CHAMPIONING ECONOMIC GROWTH BEST PRACTICES IN ASIA AND THE MIDDLE EAST Asia and Middle East Economic Growth Best Practices Project
SEPTEMBER 30, 2017 This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc. CHAMPIONING ECONOMIC GROWTH BEST PRACTICES IN ASIA AND THE MIDDLE EAST Asia and Middle East Economic Growth Best Practices Project
USAID Contract No. GS-23F-0127P Task Order AID-OAA-M-12-00008
Onion farmer tends his crops in Sri Lanka The author’s views expressed in this publication do not necessarily reflect the views of the CHEMONICS / AMEG United States Agency for International Development or the United States Government. Red onion farmer, Vinayamurthi Pushparani.
© CHEMONICS / AMEG
3 CONTENTS
CONTENTS...... III
ACRONYMS...... V
PROJECT OVERVIEW...... 6
ENTERPRISE DEVELOPMENT...... 13
YOUTH AND WORKFORCE DEVELOPMENT...... 19
FINANCIAL INCLUSION...... 27
TRADE FACILITATION...... 39
PUBLIC FINANCIAL MANAGEMENT...... 51
AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS...... 65
FRONT COVER: Women participate in youth empowerment TedX event in Yemen © TEDX SANAA/ ONSY HISHAM
4 Customs official and workshop participant at Khalifa Bin Salman Port in Bahrain.
CHEMONICS / AMEG
5 ACRONYMS
AMEG Asia and Middle MENA East Economic Growth Best Middle East and North Africa Practices Project MSME Micro, small, ASEAN Association of and medium enterprise Southeast Asian Nations NTB Non-tariff barrier BRCP Tunisia Business Reform and Competitiveness OECD Organization for Program Economic Co-operation and Development CMAA Customs Mutual Assistance Agreement PFM Public financial management ECP Enterprise Competitiveness Program SME Small and medium enterprise ESG Environmental, social, and governance TCP Tunisia Tax and Customs Reform Activity GECOL General Electric Company of Libya TFA Trade Facilitation Agreement IPEC Indo-Pacific economic corridor TTN Tunisia TradeNet
ME/TS USAID United States Agency Middle East Technical Services for Economic Development
MEDA Mennonite Economic WTO Development Association World Trade Organization
MENA II Middle East and YEFE Yemen Education for North Africa Investment Employment Initiative
6 SECTION I PROJECT OVERVIEW
Building on the accomplishments TECHNICAL SCOPE of previous centrally funded, A flexible mechanism designed innovative platforms for to capture and disseminate best technical best practices practices and pilot innovative implementation and strategic approaches and technologies, support to missions, including AMEG worked across a wide the Financial Sector Knowledge range of economic growth Sharing Project and Business sectors to provide USAID Growth Initiative, the United missions and operating units States Agency for International with design assistance, technical Development (USAID) assessments, model scopes launched the Asia and Middle of work, technical briefs, case East Economic Growth Best studies, and user-friendly sector Practices (AMEG) project in diagnostics in Asia and the 2013. A five-year initiative with Middle East. Under the guidance a shared ceiling of $69 million, of USAID’s Asia and Middle AMEG enabled technical East bureaus and participating support teams in USAID’s Asia missions, AMEG formulated and Middle East bureaus to concepts and designed scopes of collaborate with USAID missions work for short-term economic and operating units to identify growth assessments and pilot and address specific technical activities. AMEG also connected and strategic challenges in mission staff with tools and economic growth programming. resources on best practices and During the project’s lifespan, championed broader knowledge- AMEG and the bureau’s technical sharing endeavors and events. In support teams worked with addition, AMEG assisted select 30 missions, USAID operating missions with implementation units, and other U.S. government issues and piloted new agencies to identify country and proven approaches to and region priorities, capture strengthen economic institutions and disseminate best practices, and governance. Examples of develop strategies and programs, AMEG’s work across a range of and pilot innovative technologies key sectors are shown to the and approaches to enable right. broad-based and more-inclusive economic growth in Asia and the Middle East.
7 Project Overview AMEG ASSISTANCE ACROSS ALL TECHNICAL AREAS
ENTERPRISE YOUTH AND WORKFORCE FINANCIAL DEVELOPMENT DEVELOPMENT INCLUSION
• Assessments, strategies, and • Workforce development • Market assessments and design assistance assessments research • Best practices guides and • Sector and employer- • Policy assessments and best learning workshops specific strategies practices guides • Market-led/customer- • Job training and job • Guides and workshops on driven small and medium placement pilot programs innovative financial products enterprise development and approaches pilot programs • Strategies to enhance • Value chain assessments and mobile money and optimization branchless banking policies • Enabling environment and interventions assessments and strategies • Strategies and pilots to attract diaspora investment • Gender inclusive finance strategies and pilots
PUBLIC FINANCIAL TRADE AGRICULTURAL MANAGEMENT FACILITATION LIVELIHOOD AND VULNERABLE POULATIONS
• Public Financial Management • Trade policy diagnostics • Value chain assessments assessments, strategies, • Domestic and regional trade • Strategies and pilots for pilots and capacity building facilitation assessments, private sector engagement • Tax policy and strategies, and pilot • Market-led agricultural administration reform programs development strategies, pilots, and • Customs capacity building • Livelihoods strategies capacity building workshops and support and pilots for vulnerable • Payroll and pension reform • Trade corridor development populations during and strategies and pilots • Gender inclusive trade post-conflict/disaster • Local government development assessments and capacity building
8 Project Overview Cambodian Commerce Minister Pan Sorasak shakes hands with U.S. Ambassador to Cambodia William A. Heidt at a workshop presenting findings of AMEG’s trade facilitation assessment.
© USAID CAMBODIA
9 Project Overview BANGLADESH INDONESIA NEPAL ··Best Practices for Improved Employment Outcomes ··Global Entrepreneurship Summit ··Private Sector Engagement Assessment GEOGRAPHIC SCOPE ··Global Entrepreneurship Summit ··Assessment of Gender Lens Investing in Asia ··Gendered ESG ··Indo-Pacific Economic Corridor
··Indo-Pacific Economic Corridor IRAQ PAKISTAN ··Secured Transactions Reform ··Best Practices for Improved Employment Outcomes CAMBODIA ··Support to Middle East & North Africa Investment Initiative ··Pakistan Non-Agricultural Value Chain Assessment ··Revenue Capital Finance Model ··Global Entrepreneurship Summit ··Lower Mekong Initiative Clean Energy Business Dialogue ··Iraq Public Financial Management PHILIPPINES ··Cambodia Trade Facilitation Assessment ··Improved Infrastructure in Palawan ··Trade Capacity Building Pilot EGYPT ··Lower Mekong Initiative Clean Energy Business Dialogue ··Best Practices for Improved Employment Outcomes JORDAN ··Global Entrepreneurship Summit ··Assessment of Gender Lens Investing in Asia ··Secured Transactions Reform ··Best Practices for Improved Employment Outcomes ··Revenue Capital Finance Model KYRGYZSTAN ··Secured Transactions Reform SYRIA ··Trade Capacity Building Pilot ··Support to Middle East & North Africa Investment Initiative ··Revenue Capital Finance Model ··Syria Economically Essential Services EAST TIMOR ··Jordan Fiscal Assessment SRI LANKA ··Accelerating Inclusive Economic Growth in Timor-Leste SYRIA ··Trade Capacity Building Pilot ··Supporting Opportunities for Livelihoods Development Pilot ··Sri Lanka Livelihoods Assessments LEBANON INDIA ··Advantages and Disadvantages of Geographic Indicators System ··Sri Lanka Public Financial Management Needs Assessment ··Global Entrepreneurship Summit ··Trade Facilitation Needs Assessments IRAQ ··Indo-Pacific Economic Corridor ··Indian Diaspora Investment Preferences KYRGYZSTAN TUNISIA WEST BANK/ ··Assessment of Gender Lens Investing in Asia GAZA NEPAL TUNISIA ··Gendered ESG ··Kyrgyz Republic Economic Growth Assessment ··Best Practices for Improved Employment Outcomes ··Indo-Pacific Economic Corridor ··Assessment of LGBTI Economic Inclusion MOROCCO PAKISTAN LIBYA LEBANON EGYPT JORDAN ··Secured Transactions Reform ··Best Practices for Improved Employment Outcomes ··Revenue Capital Finance Model ··Increasing Enterprise Growth & Jobs INDIA ··Lebanon Diaspora Engagement Pilot ··Tunisia Tax and Customs Reform Pilot ··Lebanon Ta3mal Pilot ··Assessment of LGBTI Economic Inclusion ··Trade Capacity Building Pilot ··Trade Facilitation Needs Assessments ··Secured Transactions Reform BANGLADESH ··Support to Middle East & North Africa Investment Initiative WEST BANK/GAZA ··Revenue Capital Finance Model PHILIPPINES ··Best Practices for Improved Employment Outcomes YEMEN ··Trade Capacity Building Pilot ··Secured Transactions Reform LIBYA ··Trade Capacity Building Pilot ··Libya Enterprise Competitiveness CAMBODIA YEMEN ··Libya Public Financial Management ··Yemen E-Money Services Gap Analysis Agricultural Livelihoods SRI LANKA ··Libya Workforce Development ··Yemen Mobile Money Regulations Enterprise Competitiveness MOROCCO ··Yemen E-Money Services Gap Analysis ··Yemen Microfinance Network Training Kit for Loan Officers Financial Inclusion and ··Secured Transactions Reform Development ··Support to Middle East & North Africa Investment Initiative ··Yemen Mutual Accountability Framework ··Revenue Capital Finance Model Public Financial Management INDONESIA ··Yemen Workforce Development Pilot ··Trade Capacity Building Pilot ··Yemen Workforce Development Appraisal Trade ··Advantages and Disadvantages of Geographic ··Trade Facilitation Needs Assessments Indicators System ··TedX Entrepreneurship Events and Start-Up Weekends Youth/Workforce ··Trade Facilitation Needs Assessments Development EAST TIMOR
10 Project Overview BY THE NUMBERS
350 111 JOBS CREATED USAID OFFICERS in 2 months in Libya through and implementers enterprise competitiveness trained on the enterprise pilot program 5 competetiveness approach USAID MISSIONS with programming influenced by AMEG enterprise competitiveness knowledge dissemination activities
1,167 15 DAIRY FARMERS ENTERPRISE linked with COMPETETIVENESS international milk assessments and pilots buyers and trained in implemented in 10 improved production 20 START-UPS countries in Sri Lanka created through Start- Up Weekends in Yemen
11 Project Overview SECTION 2 ENTERPRISE DEVELOPMENT
SMEs make up nearly 90 DOCUMENTING percent of businesses in the COST-EFFECTIVE Middle East and North Africa APPROACHES TO JOB (MENA) and 98 percent in CREATION Asia-Pacific. These businesses The existence of a jobs crisis are the key drivers of job in MENA is well documented. creation, employing 66 Less than one-half of the percent of the labor force working-age population in in both regions. A core MENA is employed or in objective of AMEG was to school. Although MENA’s aid missions in designing youth is relatively well and implementing economic educated, the region has the growth programming to enable highest youth unemployment the growth and development rate in the world (28 percent), of SMEs and create new and the share of women in the employment opportunities. workforce is lower than any AMEG activities ranged from other region. The question assessing the potential for is: Can the U.S. government SME growth in specific sectors improve employment to documenting and piloting outcomes in the region and, cost-effective approaches to if so, what is the most cost- SME development and job effective method of doing so? creation. In this section, we highlight some of AMEG’s key In 2014, AMEG, working achievements in identifying closely with partners Banyan enterprise development best Global and the JOBS Group, practices and supporting embarked on an ambitious missions in Asia and the Middle initiative to answer this East to put them into action. question and identify the most
12 Enterprise Development Food processor growing his business with USAID support in Tunisia. CHEMONICS / ISAIAH OLIVER
cost-effective approaches Tunisia the USAID Business to job creation in MENA Reform and Competitiveness and beyond. The AMEG Program helped create 15,128 AMEG CASE STUDIES team examined data from jobs at a cost per job of ON PROMISING more than 40 projects to $954. USAID has used similar APPROACHES TO JOB identify successful USAID approaches successfully in CREATION and non-USAID projects that at least 15 countries that • USAID Maximizing yielded the best employment span many different regions, Agricultural Revenue and outcomes. From this, the cultures, and stages of Key Enterprises in Targeted AMEG team conducted in- economic development. Sites project in Nigeria depth research into the most promising programs, in MENA DEVELOPING TOOLS • USAID Business Reform and globally, and documented TO SUPPORT COST- and Competitiveness their approaches in a series of EFFECTIVE MISSION project in Tunisia case studies (see text box). PROGRAMMING • USAID Job Opportunities Often, enterprises’ most and Business Support AMEG’s research indicated significant growth constraints project in Bangladesh that programs using a tailored are firm-specific and, as such, approach to help firms identify they require tailored solutions • Endeavor Global real buyers and address to take advantage of existing Entrepreneurship bottlenecks to new sales and markets and reach new • World Bank’s Mauritius growth can have a direct and ones. Yet donors shy away Business Growth project cost-effective impact on job from firm-level enterprise creation. For example, in competitiveness assistance —
13 Enterprise Development often due to a misperception to help USAID determine that the cost and effort whether their country context required to tailor solutions to is appropriate for an ECP. The individual firms is not a cost- technical guide can be found effective use of resources. on USAID’s Development Experience Clearinghouse. Building on findings from its research into cost-effective AMEG later developed and approaches to SME growth delivered a series of training and job generation, AMEG workshops and other tools to developed a series of tools introduce economic growth and training courses to help officers and practitioners to missions better understand the ECP approach and technical and utilize the highly cost- guide. Approximately 111 staff effective firm-level enterprise from USAID and implementing competitiveness approach in partners attended these future programming. First, workshops in Washington, AMEG developed a practical D.C., and Frankfurt, Germany. technical guide to this type of AMEG also produced a short enterprise competitiveness video introduction and an program (ECP). The best infographic (see page 17) to the practices in the guide present ECP approach to share with an ECP approach that a broader audience of USAID maximizes cost-effectiveness economic growth officers and by promoting accountability, practitioners. The full version aligning incentives for optimal of the video can be found performance, and ultimately, on USAID’s Development helping create jobs that are Experience Clearinghouse. directly attributable to USAID assistance. The guide begins INFORMING MISSION with an overview of ECPs, SME SUPPORT including some examples of PROGRAMS USAID programs, a theory of AMEG’s ECP guide and hands- change, an economic rationale on workshops have informed for this approach, a discussion mission programming in at of the advantages of ECPs, least five countries to date and a discussion of how in the MENA region, and ECPs can complement and have influenced programming bolster other types of USAID in other USAID missions assistance. Remaining sections worldwide. One of these provide practical advice for countries is Lebanon, planning and implementing an where AMEG conducted a ECP, including guidance on two-month assessment to planning, procurement, and identify impediments to SME project implementation, and growth and opportunities monitoring and evaluation for USAID to remove or (M&E). The guide also includes alleviate these impediments an ECP model scope of work in the future. As in other and a diagnostic checklist countries, AMEG found that
14 Enterprise Development SME needs and constraints with firms. Instead, Pragma were not homogenous, even developed a network of within specific sectors like Libyan consultants who could agribusiness and manufacturing. provide needed assistance AMEG provided guidance for to Libyan firms. In roughly the mission that explained how half the cases, AMEG also a sector-agnostic ECP program brought Libyan managers and focused on linking SMEs employees to Tunisia to receive with buyers and addressing targeted training. Through constraints at the firm level this combination of bringing could help businesses become Libyans to Tunisia for training, more efficient and competitive, and providing direct assistance thus increasing sales and jobs. through Libyan advisors, The assessment also highlighted Pragma helped all of the firms how targeted workforce address key bottlenecks to development and export business growth and increase promotion initiatives could sales. complement the ECP approach and multiply the number of Despite serious operating jobs created. The mission has constraints, including frequent plans to implement an ECP blackouts, militia activity, beginning in late 2017. and limited access to roads and transport, Libyan firms PILOTING COST- participating in the program EFFECTIVE hired 351 employees within APPROACHES WITH just two months of receiving SMES AFFECTED BY technical assistance. Most CONFLICT of those hired were Libyans Utilizing its successful ECP under the age of 30. AMEG’s approach from Tunisia, experience in Libya provides AMEG partner the Pragma encouragement that this Corporation identified and type of approach could work provided assistance to 16 firms in other conflict-affected in Tripoli and Sebha, Libya. contexts like Syria and Iraq, Unlike on the Tunisia BRCP and could help communities in program, Pragma could not those countries rebuild their send international experts economies after conflicts end. to Libya to work directly
15 Enterprise Development WORKING WITH INDIVIDUAL FIRMS TO DELIVER RESULTS
Identify binding constraints preventing client firm from increasing orders or reaching new buyers in final market.
Customize assistance to Identify specific buyer attack binding constraints in final market. and strengthen buyer-seller 2 relationship. 1 3 SUPPORT
DEMAND DEMAND FINAL SUPPLY CLIENTS SUPPLY PRODUCERS MARKET
6 IMPACT 4
Strong buyer-seller relationship 5 Client firm enjoys increased continues to increase jobs. New sales to existing buyers or jobs provide income to reduce access to new markets. poverty.
As sales increase, client firm and its suppliers must create jobs to increase production.
This approach has created 158,328 jobs on just seven USAID programs
4,700 AZERBAIJAN ABAD 6,700 KOSOVO KCBS 15,128 TUNISIA BRCP
25,200 NIGERIA MARKETS 81,900 PERU PRWA 3,200 BOLIVIA RCA 21,500 PARAGUAY VENDE
KEYS TO SUCCESS UNIT COST PER JOB OF PAST PROJECTS RETURN ON Identify specific buyers before designing INVESTMENT • PARAGUAY $224 assistance packages VENDE To put the cost- • Design solutions to address individual NIGERIA effectiveness numbers problems; do not bring a pre-packaged MARKETS $515 at left in context, solution looking for a problem Chris Blattman, PERU a development • Adhere to a disciplined approach for PRA $516 selecting client firms using a quantitative economist at the criterion, such as the $500 to 1 job rule AZERBAIJAN University of Chicago, ABAD $590 suggested that a job • Require client firms to put “skin in the creation program in game” by cost-sharing assistance packages TUNISIA BRCP $954 Africa with a unit-cost • Set realistic but ambitious targets and hold of $8,500 per job may people accountable for achieving results BOLIVIA be the most cost- RCA $2,799 • Use robust M&E systems that ensure jobs effective program are real and attributable to the project in history. KOSOVO $3,026 • Focus on jobs, not sectors, and let the KCBS team capitalize on opportunities wherever they appear $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 16 Enterprise Development To learn more, find the Enterprise Competitiveness Technical Guide on USAID’s Development Experience Clearinghouse BY THE NUMBERS
100 628 280 JOB SEEKERS YOUTH TRAINED YOUTH in Lebanon were employed through employer-driven (including nearly 100 due to Ta3mal pilot site and workforce development women) placed in social media outreach efforts programs in Yemen jobs in Yemen
11 YOUTH AND WORKFORCE 30,000 DEVELOPMENT Youth across Yemen assessments and pilots PARTICIPATED implemented in 7 countries IN TEDX EVENTS promoting youth empowerment and entrepreneurship
17 Enterprise Development SECTION 3 YOUTH AND WORKFORCE DEVELOPMENT
A recent World Economic reported that recent graduates Forum highlights the high had the language, teamwork, rates of unemployment and and technical skills needed to under-employment in MENA be successful in the workforce. — especially among the young and relatively well-educated AMEG piloted several targeted — and the low participation interventions aimed at linking of women in the workforce. youth with opportunities to Youth unemployment in the develop skills needed in the MENA region stands at 31 workforce and subsequently percent, with two in five linking them jobs. The sections university graduates out of below highlight several of these a job. Nearly 40 percent initiatives. of employers in the MENA region indicate that skills gaps BUILDING SKILLS AND are a major impediment to MATCHING YOUTH business growth, citing a lack WITH JOBS of basic problem-solving skills, As its first ever activity, AMEG creative and independent conducted an economic growth thinking, and soft skills as well assessment for USAID/Yemen as technical skills. A recent to evaluate the mission’s USAID study found similar existing economic growth complaints from employers in activities. Given that in 2014, Southeast Asia. While nearly more than 75 percent of the 80 percent indicated that Yemeni population was below they are currently looking to the age of 25 and that youth hire new staff to expand their ages 18 to 24 suffered from businesses, only 15 percent a 50 percent unemployment
18 Youth and WORKFORCE DEVELOPMENT rate, the assessment team AMEG also facilitated recommended activities to introductions between YEFE enhance youth employment and USAID’s Maternal and opportunities and help build Child Health Integrated skills needed in the private Program in Yemen to develop sector. USAID/Yemen agreed potential programmatic and reengaged AMEG to synergies on training for develop demand-driven, midwifery and nursing in Aden. results-oriented activities that This led to the creation of would result in placing qualified another targeted vocational Yemenis in jobs, with a special training program in health emphasis on youth. care-related skills.
Building on recommendations Sadly, in March 2015, Yemen from private sector employers, descended into a full-fledged AMEG began working with a military conflict, resulting local subcontractor, Yemen in USAID suspending all Education for Employment non-humanitarian programs (YEFE) in 2014 to design operating in the country, and implement a program including the AMEG workforce to leverage private sector development activity. Despite participation to match the conflict, nearly 60 percent workforce skills with employer of graduates of the AMEG/ needs. Based on the results YEFE training programs have of a labor market assessment, been placed into jobs, including AMEG and YEFE developed a nearly 100 Yemeni women. program working with local Graduates of the health care vocational and educational skills training program became training institutes to train particularly important, as a total of 684 students foreign health workers were in workforce readiness, forced to flee the country. business English, and technical YEFE graduates were able in training across Sana’a, Aden, many cases to provide health and Taiz. As part of their services for Yemenis during training, the students visited this critical time. private sector companies over the course of several CREATING business days to experience OPPORTUNITIES real work-environments FOR YOUNG and conduct research ENTREPRENEURS on products, marketing, Yemen’s youth are often and sales. The students underemployed and face then completed a group difficult survival decisions capstone project to design daily. In 2014 and 2015, AMEG promotional presentations for worked with USAID/Yemen to the businesses they visited. organize two startup weekends More than sixty companies in Sana’a and Aden to foster participated in the AMEG pilot a culture of entrepreneurship across Sana’a, Aden, and Taiz. among youth, guide startups
19 Youth and WORKFORCE DEVELOPMENT Young women participating in TedX event in Yemen © TEDX SANAA/ ONSY HISHAM
SNAPSHOT Workforce Development to Counter Yemen’s Growing Humanitarian Crisis
Together with partner YEFE, AMEG developed and rolled out workforce readiness trainings to Yemeni youth, preparing them for careers in the nursing industry. YEFE teamed with local training institutes to train young men and women in nursing skills as well as soft skills such as communications, workplace readiness, and English.
While nurses were in high demand prior to the political crisis, ongoing airstrikes and escalating ground fighting have made skilled nursing professionals absolutely critical in recent years. Since April 2015, major hospitals and medical centers in Yemen have reached out to YEFE staff and alumni in Yemen to hire dozens of AMEG-trained nurses, administrative assistants, and other job positions that were previously occupied by non-Yemenis who evacuated the country in 2015.
One such AMEG graduate, Amal Al Darwbi, a 24-year-old female from Sana’a, had just completed the AMEG technical training and had started an internship at the Yemen German Hospital in early 2015. With guidance and mentoring from YEFE staff, Amal talked to her internship supervisor about her interest in continuing to work in the hospital during the turmoil. In less than five months, the hospital had offered Amal a full-time position.
Despite the turmoil in Yemen, Amal felt empowered and reenergized by her new job and by the opportunity to use her newly-learned skills to help her fellow Yemeni citizens. As of 2016, the AMEG nurse training program had placed 28 of the 50 nurses trained in permanent nursing jobs in Sana’a and Aden.
20 Youth and WORKFORCE DEVELOPMENT to successfully launch pioneer attendance and 30,000 people businesses, and establish online. a social and professional networking base for aspiring The event featured Yemeni and active entrepreneurs and international speakers in Yemen. AMEG selected to discuss business, new approximately 600 Yemeni technology and apps, science, entrepreneurs and youth to and civic engagement. The attend the two-day events Yemeni creators of a video and in Aden and Sana’a, which audio content search engine immersed attendees in a served as a major inspiration hands-on process of moving to the audience, speaking to an idea to market. Aspiring the audience about creativity, Yemeni entrepreneurs gained creation, and finding success valuable skills, cultivated new amid the political and economic and existing ideas, and built hardships in Yemen. This lasting professional networks. search engine has garnered international interest, and Three teams received awards has received multiple buy-out for the best business plans at offers from international tech each startup event, but AMEG companies such as Facebook estimates that attendees may and Google. have formed as many as 20 new businesses as a result of the With Yemen’s political situation workshops in both Sana’a and becoming more and more Aden. tenuous, finding positive sources of inspiration has SPARKING YOUTH become more difficult. The ENGAGEMENT AND TEDx themes of creativity, EMPOWERMENT entrepreneurship, love, and Back in 2014, as hate and acceptance were timely and intolerance increased in provided Yemen’s most at-risk Yemen, youths aged 12 group, its youth, with reasons to 19 were increasingly and examples to provide being recruited into radical positive contributions to groups. To promote youth Yemen. empowerment, foster entrepreneurialism, civic LEVERAGING engagement, community TECHNOLOGY TO security, and spread ideas MATCH YOUTH worth sharing, AMEG together WITH TRAINING with the Lebanese International AND EMPLOYMENT University brought the first OPPORTUNITIES IN youth-focused TEDx event to LEBANON Yemen in January 2015. AMEG While online job-matching organized the TEDx event websites were available in entitled Love, Acceptance, and Lebanon in 2015, they largely Creativity for 650 people in targeted experienced job seekers looking for high-
21 Youth and WORKFORCE DEVELOPMENT TEDxSanaa 2013 volunteer guiding the attendees in the © TEDX SANAA/ EMAN ALAWAMI registration process
level management positions. effective training programs, In 2014, an examination of AMEG teamed with Microsoft Bayt-Lebanon — one of the in 2015 to test its YouthWorks largest employment portals in online job training and the MENA region — showed placement platform in Lebanon. only 339 job positions posted Over the course of a year, in Lebanon. Of those, only AMEG, together with Lebanese 94 positions were for entry- private sector partner level positions usually filled by Netways, rolled out the young university graduates. platform — known as Ta3mal At the same time, employers Lebanon — to 14 universities, complained that few youth job donor programs, chambers of seekers in Lebanon had real commerce, local development work experience and lacked agencies, and nongovernmental the right mix of hard and soft partners. Through these and skills to succeed in the partnerships with youth- workplace. focused organizations, AMEG and Netways brought 2,600 Seeing the need to provide new youth job seekers to the youth in Lebanon with access platform, introducing them to to entry-level jobs and cost- new employment opportunities
22 Youth and WORKFORCE DEVELOPMENT A Speaker at the youth-focused TedX event in Sana’a, Yemen
© TEDX SANAA/ SALMA
23 Youth and WORKFORCE DEVELOPMENT as well as a wealth of online YouthWorks software, AMEG courses in topics ranging estimates that its Ta3mal social from English-language skills to media outreach efforts may accounting to IT. AMEG also have linked up to 100 Lebanese convinced 175 new employers job seekers with positions over in Lebanon to use Ta3mal the course of the year-long for recruiting purposes, and initiative. provided them with training and support to tailor successful DOCUMENTING PROS job postings to recruit more AND CONS OF PRIVATE qualified applicants. Over the SECTOR TECHNOLOGY course of the year-long pilot, ALLIANCES employers posted 370 new jobs Building on lessons learned to the Ta3mal site, an increase from its unsuccessful of 53 percent in the number of experience working with jobs accessible to youth. AMEG Microsoft in Lebanon, AMEG and Netways also sponsored crafted a guide for USAID on-campus youth events and economic growth officers social media campaigns to and practitioners on working share Ta3mal job postings and with private sector partners training opportunities more to support workforce broadly. development initiatives. The guide highlights workforce A mid-term survey of development programs and employers exposed problems solutions from Microsoft, with the integration of Oracle, Cisco, Souktel, and Microsoft’s platform with others, and provides a quick that of its job search engine reference guide for readers powered by Bayt. As a result, to determine which, if any, of AMEG discovered that many the solutions may complement employers were not able their skills training and job to successfully register or matching initiative. The post jobs via the platform. guide is available on USAID’s Despite what turned out to Development Experience be a fatal flaw underlying the Clearinghouse.
24 Youth and WORKFORCE DEVELOPMENT BY THE NUMBERS
584 20 INVESTORS AND Officials from 8 MENA FINANCIAL PROFESSIONALS countries TRAINED across the US and the Middle East in secured transaction received access to the Revenue $16 Million reform Capital Model INVESTED in SMEs with a social purpose in India in 2015 via the Indian Investment Initiative
$12 Million 13 Invested in 20 of FINANCIAL EARLY STAGE INCLUSION ENTERPRISES via assessments, pilots, and USAID’s Middle East 2015 workshops implemented in and North Africa The year Yemen approved 12 countries Investment Initiative MOBILE E-MONEY service regulations
25 Financial Inclusion SECTION 4 FINANCIAL INCLUSION
Micro, small, and medium AMEG piloted gender inclusive enterprises (MSMEs) in approaches to investing in emerging markets create SMEs, as well as innovative roughly four out of every five mechanisms to channel new jobs, according to the diaspora investments into World Bank. Yet more than 50 development. percent of MSMEs lack access to finance, which hinders their CHAMPIONING growth. The World Bank SECURED estimates that for the formal TRANSACTION REFORM SME sector, the credit gap IN THE MIDDLE EAST stands at roughly $1 trillion. From a global perspective, the MENA region is significantly A key area of AMEG’s work behind in pursuing and initiating aimed at improving MSMEs’ reforms to increase access access to finance and to to and availability of secured finding innovative solutions credit. While 35 percent of to unlock sources of new businesses in the region cite capital. Over the course of lack of access to finance as a five years, AMEG supported constraint, only 25 percent and shared innovative of firms in the MENA region approaches to investing in have a bank loan and collateral early stage enterprises and requirements typically average high-growth SMEs. AMEG 200 percent of the value of the also supported guides and loan. Additionally, 35 percent workshops for government of businesses in the MENA counterparts to improve the region identify lack of access policy environment for SME to finance as a constraint. The and digital finance. In addition,
26 Financial Inclusion need for reforms to improve buy-in from the necessary access to credit is glaring. key players to implement the modernized regulation. In March 2017, the USAID MENA country representatives Middle East Bureau, in networked with top leaders partnership with the U.S. in secured transaction reform Department of State and and sought advice on how to USAID’s Office of Economic launch the reform process, Growth, Education, and how to push reforms forward, Environment, hosted a two- and how to improve upon day workshop on secured existing secured transactions transaction reform for 40 systems that are limiting participants from Ministries of access to finance for MSMEs. Justice, Finance and Central Attendees left the workshop Banks in Morocco, Jordan, with a clear understanding of Tunisia, Iraq, Egypt and the importance of secured West Bank and Gaza. The transactions reforms and new purpose of the workshop motivation to start discussions was to build awareness of the and pursue reforms in their positive impacts of secured home countries. transaction reform on a country’s economy, elements BUILDING of a modernized secured FOUNDATIONS FOR transaction system, and how to DIGITAL FINANCIAL both pursue and operationalize SERVICES IN YEMEN reforms to improve access to In 2013, Yemen boasted more credit and economic growth than 8 million mobile phone throughout the MENA region. subscribers, yet Yemeni banks The goal for the workshop was held less than 1 million bank to have attendees walk away accounts. AMEG helped the with a greater understanding of government of Yemen to secured transaction reforms, harness the potential of mobile feel proficient to make the and branchless banking services case for reform in their home by providing legal expertise countries, and work to pursue and support in drafting reforms in the future. implementing guidelines for the Payment Systems and The workshop featured Electronic Financial and top international experts in Banking Transactions Law to secured transaction reform enable prudential, inclusive including the chairman of expansion of e-money services the UNCITRAL Secretariat in Yemen. In April 2013, and senior advisors from the AMEG and USAID/Yemen World Bank, USAID, and the hosted a two-day workshop National Law Center. The for the Central Bank on best workshop emphasized the practices in regulating mobile importance of not just pursuing and branchless banking. The reform, but operationalizing workshop was conducted reform and how to ensure jointly with the World Bank’s
27 Financial Inclusion Central bankers discuss best practices in mobile money regulations CHEMONICS / AMEG at an AMEG sponsored workshop in Yemen.
Consultative Group to Assist Following the study tour, the the Poor, and organized in Central Bank finalized a draft collaboration with the Social of the revised branchless Fund for Development, an banking regulations and issued organization established with the draft for public comment support from the Yemeni in Yemen. The regulations government to promote were officially issued through a economic opportunities and Central Bank circular in 2015. reduce the vulnerabilities of the poor. Technical assistance to the Central Bank of Yemen was After the completion of the suspended in 2014 due to workshop, AMEG coordinated the political situation, but in with the Alliance for Financial late 2016, AMEG resumed Inclusion to arrange and fund a its work to support the study tour in 2014 for Central expansion of digital financial Bank representatives to visit services in Yemen. A cash central banks in Bangladesh and crisis in the country was Peru to observe administration seriously threatening donor and supervision of branchless and humanitarian groups’ banking regulations first-hand. abilities to get cash grants
28 Financial Inclusion for food and necessities to SUPPORTING EARLY- conflict-affected Yemenis. Via STAGE INVESTMENTS IN phone interviews and emails THE MIDDLE EAST with Yemenis on the ground, USAID’s Middle East and AMEG advisors analyzed the North Africa Investment current e-money market and Initiative (MENA II) is an the pre-conditions needed innovative mechanism designed to facilitate the expansion of to set up regional investment e-money products and services managers that will provide to facilitate the flow of salary matching investment capital, payments and cash transfers investment insurance, and to address the humanitarian other needed technical crisis in Yemen. They found assistance support to a broad that thanks to USAID/Yemen’s spectrum of qualified early support for the issuance of the stage businesses in the MENA mobile money circular in 2015 region. Over its lifespan, through AMEG, the country AMEG has supported the had a strong regulatory MENA Investment Initiative framework in place to support in many ways. In preparation the introduction and adoption for the MENA II launch, of e-money services. One of AMEG conducted in-depth Yemen’s largest microfinance assessments of the investment banks had launched a mobile landscapes and business e-money platform in 2016 environments for startups and and two more banks planned SMEs in the West Bank and in to start offering e-money Lebanon. AMEG gathered input services in 2017. And while from angel investors, venture the e-money infrastructure capitalists, commercial banks, is still in a nascent state in business incubators, business Yemen, AMEG proposed accelerators, entrepreneurs, steps that the Central Bank government representatives, can take to ultimately enable and others to assess the e-money adoption and usage status and trajectory of the in the medium to long-term, two countries’ early stage and including support to improve growth capital funding sources, the policy and regulatory the quality and impact of the environment to enable more institutions supporting business robust and extensive agent startups, and challenges and networks. AMEG also outlined opportunities of the enabling potential options for USAID environment. The assessments or other donors to support vetted the feasibility of using the expansion of e-money matching grants, investment services for humanitarian insurance, and technical payments, including remote assistance as potential training of bank staff and agents solutions to enhance new in e-money promotion and business startup and growth. adoption.
29 Financial Inclusion Following the launch of businesses are those in which MENA II, AMEG developed revenues grow 20 percent or a set of indicators for USAID more for four consecutive to measure and track the years or 30 percent per year progress of the investment for three consecutive years. managers and the impacts of But potential fast-growth funding on investee growth SMEs, and SMEs in general, and job creation. AMEG also are not well served by either organized annual workshops banks or equity investors. The in Dubai in 2016 and 2017 average bank loan for an SME to bring together MENA II requires collateral of 150 to investment managers to discuss 200 percent of the amount of successes, challenges, and best the loan and venture capital practices in structuring deals and private equity are so rare with early stage businesses. at smaller levels that they The first day of each workshop have no appreciable systemic allowed for internal dialogue value for the SME sector. among implementers and For expansion-ready SMEs USAID, while the second day in MENA, there is virtually showcased major investors no widely available type of from around the region growth financing offered within who shared best practices the broad gap between bank in risk management and deal financing and conventional flow, as well as innovative private equity. approaches to funding early stage enterprises in the region. Revenue capital, a hybrid of MENA II investment managers banking and private equity, have expressed their gratitude has the potential to fill this for being able to learn from instrument gap for many fast- one another, as well as from growth businesses. Revenue leaders in the field of investing. capital is a form of “risk capital” that dispenses with To date, MENA II’s partners high collateral requirements have invested $12 million in imposed by banks and the 20 early-stage enterprises in “exit” dilemma intrinsic Lebanon and Iraq, creating 222 to private equity while new jobs. participating in the growth of the SME investee. Revenue PROMOTING capital reduces the risk of INNOVATIVE INVESTING the investor, rewards the MODELS entrepreneur whose hard More than 30 years of data work creates an expansion collected globally show that opportunity, and realigns the four to eight percent of interests of the investor and formal businesses create 70 the investee by focusing both to 100 percent of net new parties intensely on increasing jobs. Known to economists as revenues as opposed to share “gazelles,” this small percentage value. of small and medium-sized
30 Financial Inclusion To share the potential of the Gender lens investing is an revenue capital for financing innovative investment approach high-growth SMEs, AMEG that integrates gender analysis documented successful case with financial analysis to studies of investors using the encourage improved gender- revenue capital model and based outcomes from private developed a technical guide investment. In partnership for those not familiar with this with USAID’s Regional financing structure. The case Development Mission for Asia, studies and guides were shared AMEG and partner Criterion through a USAID Microlinks Institute conducted field webinar that featured Business research to evaluate the state Partners and the Tunisian of the gender lens investing American Enterprise Fund, two field in Asia and identify investment firms successfully opportunities to help move utilizing the model to finance this cutting-edge field forward high-growth SMEs. AMEG also in the region and beyond. In organized a one-day workshop March 2015, AMEG facilitated on the revenue capital model gatherings of gender lens in Dubai in May 2017. The investing actors in Bangkok, workshop hosted investors Thailand, and Washington, from around the MENA D.C., hosting more than region and introduced them 100 impact investors, to their peers successfully women’s organizations, utilizing the model to finance donors, finance experts, and high-growth SMEs. AMEG’s implementing partners to technical guide to the Revenue initiate conversations between Capital approach can be found gender and finance experts on USAID’s Development about approaches to gender Experience Clearinghouse. lens investing, data gaps and potential data sources, and PILOTING GENDER LENS frameworks for investing with a INVESTING IN ASIA gender lens. A nation’s path to economic prosperity and social justice In 2016, AMEG partnered depends on the ability of with the Mennonite Economic women and men to access Development Association and use resources, and to (MEDA) to develop a contribute to the country’s practical Gender Equality economic development. With and Mainstreaming (GEM) SMEs hailed as the vehicle methodology and gendered of growth in developing environmental, social, and economies, it is especially governance (ESG) assessment important to empower tool. ESG is a tool used by women who are traditionally investors to evaluate corporate and historically untapped and behavior and to determine the underemployed human capital future financial performance of in many countries. companies. There is growing evidence that suggests that
31 Financial Inclusion AMEG REVENUE CAPITAL Alternative financing for fast-growth small and medium enterprises in the Middle East and North Africa
REVENUE CAPITAL
THE OPPORTUNITY OPTIONS Ahmad has an opportunity to make door WHAT IS IT? WHY CHOOSE IT? and window frames for a new apartment • A logical response to • Gives a loan with a low development. This one contract would the “instrument gap” interest rate bring him more business than all of his current work combined; but he needs • A hybrid of venture • Investor and business $500,000 to be able to fulfill the BANKS capital and bank lending have same focus on sales AHMAD, SME OWNER contract and do more big jobs. Ahmad has been turned down • Particularly appropriate • Lender doesn’t need by all of the banks because he If he can get the expansion financing, for high growth SMEs excessive collatoral doesn’t have enough collateral he could also create new jobs for his Ahmad makes door and window frames for houses to offer. • A shift in the risk • Repay investor by and small commercial buildings; mostly from community. capital paradigm from paying them small aluminum and PVC. share value growth to percentage of sales sales growth Here are his door and window business sales and • Good for business that projections for the next 5 years: has identified a growth opportunity $4M $4M INSTRUMENT GAP $3M (in between banks and VCs) HOW DOES IT WORK? $2M $3M 1 2 3 $1M Meet-and- Explain Business $0 greet business planning Y1 Y2 Y3 Y4 Y5 $2M
SALES FIGURES FOR THE PAST 5 YEARS 4 5 6 Run numbers Due diligence Cost variables $4M $1M VENTURE CAPTIALIST He also went to the only $3M venture capital fund he could 7 8 9 find that makes investments $2M $0 Decision Documents Technical Y6 Y7 Y8 Y9 Y10 under $2,000,000, and they making issued Assistance told him that he wasn’t big $1M 5 YEAR PROJECTION enough, that it wasn’t a WITH EXPANSION technology company, and $0 10 Y1 Y2 Y3 Y4 Y5 that he would have to sell their business to be a good Exit after 5 years 5 YEAR PROJECTION WITHOUT EXPANSION investment. ESG AREA EXAMPLE ESG INCLUSIVE ESG INDICATORS OF FOCUS INDICATOR PROMOTING WOMEN’S ECONOMIC EMPOWERMENT
Environmental practices that benefit female and male members of Environmental practices that communities (e.g. women’s concerns may be around drinking water and benefit local communities health issues, while men’s might focus on agricultural production)
ENVIRONMENT Environmental policies and Environmental policies and practices that benefit female and male staff (e.g. practices that benefit staff women may have different needs around maternity and breastfeeding)
Internal training and Internal training and promotion practices geared to women as well as to promotion practices men — women may be currently overlooked and under-represented
Improved market access for Improved market access for small-scale male and female suppliers, small scale supplier understanding the gendered nature of markets SOCIAL Better health and safety for Better health and safety for female and male employees which may require employees different considerations
Qualified and functional Qualified, functional and gender balanced boards boards
Employee committees Employee committees inclusive of women and men
GOVERNANCE Grievance procedures for issues such as sexual harassment and Grievance procedures discrimination that are more likely to affect women
ESG factors, when integrated To test the GEM methodology into investment analysis and and ESG, MEDA in partnership portfolio construction, may with Sarona Fund, carried out offer investors potential long- gendered ESG assessments term performance advantages. of Sarona Fund investees MEDA adapted the existing in India and Indonesia and ESG framework already familiar made recommendations to to many funds to mainstream the SMEs for mainstreaming the inclusion of women across gender into their business the entire framework. MEDA policies and practices. MEDA also developed a guidance then developed capacity document on how to develop building plans for a few of the gendered ESG performance SMEs and provided funding indicators tailored to each to support implementation SME’s sector and operating of recommendations. AMEG environment. The table and MEDA shared the impacts above compares examples of of these firms mainstreaming currently used ESG indicators gender into their analysis at a versus inclusive/mainstreamed workshop with USAID, other ESG indicators that will donors, practitioners, and fund promote women’s economic managers in September 2017 in empowerment. Washington, D.C.
33 Financial Inclusion ENGAGING DIASPORA market research participants TO INVEST IN THEIR confirmed existing research: HOME COUNTRY the U.S. Indian diaspora is Through this assignment, highly educated, professionally USAID/Washington’s Asia successful, and made up of Bureau and USAID/India high-income earners. Although engaged AMEG to conduct many members of the Indian market research to better diaspora are deeply skeptical understand the background of investing in India, AMEG’s and investment interests of market research team found Indian diaspora living in the demand potential for a social United States, particularly impact oriented fixed-income high net worth individuals. security, if designed and The market research includes implemented in a way that three primary methods of data maximizes social impact and collection: focus groups in four minimizes opportunities for major U.S. cities, an online corruption. In addition, AMEG survey, and a limited number developed a legal review of of one-on-one interviews the Indian laws and securities with investment experts and regulations that would impact Indian diaspora leaders. Using the creation of a fixed-income the research findings, AMEG social impact investment fund. conducted a demand analysis to help USAID determine the Ultimately, AMEG’s researched conditions under which Indian paved the way for USAID diaspora in the United States and the Calvert Foundation would invest in a fixed income to create a new social impact security that finances Indian investment vehicle, which SMEs in sectors that generate a President Obama announced in positive social impact. January 2015 on a visit to New Delhi, India. In its first year, Over a six-week period, AMEG Calvert’s Indian Investment engaged 142 members of the Initiative had already Indian diaspora through an committed $16 million in loans online survey and four focus to financial intermediaries that groups in San Francisco, Austin, invest in SMEs with a social Chicago, and New York. The purpose in India. demographic profile of these
34 Financial Inclusion Honey vendor in Yemen
CHEMONICS / AMEG
35 Financial Inclusion SNAPSHOT Using Technology as a Tool to Spark Diaspora Investment
A public-private sector partnership is leveraging technology to help members of the Lebanese diaspora invest their time, talent, and treasure to support development in their home country.
As a former member of the Lebanese diaspora, Netways CEO and founder Roula Moussa saw the potential for Lebanese living abroad to spur development in her home country. Upon returning to Lebanon after living in the Gulf for many years, Roula began training and employing local youth in IT skills in her family’s home village in the remote region of Akkar, where Netways now employs 60 people. After seeing Netways’ success in employing Lebanese in one of the poorest regions of Lebanon, other Lebanese living abroad began contacting Roula to find highly-skilled Lebanese IT developers and managers. With support from USAID, Roula built a “Knowledge City” in Akkar to provide IT infrastructure and training to youth in the region and match them with opportunities in diaspora-owned companies. She also recognized that technology could help capitalize on the enormous potential of diaspora members to contribute to employment and economic growth in Lebanon.
A NEW TOOL TO CONNECT DIASPORA TO LEBANON With the support of AMEG, in 2017 Roula created DiasporaID, a digital platform that connects diaspora communities and engages them through digital collaboration in development in their home countries. Much more than a social network, DiasporaID aims to strengthen (or rekindle) diaspora members’ connection to their homeland, increasing their willingness to assume a pivotal role in its socio-economic development.
WHAT IS DIASPORAID? DiasporaID leverages the strong bonds Lebanese diaspora members feel to their local communities and their desire to contribute to their home villages - years, and sometimes even generations, after they have migrated to other parts of the world. DiasporaID leverages Lebanese cultural affinities for working with their fellow country men and women, in the same city or halfway across the globe. By linking diaspora members with individuals, institutions, and enterprises in their home villages, as well as fellow diaspora living abroad and working in similar sectors, DiasporaID facilitates collaborative action between Lebanese residents and expats for mutual benefit of their businesses and communities.
Launched in August of 2017, the DiasporaID platform is currently being piloted with Lebanese communities and diaspora members. More than 800 diaspora members in the United States, Canada, the United Arab Emirates, France, Australia, Mexico, the Dominican Republic, and Sweden are currently registered on the site.
36 Financial Inclusion BY THE NUMBERS
PRIVATE SECTOR PARTNERS supporting AMEG workshops and pilots
18 55 4 Steps recommended to be Government COUNTRY ASSESSMENTS removed in the process at officials trained on completed to help governments Tunisia’s largest port to BEST PRACTICES comply with the WTO Trade RELEASE IMPORTED for national single Facilitation Agreement GOODS windows in South Asia
95 81 21 Government officials from 12 MENA government officials TRADE MENA countries TRAINED participated in trade facilitation assessments, workshops, IN TRADE FACILITATION BEST PRACTICE STUDY and pilots implemented in best practices and risk TOURS 14 countries management
37 Financial Inclusion SECTION 5 TRADE FACILITATION
WTO TRADE and some may need donor FACILITATION assistance. ASSESSMENTS After nearly 10 years of AMEG and partner Crown deliberations, World Trade Agents conducted four in- Organization (WTO) members depth assessments to help the concluded negotiations on the governments of Cambodia, Trade Facilitation Agreement Morocco, Tunisia, and (TFA) in December 2013. Yemen comply with the TFA. This landmark agreement Through these assessments, acknowledges the need to AMEG helped host-country tackle red tape, increase governments categorize the transparency, and address TFA’s 12 articles into Category non-tariff barriers that impede A, which indicates that the trade across the globe. The WTO member will comply WTO estimates that the TFA with the provision when the will boost developing countries’ TFA goes into force; Category exports by approximately B, which indicates that the $730 billion per year and will country needs additional time help diversify their economies to implement the provision; or — in terms of both products Category C, which indicates exported and markets reached. the member requires both The TFA recognizes, however, time and outside assistance. that implementation will not In addition, these assessments be easy and some developing identified needed reforms countries will be unable to and capacity improvements, comply fully with the TFA by timelines for implementation, the time it enters into force and areas where donor
38 Trade Facilitation assistance is needed to bring in-person observations the country into compliance and discussions with key with the TFA. The technical stakeholders. Through the focus of the TFA spans many mapping exercise, AMEG’s areas of trade facilitation, customs expert observed what including risk management in happens when a ship arrives at border operations, authorized port and goods are released economic operator programs, to Customs. AMEG found that national single windows, and the Customs Administration access to trade information required 52 manual steps through online portals. in its import process. For every manual step, a customs STREAMLINING official needs to follow a CUSTOMS PROCEDURES procedure that requires their IN TUNISIA individual discretion, increasing Building on recommendations risk for non-transparent from the WTO assessment in proceedings and the potential Tunisia, AMEG implemented for misevaluation of goods, a longer-term pilot program slowdown in movement of to support customs reform products to market, and goals vital for the country’s potential lost revenue to the stability and economic growth. importer and to the Customs AMEG’s Tax and Customs Administration. AMEG Reform activity supported recommended changes to the Tunisian Customs the Customs Administration Administration to review and to reduce import process make recommendations on steps at Port Rades by 35 an advance rulings regulatory percent, eliminating 18 of framework for tariff, the original 52 steps in the classification valuation, and import process. Customs origins to support Tunisia’s officials verbally approved a compliance with the TFA. revised Port Radès procedures To advance the Customs manual, incorporating Directorate’s progress toward AMEG’s recommendations the TFA requirements, AMEG for continued efficiencies and provided guidance on multiple reduction in process steps for aspects of advance ruling the port’s overall import and development procedures, such export procedures. as best practices in flowchart processes. SPARKING PUBLIC- PRIVATE SECTOR In 2015, AMEG assisted the DIALOGUE AROUND Customs Directorate with TRADE business process mapping at Building on the initial results Port Radès, Tunisia’s largest from AMEG’s work with the and busiest port. AMEG Customs Administration developed graphic and on procedure reduction narrative process descriptions, at Port Radès, Tunisia and validated them through TradeNet (TTN), Tunisia’s
39 Trade Facilitation Cargo ship awaiting release of goods at Port Radès, Tunisia CHEMONICS / AMEG
quasi-governmental agency Through interviews with overseeing the implementation more than 25 private sector of an electronic trade stakeholders, including platform and single window, maritime freight forwarders requested AMEG’s support to and ship consignees, bring together a coalition of commercial banks, customs government and private sector and government agents, and counterparts to implement a express mail couriers like more comprehensive diagnostic UPS and FedEx, the diagnostic of external commerce mapped processes, illuminated procedures to simplify foreign redundant processes and trade processes. AMEG and documents, and identified TTN launched the diagnostic barriers causing excessive of foreign trade procedures delays. AMEG consolidated the in 2016 over a 10-week findings into a comprehensive period, utilizing participatory map of external diagnostic methods to mobilize public and procedures. The final report private sector stakeholders to exposed some frustrations identify critical trade barriers. on the part of the private To ensure the activity had sector with the services support from both public provided by trade-oriented and private sector actors, public institutions. Many of AMEG and TTN launched these frustrations related to a first-of-its-kind public- operational delays, complexity private steering committee to of formalities for import/ examine the issue and oversee export, and unnecessary steps the implementation of the such as requiring importers and diagnostic.
40 Trade Facilitation exporters to physically submit control). The Tunisia Tax TOWARD A CUSTOMS paperwork to government. and Customs reform activity MUTUAL ASSISTANCE team supported the customs AGREEMENT WITH THE UNITED STATES TTN recognized that the only administration with robust way forward on these issues training and preparation for In 2017, TCP supported was to utilize its steering implementing a systematic three senior Tunisian committee approach as a and credible risk management Customs officials to travel platform for private sector regime. AMEG worked to Washington, D.C., for to voice their concerns and closely with Customs’ Risk high-level negotiations for a suggestions, and for the Management Directorate to Customs Mutual Assistance government to be on hand develop and propose a risk Agreement (CMAA) between to listen and engage directly management framework for U.S. Customs and Border with the issues. TTN and Tunisian Customs, including Protection and the Tunisian AMEG convened a public- organizational policy directives, Customs Administration. private dialogue to bring process models, standard The CMAA is a binding bilateral together these public and terminology, and proposed risk executive-level international private stakeholders and management activities. In 2015, agreement, negotiated and identify concrete ways to the Customs Administration enforced by both respective move forward together on adopted and disseminated Customs administrations. trade process improvement. a risk management policy The U.S. has 76 CMAAs with The steering committee consistent with best practices partner countries across the developed a detailed as proposed by AMEG. world, and sought to achieve roadmap for implementing Customs also updated the a cooperation agreement with the recommendations in the organizational structure Tunisia. The CMAA facilitates initial diagnostic. The ongoing of its Risk Management information sharing on public-private dialogue forged Directorate to conform Customs issues, such as shared with AMEG’s support will to the risk management training and mitigating offenses help Tunisia in its effort to framework requirements, that impede trade facilitation. implement the TFA, ultimately while introducing model Areas of assistance from CBP positioning Tunisia to reduce risk registers in its main can include training to prevent the costs of foreign trade operations, covering two Port and detect money laundering Radès offices and customs and financial crimes, controlled operations and improve the substances, trafficking of environment for foreign intelligence. The Customs antiquities, wildlife, and other investment. Administration also adopted a controlled goods, threats to centralized customs intelligence human health, agriculture, and IMPROVING TUNISIAN gathering function linked to the threats of terrorism and other CUSTOMS’ APPROACH centralized risk management dangerous materials. TO RISK MANAGEMENT committee. As part of its initial assistance to customs in Tunisia, and as AMEG also worked with prioritized by the director Customs Administration general of the Customs staff to design a four-session Administration, AMEG complementary training focused on improving customs’ course to support the management of importer/ implementation of the risk exporter compliance in management framework preparation for a transition to across the agency. The training a more robust post-clearance courses provided more than audit regime (a posteriori 80 Customs staff with the
41 Trade Facilitation opportunity to apply new risk In collaboration with USAID’s management processes, more Office of Middle East Programs fully understand methods and the United States Trade for risk identification, and to Representative, AMEG enhance practical skills around worked to strengthen the U.S. developing risk registers and government’s knowledge base risk management plans for of constraints, opportunities, their respective operational and ongoing initiatives related sections. TCP also supported to trade and investment in several key Customs officials the region, and partnered to travel to Washington, D.C., with local and international in 2017 for the final negotiation organizations to host regional of a CMAA, which will further events aimed at promoting the Customs Administration’s high-level consensus on the efforts to strengthen its risk intra-region and external management protocols (see trade. AMEG first drafted a text box on opposite page). report on “Barriers to Trade and Investment in the Middle BUILDING CAPACITY IN East and North Africa” and TRADE FACILITATION IN supported the organization of a THE MIDDLE EAST high-level workshop on non- Years after the tumultuous tariff measures encountered events of the Arab Spring, by Arab States in Tunis in the political and economic April 2014. The event was circumstances are still fragile organized by the International in many of the developing Trade Centre and the Islamic countries in the MENA region. Trade Finance Corporation Long-term political reform and provided an important strategies in many countries platform for the participants’ will not be feasible without countries to discuss current new economic opportunities. themes related to non-tariff Aside from oil, for decades measures, regional integration the MENA region has been and the challenges they are responsible for roughly one confronted with, particularly percent of global trade, and against the backdrop of the non-fuel exports average financial crisis and the global approximately 20 percent meltdown within the context of GDP for these countries of the Arab Aid for Trade — among the lowest in the Initiative. In addition, AMEG world. The failure to open worked with the Organization protected economic niches to for Economic Co-operation wider markets has translated and Development (OECD) to into anemic productivity organize a regional meeting in growth, declining economic Cairo in May 2014 to assess competitiveness, higher the relevance and feasibility of consumer prices and fewer launching a working group on choices, and a scarcity of competitiveness for MENA in economic opportunities for a the framework of the MENA- young and growing labor force. OECD Investment Program.
42 Trade Facilitation AMEG’s trade facilitation With U.S. government workshop series later rolled support, the countries in out a series of workshops South and Central Asia have on best practices in trade made considerable progress facilitation in Dubai, Bahrain, encouraging the expansion and Abu Dhabi in 2016 and of northward trade and 2017. The workshops hosted infrastructure connectivity 95 Customs representatives along historic trade routes from 12 countries across the into Pakistan, Afghanistan, region. Trainers from the and into Central Asia. The U.S. Customs and Border U.S. government believes Protection Agency provided that it is now the opportune advanced training for time to increase regional participants on topics like risk connectivity within South management, post-clearance Asia and between South and audit, authorized economic Southeast Asia. While trade operator programs, and among South Asian countries national single windows. Study remains far below its potential, tours to ports and Customs current political and economic offices in each country conditions in the region have provided participants with created a political window of the opportunity to see best opportunity to strengthen practices in action. the economies and economic prosperity through enhanced SUPPORTING THE economic integration and INDO-PACIFIC connectivity. ECONOMIC CORRIDOR Although trade and transit USAID and the U.S. links between South and Department of State, which Southeast Asia have existed funded this initiative, engaged for centuries, modern trade AMEG in late 2014 as the lead between these two regions implementing partner for the has been hindered due to trade, investment, and private- poor infrastructure, regulatory sector engagement component barriers, and limited regional of the Indo-Pacific Economic cooperation. Various regional Corridor (IPEC). This two- agreements aimed at reducing year, $1.8 million activity tariff rates have tried and failed spanned three phases with four to achieve trade cooperation; primary objectives: 1) foster indeed, South Asia is the least economic growth and regional integrated regional bloc on the trade in South Asia; 2) increase globe, with only 5.7 percent private sector competitiveness of exports from South Asian in the region by enhancing countries going to other the business environment; 3) countries in the region. These engage the private sector on trade impediments hinder economic issues, particularly economic growth and poverty regional trade, in South Asia reduction efforts, particularly and trade between South in South Asia. and Southeast Asia; and 4)
43 Trade Facilitation Trucks with goods waiting to be cleared at the Bangladesh-India CHEMONICS / AMEG Benapole-Petrapole border crossing.
encourage stronger economic to intra-regional trade in integration between South South Asia and inter-regional and Southeast Asia, engaging trade between South and with regional institutions as Southeast Asia. Through the appropriate. IPEC Phase 1 and Phase 2 assessments, AMEG identified The State Department, USAID, several key interventions for and AMEG worked closely on U.S. government assistance IPEC implementation, using to support increased intra- a three-phased approach. regional trade in South Asia, Through Phases I and II, AMEG as well as increased inter- conducted coordination regional trade between South regional trade assessments that and Southeast Asia. In Phase 3, aimed to identify ongoing work AMEG implemented a series of by other donors and USAID technical assistance activities agencies, review existing to address the priority NTBs data and research to identify identified over the course regional trends and non-tariff of the IPEC assessments. A barriers (NTBs), and design comprehensive final report and prioritize potential U.S. for this AMEG activity can be government activities that found USAID’s Development remove or alleviate barriers Experience Clearinghouse.
44 Trade Facilitation HARMONIZING voice their concerns, while STANDARDS IN SOUTH also learning about new ASIA developments in India’s Throughout Phases I and II of standards ecosystem, so that IPEC, private sector leaders, the traders have the knowledge government officials, and needed to comply with Indian donors continuously pointed regulations. Afterwards, AMEG to conformity assessment designed another activity challenges — including in partnership with CUTS procedures, capacities, and International that facilitated technical regulations — as one dialogue focused on a specific of the most pressing barriers set of agricultural commodities to South Asia’s regional — potato, green chili, tomato, integration. AMEG’s research and brinjal (aubergine). indicates that one major problem is India’s reluctance PROMOTING NATIONAL to accept certificates issued SINGLE WINDOWS IN by an accredited conformity SOUTH ASIA assessment body located in The lack of system integration another SAARC member within South Asian countries country. Yet, informant and across borders results interviews conducted over in unnecessary delays and the past two years tell two opportunities for corruption. very different stories: from The experience of the South the perspective of Indian Asia and the Association of stakeholders, the government Southeast Asian Nations is not discriminating against (ASEAN) in promoting a importers, but rather trying unified single window, on to elevate standards and the other hand, shows the protect consumers, not unlike potential for South Asian any other developed country. countries to adopt platforms Conversely, traders have that are more efficient, complained that India applies transparent, and predictable. these standards inconsistently In addition, the WTO TFA and use them to extract bribes requires member countries to and restrict market access. use e-solutions for sharing the rules and regulations governing To help tackle these cross-border trade. Notably, conformity assessment India, Bangladesh, and Sri challenges, AMEG worked Lanka are individually adopting with key private-sector national trade portals and the partners, the Confederation single-window platform. of Indian Industry and BUILD Bangladesh, to organize a To share the lessons of two-day training and dialogue several ASEAN countries and workshop through which promote dialogue among South Bangladeshi traders could Asian countries, AMEG held speak directly to Indian a National Trade Portal and standards authorities to Single-Window Best Practices
45 Trade Facilitation Forum in Colombo, Sri Lanka. courier and regular mail The forum, the first activity packages are only allowed to under IPEC Phase 3, brought flow via airports. They are together representatives not allowed to use cheaper from USAID’s ASEAN land transportation through Connectivity through Trade routes such as the Benapole/ and Investment program and Petrapole border crossing, one USAID’s Bangladesh Trade of Asia’s largest land ports. Facilitation Activity to present This policy not only limits different perspectives on regional economic integration, implementing trade projects but also deprives the postal in the region. AMEG hosted systems in both countries 55 trade officials from India, of new revenue sources to Bangladesh, Nepal, Bhutan, replace those lost to email and and Sri Lanka from customs other technologies. The impact agencies, government officials of such a policy change would dealing with trade issues, be amplified by the expected private-sector organizations, implementation of the and prominent trade-related Bangladesh-Bhutan-India-Nepal think tanks. AMEG followed Motor Vehicle Agreement, up this regional forum the which will allow trucks of any following year with a workshop one of these nations to travel specifically for the government and carry freight on the roads of Sri Lanka’s Trade Facilitation of any of the other three. Committee, which will be overseeing the design and AMEG worked with private- implementation of a national sector partners including single window in the coming DHL, Amazon, and eBay to years. implement an activity with the primary objective of PILOTING EXPRESS demonstrating the viability SHIPMENTS IN SOUTH and positive impact of allowing ASIA express shipments through E-commerce is growing rapidly land ports between Bangladesh in South Asia (a February 2016 and India. AMEG conducted Dhaka Tribune article cited research and organized a cross- growth rates above 30 percent border India-Bangladesh task annually) through portals such force to design and agree on a as eBay, Amazon, Flipkart, and demonstration pilot. The pilot many others. This phenomenon would allow customs-sealed has greatly expanded market trucks to run from Kolkata opportunities for SMEs in airport to Dhaka airport Bangladesh and India. However, (and vice-versa) for licensed its growth is hampered by couriers in both countries the high cost of product to demonstrate a workable delivery. Currently, costs for solution for lowering shipping courier and postal shipments costs and increasing revenues between the two countries for both courier companies are unnecessarily high because and postal systems. A blueprint
46 Trade Facilitation outlining the details of the develop time-bound plans proposed pilot can be found for addressing those NTBs, on USAID’s Development and then implementing those Experience Clearinghouse. plans until change is realized. Once success is achieved, SUPPORTING task forces are disbanded. THE SOUTH ASIA By creating task forces with BORDERLESS ALLIANCE an extremely specific focus The AMEG team of trade (e.g., “import delays on economists, trade lawyers, express courier shipments and trade facilitation experts from India to Bangladesh” who led the IPEC Coordinated not “SPS challenges between Regional Trade Assessments in Bangladesh and India”), Phases 1 and 2 recommended this approach encourages that the U.S. government the program managers and consider supporting the South Asian counterparts to creation of a “borderless focus on specific problems alliance.” This idea stems from and actionable solutions. a successful model used by If additional research is USAID in West Africa. The necessary, it is because specific borderless alliance would be information gaps are preventing a private-sector led, cross progress of the reform efforts. border initiative to identify regional priorities, generate MAINSTREAMING data and information needed GENDER IN TRADE to design and advocate for In March 2012, USAID rolled reform, and mobilize advocates out its Gender Equality across the region to hold and Female Empowerment governments accountable for Policy, emphasizing that facilitating increased trade. gender equality and female empowerment are not only Although AMEG lacked core development objectives, the time to launch such an they are also critical to ambitious initiative, the IPEC effective and sustainable team tested key hypotheses economic growth outcomes. and design a model, which has been documented in a To this end, USAID tasked Borderless Alliance Blueprint. AMEG with producing a series Rather than create another of case studies and a guide to broad regional institution, Integrating Gender into Trade AMEG recommends that Capacity-Building Programs the South Asia Borderless in the Middle East and Asia. Alliance be a nimble, Designed to be a practical opportunistic mechanism programming tool for USAID for 1) identifying priorities economic growth officers that have a high probability and practitioners, the guide of being changed and 2) provides recommendations mobilizing task forces that are and guidance on how to most focus in on concrete NTBs, effectively integrate gender
47 Trade Facilitation THE TRADE-GENDER NEXUS: A SUMMARY
Trade has increased formal job opportunities for women, resulting in greater BENEFITS FOR autonomy gained through wage-paying jobs outside the home and investing wages WOMEN earned to improve their families’ health and education. Increased trade results in more jobs and better Expanded international markets increase opportunities for development and growth connections to markets of small/medium enterprises, including women-owned firms, which are increasingly engaged as suppliers by multi-national companies.
In global terms, women have been found to be more significant as drivers of economic growth than China, India, or the internet. BENEFITS FOR TRADE With increased incomes, women’s influence over critical decisions regarding their work, family, and selves also increases. This can contribute to economic growth by Economically empowered improving nutrition, health, and education outcomes. women improve trade Women-owned enterprises are increasingly seen as a source of new and better supplies, particularly in retail and consumer goods.
In developing countries, wage employment arising from international trade is mostly low-skilled, labor-intensive, underpaid, and low-value added, with most jobs filled by ON THE OTHER women, particularly in the garment, agriculture, and information technology sectors. HAND Wage gaps tend to widen in environments where women’s relative access to education Where gender gaps are is poor. already severe, trade may exacerbate those Where exports are dominated by natural resources and agriculture, women have less gaps and even diminish access to jobs offering security and growth potential. Natural resource wealth often conditions for women results in “Dutch disease,” making industries where women play a greater role (such as textiles or retail goods) less profitable. In agriculture, women often provide unpaid labor to the farm.
considerations in future 3. Integrating Gender Equality trade programming. To assist “Behind the Border:” development professionals Connecting women’s in identifying appropriate enterprises to formality, areas for interventions, this finance, markets, and other document gives an overview of avenues toward trade the complex issues related to gender and trade, presented in 4. Integrating Gender five parts: Equality “At the Border:” Strengthening conditions for 1. Setting the Stage: The nexus women traders of gender and trade 5. Integrating Gender Equality 2. Testing Assumptions “Beyond the Border:” and Measuring Change: Gender and trade policy The critical need for sex- disaggregated data and Each section highlights key empirical evidence for concepts to be considered program planning and in program design, and measuring results provides examples drawn from pertinent research, individual case studies, and other sources.
48 Trade Facilitation BY THE NUMBERS
$3.5 Million 9 $1 Billion SAVED PER MONTH NEW TAX POLICY LAWS UNSECURED BOND in Kurdistan via new biometric adopted in Tunisia to address successfully marketed to payroll registration system personal income tax, VAT, and attract new investment excise taxes capital for reconstruction in Iraq
$650,000 948 $540 Million In additional Tax administration Estimated increase in REVENUES COLLECTED EMPLOYEES TRAINED ELECTRIC TARIFF REVENUE in Tunisia through targeted in risk management to be captured in Libya over five non-filers pilot program approaches in Tunisia years due to electricity sector reform
1,100 11 6 Government employees and private MINISTRIES across three PUBLIC FINANCIAL sector individuals trained in more countries in the region are MANAGMENT TRANSPARENT PROCURMENT implementing improved public Assessments and pilots practices in Iraq financial management practices implemented in 5 countries
49 PUBLIC FINANCIAL MANAGEMENT SECTION 6 PUBLIC FINANCIAL MANAGEMENT
At the heart of effective FORMULATING governance and macroeconomic IMPROVED TAX POLICY stability is a well-functioning IN TUNISIA public finance management In 2014, Tunisia held its first system operating in well- free and democratic elections, integrated coordination among completing a transition of public sector institutions at the nearly four years. Tunisia’s national level and between the newly formed government national and the sub-national faced high economic and social levels, all within the context expectations and a deteriorating of an inclusive public policy socioeconomic situation. High process. AMEG worked directly tax rates, base complexity, with governments throughout excessive administrative burden, the Middle East and Asia to and low levels of “tax certainty” test and implement improved — along with a special regime public financial management of tax incentives that favored a systems and procedures, privileged few large companies including reforming tax policy — made Tunisia a difficult and administration, budgeting environment for foreign direct processes, and procurement investment. With total fiscal and payroll systems. AMEG revenues of about 22 percent, focused largely on empowering a fiscal deficit of about seven and building the capacity of percent of GDP in 2013, and national and sub-national economic growth stagnant governments to design and over preceding years, reform implement reforms themselves. of the tax policy framework Below are several examples of was a priority both to improve AMEG’s work in public financial revenues and to drive renewed management. investment and job-creating growth.
50 PUBLIC FINANCIAL MANAGEMENT SUMMARY OF TAX REFORMS ENACTED IN TUNISIA
LAWS COVERING DETAIL OF LAW’S COVERAGE
The 2017 Budget Law included a new personal income tax bracket with a maximum ceiling for PERSONAL “professional fees” of 2,000 dinars (10 percent of salary), a reduction of the number of personal income INCOME TAX tax rates from six to give, broadening of the brackets and the expansion of the 0 percent rate bracket from 1,500 to 5,000 dinars. Resultant reduction in the effective tax rate from 15.7 to 14.8 percent.
CUSTOMS Reduction of Customs duties to two rates: 0 percent (primary products — e.g., equipment, raw materials, semi-finished products, and spare parts) and 20 percent (consumption products — e.g., DUTIES household appliances, cleaning products, food, furniture, and electronics)
Law passed in 2016 limiting usage of temporary decrees on value-added tax reductions REDUCTION IN NUMBER In 2017, partial transition of the number of rates from three (6, 12, and 18 percent) to two (6 and 18 OF VAT RATES percent). Partial elimination of the 12 percent value-added tax rate and introduction of an 18 percent rate.
VAT ON Law imposes 6 percent value-added tax on previously exempted products, such as sugar and sporting EXEMPTED equipment. PRODUCTS
EXCISE Elimination of excise taxes on more than 32 products, and reduction of multi-rate excises on alcohol to TAXES two rates
VAT ON Law imposes a 6 percent value-added tax rate on medications (wholesale and retail) MEDICATION
VAT ON Law reducing the withholding tax for transactions between the private and public sectors from 50 to 25 WITHHOLDING percent to reduce outstanding value-added tax credit to the national treasury. TAX
*Policy laws approved by the Assembly of the People’s Representatives and included in the 2016 and 2017 Budget Laws.
As part of its Tax and Customs Ministry of Finance to establish Reform Pilot (TCP), AMEG a fiscal analysis unit. The new set out to strengthen the unit provides policy analysis, capacity of Tunisia’s Ministry of revenue estimates, and analysis Finance to develop and manage of revenue developments. appropriate and equitable For example, when the Tax tax policies. As a first step, Directorate prioritized a AMEG helped Tunisia’s Ministry revenue-neutral reform package of Finance craft and build to address deficiencies in consensus around a strategic multiple areas of the tax code, vision for tax reform. This the new unit within the ministry plan provided an economic generated microsimulation foundation for the proposed tax models to demonstrate the reform agenda and encouraged revenue impact of those policy a consensus-building approach scenarios. to implementation. In addition, AMEG supported AMEG also incorporated the Tax Directorate to high quality fiscal analysis into strengthen transparency tax policy reform decision- and clarity of the tax code making by working with the and to improve compliance
51 PUBLIC FINANCIAL MANAGEMENT in the personal income tax, at reorganizing procedures corporate income tax, value- around risk management added tax, and SME tax. Across principles, building the capacity these cumulative successes, of its workforce to utilize risk AMEG encouraged champions management principles in their from within the ministry everyday work, and helping to take the lead on reform pilot specific programs aimed at efforts, and ensured program improving revenue collection. experts worked alongside Tunisian specialists to transfer AMEG first worked with the knowledge and capacity. tax administration to create a AMEG’s efforts contributed tax compliance improvement directly to supporting the plan, a framework for reform ministry’s commitments to priorities for improving tax greater budget neutrality within administration. The plan a framework of increased prioritized the need for a risk equality and fairness in the management unit to oversee tax system. Of the laws the the implementation of risk- Ministry of Finance proposed based decision-making for tax based on the FAU’s analysis, six administration operations. were approved by the assembly Since its inception, the and included in the 2016 Budget risk management unit has Law. An additional three been instrumental in the proposed laws were approved development of the automated and inserted into the 2017 audit criteria selection system. Budget Law, including further The system has provided the application and reduction tax administration with a of value-added tax rates mechanism to transparently and multiple reforms to the and consistently select cases personal income tax structure. for audit, thereby significantly reducing backload of cases in INSTITUTIONALIZING the central and regional offices RISK MANAGEMENT TO to review for signs of fraud. INCREASE REVENUES The risk management unit To support greater voluntary also spearheaded a non-filers compliance and increase initiative, which piloted a polite revenues, Tunisia’s tax letter to approximately 6,000 administration asked AMEG high-risk non-filers reminding to provide recommendations them to file their tax returns. on how to remove structural This simple measure resulted in barriers and improve a 41 percent response rate and procedures to increase collections of TND 1.6 million tax revenue and better ($650,000) in overdue tax serve taxpayers. Through revenue in just 10 weeks. a participatory approach that incorporated regular The tax compliance consultation, AMEG and improvement plan also helped Tunisia’s tax administration institutionalize a risk-based implemented initiatives aimed approach to reform and to build
52 PUBLIC FINANCIAL MANAGEMENT Members of Tunisia’s newly created Fiscal Analysis Unit CHEMONICS / AMEG
capacity for sustaining reforms local tax offices and wait in and overall tax administration long lines to ask questions or procedures. AMEG worked have an agent address their with the tax administration unit issues. Recognizing that if to design and roll out a risk taxpayers find it difficult to management training program access information about how to 948 tax administration to calculate or pay their tax employees across 189 regional responsibilities, their likelihood and local tax administration of voluntarily complying with offices. The training programs tax requirements is significantly focused on understanding the dampened, Tunisia’s tax importance of risk management, administration made improving how to identify risk, developing taxpayer services a priority in risk treatment strategies, and its tax compliance improvement the process for evaluating, plan. This included improving prioritizing, and addressing design of tax forms, removing risks. redundant procedures, and emphasizing early intervention USING MOBILE PHONES to prevent error. TO IMPROVE TAXPAYER SERVICES IN TUNISIA AMEG helped Tunisia’s tax Accessing and understanding administration to engage tax tax information is a long and payers as part of an ongoing difficult process for Tunisian public outreach strategy taxpayers. Tax information was focusing on education and typically out of date and only transparency to broaden available in tax offices. Individual the tax base. With AMEG’s taxpayers had to go to their support, the tax administration
53 PUBLIC FINANCIAL MANAGEMENT developed and deployed its individual income earners, its own, separate website and intended audience. Facebook page, independent of the Ministry of Finance, AMEG supported Tunisia’s tax providing better and more administration to market the direct access to information app on social and traditional than was previously available. media channels. Within just its AMEG also supporting the first week of release, the tax tax administration to develop administration logged more a strategic communication than 300 downloads of the app, program on tax compliance and had close to 7,000 within awareness, and to roll out the two months, far exceeding program through participation their original target of 5,000 at economic fairs, trade shows, downloads by the end of 2017. civil society events organized by tax-focused organizations, FOSTERING and within the school system. TRANSPARENT The roadshows were paired PROCUREMENT with the tax administration’s PROCESSES IN IRAQ use of mass media outlets to Iraq continues to be impacted encourage greater registration by the ongoing conflict with by all segments of the taxpayer the Islamic State in Iraq and population, and reinforced Syria and the precipitous fall through its website and social in oil prices during 2015 and media channels. 2016. The double shock of conflict and oil prices has In addition, AMEG and the drastically downsized much of tax administration partnered Iraq’s economic output, and with a local IT firm to create deteriorated living conditions. TUNIMPOT, a free tax To address urgent needs to calculator application for procure goods and services mobile phones. The app allows to address humanitarian, taxpayers to immediately security, and reconstruction assess their potential tax needs, AMEG supported the liability through a few taps Ministry of Planning’s Office on their phones. The app of Government Contracts provides immediate and real- to roll out more streamlined time information for anyone and transparent procurement interested in estimating systems and procedures. their taxes or wishing to run scenarios based on different In the past, the transparency income levels. This tool and efficiency of government simplifies the process of procurement in Iraq has calculating personal taxes by been hindered by reliance on instantaneously addressing disorganized, paper-based taxpayers’ most frequently systems and antiquated asked questions. The app processes. incorporates the most common tax scenarios and rates for
54 PUBLIC FINANCIAL MANAGEMENT To build government of associations with the standard Iraq capacity in sound bidding documents, building procurement practices aligned private sector confidence in with international standards, government bidding processes. AMEG embedded a team in the Ministry of Planning to In addition, AMEG also provide on-the-job training to supported the Ministry of the procurement help desk to Planning Office of Government respond to government and Contracts to issue an official private sector requests for order to all Iraqi contractual information on procurement entities on the process for regulations and standard bidding announcing tenders on the procedures. AMEG also built new Tenders Worldwide the capacity of the ministry’s dgMarket. This website is procurement help desk staff designed to reach domestic to train other government and international companies agencies at the federal and interested in working in Iraq provincial levels to implement in the hopes of increasing reforms designed to streamline competition and bringing procurement processes and international experience to make them more transparent. Iraq. The dgMarket site is also Specifically, together with designed to foster greater ministry trainers, AMEG trained transparency in bidding 1107 government employees processes and even the from numerous ministries and playing field for both Iraqi and provincial governments — international bidders. including the Ministry of Oil, Ministry of Youth, Ministry of MODERNIZING PAYROLL Electricity, the Integrity Council, REGISTRATION IN and the Secretary General of KURDISTAN the Council of Ministers — in At the start of 2016, the the correct use of new standard Kurdistan regional government bidding documents for the in Iraq was facing a cash procurement of goods and crunch, in part due to the services. By streamlining and large number of government standardizing the procurement employees on the payroll. The process across all government government’s systems allowed agencies, the standard bidding employees and pensioners to documents are designed to register in multiple towns for support more efficient and multiple salaries and benefits. transparent procurement As a result, the government processes, creating an had no way of knowing how environment conducive to many people were actually on fair and open competition in its payroll, making accurate the tendering and awarding estimates of salary expenditures of contracts. AMEG has nearly impossible. To identify also helped the MOP to actual employees on the organize events to familiarize payroll and eliminate duplicate private sector firms and records and payments, AMEG
55 PUBLIC FINANCIAL MANAGEMENT worked with the government new system in October 2016. to introduce a new employee Full-scale rollout with video registration and electronic training materials and biometric payment system to modernize units distributed across all distribution of wages and governorates followed. In total, benefits. nearly 1.2 million people were registered in the new system. AMEG devised a phased roll out for the new payroll As part of the second system, including designing “validation” phase, AMEG and introducing streamlined supported auditing offices registration and validation in the government to design processes for individual and implement systems and employees, pensioners, and processes to verify records others on the government among the 1.2 million registered payroll. As part of the first and cease salaries for those phase, AMEG designed data who did not validate enrollment quality requirements for in person (likely “ghost the registration process, employees”). The government including providing guidance removed 5,000 individuals from on software application design, the payroll through this process, risk mitigation, and failure resulting in estimated payroll point analysis. AMEG then savings of more than $3.5 worked with the government’s million per month. council of ministers’ IT and software development team INCREASING to incorporate biometrics MUNICIPAL FINANCIAL into improved systems and MANAGEMENT processes for securing and CAPACITY IN LIBYA validating individual data Despite Libya’s promising for each person in receipt success in its post-Arab Spring of Government funds. The elections, political divisions at new registration application, the national and local levels designed with AMEG support, have degraded state authority captures a copy of the and mired the country in employee’s identification card, conflict. In early 2014, just an iris scan, and fingerprints before Libya descended once using point and click graphics. It again into internal conflict, takes just two to three minutes AMEG conducted an in- per individual to capture the country assessment of Libya’s required information. public financial management (PFM) system, identified Prime Minister Nechirvan challenges and opportunities Barzani and Deputy Prime for improvement, and provided Minister Qubad Talabani were practical recommendations the first government employees for assistance in areas such as to have their electronic cards procurement, treasury services, and biometric data registered budget formulation, and budget at an inaugural event for the execution. In addition, AMEG
56 PUBLIC FINANCIAL MANAGEMENT looked at PFM and procurement competing governments and capacity at the sub-national dozens of militias continued to level and reviewed policies clash, Libya’s civilian population and laws relevant to fiscal struggled for access to basic decentralization. Finally, AMEG services such as healthcare, fuel, proposed recommendations for and electricity. Recognizing that technical assistance, capacity in many parts of the country, building, and discrete, targeted local authorities were filling interventions at both the the governance and services national and sub-national levels. void, AMEG initially focused on working with local governments Following a two-year to identify new potential legal suspension in activities due to streams of revenue to support the conflict, AMEG returned in the provision of basic services early 2016 to implement some such as water and garbage of the recommendations laid removal. AMEG reviewed out in its initial assessment. As Libya’s Local Government forces aligned with the three Law and developed a guide for
PFM ACTION PLAN COMPLETION RATE Amongst Government of Libya Entities in August 2017
57 PUBLIC FINANCIAL MANAGEMENT mayors on municipal revenue develop and deliver content generation. The guide was on budget policy, planning, shared with municipal leaders and formulation; managing from 12 of Libya’s largest budget execution; accounting, municipalities at a workshop in reporting, and auditing; Istanbul on best practices and government revenues; and models for municipal revenue municipal PFM processes, generation. among other topics. The training course delivered PFM AMEG followed the revenue best practices, approaches, generation workshop and guide and tools in digestible modules with a workshop for mayors on with in-depth scenario municipal budgeting in Tunis in exercises designed to ensure the summer of 2016. Leveraging participants analyzed and apply experiences and expertise of the information presented. The international and local partners training of trainers instructed (namely the World Bank, the 44 PFM trainers who, in turn, Libya Transparency Association, trained 414 more government the International Republican staff in Libya in critical Institute, and the American public financial management Bar Association Rule of Law competencies. Initiative), AMEG successfully brought together key ministries In the fall of 2016, AMEG and (finance, planning, and local partners Pragma and Crown government), Libyan mayors, Agents engaged stakeholders municipal council members, from three ministries and 11 other government officials, and municipalities (see graph on Libyan experts to introduce page 56) in a comprehensive basic concepts in municipal PFM capacity building program. budget planning and preparation Each of the stakeholders and to build relationships assessed existing PFM practices and foster dialogue among within their respective entities, the Libyan participants. The identified gaps between best workshop challenged municipal and current practices, and leaders to identify their developed action plans for priorities for improving budget improvements. AMEG-trained planning and preparation to local capacity experts analyzed take back to their municipalities. the baseline self-assessment data to develop evidence-based Later that year, AMEG action plans with each of the and partners Pragma and participating ministries and Crown Agents, launched a municipalities. They helped comprehensive PFM training each government unit identify of trainers program to build three to five of the most a cadre of PFM experts important financial practices within Ministries and local to improve over a period of governments in Libya. approximately six months AMEG coordinated closely with AMEG support. AMEG with the World Bank to advisors and trainers conducted
58 PUBLIC FINANCIAL MANAGEMENT follow-up training courses and electricity sector to detail workshops at the ministry and the causes for shortages and municipal levels to monitor the difficulties with the electricity implementation of the action operating grid as well as to plans. To date, nine of the 11 identify short-term actions municipalities, and all three to alleviate the electricity ministries have made progress crisis. AMEG then worked toward their action plans. with GECOL to develop a roadmap for electricity IMPROVING sector reform. The aim of the LIBYANS’ ACCESS TO roadmap is to present options ELECTRICITY for a restructured electricity For the past year, Libyans have sector that is self-sustainable been plagued by blackouts due and financially independent to conflict and fuel shortages. and contributes long-lasting Economic reconstruction benefits, including security, of Libya depends on the economic growth, job creation, continuing provision of reliable a more globally-competitive and safe basic services, economy, and greater including electricity, water, prosperity for Libyans in the and telecommunications. To decades to come. support more reliable provision of electricity to power homes In preparing the roadmap, and businesses, AMEG began AMEG hosted a series of working with the General dialogues and workshops with Electric Company of Libya present and past government (GECOL) to develop a strategic officials, electric utility road map to transform and executives, international ensure the sustainability of the donors, financial institutions, electricity sector. municipalities, businesses, and individual customers to identify Electricity is currently provided the most promising pathways by state-owned enterprise, to meet the goal of solving the GECOL, which operates but electricity crisis in Libya. As a does not own the electricity result, the roadmap identifies sector assets. GECOL is heavily actions for a broad range of subsidized by the government, stakeholders, including the and unlike comparable country government of Libya, GECOL, electricity sectors — which local municipalities, and cover their cost and can either customers, all of whom must make an acceptable surplus work together to achieve the for the national treasury or national objective of solving reinvest in new projects and Libya’s current electricity crisis. technologies for growth and development — is completely The roadmap includes an unsustainable in the absence of action plan that describes the central government support. key activities, their estimated First, AMEG conducted duration, sequence, and costs a rapid assessment of the required for the sector to
59 PUBLIC FINANCIAL MANAGEMENT make significant progress electric tariff/revenue collection. STEPS IN LIBYA’S toward becoming a sustainable AMEG also worked with ROADMAP TO source of reliable electricity GECOL to develop high-level ELECTRICITY SECTOR REFORM generation, transmission, and technical specifications for distribution, and positions accounts receivable software to • Clarification and adoption of the sector to become a more improve the revenue collection. new electricity policies and effective contributor to Libya’s strategies short and long-term economic OPENING UP • Enactment of electricity future. The roadmap also FINANCING FOR legislation proposes a Libya Electric CONFLICT-AFFECTED Sector Reform Law intended COUNTRIES • Establishment of independent to restructure the electricity Conflict and political crises, regulation sector by corporatizing and coupled with drops in oil prices • Introduction of independent unbundling the sector assets in recent years, have put Iraq power producers to the into multiple generation and and Libya in precarious financial generation market distribution companies and a positions. These countries • Unbundling and single transmission company. need financing to stabilize and corporatization of vertically The new law would create the reconstruct their economies. integrated state-owned legal and regulatory framework In 2015, AMEG prepared a utilities into their competitive for operations in the electricity guidebook for developing (generation, distribution, and sector by establishing the a domestic debt market in retail supply) and monopoly electricity market as a “single Iraq for the Central Bank (distribution, transmission and buyer.” This system would and Ministry of Finance. The system operation) functions facilitate the introduction guidebook outlined guidance and the commercialization of of private capital needed to for developing a bond market, these functions refurbish, upgrade, and expand issuing domestic debt, and developing the investor base. • Establishment of a single the electricity infrastructure. buyer that buys all production The sector will be overseen Later, AMEG worked with the and sells electricity to by a new entity called the Ministry of Finance and Central distribution companies for Regulatory Authority, which Bank to develop the prospectus delivery to end users would be given the power for a $1 billion unsecured to approve sector company bond that was successfully • Privatization of certain proposed tariffs for licensed marketed to international unbundled assets, such as the services, such as transmission investors in 2017. This bond, non-core companies and the and distribution, and the price coupled with a separate $1 distribution and generation at which electricity is purchased billion bond guaranteed by companies and sold by the single buyer and the U.S. government, should distribution companies, as well open financing sources for the as the price at which electricity reconstruction of the country is sold to consumers. moving forward.
In addition, AMEG developed In early 2017, AMEG engaged analytical and economic a short-term sovereign wealth models to improve revenue fund expert to work closely collection efforts by GECOL. with the newly appointed The purpose of these models CEO of the Libya Investment is to analyze scenarios aimed at Authority to review its reducing government subsidies current assets and corporate by increasing non-residential governance and accountability
60 PUBLIC FINANCIAL MANAGEMENT framework, as well provide AMEG identified priority recommendations for improving technical intervention areas corporate governance and needed by the ministry that accountability standards in line had the potential to improve with the Santiago principles. the effectiveness, efficiency, The Libya Investment Authority and transparency of PFM in is the government’s sovereign the short to medium term. wealth management entity Key issues and recommended overseeing a portfolio of liquid areas of donor intervention assets valued at around $67 highlighted by AMEG included: billion. The advisor helped the Libya Investment Authority 1. Promoting an enabling recognize the need for regulatory framework for improved governance rules, procurement and auditing accounting, and oversight requirements to position it as 2. Developing the parliament’s an effective budget stabilization capacity to oversee PFM mechanism for Libya and to and efficient budget enable it to operate effectively planning and execution as a future generation wealth matters fund for the nation. 3. Assisting in raising FOSTERING GREATER awareness about the TRANSPARENCY IN SRI procurement process to LANKA stakeholders, including The current vision for the Sri government of Sri Lanka Lankan Ministry of Finance officials, civil society, and and Planning is “to create a media sound public finance regulatory framework to improve 4. Supporting the government transparency, accountability, in enhancing the quality, and service delivery in the timeliness, and access of public sector.” As such, the budget and procurement goal of the new government information to the public, has been to design and while training the media and develop PFM procedures civil society to analyze and and systems to strengthen report on the information. economic governance, support transparent processes, and AMEG’s recommendations improve accountability. informed the design of a multiyear program that is To support Sri Lanka’s currently being implemented objectives, in 2015 AMEG to support President Sirisena’s conducted a rapid two-week reform agenda, specifically assessment of the current state in the areas of audit and of the country’s PFM systems, oversight, public procurement, processes, and procedures. and public-private partnerships.
61 PUBLIC FINANCIAL MANAGEMENT Women sorting olives in Morocco
CHEMONICS / AMEG
62 PUBLIC FINANCIAL MANAGEMENT BY THE NUMBERS
8,050 268,500 4,834 HECTARES OF PEOPLE HOUSEHOLDS FARMLAND BENEFITTED BENEFITTING irrigated in Syria to support from access to water for from livelihood improvement livelihoods during the conflict drinking and irrigation in Syria activities in Sri Lanka
30% 2,250 2,200 AVERAGE INCREASE Farmers in Farmers in in household income for Sri Lanka trained in Sri Lanka trained in farmers participating in SAFE PESTICIDE IMPROVED AMEG activities in Sri Lanka USE NUTRITION
10 AGRICULTURAL LIVELIHOODS 100 AND VULNERABLE POPULATIONS WOMEN TRAINED Assessments and pilots and placed in jobs in Yemen implemented in 10 countries during the conflict
63 PUBLIC FINANCIAL MANAGEMENT SECTION 7 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS
Climate change and conflict REVIVING are increasingly impacting AGRICULTURAL rural populations in Asia and LIVELIHOODS IN SRI the Middle East, displacing LANKA large numbers of civilians Three years after the end and disrupting livelihoods. of Sri Lanka’s 30-year civil Rebuilding agriculture is an war, families in the conflict- important strategy for post- affected areas of the northern conflict reconstruction as and eastern provinces were internally displaced people still rebuilding their lives and return home to their villages. communities. Thousands of Agriculture can also support lives were lost in the conflict, demobilized combatants, and entire communities were improve food security, and displaced from their land, enhance livelihoods post- homes, and belongings. Many conflict. Below are several households in these areas were examples of AMEG activities previously farmers, but were in post-conflict and post- displaced during the war or had disaster contexts designed few opportunities to scale their to support and reintegrate livelihoods sustainably to lift internally displaced people and their families from poverty. reinvigorate local economies.
64 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS In 2013, USAID/Sri Lanka under AMEG aimed to engaged AMEG to identify complement the government opportunities and constraints of Sri Lanka’s livelihood to the livelihoods of vulnerable development and economic populations in the north and growth promotion efforts, select districts in the east with a focus on creating and inform future activities to economic opportunities for transition USAID development women, youth, and vulnerable assistance to targeted, populations. sustainable livelihoods development. After significant AMEG strengthened the analysis and consultations with capacity of beneficiaries to the government of Sri Lanka, participate in and contribute to the private sector, potential economically competitive value implementing partners and chains, generating sustained beneficiaries, AMEG concluded increases in financial, physical, that the dairy, poultry, and social, and human capital for horticulture sectors offered participating households. the most viable opportunities AMEG also strengthened to strengthen the livelihoods linkages between beneficiaries of vulnerable populations, and market actors (i.e., buyers) putting them on a path by building the capacity of toward a more economically these households to shift sustainable future. Following from subsistence agriculture this work, USAID/Sri Lanka to small-scale commercial requested that AMEG pursue poultry, dairy, and horticulture additional assessments of production, and by engaging these prioritized sectors of the private sector to link interest to inform future pilot smallholder production to activities to support livelihoods market demand. development. USAID engaged a team through AMEG to The SOLID dairy development conduct detailed assessments model was a prime example of the dairy, poultry, and of the activity’s ability to horticulture sectors intended transfer skills to farmers in to inform illustrative vulnerable areas and link interventions as part of a them to increased market livelihoods development opportunities. Local dairy activity. production currently meets just 30 percent of demand for Is 2014, AMEG began a three- fresh milk in Sri Lanka, and year, $10.5 million pilot activity demand continues to grow at to test these interventions a rate of 13 percent per year. designed to strengthen the AMEG’s SOLID activity trained livelihoods of vulnerable nearly 2,200 milk producers populations in selected areas across 15 districts to improve of Sri Lanka. The Supporting milk production by growing Opportunities in Livelihoods and feeding fodder sorghum, Development (SOLID) activity improving cattle feed rations
65 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Dairy farmer in Sri Lanka CHEMONICS / AMEG
through the addition of low- collection and chilling centers cost protein supplements such that allow farmers in the as azolla, and making silage. In clusters to cool and store addition to boosting quantity evening milk for morning and fat content of milk, these delivery to the client milk practices help build resiliency company. Private sector milk of dairy farmers during times of buyers Nestle, CIC, and Milco drought when grass for grazing have signed on to provide becomes scarce. Farmers repair and maintenance of participating in the SOLID the chiller center facilities dairy development model saw and upgrades to chilling milk production increase by 30 equipment as milk production percent on average. increases. These private sector partners are also investing in AMEG teamed with Nestle, new chilling centers. Dairy CIC, and Milco to promote farmers participating in the the SOLID dairy development program are already seeing program to their farmers. In average increases in income addition, AMEG organized of 35 percent. AMEG’s work village dairy “clusters” in the sector also indicates and constructed nine milk that longer-term, sustained
66 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS involvement with Sri Lanka’s broiler management. In total, milk producers can lead to a AMEG worked with 248 productive, profitable dairy poultry farmer beneficiaries industry which will reduce the who saw their household nation’s reliance on imports of incomes increase by an average milk powder and other dairy 20 percent as a result of the products. program.
AMEG’s SOLID activity CREATING WIN-WIN also saw success in training OPPORTUNITIES FOR smallholders in select regions FARMERS AND LOCAL in Broiler Poultry Production BUSINESSES and Management for meat Over the course of its production. During its first three-year lifespan, AMEG’s phase, 80 farmers from Sri SOLID activity supported Lanka’s Batticaloa District 20 horticultural activities, completed a five-module including onions, mushrooms, training course, built a 100-bird gherkins, and chilis. The project capacity broiler coop designed assisted more than 2,500 by SOLID, and successfully crop farmers from 10 districts passed a final examination. through training, technical Following the completion of assistance, and the introduction the training program, SOLID of labor-saving or resource- supported the Batticaloa conserving new technologies. farmers in organizing and SOLID crop farmers saw an formally registering themselves average monthly household and as a limited liability company. horticulture income increase of The company helps to provide approximately 32 percent. members with discounts on bulk purchase of inputs, But AMEG also saw farmers, facilitates transport and particularly in northern Sri logistics of inputs, and supports Lanka, increasingly battling farmers with marketing and unpredictable and extreme sale of broiler meat. On weather conditions. AMEG’s average farmers who have SOLID team became interested purchased inputs through the in introducing cultivation of company have saved more a crop that could thrive with than 50 cents per bird. AMEG little water but also withstand subsequently rolled out the heavy rains. Passion fruit was broiler management training identified as a suitable plant program to two additional as it can be cultivated with districts (Trincomalee and minimum water during the dry Ampara) selected for their period using supplementary strong local market demand irrigation. With substantial for live broiler meat and market demand in the local the concentration of small and export markets, producing farmers interested in learning passion fruit also had the and improving their skills in
67 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Passionfruit farmer in Sri Lanka
CHEMONICS / AMEG
68 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS potential to generate a good payment systems make it easy income for farmers. for farmers to transport their product. With the opening of its new vegetable and fruit processing Cultivation is still in the early plant in Kilinochchi, private stages, but roughly 20 passion sector partner Cargills Ceylon fruit farmers began harvesting PLC was looking to source in the summer of 2017. Initial large quantities of passion harvests were low due to fruit. AMEG partnered with dry weather conditions, but Cargills to develop commercial farmers are hopeful that cultivation of passion fruit in the yield will be higher in the Anuradhapura, Mullaitivu, the coming months and are and Vavuniya Districts of convinced of the tolerance northern Sri Lanka. The of the passion fruit plant to SOLID activity provided 200 extreme weather conditions. passion fruit farmers with Despite lack of rain, some water pumps and materials farmers harvested 500 to and training to construct trellis 600 kilograms of fruit within structures for the plants to a five-week period, resulting achieve high yields. The project in average monthly income also conducted training on of $170. These farmers are the safe and responsible use expecting to double their of pesticides and integrated harvest next season. pest management. The SOLID activity promoted inter- RESTORING cropping with groundnut ECONOMICALLY during the early months of ESSENTIAL SERVICES IN cultivation to ensure steadier SYRIA revenue streams for farmers. With at least 470,000 killed, 5 million living abroad as Cargills signed forward refugees, and 40 percent buying agreements with pre- of the population displaced determined prices with the by the conflict, restoration passion fruit farmers. In the of essential services is vital unlikely event that Cargills for stability and economic is not buying passion fruit at recovery in Syria. In 2013, the time of harvest, farmers AMEG conducted an essential have opportunities to sell services needs assessment in their produce in the open northern Syria and concluded market. Cargills also employed that water, specifically water two full-time extension infrastructure, was critical to officers and hired experts to livelihoods in the struggling conduct technical training in agricultural communities in support of the SOLID passion northern Syria. AMEG’s Syria fruit initiative. In addition, Economically Essential Services the company’s established bridge activity implemented collection networks and four pilot activities inside
69 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Syria to restore economically intermediate and long-term essential infrastructure. solutions in the water and The pilots aimed to provide agricultural sectors designed to communities in the north reinvigorate local economies with access to reliable water affected by the war. Water infrastructure via clean energy infrastructure and irrigation to sustain livelihoods in systems had suffered due to communities affected by the the loss of government funding conflict. and support, war-related damage, and shutdowns due to Given that other donors were escalating fuel costs and lack focusing on water, sanitation, of electric power, spare parts, and hygiene initiatives, and qualified repair technicians. AMEG focused on providing Operating from Turkey, AMEG
SYRIA ACTIVITY LOCATIONS
ALEPPO AND IDLIB AL MAYADIN Water Purification Unit Transfer HASAKAH Irrigation Pump Station
24,000 Community beneficiaries ALEPPO 86,000 Community beneficiaries AR RAQQAH 1,700 Hectares Farmland irrigation (planned)
IDLIB
BDAMA Apple Orchards and Solar HAMA HAJIN Powered Pump Systems Water Irrigation Pump Repair
18,500 Community beneficiaries DEIR EZ 70,000 Community beneficiaries ZOUR 70 Hectares Apple and 3,000 Hectares peach orchards irrigated Farmland irrigation (planned)
JABAAR HAMA Station Rehabilitation Irrigation Equipment and Water Pumping
15,000 Community beneficiaries 55,000 Community beneficiaries 600 Hectares Apple and 2,680 Hectares peach orchards irrigated Farmland irrigation (planned)
70 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS
San Salvador coordinated closely with the AMEG helped Syrian apple Assistance Coordination orchards become economically Unit and local and provincial viable again, producing their councils to determine high- first harvest since 2012. priority interventions to Twelve solar power generation restore economic viability in sets were installed, which their communities. Syrian local are capable of powering and provincial councils in the eight to 14 orchards each. north identified physical and AMEG also assisted local technical resources critical to farmers and orchard owners restore or rejuvenate their to establish water users’ largely agricultural economies. associations to govern usage of the irrigation wells and To combat heavy reliance on operation and maintenance of diesel power generators that the solar-powered irrigation required costly fuel (largely equipment. As a result of under the control of extremist AMEG’s intervention, Syrian groups at the time), AMEG apple farmers were able to get worked with local councils back to work, create jobs in to install solar-powered their community, and establish irrigation equipment where a system of governance for feasible. By using sustainable shared resources through the clean energy, AMEG reduced water users’ associations. This interruptions in irrigation and sustainable and easily replicable rejuvenated local economies activity demonstrates the while simultaneously building viability of alternative energy the local councils’ credibility projects and provides as service providers and viable hope for reconstruction governance alternatives to and revitalization of Syria’s extremist groups such as the agricultural-based communities Islamic State and Jabhat al post-conflict. Nusra. Wherever feasible, AMEG not only restored IDENTIFYING irrigation, but also provided OPPORTUNITIES communities with equipment TO ENGAGE THE that could provide purified PRIVATE SECTOR IN drinking water using solar RECONSTRUCTION power. The map on the POST-DISASTER following page highlight’s Following Nepal’s earthquake AMEG infrastructure and in April 2015, USAID staff in rehabilitation projects in Kathmandu and Washington northern Syria. came together to reflect on how the agency could In Bdama, AMEG support reinforce the private sector’s enabled approximately 120 ability to support the orchards to be irrigated using Nepalese recovery and “build solar technology. By installing back better.” The USAID/ submersible irrigation pumps Washington team, comprising powered by solar panels, Global Partnerships, Private
71 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Water pump installation in Syria. CHEMONICS / AMEG
Capital and Microenterprise, help USAID/Nepal identify the Development Credit private sector engagement Authority, and the Asia opportunities — such as Bureau, grounded its work in catalyzing private capital, the theory that by leveraging public-private alliances, and the activities and resources market-driven initiatives — of the recovery effort, the that the mission can pursue to government of Nepal and 1) support near-term recovery development partners could and reconstruction needs and empower the private sector as 2) lay the groundwork for long- a partner and service provider term agricultural value chain for the recovery. In addition, development in Nepal. As a effective engagement of the focus Mission under the U.S. private sector would solidify Feed the Future initiative, a and strengthen its role as large portion of USAID/Nepal’s the economic foundation for emphasis and resources Nepal’s future growth and focuses on sustainably development. increasing agricultural productivity and facilitating AMEG contributed to farmers’ access to markets. an assessment in 2015 to The AMEG assessment team
72 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS evaluated opportunities to optimize the impact and cost- catalyze private sector-led effectiveness of the Mission’s growth in the agricultural post-earthquake recovery and sector to improve the reconstruction investments effectiveness of Feed the in the agricultural sector. Future programming. AMEG found that Nepal has an opportunity to develop more AMEG examined opportunities vertically and horizontally in the agricultural sector coordinated and efficient and worked with Nepali agricultural supply chains, stakeholders to identify and which will increase smallholder prioritize market-driven incomes. This would allow approaches, opportunities the mission to achieve greater to engage private sector impact with its resources by players, and methods for leveraging and capitalizing on mobilizing private capital to existing private sector efforts.
A farmer in Sri Lanka sells her goods in the market.
CHEMONICS / AMEG 73 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS SOLID dairy farmer Nagalingam Kanakasapapathi. CHEMONICS / AMEG
SNAPSHOT Rebuilding Lives through Farm Interventions in Sri Lanka
Nagalingam Kanakasapapathi resettled in Mullaitivu in August 2011 with his wife when both were released from a detention camp for former combatants of the Liberation Tigers of Tamil Eelam (LTTE). In 2013, they started farming on a half-acre plot of land, focusing on mushroom cultivation, and small-scale poultry and dairy farming. With one dairy cow and a knack for farming, Nagalingam caught the attention of a local veterinary surgeon who recommended Nagalingam take training through AMEG’s SOLID activity. Nagalingam received sorghum seeds and training on fodder sorghum cultivation from SOLID in October 2014. Nagalingam later attended SOLID training sessions on silage production, total mixed ration feeding, azolla production, clean milk production, farm planning, and the safe and responsible use of pesticides. In less than a year Nagalingam transformed his farm. He now has seven cows, four of which are pregnant, and has purchased an extra half-acre of land to extend his sorghum cultivation. As a result of the new feeding practices introduced by SOLID, the two milking cows in Nag- alingam’s herd now produce an average of 20 liters of higher fat milk per day — a significant improvement from the four liters per day they used to produce. With the increased quantity and quality of his milk, Nagalingam has started producing cheese and other milk-based products which command higher prices in the market.
Nagalingam’s success spread far beyond his own one-acre plot. He has become a recognized figure in the local farming community and has been approached by other organizations and farmers for support. Since receiving training and technical assistance from SOLID, he has trained roughly 200 other neighboring farmers on animal nutrition and feed management. The growth of his farm has allowed Nagalingam to demonstrate his devotion to his community and to Sri Lanka’s dairy industry.
While many ex-combatants face difficulties in resuming livelihood activities and in reintegrating into society, Nagalingam has been able to overcome these obstacles. In the eyes of the local community he is no longer just a “former combatant,” he is a dairy farmer and a community leader.
74 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Asia and Middle East Economic Growth Best Practices Project Reports by Activity Youth and Enterprise Workforce Financial Inclusion Public Financial Agricultural Activity Name Geographic Area Competitiveness Development and Investment Trade Management Livelihoods Final Deliverable(s) Accelerating Inclusive Economic Growth in Timor-Leste East Timor • Accelerating Inclusive Growth in Timor-Leste Advantages and Disadvantages of Geographic Indicators System: Tools and Lessons Advantages and Disadvantages of Geographic Indicators System Morocco • Learned from Morocco Assessment of LGBTI Economic Inclusion Tunisia, Lebanon • Not for public distribution Assessment of USAID COMPETE Project Impacts of Increased Impacts of New Infrastructure on Tourism in the Philippines: Case Study on USAID Philippines • Investment in Palawan Support for the Philippines’ Tourism Road Infrastructure Program India, Singapore, Assessment of Gender Lens Investing in Asia Vietnam, Bangladesh, • Gender Lens Investing in Asia Philippines, Thailand Enterprise Competitiveness Technical Guide Enterprise Competitiveness Video Case Study: Tunisia Business Reform and Competitiveness Project Egypt, Lebanon, Jordan, Case Study: Nigeria MARKETS Best Practices for Improved Employment Outcomes Tunisia, Pakistan, West • Case Study: Pakistan Entrepreneurs Livelihoods Model Bank/Gaza, Bangladesh Case Study: Endeavor Entrepreneurship Model Case Study: Bangladesh Jobs Opportunities and Business Support Case Study: Mauritius Business Growth Scheme Technology Partnerships for Workforce Development Technical Guide Facilitating Cambodia’s Trade Integration: A Road Map to Implementing the WTO Trade Cambodia Trade Facilitation Assessment Cambodia • Facilitation Agreement Gender Equality Mainstreaming Framework and Pilots India, Indonesia • Gender Equality Mainstreaming Framework India, Pakistan, Investing in South Asia: What’s Next for Entrepreneurship in India, Pakistan, and Beyond Global Entrepreneurship Summit Bangladesh, Indonesia, • Navigating the ASEAN Market: Successes and Challenges in Investing in Southeast Asia Philippines, Vietnam ASEAN Connect Guide to Integrating Gender into Trade Capacity-Building Middle East • Integrating Gender into Trade Capacity-Building Programs in the Middle East and Asia Programs Asia Increasing Enterprise Growth & Jobs Lebanon • Increasing Enterprise Growth and Jobs in Lebanon The U.S. Indian Diaspora: Investment Preferences and Demand for a Fixed-Income Indian Diaspora Investment Preferences India • Social-Impact Investment Indo-Pacific Economic Corridor Phase I: Coordinated Regional Trade Analysis Indo-Pacific Economic Corridor Phase II: Assessment of Non-Tariff Barriers in South Asia Facilitating Regional Connectivity in South Asia: Indo-Pacific Economic Corridor Final Report New Delhi Conformity Assessment Workshop Report National Single Window Best Practice with Lessons from Southeast Asia Non-Tariff Barriers to Trade in Bangladesh: National Action Plan Bangladesh, India, Sri South Asia Borderless Alliance Blueprint Indo-Pacific Economic Corridor (IPEC) • Lanka, Nepal Expanding Access to Express Courier Services through the Benapole-Petrapole Land Port: Economic Study Enhancing Connectivity and Market Access through Express Courier and Postal Shipments: A Blueprint for a Demonstration Pilot between Bangladesh and India Optimizing Cross-Border Trade Operations between Bangladesh and India: A Business Needs Assessment of Customs Facilities at Dhaka Airport and the Benapole and Petrapole Land Ports India-Bangladesh Dialogue Workshop on Conformity Standards: Summary Report Action Plan for Removal of Non-Tariff Barriers between Bangladesh and India Developing a Domestic Debt Market in Iraq: A Guidebook Iraq Public Financial Management Iraq • Towards Economic Reform in Iraq Jordan Fiscal Assessment Jordan • Jordan Fiscal Environment Assessment Final Report Kyrgyz Republic Economic Growth Assessment Kyrgyzstan • Kyrgyz Republic Economic Growth Assessment Lebanon Diaspora Engagement Pilot Lebanon • www.diasporaid.com Lebanon Ta3mal Pilot Lebanon • Ta3mal YouthWorks Pilot in Lebanon: Final Activity Report Libya PFM Pilot Final Report Libya Municipal Revenue Generation: A Short Guidebook for Libyan Municipalities (2016) Libya Public Financial Management Libya • Libya PFM System Reform: Subnational and Procurement Reform Assessment (2014) Libya Public Financial Management System Reform Assessment (2014) Philippines, Vietnam, Lower Mekong Initiative Clean Energy Business Dialogue Burma, Laos, Cambodia, • Lower Mekong Initiative Clean Energy Business Dialogue 2015 Thailand Egypt, Jordan, Lebanon, Middle East and North Africa Trade Barriers: A Synthesis Tunisia, Morocco, The Integration of Middle East and North African Countries into Global and Regional MENA Regional Trade Capacity Building Pilot • West Bank/Gaza (UAE, Value Chains: Taking Stock of the USAID MENA Trade Capacity Building Pilot Bahrain, Abu Dhabi) Tunisia External Commerce Diagnostic Pakistan Non-Agricultural Value Chain Assessment Pakistan • Pakistan Non-Agricultural Value Chain Assessment Private Sector Engagement Assessment Nepal • Published by USAID Partnership Services Program Egypt, Tunisia, Lebanon, Revenue Capital Technical Guide Revenue Capital Finance Model Iraq, Morocco, Jordan, • UAE Introduction to Revenue Capital (Video) Egypt, Jordan, Lebanon, Tunisia, Morocco, Iraq, • Status of Secured Transactions Reform in the Middle East and North Africa Region Secured Transactions Reform West Bank/Gaza Sri Lanka Public Financial Management Needs Assessment Sri Lanka • Sri Lanka Public Financial Management Assessment Report 75 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS Supporting Livelihoods for Vulnerable Populations in Sri Lanka Assessment of Findings Sri Lanka Livelihoods Assessments Sri Lanka • and Opportunities Supporting Opportunities for Livelihoods Development Annual Report FY 2014 Supporting Opportunities for Livelihoods Development Annual Report FY 2015 Supporting Opportunities for Livelihoods Development Annual Report FY 2016 Supporting Opportunities for Livelihoods Development Pilot Sri Lanka • SOLID Broiler Management Training Manual SOLID Approach to Producing Year-Round Cattle Feed Supporting Opportunities for Livelihoods Development Activity Final Report Jordan, Lebanon, Iraq, Lebanon Investment Landscape and Business Environment Assessment Support to Middle East & North Africa Investment Initiative Morocco, West Bank/ • Gaza Investment Landscape and Business Environment Assessment in the West Bank Syria Economically Essential Services Syria • Essential Services North Final Report Trade Facilitation Needs Assessments Yemen, Tunisia, Morocco • Not for public distribution Tunisia Tax and Customs Reform Pilot Activity: Phase I Final Report Tunisia Tax and Customs Reform Pilot (TCP) Tunisia • Policy Challenges of Decentralization in Tunisia Tunisia Tax and Customs Reform Pilot Activity: Final Report Yemen Economic Growth Appraisal Yemen • Yemen Economic Growth Appraisal Yemen E-Money Services Gap Analysis Yemen • E-Money Services and their Potential in Yemen Yemen Microfinance Network Training Kit for Loan Officers Yemen • Developing Training Curricula for Microfinance Loan Officers in Yemen Yemen Mobile Money Regulations Yemen • Review of Branchless Banking Regulations in Yemen Support to the Executive Bureau for the Implementation of the Mutual Accountability Yemen Mutual Accountability Framework Yemen • Framework Yemen TedX Entrepreneurship Events and Start-Up Weekends Yemen • TedX Sana’a Yemen Workforce Development Appraisal Yemen • Yemen Workforce Development Appraisal Yemen Workforce Development Pilot Yemen • Yemen Vocational Training Market Assessment U.S. Agency for International Development 1300 Pennsylvania Avenue, NW Washington, DC 20523 Tel: (202) 712-0000 Fax: (202) 216-3524 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76 AGRICULTURAL LIVELIHOODS AND VULNERABLE POPULATIONS