Usaid Economic Resilience Activity: Annual Report: Year One August 27, 2018–September 30, 2019
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USAID ECONOMIC RESILIENCE ACTIVITY: ANNUAL REPORT: YEAR ONE AUGUST 27, 2018–SEPTEMBER 30, 2019 This publication was produced by the USAID Economic Resilience Activity under Contract No. 72012118C00004 at the request of the United States Agency for International Development (USAID). This document is made possible by the support of the American people through the USAID. Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the United States Government. USAID ECONOMIC RESILIENCE ACTIVITY Annual Report: Year One (August 27, 2018–September 30, 2019) Program Title: USAID Economic Resilience Activity Sponsoring USAID Office: USAID Ukraine Contract Number: 72012118C00004 Contractor: DAI Global, LLC Submission Date: October 30, 2019 Author: DAI Global, LLC ii | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV Contents ACRONYMS AND ABBREVIATIONS ................................................................................................................... v I. EXECUTIVE SUMMARY ........................................................................................................................................ 8 II. INTRODUCTION ................................................................................................................................................ 10 III. CONTEXT UPDATE ........................................................................................................................................... 11 IV. KEY NARRATIVE ACHIEVEMENTS ................................................................................................................ 13 V. PROGRESS AGAINST TARGETS ..................................................................................................................... 30 VI. PERFORMANCE MONITORING, EVALUATION, AND LEARNING ................................................... 33 VII. LESSONS LEARNED ......................................................................................................................................... 38 VIII. ENVIRONMENTAL MONITORING............................................................................................................ 40 IX. PROGRESS ON LINKS TO OTHER ACTIVITIES, DONOR-FUNDED PROGRAMS, AND HOST GOVERNMENT ............................................................................................................................................................... 41 X. PROGRESS ON INCLUSIVE DEVELOPMENT .............................................................................................. 44 XII. SUB-AWARD DETAILS ................................................................................................................................... 45 XIII. ACTIVITY ADMINISTRATION ..................................................................................................................... 48 iii | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV iv | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV ACRONYMS AND ABBREVIATIONS AFB Award Fee Board AMEL Activity Monitoring, Evaluation, and Learning AMELP Activity Monitoring, Evaluation, and Learning Plan APS Annual Program Statement BEO Bureau Environment Officer BIIR Bojer Innovativ Ingeniørrådgivning CDM CDM Engineering Ukraine CEP Competitive Economy Program CIS Commonwealth of Independent States CLA Collaboration Learning Adaptation COP Chief of Party COR Contracting Officer’s Representative DAI DAI Global LLC DGE Democratic Governance East DOSA Donetsk Oblast State Administration DRC Danish Refugee Council EBRD European Bank for Reconstruction and Development EE Energy Efficiency EIB European Investment Bank EU European Union EMMP Environmental Mitigation Measures Plan ERA Economic Resilience Activity ERC Environmental Review Checklist ESP Energy Security Program E3 Bureau for Economic Growth, Education and Environment FAA Fixed Amount Award GDIP General Directorate for Servicing Foreign Representative Offices GoU Government of Ukraine GUC Grants Under Contract HCCP Hazard and Critical Control Points v | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV HR Human Resources HO Home Office HVA High Value Agriculture ICT Information, Communication and Technology IDP Internally-Displaced Persons IFC International Finance Corporation IFI International Financial Institutions IM Innovative Manufacturing IT Information Technology KfW Kreditanstalt für Wiederaufbau ("Credit Institute for Reconstruction”) LGBTQI Lesbian, Gay, Bisexual, Transgender, Queer (or Questioning), and Intersex LNAU Luhansk National Agrarian University LOSA Luhansk Oblast State Administration MEDT Ministry of Economic Development and Trade MEL Monitoring, Evaluation, and Learning MEO Mission Environmental Officer M&E Monitoring and Evaluation MoU Memorandum of Understanding MSM Men Who Have Sex With Men MSME Micro, Small, Medium Enterprises MSRA Market Systems Resilience Assessment NEFCO Nordic Environment Finance Corporation NGCAs Non-Government-Controlled Areas NGO Non-Governmental Organization NIP Neighborhood Investment Platform OTI Office of Transition Initiatives PPP Private and Public Partnerships RAD Resource Assistance Development REG Regional Economic Growth Project RFP Request for Proposal SDAA Senior Deputy Assistant Administrator vi | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV SMEs Small and Medium Enterprises TVET Technical and Vocational Education Training SMM Social Media Marketing UCBI Ukraine Confidence Building Initiative ULA Ukrainian Leadership Academy USAID United States Agency for International Development VET Vocational Education Training WFD Work Force Development vii | USAID ECONOMIC RESILIENCE ACTIVITY ANNUAL REPORT – YEAR ONE USAID.GOV I. EXECUTIVE SUMMARY The Russia-backed conflict in eastern Ukraine and Russia’s hybrid war in the Azov Sea have upended the economy of the region, cutting it off from important markets, catalyzing the decline of traditional industries, and displacing 1.5 million people from their homes and jobs. More than 13,000 Ukrainians have died in the conflict, families have been torn apart, and tanks have rolled through much of the region creating terror and uncertainty. Adding to the damage, there’s been a banking crisis. Despite the staggering obstacles, the U.S. Agency for International Development (USAID)’s Economic Resilience Activity (ERA/Activity) has achieved exemplary results in its first year using a collaboration, learning, and adaptation (CLA) approach and a market-based private sector engagement strategy. Collaboration. The ERA team created a strong coordination plan that analyzed types of partners and assigned actions. ERA management prioritized USAID partner projects and dedicated time to making that collaboration work, including actively participating in both the Ukraine Confidence Building Initiative II (UCBI II) handover collaboration meeting and the USAID-organized Democracy and Government East (DGE)-ERA collaboration meeting, and establishing regular cross-Activity collaboration meetings with DGE and Competitive Economy Program (CEP). ERA carried out an unprecedented collaborative workplanning session with USAID and other donor projects, subcontractors, and a third-party evaluator. ERA management also shared drafts of the workplan with key partners for feedback. ERA also achieved interesting results through collaboration with local governments and partners, such as attracting Dutch firm Bojer Innovativ Ingeniørrådgivning (BIIR) to the region and collaborating with the East Ukrainian Volodymyr Dahl National University (Dahl University)—displaced due to the conflict— and the Institute of Chemical Technologies Rubizhne in the Luhansk Oblast. Through this partnership, BIIR is helping to make the skills taught in the region more relevant to the demands of working in the global economy and hiring newly trained workers. The partnership is a first step toward drawing international engineering firms to invest more resources in Luhansk, which historically has had a strong engineering base. Learning. The ERA team established a learning culture from day one—starting with data-driven sector selection drawing on sales, beneficiary, and market trends as well as selection criteria designed to maximize inclusion, grow micro, small, and medium enterprises (MSMEs), and bolster developmental benefits. The ERA team quickly assessed value chains, the political economy, and the labor market to provide evidence for workplanning. The management team institutionalized pause-and-reflect sessions along each step, starting with a stocktaking with the core staff of the proposal and contract, as well as best practices in market-based engagement in other countries, followed by analyzing the rapid assessments, the Resonance baseline survey data, gender integration, and Sea of Azov assessment findings—learning that informs the workplanning, market systems resilience, and methods to carry out visioning for economic transformation. The monitoring, evaluation, and learning (MEL) team created a learning harvesting log to help each team articulate hypotheses to test, detail pilot tests, how they would learn from those tests, and with whom they would share the information. Adaptation. The ERA team used learning to adaptively manage the project. For example, ERA was able to quickly mobilize a team to assess the Sea of Azov region in a short timeframe and use those findings to build a program expanding