the work plan and anticipated results, covering the first year of First Annual Activity implementation (August 20, 2018 – Admin October 30, 2020 Progress Report September 30, 2018) * Annual report will cover the final quarter of the first year and 1 month of second project year to align with fiscal year A report that will present the methodology, Draft Annual A.1 data limitations, draft findings, and December 13, 2019 Study Report conclusions. A report that will present the methodology, January 27, 2020 Final Annual data limitations, final findings and (Word Version) A.1 Study Report conclusions, and address USAID comments on May 12, 2020 the draft. (InDesign Version) Second Award A brief report summarizing findings related Fee Assessment B to the second award fee evaluation factors November 7, 2019 Summary Report and criteria. Second Award A presentation that summarizes findings Fee Board (AFB) B related to the second award fee evaluation November 13, 2019 Meeting factors and criteria and Q&A with the AFB. Data Quality A report that summarizes findings and Assessment Admin recommendations for addressing any data December 12, 2020 (DQA) Report quality issues identified during the ERA DQA.

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Short briefs focused on specific topics of Technical Briefs A.1 interest to USAID and ERA and based on data July 27, 2020 from the ERA_AS annual survey. Quarterly A summary of relevant findings from other Within 30 days of Literature/Data A.1 published research and data on eastern end of each quarter Reviews Ukraine and related to ERA objectives. A Sector Analysis of Agriculture, Economic Market Systems A.1 Resilience in Eastern Ukraine, Financial May 20, 2020 Assessment Services, and SME Competitiveness

After discussions with the ERA_AS Contracting Officer’s Representative (COR), several adjustments to the original schedule of workplan deliverables were made. Please see these changes outlined below: • Due to COVID-19 restricting travel, the team was unable to hold an in-person learning event to present annual survey findings in April 2020 as expected. Instead, Resonance conducted a virtual presentation with ERA and USAID staff. • In discussions to refine the focus of the USAID learning event, it was requested by USAID/Ukraine OEG in April 2020, that Resonance facilitate a portfolio-level review of current USAID/Ukraine economic growth programming that supports small and medium-sized enterprise (SME) development using a market systems lens. The purpose of this learning exercise was to capture lessons learned and increase understanding of sector challenges and constraints based on the knowledge and experiences of its current implementing partners. While Resonance had planned to support USAID/Ukraine OEG learning in the annual work plan, the actual task and resulting products and services were different than originally planned. Resonance was able to demonstrate flexibility and adaptability in responding to this request. In Year Three work plan, Resonance has included the possibility to future ad-hoc support that may be requested. During the second year of implementation, Resonance has refined and responded to its original suite of activities, refining processes, and introducing new products. Specifically, Resonance: • added a new region, the coastal area along the Sea of Azov (SoA), to the annual study. This increased the total sample size of the annual household survey from1,200 to 1,800 households, and from 400 to 600 businesses for the annual business survey. • provided final survey products in both English and Ukrainian, and using the Adobe InDesign publishing software. • delivered the second award fee assessment, conducting approximately 50 interviews of ERA Staff, staff from other activities, other donors and ERA beneficiaries. • provided supplemental analysis of the annual survey data through four data dives to further elaborate relevant findings in a more visual and succinct format. Please see Annex A for an example. • provided flexible and responsive service to adapt and pivot planned learning support and deliver an on-demand research product. Considering COVID-19, Resonance has responded to changing circumstances by drawing from its bench of Economic Growth and Monitoring, Evaluation and Learning (MEL) 2

professionals. For example, the Resonance team adapted the data collection process for the Third Award Fee Assessment, underway at the end of FY20 and at the writing of this report, from in-person interviews to a complete virtual process. This approach has allowed us to expand the number of interviews conducted and tap into a larger assessment team of experts, translators, and note-takers to conduct over 90 interviews within six weeks— almost twice the number of interviews conducted in 2019. In short, during the second year of implementation, Resonance expanded the depth, quantity, and quality of services provided to USAID. With input from USAID/Ukraine, additional activities have been scoped for Year Three (FY 2020-2021) to support ongoing MEL and adaptive management of ERA. III. KEY NARRATIVE ACHIEVEMENT Component A Under Component A, Resonance’s mandate is to “Develop and Implement a Monitoring and Evaluation Framework for Measuring Economic Resilience Activity Progress” and “Advise USAID and Economic Resilience Activity Implementer to Finalize Economic Resilience Activity MEL Plan.” A.1 Develop and Implement Monitoring and Evaluation Framework for Measuring Economic Resilience Activity Progress Under this task, Resonance conducted the first annual survey, which builds off of the baseline survey conducted in Year One. Due to ERA’s strategic expansion into the Sea of Azov region, five additional rayons in two oblasts, and Oblasts were added to the survey sample. The study included a household-level survey of 1,800 individuals and a business-level survey of 600 businesses. There were a number of interesting findings and conclusions from this study. Key findings and conclusions include: • Unemployment—especially underemployment—trends in government-controlled Donetsk Oblast (GCA-D) have improved dramatically compared to baseline, driven primarily by increased numbers of workers in full-time positions (84.9 percent compared to 50.2 percent at baseline). • Conversely, unemployment rates rose almost five percent in government-controlled Luhansk Oblast (GCA-L), and almost 10 percent fewer employed individuals are working in full-time positions. Additionally, the number of GCA-L respondents who feel strongly or extremely confident that they will keep their jobs over the next year fell from 80.1 percent at baseline to 57.5 percent—almost 23 percentage points. • Compared to baseline, reported key employment sectors have changed. In GCA-D, top sectors are industry, followed by agriculture, mining, and construction. In GCA-L, education employs the most respondents, followed by trade, agriculture, and public administration. At baseline, services and manufacturing were the dominant employment sectors indicated by workers; now, these two sectors employ less than five percent of employed respondents in both oblasts.

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• In GCA-D, individual respondents indicated that economic challenges caused by the conflict were much less significant than at baseline, ranking access to hard infrastructure and public sector service provision as greater challenges. • Almost 95 percent of business respondents in GCA-D and 89.6 percent in GCA-L felt that more or better economic opportunities will allow people to stay in the region in the next five years, citing changes in the local economy and the degree and intensity of the conflict as primary factors for their optimism. Although confidence rates were somewhat similar for individuals across both indicators, business respondents were notably more enthusiastic about whether economic opportunities will adequately address demand in the next five years than whether their oblast economy will improve in the next two years. The difference could relate to the specificity of individual opportunities versus the generality of an improved economy or, more likely, to a time horizon of two versus five years. • Unemployment in the SoA region is high (around 20.0 percent), most pronounced in Melitopol (of the three urban poles), where underemployment related to time status is also a concern. Over 40 percent of Melitopol’s active labor force is either unemployed or underemployed. • In all three urban poles and across the region, the highest levels of individual satisfaction with access to economic opportunities are linked to absence of conflict- related economic challenges. Individuals in are the most satisfied of all geographic groups with their access to economic opportunities, although their confidence rates related to their future oblast economy are lowest. Dissemination of Findings To disseminate the report, the Resonance team delivered a presentation to relevant USAID and ERA staff. This year the report was translated into Ukrainian, so it could be more widely distributed. Due to COVID-19 travel and safety restrictions, Resonance outreach was not as extensive as intended. Prior to March and April 2020, the Resonance team was devising targeted, regional learning events to share findings with oblast-level stakeholders. However, this was deemed not feasible due to COVID-19.

Award and Design for Second Annual Survey During Q4 of FY20, the Resonance team renewed a sole source for Kyiv Institute for International Sociology (KIIS) to conduct data collection for the second annual study (third overall study). Although there were initially concerns about the viability of collecting data during the pandemic, KIIS successfully and safely conducted data collection for both the in- person household survey and the computer-assisted telephone business surveys in September-October 2020 without any changes to methodology or significant delays.

A.2 Advise USAID and Economic Resilience Activity Implementer to Finalize Economic Resilience Activity MEL Plan The second component of Component A is the review of ERA’s Activity Monitoring Evaluation and Learning Plan. Resonance continues to provide intermittent and timely feedback to USAID on ERA Activity Monitoring, Evaluation and Learning Plan (AMELP) revisions and expert advice on how to effectively measure outcomes. As part of this effort, in

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March-April 2020, Resonance conducted and presented research on best practices for measuring communication outcomes at USAID’s request. Data Quality Assessment During November 2020, Resonance provided DQA Support in the review of ERA indicators. Working with the Alternate COR, Resonance conducted a three-day consultation with DAI MEL Team to discuss and review reporting for eight different indicators. Seven indicators were found to have adequately met the five criteria, but the team identified one problematic indicator which was subsequently dropped. In all, the assignment led to productive discussion to improve the quality of ERA’s AMELP and monitoring and evaluation (M&E) processes. Market Systems Assessment As an additional activity this FY, Resonance conducted a Market Systems Assessment to support USAID/Ukraine. After conducting interviews and facilitating presentations with USAID/Ukraine OEG implementing partners, Resonance identified several recommendations for USAID to consider in future programming. These were elaborated in an internal USAID report. To enhance analysis of the various sectors under which USAID/Ukraine is providing support to SMEs, Resonance generated stakeholder maps to depict the characteristics of the relationships between key stakeholders. These maps helped to provide additional insight into the landscape for potential collaborations. See Figure 1.

Figure 1: Network Map Example

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Component B Component B has two sub-components: B.1 Designing the Award Fee Criteria and B.2: Assist USAID in conducting the Award Fee Assessment. This year, Resonance provided input into the evaluation criteria for the third award and fourth year award fee assessments, assessed performance for the second award fee assessment, and began the data collection process for the third award fee period. B.1 Assist USAID in Developing Award Fee Criteria In October 2019, Resonance worked with the USAID COR to develop and finalize award fee criteria for the third award fee period. After the second award fee assessment, Resonance interviewed USAID and ERA staff involved in the award fee process as part of an after-action review to glean feedback and suggestions on improving the process. Lessons learned around timing and structure of the process was synthesized, shared, and incorporated into the process for the third award fee assessment. B.2 Assist USAID in Assessing Economic Resilience Activity Implementer Performance, Based on Award Fee Criteria During FY20, Resonance completed the Second Award Fee Assessment, which is the first iteration that assessed a full set of programmatic and management-related evaluation criteria. Resonance was responsible for assessing approximately 23 criteria. By October 2019, approximately 50 interviews were conducted, and the findings were shared in a report and presentation to the Award Feed Board on November 15, 2019. The main findings/conclusions were as follows: • ERA did not achieve most of its Year One targets and where it did achieve targets, it greatly surpassed them. • Most of ERA’s interventions are aimed at urban and peri-urban areas and ERA could do more to ensure outreach and inclusion of rural populations. • ERA will need to greatly increase its implementation in Year Two and Three to maximize results and use of its budgetary resources. • ERA needs to focus and further define its approach to inclusion and gender equality and make greater efforts to integrate inclusion across all components. • Currently, synergy between ERA objectives needs to be reinforced. • There has been an expected level of groundwork laid in Year One to leverage other donor resources, though the potential of these opportunities needs is uncertain. • ERA has taken steps to mitigate risks, though based on assessment there are additional potential risks that ERA should consider. • MOUs could be improved by making them more detailed and specific. • ERA has demonstrated flexibility and adaptive management, though there may be additional necessary measures related to the use of its grants fund. • ERA has processes in place to encourage learning, but their activities are not tied to an overall learning agenda or specific learning objectives. The report was well received and informed the AFB in their award fee determination.

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During August and September 2020, Resonance recruited assessment team members, coordinated with USAID and ERA to request necessary documentation and interviewee contact information, and organized all necessary logistics to carry-out the third award fee assessment. Component C Component C has two sub-components: C.1 Design and conduct midterm performance evaluation of Economic Resilience Activity and C.2: Design and conduct final performance evaluation of Economic Resilience Activity. With ERA’s Mid-Term Performance Evaluation scheduled for FY21, Resonance developed a presentation to engage USAID in initial design discussions. Based on these discussions and the draft evaluation questions, Resonance developed an evaluation statement of work and began to identify recruitment needs.

The evaluation approach will complement the award fee assessment process by digging deeper into intended and unintended outcomes through use of participatory, complexity aware methods such as outcome harvesting. This process will also involve a heavy emphasis on beneficiary participation, having them identify the most salient outcomes to them through the Most Significant Change methodology. Activity Management During this year, the core team of two key personnel, a Project Director, and a Project Analyst remained on the team. We also expanded our roster of consultants and economic growth experts at Resonance to be able to provide seamless support. IV. LESSONS LEARNED There were several lessons learned across the Components and from an activity management perspective. Component A • Timely Data. Resonance encountered issues with receiving timely business survey data, which delayed analysis. Though it did not result in any delays in meeting our deadlines with USAID, it did disrupt internal review processes. This has been communicated with KIIS and has been mitigated this year through a more streamlined project management plan with KIIS. • InDesign Utility. Resonance used InDesign to finalize content to make the report more visually appealing. However, due to multiple rounds of revisions, adjusting InDesign took considerably more time and resources than anticipated. It has been determined that the aesthetic appeals are not worth the cost or time required to make frequent edits. • Sharing Report Findings. Because the report finalization has traditionally taken a number of months with multiple rounds of review and comments, it delays distribution to stakeholders with the result of the data being less relevant and useful to stakeholder decision-making. To make sure that findings are shared in a more

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timely manner, Resonance will present the main learnings prior to report finalization to USAID, ERA, and select external stakeholders early on in the process. Feedback will be incorporated into the final report. • Streamlined Documents. Having expanded to a third region, the report continues to be a dense document. To streamline, we will adopt a presentation first that will be the basis of the overarching report. Component B • Award Fee Timing. During the after-action review of the second award fee assessment, multiple recommendations were made to improve future assessments. For example, the evaluation period and assessment schedule were adjusted to allow more time for end of year reporting and preparation of the assessment report and presentation to the AFB. Activity Management In previous years, Resonance has flagged the tension of its role with ERA between providing learning support and advisory services versus being relied upon as an independent, third- party evaluator. This year, Resonance and ERA maintained a strong working relationship, providing ERA with key information and coordinating as necessary to provide required information. However, USAID remained the targeted audience for advisory services. For example, Resonance shared good practices around communications M&E to inform discussions between USAID and ERA on communication initiatives and how best to measure their effectiveness. V. ENVIRONMENTAL MONITORING The Initial Environmental Examination (IEE) DCN: 2014-UKR-011and Amendments to IEE (DCN: 2015-UKR-013, DCN: 2016-UKR-002, DCN: 2019-UKR-065) have been approved for this activity. USAID has determined that a Categorical Exclusion applies to the proposed activities discussed in the Section C, SOW, of this award. This indicates no adverse impacts on the environment are likely. VI. PROGRESS ON LINKS TO OTHER ACTIVITIES The ERA_AS Team coordinated extensively with ERA this year in numerous ways described above. In addition, ERA_AS has coordinated with other USAID and non-USAD activities during the award fee assessment, including Democratic Governance East, Competitive Economy Program and the Ukraine Building Confidence Initiative II.

VII. PROGRESS ON LINKS TO HOST GOVERNMENT Resonance has become registered with governments of Luhansk and Donetsk oblasts being recipients and beneficiaries of the ERA_AS as of August 18, 2020. VIII. PROGRESS ON INCLUSIVE DEVELOPMENT

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The ERA_AS team has addressed inclusive development in the design of its survey and data analysis. Survey data is disaggregated by sex, age, and vulnerable population status and presented in annual survey reports. Vulnerable persons in eastern Ukraine include internally displaced persons (IDPs), returnees, persons with disabilities (PWD), anti-terrorist operation (ATO) veterans, members of the lesbian, gay, bisexual, transgender, intersex and queer (LGBTIQ) community, members of the ethnic Roma community, low-income persons, youth and others depending on their unique economic and geographic situation. Due to sensitivities and other barriers, it is not possible to collect and report on all of the categories of vulnerable persons. Resonance presents disaggregated survey data on IDPs, PWDs, women, and ATO veterans. IX. FINANCIAL INFORMATION Note: the financial data provided in this section is an estimate of the financial condition and does not constitute the contractually required financial reporting as defined in the Award Notice.

Obligations

Obligated Expenditures Obligated Balance Total Budget Amount Invoiced to Date Remaining

$3,887,786.00 $1,985,579 $1,196,572 $789,007

X. SUB-AWARD DETAILS There was one sub-award made during the Year Two reporting period. Having of established KIIS as a preferred vendor last year, they received a sub-award of $42,200. Please find details on the sub-award in the table below:

Sub- Subaward Sub Project/Activity Subaward award Description awardee Development USAID Award No. IP Name Start Date End Date Name Name Amount, Webpage Objective USD KIIS is kiis.com.ua Analytical Kyiv implementing Services in International the survey Support of The 72012118C00005 Resonance Institute of 8/15/2020 12/15/2020 $42,200.00 data CDCS DO 2 Economic Sociology collection for Resilience (KIIS) Ltd. the annual Activity study.

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ANNEX I. Data Dive Example

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Annex II. Key Findings from Annual Survey GCA-D, GCA-L, and the SoA region in eastern Ukraine have faced significant interruptions and economic shocks for more than four years due to ongoing conflict. Nonetheless, they are working to stabilize their economies, build business capabilities and competitiveness, and restore confidence in the region. Exhibit 1 is an overview of indicator values for GCA-D and GCA-L and key survey findings.

Exhibit 1. Table of GCA-D and GCA-L Key Findings and Indicator Values by Oblast Indicator Value, By Oblast Key Findings GCA-D GCA-L Unemployment Rate, by Working Age in Ukraine (State Statistics Service of Ukraine) GCA-D and GCA-L have some of the highest unemployment rates in the 14.4% 16.0% country, indicative of the recent economic downturn following the conflict and reduction of businesses. Gross Regional Product (GRP) in Targeted Region in Eastern Ukraine, in U.S. Dollars (USD) GCA-D ranks fourth of 24 oblasts in Ukraine. GCA-L is among the lowest- $6.5 billion $1.1 billion performing oblasts in the country. Average Annual Disposable Income per Capita in Target Region, in USD Aligned with other economic performance trends, GCA-D households have almost 55.0 percent more disposable income than GCA-D households. $1,173 $758 GCA-D lags almost 45.0 percent behind disposable income per capita in Ukraine overall. Consumer Price Index (CPI) Recent CPIs for both GCA-D and GCA-L have remained relatively constant 103.8 102.8 and relatively low. Economic Resilience Index Score The ERI is a custom index that measures changes in the economic Low (39.4) Low (37.8) resilience of the region and oblasts at four levels—the regional economy, (from 2018 (from 2018 institutions, households, and businesses. The ERI is computed biennially: baseline) baseline) at baseline, in 2020, and in 2022. Baseline values from 2018 are presented here. Unemployment Rate within Study Population ● As a self-identified percentage of the active labor force within the study population, 14.8 percent of individual respondents in GCA-D and 15.2 percent in GCA-L are unemployed. 14.8% 15.2% ● In GCA-D, 9.1 percent of unemployed respondents are men, and 5.7 percent are women. In GCA-L, 6.6 percent are men, and 8.6 percent are women. Access to Economic Opportunity for Individuals Index The Access to Economic Opportunity for Individuals Index measures the level of satisfaction of individuals in key areas related to individual economic opportunity. This index is based on a scale of 0–100, from low to 47.8 38.8 high access. ● Individuals in GCA-D were much more satisfied than those in GCA-L. ● In both oblasts, satisfaction is highest with access to skills improvement and/or education opportunities and access to soft

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infrastructure, such as utilities and internet. Reduction in economic challenges caused by the conflict additionally ranked high in GCA-D. ● Lowest levels of satisfaction in both oblasts related to hard infrastructure and public sector service provision. ● Men in GCA-D are slightly less satisfied with their overall access to economic opportunities than women, while the reverse is true in GCA- L. ● Scores are consistent with baseline study findings and represent little to no change in levels of satisfaction in the identified key areas. Access to Economic Opportunity for Businesses Index The Access to Economic Opportunity for Businesses Index measures business viewpoints on their level of satisfaction in key areas related to business growth. This index is based on a scale of 0–100, from low to high access. ● Businesses in GCA-D were slightly more satisfied with their access to variables that affect economic opportunity than those in GCA-L., although composite scores in both oblasts dropped by about five percentage points compared to baseline figures. 45.5 40.8 ● In both oblasts, satisfaction is highest with access to soft infrastructure (utilities, internet), business development services, and input suppliers, and lowest with access to public sector assistance, new market opportunities, and access to capital or financing. GCA-L shows much lower satisfaction with access to hard infrastructure. ● Male business respondents in both GCA-D and GCA-L are a bit less satisfied with their overall access to business economic opportunities than female business respondents. Percent of Respondents Who Express Confidence in the Economic Future of the Region ● In GCA-D, 23.5 percent of individuals and 61.5 percent of business respondents (compared to 41.9 percent at baseline) believe their oblast economy will get better over the next two years. In GCA-L, 27.9 percent of individuals (compared to 10.6 percent at baseline) of Individuals individuals and 47.5 percent of business respondents (compared to 27.9% Individuals 57.2 percent at baseline) of business respondents believe this.

23.5% ● Compared to baseline, the most dramatic increases in confidence came from GCA-D business respondents and GCA-L individual respondents. ● Confidence rates of business respondents were higher than those of individual respondents in both oblasts. ● Confidence rates among male and female respondents of the same surveys in the same oblast were similar, except for male business

respondents from GCA-D, 36.5 percent of whom were confident compared to only 25.0 percent of their female GCA-D counterparts. ● Among individuals, 47.7 percent in GCA-D and 37.5 percent in GCA-L Businesses Businesses expressed the belief that more or better regional opportunities over 61.5% 47.5% the next five years will allow people to stay in the region. A remarkable 94.7 percent of business respondents in GCA-D and 89.6 percent in GCA-L felt similarly.

Indicator values and key survey findings for the SoA region are shown in Exhibit 2.

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Exhibit 2. Table of SoA Key Findings and Indicator Values Indicator Value Key Findings SoA Unemployment Rate within Study Population ● As a self-identified percentage of the active labor force within the study population, 20.9 percent of individual respondents in the SoA region are unemployed, including 25.9 percent in Melitopol (Mel), 16.9 percent in (Berd), and 15.1 percent in Mariupol (Mar), comprising mostly males in the 36–59 age range, except in 20.9% Mariupol, where more similarly aged female members of the labor force are unemployed. ● Underemployment (unemployment rates combined with rates of part- time workers willing to work more) in the SoA region is 34.0 percent (Mel: 40.7 percent; Berd: 32.2 percent; Mar: 26.0 percent). Access to Economic Opportunity for Individuals Index ● Of the three urban poles—Melitopol, Berdyansk, and Mariupol— individuals in Mar (52.1) are more satisfied with their access to economic opportunities, compared to the SoA region as a whole (44.0), Berd (38.1), or Mel (38.5). ● Male respondents in Berdyansk and Mariupol are generally more satisfied than females in those geographic areas, while the converse is true in both the SoA region as a whole and Melitopol, where women 44.0 are more satisfied. ● For both the region and urban areas, ability to work has been least affected by the conflict, compared to access to skills development, infrastructure, or public service provision. ● The lowest levels of satisfaction vary depending on location—access to skills or education improvement in Berdyansk (variable score of 1.6 out of 10) and public sector service provision in Melitopol (variable score of 2.1 out of 10) and Mariupol (variable score of 3.7 out of 10). Access to Economic Opportunity for Businesses Index ● Business respondents in Melitopol (47.3) and Mariupol (47.0) are slightly more satisfied with their access to economic opportunities than the SoA region as a whole (46.1) or business respondents from Berdyansk (44.9). ● Across all urban poles and the entire region, highest satisfaction levels are linked to access to soft infrastructure, business development services, and input suppliers; the absence of conflict-related economic 46.1 challenges also rates relatively well. ● Lowest satisfaction across in the region and all urban poles relates to public sector service provision, hard infrastructure, and access to capital or financing. ● Male business respondents in all four geographic areas were less satisfied than female respondents, especially in Melitopol and Berdyansk.

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Percent of Respondents Who Express Confidence in the Economic Future of the Region ● In the SoA region, 36.3 percent of individuals (Mel: 43.4 percent; Berd: 40.7 percent; Mar: 17.9 percent) and 55.2 percent of business respondents (Mel: 56.6 percent; Berd: 52.3 percent; Mar: 64.3 Individuals percent) believe their oblast economy will get better over the next 36.3% two years. ● Business respondents the region and all urban areas are more

confident than individuals. Of the urban poles, the largest disparity between confidence in individuals and business respondents is found in Mariupol. ● Among individual respondents, females are more confident than males in across the region and within each urban pole. Attitudes between biological sexes are more consistent for business respondents, although females in Mariupol are 7 percent more confident than their male counterparts. ● More than half (53.7 percent) of individuals in the SoA region Businesses expressed the belief that there will be more or better regional 55.2% opportunities over the next five years that will allow residents to stay in the region, and 94.0 percent of business respondents felt similarly.

● Changes in the local economy and the government were the two most oft-cited factors that influenced confidence. However, changes in the degree and intensity of the conflict were more influential for businesses than individuals across both confidence indicators, especially as related to whether there will be more or better economic opportunities in five years.

CONCLUSIONS: GCA-D and GCA-L Oblasts ● Unemployment—especially underemployment—trends in GCA-D have improved dramatically compared to baseline, driven primarily by increased numbers of workers in full-time positions (84.9 percent compared to 50.2 percent at baseline). ● Conversely, unemployment rates rose almost 5 percent in GCA-L, and almost 10 percent fewer employed individuals are working in full-time positions. Additionally, the number of GCA-L respondents who feel strongly or extremely confident that they will keep their jobs over the next year fell from 80.1 percent at baseline to 57.5 percent—almost 23 percentage points. ● Compared to baseline, reported key employment sectors have changed. In GCA-D, top sectors are industry, followed by agriculture, mining, and construction. In GCA-L, education employs the most respondents, followed by trade, agriculture, and public administration. At baseline, services and manufacturing were the dominant employment sectors indicated by workers; now, these two sectors employ less than 5.0 percent of employed respondents in both oblasts. ● In GCA-D, individual respondents indicated that economic challenges caused by the conflict were much less significant than at baseline, ranking access to hard infrastructure1 and public sector service provision as greater challenges. ● The composite score for the Access to Economic Opportunities for Businesses Index was about five percentage points lower in both oblasts compared to baseline, reflecting overall decreased satisfaction with access to services or resources needed for businesses to pursue economic opportunities. As at baseline, lowest satisfaction levels relate to public sector assistance, new

1 For the purposes of the ERA_AS Economic Resilience Study, “hard infrastructure” refers to physical assets— roads, bridges, real estate—related to economic activity, and “soft infrastructure” relates to intangible services, such as utilities, internet, or telecommunications. 15

market opportunities, and access to capital or financing, with GCA-L businesses still reporting much lower satisfaction with access to hard infrastructure, such as roads and bridges. ● Compared to baseline (and despite lower levels of job confidence), twice as many individuals in GCA-L believe their oblast economy will get better over the next two years. Although confidence by business respondents fell by 10 percentage points in GCA-L, it rose by almost 20 percentage points in GCA-D. ● Almost 95 percent of business respondents in GCA-D and 89.6 percent in GCA-L felt that more or better economic opportunities will allow people to stay in the region in the next five years, citing changes in the local economy and the degree and intensity of the conflict as primary factors for their optimism. Although confidence rates were somewhat similar for individuals across both indicators, business respondents were notably more enthusiastic about whether economic opportunities will adequately address demand in the next five years than whether their oblast economy will improve in the next two years. The difference could relate to the specificity of individual opportunities versus the generality of an improved economy or, more likely, to a time horizon of two versus five years.

Sea of Azov Region ● Unemployment in the SoA region is high (around 20.0 percent), most pronounced in Melitopol (of the three urban poles), where underemployment related to time status is also a concern. Over 40 percent of Melitopol’s active labor force is either unemployed or underemployed. ● In all three urban poles and across the region, the highest levels of individual satisfaction with access to economic opportunities are linked to absence of conflict-related economic challenges. Individuals in Mariupol are the most satisfied of all geographic groups with their access to economic opportunities, although their confidence rates related to their future oblast economy are lowest. ● Highest satisfaction with access to economic opportunities for businesses in the region and all urban poles are linked to access to soft infrastructure2, business development services, and input suppliers. Businesses are also less likely to have been negatively affected by the conflict relative to public sector service provision, hard infrastructure, and access to capital or financing. Specifically, business respondents in Berdyansk are least satisfied with access to skills or education improvement; in Melitopol and Mariupol, business respondents are least satisfied with public sector service provision. ● Despite unemployment rates and satisfaction levels that would seem to contradict these points, individuals in Melitopol were the most confident that their oblast economy will get better over the next two years; those in Mariupol were the least confident—with a spread of over 25 percentage points.

Similar to responses from business respondents in GCA-D and GCA-L, 94.0 percent in the SoA region believe more or better opportunities will allow people to stay in the region in the next five years, most influenced by changes in the local economy and in the degree and intensity of the conflict—a factor that was more influential for businesses than individuals across both indicators. As described above in the GCA-D and GCA-L conclusions, the gap between optimism for these two indicators could be related to specificity of individual opportunities versus generality of an improved economy or, more likely, to an expanded time horizon of five years in the sub-indicator.

2 For the purposes of the ERA_AS Economic Resilience Study, “hard infrastructure” refers to physical assets— roads, bridges, real estate—related to economic activity, and “soft infrastructure” relates to intangible services, such as utilities, internet, or telecommunications. 16