ANE Regional Activities

>> Regional Overview >> ANE Regional Activities Overview

ACTIVITY DATA SHEET PROGRAM: Asia and the Near East Regional TITLE AND NUMBER: Encourage Economic Growth, 498-023 STATUS: New PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $17,735,000 DA (including $2,334,000 in FY 2000 carryover funds); $11,568,000 ESF (including $300,000 in FY 2000 carryover funds) PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $7,700,000 DA; $10,000,000 ESF INITIAL OBLIGATION: FY 2001    ESTIMATED COMPLETION DATE: Continuing Summary: Americans and citizens of other countries benefit from USAID's efforts to stimulate sustained economic growth in developing and transition economies by promoting open and fair trade practices. Doing so requires the refocus of development priorities, giving top priority to programs that establish a more direct link between trade promotion and investment, and international development. Creating appropriate legal, regulatory, tax, trade and financial frameworks that open markets and facilitate foreign investment best achieve this result. USAID's newly established Strategic Objective, Encourage Economic Growth, brings the combined resources of three programs to promote its goals: (1) increasing foreign direct investment; (2) improving public and private sector governance; and (3) removing barriers to free trade. Accelerating Economic Recovery in Asia (AERA), a five-year initiative that builds upon on-going donor and bilateral USAID efforts in Southeast Asia (Indonesia, the Philippines, Thailand, Vietnam, and possibly Cambodia), addresses the weaknesses in these countries' economic and governance systems. AERA has three key objectives: (1) improve public and private sector governance; (2) provide Small and Medium-Sized Enterprises (SME) support; and (3) support reforms that will encourage foreign direct investment. The U.S. North Africa Trade and Investment Initiative is a multi-agency effort to address the legal, policy, and regulatory constraints to increased trade and investment in North Africa. Assistance includes short-term expert consulting and workshops for public and private sector entities in North Africa-primarily Morocco, Tunisia and Algeria (the Maghreb). The expected results of this activity are to: reform regulations, procedures, and policies to improve the trade and investment climate in North Africa; establish an internet-based network to match business opportunities in North Africa with businesses in the United States; and facilitate internet/e-commerce-related activities in the region. The beneficiaries will be local industries and industry associations, foreign investors, and the host country. The South Asia Regional Initiative/Energy Program (SARI/Energy) encourages regional cooperation in energy development and the eventual trade in clean energy resources among South Asian countries including Bangladesh, Bhutan, India, Nepal, the Maldives and Sri Lanka. SARI/Energy supports sustained economic growth in the region while minimizing greenhouse gas emissions and harm to human health. SARI/Energy brings together energy sector actors from public and private sectors across the region to discuss and resolve issues that impede trade and investment in energy development. Taken together, these measures will help achieve the dual objectives of promoting sustainable economic development and market-driven energy sectors in South Asia, and a greater opening of markets to U.S. and regional firms. Furthermore, by promoting cooperation that builds on mutual economic interest, the program can help ease political tensions in the region and build trust and confidence among countries. A new regional Information Technology (IT) program will begin in FY 2002. The program will build on country level assessments and limited interventions supported to date by Program Development and Learning funds (498-007). The program will support ANE development objectives by improving access to and generation of information, and its related applications in areas such as capacity building, poverty alleviation, and human empowerment. The program, working with partners in ANE countries, also will support policy/regulatory reform and private sector development. Key Results: The AERA program initiated activities in Indonesia and the Philippines in July 1999, Thailand in October, 1999, and in Vietnam in September, 2000. AERA-funded activities provided technical assistance to the governments of Indonesia and the Philippines in drafting and enacting legislation that supports the reform packages negotiated with the international financial institutions. In Indonesia, resistance to deeper reform has impeded significant progress on bank and enterprise restructuring. Nonetheless, USAID technical assistance to the Jakarta Initiative Task Force (JITF) did facilitate the execution of debt restructuring deals for about 18 companies valued at $625 million. USAID activities also contributed to the objectives of improved private and public-sector governance. In the Philippines, AERA activities supported the strengthening of the Securities and Exchange Commission that resulted in the adoption of procedures for securities investigation, as well as new rules for adjudicating corporate recovery. In Indonesia, USAID-funded activities contributed to the adoption of four key laws, decrees and regulations in 1999. These measures include: the critical competition law which defines rules for competitive behavior by firms as well as anti-corruption, arbitration, and secured transactions law. This last law provides a legal basis (previously lacking) for registering secured interests in assets used as collateral. In Thailand, AERA-supported efforts include the following: The program has established a center in Bangkok to advise small and medium sized businesses on debt restructuring and restarting their operations. The center began operations in early December 1999 and has assisted more than 200 Thai businesses to diagnose and resolve their business problems. AERA funded commercial bank training to approximately 3,000 executives and staff from 12 Thai-owned banks to help them reform and strengthen bank supervision and on-site examination policies and procedures. With AERA assistance, Indonesia and the Philippines have undertaken legislative reforms in areas such as competition law, government procurement, consumer protection, arbitration and secured transaction. A USAID grant to the U.S. Chamber of Commerce developed an U.S.-Thai SME matching facility that has generated over 3,600 matches, and over $50 million in negotiated business. U.S. North Africa Trade and Investment Initiative: The expected results are reforms in regulations, procedures and policies that improve the trade and investment climate in North Africa, and the establishment of an Internet-based network to match business opportunities in North Africa with businesses in the U.S. These results should lead by the end of the activity to increased trade among the three Maghreb countries and with the United States. Work is underway in Morocco, Tunisia, and Algeria to strengthen commercial law, promote U.S.-Maghreb university partnerships, provide business training, develop debt markets, and promote the development of internet and communications technologies. Internet connections between Chambers of Commerce in the Maghreb and U.S. businesses have been established through USAID's Global Technology Network. SARI/Energy: Baseline sector information has been collected from Bangladesh, Bhutan, India, Nepal, and Sri Lanka during fact-finding visits, and incorporated into integrated contractor and grantee work plans. A SARI-Energy website has been designed and will be on the Internet by May 2001. South Asian officials have traveled to the United States under the transmission and regulatory partnerships sponsored by the United States Energy Association (USEA). A utility partnership has been launched with its first meeting in Mumbai, India. The regulatory partnership's first priority is the drafting of a regional grid code and the sharing of tariff-setting mechanisms for regional energy exchange. Preparations are underway to link 18 Chambers of Commerce in the region with the U.S. Chamber of Commerce. The first training event, a course on marketing energy efficiency, was held in Sri Lanka in February 2001. This activity has supported capacity building in regional infrastructure regulation and finance. The first technical assistance event was held in Nepal in March. This led to the formation of a technical level contact and advocacy group that has identified six key policy and technical issues to focus on in FY 2001. Partnership, training and technical assistance efforts will be linked in ways designed to reinforce the capabilities of key actors and to support policy and regulatory changes required for increased regional energy trade and cooperation. Interest in participation in SARI-E has been strong among public and private sector energy officials, as well as support from U.S. energy firms working in the region. Performance and Prospects: In FY 2001, USAID expects to allocate approximately $12 million in DA funds to continue AERA-funded activities; $5 million in DA funds to continue the North Africa Regional Trade and Investment Initiative; and $11.568 million ESF and $735,000 in DA funds to continue the South Asia Regional Initiative/Energy. Funding of the IT program will be initiated in FY 2002. AERA is closely linked and coordinated with World Bank and Asian Development Bank crisis response efforts. The AERA program will provide technical assistance and training that complement ongoing structural adjustment loans funded by the International Monetary Fund and multilateral development banks. This close coordination will enable the program to have a significant impact, particularly in the areas of competitiveness, economic governance, and financial and corporate debt restructuring. In FY 2001 and 2002, USAID will continue to focus on the systemic changes necessary to bring about structural reform and sustained economic growth. USAID bilateral programs in Indonesia and the Philippines will continue activities initiated by AERA. USAID will continue the AERA governance reform activities in Thailand and Vietnam. U.S. North Africa Trade and Investment Initiative: Activities undertaken in FY 2001 will include efforts to improve the investment climate in Morocco via continued work to rationalize access to land and restructure the tourism sector. In Algeria, efforts will focus on helping to prepare the country for accession to the World Trade Organization. In Tunisia, funding will support training and university linkages, and continued operation of the Global Technology Network. Support for development of Internet and communications technologies will continue in all three countries. SARI/Energy: Both governments and private sectors in South Asia have responded positively to the SARI/Energy program. Representatives from both the public and private sectors agree that the time is opportune to approach issues of energy development and trade from a regional perspective, in order to benefit from shared information, knowledge and experience. By linking SARI/Energy activities with ongoing USAID bilateral activities, as well as with other donor energy assistance, USAID expects the program to have a significant impact. The initial activities launching regional energy transmission and energy regulatory body partnerships have already created forums where key technical people from the region are learning from each other and other regions of the world in order to construct the unique building blocks for regional energy cooperation and trade in South Asia. Information Technology: The FY 2002 program will work with NGOs, universities, other donors, foundations, and the private sector to promote IT development and applications. Additional resources will be leveraged from missions and other public and private partners, thereby broadening the pool of resources and expertise than can be mobilized in support of IT development. Possible Adjustments to Plans: Starting in FY 2001, this regional objective includes funding for and reporting on activities previously notified under the objectives "Accelerating Economic Recovery in Asia" (498-001); "North Africa Regional Trade and Investment Initiative" (498-003), and "South Asia Regional Initiative/Energy" (498-031). In FY 2000, USAID took the decision to continue AERA-supported activities in Indonesia and the Philippines under ongoing bilateral programs. FY 2001 AERA funds will be focused on supporting regional activities and ongoing efforts in Thailand and Vietnam. In Vietnam, AERA efforts will be limited to encouraging the government to undertake policies and reforms needed to become better integrated into the world economy. Other Donor Programs: AERA: The World Bank, Asian Development Bank, International Monetary Fund, European Union, and bilateral development agencies have pledged more than $58 billion to help Indonesia, Thailand and the Philippines recover from the financial crisis. Donor assistance has taken the form of cash transfers to help these countries meet foreign exchange obligations. Although these resources have provided critical assistance and have supported essential policy and legal reforms, they have not delivered the necessary technical assistance and training to help the countries implement the required policy changes. Thus, the AERA initiative complements other donor assistance by providing the technical expertise and training that will be essential to fully implement the reforms needed for economic recovery. U.S. North Africa Trade and Investment Initiative: A $500 million multi-sector Policy Reform Adjustment Program and a sector-specific adjustment program in Morocco-beginning with $200 million for telecommunications reform program-are planned with joint financing from the World Bank and African Development Bank. World Bank assistance to Tunisia includes funding for foreign investment promotion, service sector liberalization, and export development. In Algeria, the World Bank is preparing studies to promote privatization. The European Union has an extensive program to improve ties with the Maghreb, through agreements that may lead to a Euro-Mediterranean Free Trade Area by the year 2010. USAID will coordinate activities with other development partners to promote favorable conditions for private sector investors. SARI/Energy: Donor assistance is almost entirely focused at a bilateral level, assisting countries in areas ranging from technical assistance in regulatory and pricing issues to providing loans for upgrading and rehabilitating domestic distribution and transmission systems. Although this bilateral assistance is essential, it does not provide a forum for countries to discuss and resolve cross-border issues necessary to rationalize energy supply and distribution across the region. SARI/Energy is uniquely positioned to fill this gap. The SARI/Energy program will provide fora for energy sector players to discuss policy and systems harmonization issues that need to be resolved, and to promote relationships and networks that foster the trust and confidence needed in the region to support agreements on energy trade. Thus, the program complements other donors' efforts and USAID's own bilateral programs through regional mechanisms, and takes energy development a step further into trade that will have economic growth and reduced greenhouse gas emissions benefits. IT: ANE has been working closely with Japan and the World Bank to conduct IT assessments and coordinate initial pilot activities. A key strategy of the regional program will be to collaborate with private foundations and NGOs to leverage resources and expertise for the program. Principal Contractors, Grantees, or Agencies: AERA activities are being implemented by the Kenan Institute Asia, the U.S. Chamber of Commerce, the U.S. National Committee for Pacific Economic Cooperation, Deloitte Touche Tomatsu, Development Alternatives, Inc., KPMG Peat Marwick, R. Robert Nathan Associates, the American Center for International Labor Solidarity, and the Asia Foundation. U.S. North Africa Trade and Investment Initiative: In addition to a large number of existing USAID Global Bureau pre-qualified contractors, consultants from U.S. agencies such as Customs, Commerce, and Treasury will be utilized to provide short-term technical assistance. SARI/Energy: Principal contractors and cooperators are the U.S. Energy Association, Nexant Consulting (a Bechtel subsidiary), Deloitte Touche Tohmatsu, Academy for Educational Development, Core International, Institute of International Education, and the National Association of State Development Agencies. Other expected partners will include the U.S. Chamber of Commerce and the Energy Information Administration of the U.S. Department of Energy. IT: The program will be implemented through Global Bureau mechanisms. Selected Performance Measures: AERA: Baseline (2000) Target (2001) Target (2002) Cumulative value of debt workouts completed by the Jakarta Initiative Task Force (percentage increase in real terms) 3 billion 6 billion TBD Reduction in bank non-performing loans in the Philippines (as % of total loan portfolio) 12.48% TBD TBD US-Thai business linkages (millions) $50 $75 $125 Number of key legislative and/or administrative reform measures in corporate and financial governance enacted or amended -- Indonesia 4 7 TBD -- Philippines 7 7 TBD U.S.-North Africa Trade and Investment Initiative: Maghreb-US private-sector business-linkages developed through the Global Technology Network 1 5 8 Increase in volume of trade between U.S. and the Maghreb 1% 2% 2% SARI/Energy: The performance measures are still being developed. Preliminary measures include: Number of commercial documents drafted and regional gas assessments completed to facilitate infrastructure investment; Number of forums held and recommendations made to develop/modify laws, regulations and agreements to facilitate regional energy trade and private sector project development; Number of initiatives developed/adopted by regulatory bodies that support regional energy trade and development of projects with private sector participation; Number of processes/initiatives identified and addressed to facilitate harmonization of regional energy efficiency standards and practices; Number of best practices in rural energy delivery adapted to and implemented in more than one country; Cost of poor quality of service to economy and end-use sectors; Number of local/regional entities that promote energy sector reform; and Number of cases where participants have utilized knowledge or skills gained from training towards advocacy of energy sector reform and adoption of best practices. U.S. Financing (In thousands of dollars)   Obligations   Expenditures   Unliquidated   Through September 30, 1999    0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA   0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 2,334 DA   0 CSD 300 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 15,401 DA   0 CSD 11,268 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 17,735 DA   0 CSD 11,568 ESF 0 SEED 0 FSA 0 DFA       Future Obligations   Est. Total Cost   Proposed Fiscal Year 2002 NOA 7,700 DA 170,665 DA 196,100 DA 0 CSD 0 CSD 0 CSD 10,000 ESF 10,400 ESF 31,968 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA

:  :  :  :  :  :  :  :  :  :  What's New : FOIA Requests : Privacy Policy : Email This Page : Plug-ins : FAQs : Help Desk : Contact Us : Site Map Last Updated on: May 29, 2002