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USAID/Ukraine Analytical Services in Support of the Economic Resilience Activity (ERA AS)

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USAID/Ukraine Analytical Services in Support of the Economic Resilience Activity (ERA AS) USAID/Ukraine Analytical Services in Support of the Economic Resilience Activity (ERA_AS) Household and Business Economic Resilience Study of Government-Controlled Areas of Donetsk and Luhansk Oblasts in Eastern Ukraine – Baseline Report July 3, 2019 This report was prepared for the United States Agency for International Development (USAID) by SSG Advisors, LLC (d/b/a Resonance) 1 This publication was produced for review by the United States Agency for International Development Ukraine Mission (USAID/Ukraine) by SSG Advisors, LLC (d/b/a Resonance), through Contract No. AID- 72014118C00005 Principal USAID Contact: Jacob Morrin, Contracting Officer’s Representative, [email protected] Principal Authors: Jane Shearer, Senior Technical Advisor, SSG Advisors, LLC (d/b/a Resonance) [email protected] Valerie Hovetter, Team Leader, SSG Advisors, LLC (d/b/a Resonance) [email protected] Implemented By: SSG Advisors, LLC (d/b/a Resonance) 2000 P Street NW, Suite 410 Washington, DC 20036 Tel.: 202-548-7107 1 Mill Street, Suite 200 Burlington, VT 05401 USA Tel.: 802-735-1169 ERA_AS Household and Business Economic Resilience Study of GCA Donetsk and Luhansk Oblasts in Eastern Ukraine Study — Baseline Report, March 2019 Page i USAID/UKRAINE ANALYTICAL SERVICES in Support of the ECONOMIC RESILIENCE ACTIVITY (ERA_AS) Household and Business Economic Resilience Study of the Government-Controlled Areas of Donetsk and Luhansk Oblasts in Eastern Ukraine – Baseline Report July 3, 2019 DISCLAIMER: The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. ERA_AS Household and Business Economic Resilience Study of GCA Donetsk and Luhansk Oblasts in Eastern Ukraine Study — Baseline Report, July 2019 Page ii Acronyms ATO Anti-Terrorist Operation BER Business Economic Resilience CATI Computer-Assisted Telephone Interview CPI Consumer Price Index ERA Economic Resilience Activity ERA_AS Analytical Services in Support of the Economic Resilience Activity ERI Economic Resilience Index FI Financial Institution GCA Government-Controlled Area GCA-D Government-Controlled Area of Donetsk Oblast GCA-L Government-Controlled Area of Luhansk Oblast GDP Gross Domestic Product GOU Government of Ukraine GRP Gross Regional Product HER Household Economic Resilience IER Institutional Economic Resilience IDP Internally Displaced Person IT Information Technology KII Key Informant Interview KIIS Kyiv International Institute of Sociology M&E Monitoring and Evaluation NGCA-D Non-Government-Controlled Area of Donetsk Oblast NGCA-L Non-Government-Controlled Area of Luhansk Oblast PWD Person with Disabilities RER Regional Economic Resilience SMEs Small and Medium Enterprises SSSU State Statistics Service of Ukraine USAID United States Agency for International Development ERA_AS Household and Business Economic Resilience Study of GCA Donetsk and Luhansk Oblasts in Eastern Ukraine Study — Baseline Report, March 2019 Page iii Contents Executive Summary ...................................................................................................... 1 1. PREFACE ............................................................................................................... 5 1.1 Background ................................................................................................................................ 5 1.2 Scope of the Study ................................................................................................................... 6 1.3 Use of Quantitative and Qualitative Data and Methodologies ...................................... 7 1.3a Design of Data Collection Instruments ................................................................. 7 1.3.b Household Survey Methodology ............................................................................. 8 1.3.c Business Survey Methodology .................................................................................. 9 1.3.d Key Informant Interview Methodology ................................................................ 11 1.4 Challenges Encountered and Limitations .............................................................................. 11 2. Key Findings ....................................................................................................... 13 2.1 Regional Economic Profile .................................................................................................... 13 2.2 Characteristics of Individuals from Household Surveys ................................................ 14 2.3 Characteristics of Businesses from Business Surveys .................................................... 15 2.4 Characteristics of Vulnerability Status of Persons Interviewed ................................... 19 2.5 Economic Resilience ............................................................................................................. 20 2.5.a Regional Economic Resilience ................................................................................ 22 2.5.b Institutional Economic Resilience .......................................................................... 23 2.5.c Household Economic Resilience ........................................................................... 24 2.5.d Business Economic Resilience ................................................................................ 26 2.5.e Overall Economic Resilience Index Score ........................................................... 28 2.6 Employment ............................................................................................................................. 28 2.7 Access to Economic Opportunity for Individuals Index ................................................ 33 2.8 Access to Economic Opportunity for Businesses Index ............................................... 34 2.9 Confidence in Economic Future .......................................................................................... 36 2.10 Importance of New or Different Sectors to Future Economy .................................... 39 3. Summary of Findings and Conclusions ........................................................ 42 3.1 Summary of Findings .............................................................................................................. 42 3.2 Conclusions ............................................................................................................................. 44 ERA_AS Household and Business Economic Resilience Study of GCA Donetsk and Luhansk Oblasts in Eastern Ukraine Study — Baseline Report, July 2019 Page iv ANNEXES 1. Study Instruments .................................................................................................................................47 2. Detailed Survey Methodology ............................................................................................................94 3. Data Collection Location Information and Key Informant Sources ..........................................98 4. ERA_AS M&E Framework Indicator Baseline Values ............................................................... 103 5. Report Exhibits and Supplemental Data ....................................................................................... 106 ERA_AS Household and Business Economic Resilience Study of GCA Donetsk and Luhansk Oblasts in Eastern Ukraine Study — Baseline Report, July 2019 Page v Executive Summary The United States Agency for International Development (USAID)/Ukraine Mission (the Mission) has a specific interest in the development of the regional economy of the government-controlled areas of Donetsk (GCA-D) and Luhansk (GCA-L) oblasts in eastern Ukraine. In August 2018, the mission awarded the five-year Analytical Services in Support of the Economic Resilience Activity (ERA_AS) to SSG Advisors (d/b/a Resonance). ERA_AS supports USAID/Ukraine through monitoring, evaluation, and adaptive management activities with respect to the Economic Resilience Activity (ERA), concurrently awarded to DAI Global LLC. ERA, a separate five-year, $61.8 million USAID activity, works to stabilize and strengthen the regional economy in eastern Ukraine and to strengthen economic resilience within GCA-D and GCA-L in eastern Ukraine. To provide the Mission with a comprehensive set of contextual data, information, and analysis from which to more deeply and broadly understand the complexities of the region, assess current activities, and inform programmatic decisions, ERA_AS will report annually on 10 context indicators that provide insight into economic conditions within the region (see Exhibit 1). The Household and Business Economic Resilience Study of GCA-D and GCA-L in eastern Ukraine (the “Household and Business Economic Resilience Study”) is the primary tool that ERA_AS will use to populate these indicators and to conduct contextual monitoring of economic trends in eastern Ukraine on an annual basis. Annex 4 is a complete summary of indicator baseline values, including disaggregated data. The study includes a household-level survey of 1,200 individuals, a business-level survey of 400 businesses, and key informant interviews (KIIs) with about 20 private sector, public sector, and non-governmental stakeholders from both target oblasts. Data collection for this baseline study occurred between November 2018 and February 2019. This baseline report summarizes findings and provides baseline data and analysis that will be used
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