Short-Term Employment Opportunities, Reforms, and Market Enabling Infrastructure

SHORT‐TERM  EMPLOYMENT  OPPORTUNITIES,  REFORMS,  AND  MARKET  ENABLING INFRASTRUCTURE UNDER IDLG (US$120.5 million) This component aims to increase economic opportunities in cities that fall under IDLG’s mandate and that face a high  influx  of displaced  people,  by  (i)  creating  short‐term  employment  opportunities;  (ii)  investing  in  market enabling  infrastructure  in cities  such  as  Jalalabad,  Kandahar,  Herat,  Mehterlam,  Puli  Khumri,  Khost  Matun, Asadabad,  Taluqan,  Kunduz,  Chaghcharan, Mailman,  and  Paroon;  and  (iii)  supporting  the  implementation  of municipal level regulatory and process reforms, which need to be carried out before funding for Priority Projects under Component 3 can be released to the Jalalabad, Kandahar, Herat and Khost municipalities. 

Subcomponent  2.1:  Short‐Term  Employment  Opportunities.  This  subcomponent  supports  short‐term employment in urban areas for vulnerable households that may not benefit from other project activities. It also recognizes that large numbers of IDPs and/or returnees in urban areas rely on daily wage work. To demonstrate quick  results,  it  will  follow  the  design, implementation  modality,  and  lessons  learned  from  the  ongoing Maintenance  and  Construction  Cash  Grants  (MCCG) scheme  under  the  Citizens’  Charter  Afghanistan  Project (CCAP)(P160567)  implemented  by  the  Ministry  of  Rural Reconstruction  and  Development  (MRRD)  –  while customizing this to focus on urban communities. Facilitating Partners (FPs) will be contracted by IDLG to establish an estimated 1,160 urban Community Development Councils (CDCs), facilitate their elections, conduct a Well‐Being Analysis (WBA) to identify vulnerable households who will participate in the daily wage work and carry out all other facilitation processes as set out in CCAP. Grants of up to US$27,000 will be disbursed directly to each CDC, at least 60 percent of which will be used for daily wages (for work on repairs, maintenance, and/or light construction), benefitting an estimated 80,000 vulnerable households.  

Subcomponent  2.2:  Market  enabling  infrastructure.  This  subcomponent  aims  to  improve  the  poor  market infrastructure which businesses complain constrains the enabling environment for business activity, which is in  turn essential for job creation and economic wellbeing, particularly among the urban population. This will be done by  providing  grants  to  Gozars  and Business  Gozars,  which  will  invest  the  grants  in  priority  market  enabling infrastructure. IDLG will establish  (i) Gozar Assemblies  (GAs) and  (ii) Business Gozars Assemblies  (BGAs) in  the cities. A Gozar will be formed from four to five CDCs electing one representative each who will be part of the GA. A Business Gozar is a parallel body which will consist of an estimated range of 100 to 300 businesses, who will also  elect  their  representatives  into  the  BGA.  Before  a  BGA  is  established,  IDLG,  in  consultation  with  the municipality, will conduct a Gozar and Business Gozar Assessment (G/BG‐A) to identify opportunities where EZ‐Kar investments can have a high economic impact. The G/BG Assessment will be conducted in all IDLG project cities by a firm recruited and managed by IDLG. This assessment will include work to identify locations in the city with a high density of businesses where potential Business Gozars could be established, before the identification and  recommendations  for  market‐enabling  infrastructure  takes  place  at  the  Gozar  or  Business  Gozar  level. 
Subproject  proposals  identified  for  implementation  by Business  Gozars  shall  be  aligned  with  national  public Facilitating Partners means international and/or national non‐governmental organizations and agencies that will assist the CDCs, GAs, and BGAs with the preparation and implementation of subprojects. The coverage is expected to be close to 90 percent of the city if using the Afghanistan’s National Statistics and Information Authority (NSIA,  2018)  urban  population  figures, which  shows  that  there are  1,210  communities in  these  urban areas. However,  data  from UN‐Habitat’s ‘State of Afghan Cities’ report (SoAC 2015, updated 2017), shows that there are around 2,035 communities. Saturation beyond 1,160 CDCs in the cities can be carried out under CCAP as more resources are made available. Community Development Council is a community‐based decision‐making body that includes a chairperson, vice‐chairperson, secretary, and  treasurer,  and  is  responsible  for,  inter  alia,  preparing  Community  Development  Plans  and  Sub‐Project  proposals,  and  for  the implementation and management of subprojects. Each urban CDC comprises approximately 200 households. The Well Being Analysis (WBA) is part of the Participatory Learning and Action (PLA) tools, which is a participatory process that classifies all households in the community into socio‐economic categories (rich or well‐off, middle class, poor, and very poor). Each household in the poor or poorest categories of the WBA with an able‐bodied member willing to participate in paid labor is considered a potential beneficiary for this component. If the total number of such eligible households exceeds 35 percent of the total households in the community, then a lottery approach is used exclusively from among the eligible households only to select the actual beneficiaries. MCCG Agreements will be signed between IDLG and the CDCs before transferring the grants. 1,160 CDCs x 200 households per CDC x 35 percent = 81,200 households. Gozar is an urban neighborhood area‐based organization structure at the sub‐district level. A Gozar Assembly is a group of 4‐5 CDCs. A Business Gozar Assembly would consist of 100‐300 businesses. Doing Business 2019; Sub‐National Doing Business in Afghanistan, 2017; and Economic Cluster Analysis: Study of Food Processing and Informal Manufacturing Activities in Kabul City, prepared by Altai Consulting for the World Bank, March 2015. The term “businesses”’ refers to small and medium size enterprises (SMEs) as well as microenterprises. These could be, for example, shops in formal markets, small semi‐formal shops, vendors, workshops or small factories, etc. investment management (PIM) approach. IDLG, as the proposing entity, shall submit the proposals for strategic fit screening and final approval by the Ministry of Economy (MoEC). For such screening and approval, MoEC shall use a screening tool. It is recommended that IDLG uses the same screening tool, while proposing subprojects to reduce the risk of rejection/revision of subprojects during MoEC’s subproject approval process. The details of the process shall be elaborated clearly in the Component 2 Operations Manual.

Gozars and Business Gozars will have the same governance structure which has proven to work in Afghanistan (under CCAP). By applying CCAP’s participatory and transparent process to develop Development Plans, priority economic infrastructure needs of GAs and BGAs will be identified in an inclusive manner, reflecting the views of both male and female owned and operated businesses. The Development Plans for the GAs and BGAs will have similar “positive menus” based on selection criteria, as the objective of their investments will be the same Upon approval of Development Plans, a grant of up to US$200,000 will be channeled to each GA/BGA for implementing  their investments21. GAs/BGAs can choose to pool their resources and will be supported by FPs. 
Roll out and coordination: Once CDCs have been formed and have begun utilizing their MCCG, an estimated 230 GAs will be formed (as GAs are a grouping of CDCs). Once formed, IDLG, with the support of FPs, will ensure that there is close coordination between GAs and BGAs  (to avoid any duplication) and there is regular consultationvwith nahia (Municipality District) administration and the Municipality Advisory Boards (MABs) in site selection, alignment with municipal economic development plans for the market enabling infrastructure, and the progress of project implementation. This coordination is already being done under CCAP

Subcomponent 2.3: Support for Municipal Level Regulatory and Process Reforms. This will be implemented by IDLG and will focus on reforms at the municipal level and within IDLG’s mandate. To move municipalities towards an investor friendly way of operating, this subcomponent will support the following activities: 
a. Undertake a regulatory assessment for each project city to identify city‐level priorities in Government to Business (G2B) services e.g., obtaining a license, permit, certification, registering a business, paying taxes. Specific consideration will be given to city‐level G2B reforms that can help close the gender economic gap. 
b. Support reforms identified by the regulatory assessment. This will be in the form of technical assistance to the Gozars, Business Gozars, and Municipalities across IDLG cities. Priority will be given to simplification of construction  permits22  [in  coordination  with  the  IFC23  and  the  Executive  Committee  on  Private  Sector Development (PRISEC)], and those related to Doing Business (DB).  

Illustrative criteria could, inter alia, include: (i) a high‐level assessment of feasibility and basic financial analysis by FPs, given the available funding,  timelines  and  capacity;  (ii)  promoting  businesses;  (iii)  prioritizing  market‐enabling  infrastructure  that  can lead  to  improved economic opportunities (such as cold storage and warehousing facilities, sanitation facilities, electricity connections). IDLG will ensure that all Gozar and Business Gozar investments are consulted with the Mayor  (or acting), whose role will also be to ensure alignment of the investments with municipal economic development plans in consultation with Municipal Advisory Boards. IDLG will sign Gozar Grant Agreements with GAs and Business Gozar Agreement with BGAs before transferring the grants. Construction permits were selected because of the focus on light construction under the EZ‐Kar project (including at community‐level subprojects), complementarities with Cities Investment Program (since construction permits are very relevant for businesses and markets in cities), and the ability of IDLG and Municipalities to implement reforms related to construction permits. Draft action plans for improving the  construction  permit  may  include,  inter  alia,  topics  such  as  building  inspections,  risk‐informed  land  use  planning,  automation  of processes. Subject to coordination with IFC, green buildings certification may be incorporated in this process. 

Subcomponent 2.4: Component 2 Management. Activities under this component will be implemented using the existing  CCAP PIU established  under IDLG and will  cover all  the additional  operations and management  costs associated with the EZ‐Kar activities in IDLG (up to 10 percent of Component 2 amount).