Asia 19-008

USAID FROM THE AMERICAN PEOPLE

INITIAL ENVIRONMENTAL EXAMINATION (IEE) REQUEST FOR CATEGORICAL EXCLUSION (RCE)

PROJECT/ACTIVITY DATA:

Activity Name : Trade and Growt h (T &G) Proj ect Appra isal Document (PAD) Amendmen t

Three new act ivities including:

(I) Strengthening Provincial Capacity; (2) Vietnam Leads; and (3) Extension of the Provincial Competitiveness Index (PCI) progra m.

Country/region: Vietnam Start Date: 4/1/2019 End Date: 9/30/2024 Life of Project Amount($): 17,500,000 IEE Prepared by: Economic Growth and Governance Office (EG2) Date: I 0/25/20 18

ENVIRONMENTAL ACTION RECOMMENDED: (Place X where applicab le)

Catego rical Exclusion: [X] Negat ive Determination with Cond itions: [ ] Positive Determination: [ ] Deferral: [ ]

CLIMATE RISK RATING(S): (Place X where applicab le)

Low: [X ] Moderate: [ ] High: [ ]

Purpose and Scope

The purpose of this document is to estab lish that all proposed projects/activities belong to classes of actions eligib le for Categor ical Exclusions as set out in Agency regulations (22CFR216.2(c)) and that there are no foreseeable significant direct or indirect impacts that would preclude them from receiving a Categorica l Exclusion . Upon approva l of this document, the Categorica l Exclusions are affirmed for the project/activity. This analysis also documents the results of the proj ect/act ivity level Climate Risk Managemen t process in accordance with USAID policy (specifica lly, ADS 20 I mandatory reference 20 I mal). This RCE is a critical element of a mandatory environme ntal review and compliance process meant to achieve enviro nment ally sound activity design and implementation.

The act ivities under review are recommended for categorica l exclus ion .

Background and Description of Activities

USAID/Viet nam is amending the T&G PAD to add a third sub-purpose to support the project's

purpose, and three new act ivities that wi ll contribut e to the sub-purpose. This new sub-purpose

is: Provincial capacity to implement economic governance reforms increased. Given the

mutually reinforcing nature of these three activities, and their relat ionship to the sub-purpose,

this is a joint IEE for these three new activities under the T&G PAD amendment.

Strengthening Provincial Capacity - The act ivity is designed to provide technical

assistance and tra ining to relevant institutions to build the capacity of provincial officials

to more effective ly implement and measure eco nomic governance reforms.

Vietnam Leads - Indiana University is working with Ho Chi Minh Academy to update

and develop training resources for loca l prov inc ial leaders to be better equipped to

manage econom ic reforms and public resources in a market-oriented socia list economy.

This activ ity will suppo rt and strengthen existing work currently being undertaken by

Indiana University.

Extension of the Provincial Competitiveness Index (PCI) program - The activity aims

to promote private secto r growth in Vietnam by through the improvement of economic

governa nce in 63 provinces, by implementing the annual Provincial Compet itiveness

Index survey to get reliable evidence.

Recommended Threshold Decisions

Justification for Categorical Exclusion Request

The act ivities described just ify Categor ical Exclus ions, pursuant to 22CFR2 l 6 .2( c)(2)(i),(iii) , and (v) for which an Initia l Env ironmenta l Examinat ion, or an Environment al Assessment are not required because the actions do not have an effect on the natural or physical environment.

Specifically, as currently planned , these activ ities fall into the following classes of action:

Educat ion, technical ass istance , or training programs except to the extent such programs include activities direct ly affecting the environment (such as construction of facilities , etc.) Analyses, stud ies, academic or research workshops and meetings Document and inform ation transfers

Climate Risk Management

Located on the tropical typhoon belt, Vietnam is cons idered one of the most hazard-prone

countr ies in the world . This situat ion is compounded by a host of non-climate factors such as

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high population density, high levels of poverty concentrated in coastal areas vulnerable to

extreme events, and extensive low-lying land highly susceptible to flooding. While there is high

dependence on climate- sensit ive live lihoods such as fishing and rain-fed agricultur e, growing

industrial and service sectors have reduced the relative contribution of agriculture, forestry and

fishing to GDP. However, these sectors still collectively contribute 21 percent of GDP and

employ over 47 percent of the country's labor force, according to the World Bank. 2050 climate

projections forese e a 180% increase in the frequency of heat waves, an increase in temperature of

1-2° C, and more extreme variability in precip itat ion between the dry and wet season.

During the USA ID/Vietnam CDCS Strategic Midpoint Portfolio Review in 20 I 6 as well as the

development of the Vietnam Integrated Country Strategy (ICS) for 2018-2021, existing

objectives were evaluated to determin e ifthere is a low, moderate , or high risk that climate

change could impact attainment of objectives. Both the overall ICS and the CDCS were rated

" low" when taking into account potential actions to Vietnam's climate risk profile.

Given Vietnam's precarious environment, it is critical for Vietnamese officials to take into

account how their actions and roles might exacerbate or mitigate climate hazards. Although these

activities are technical assistance and focused on economic management , USAID/Vi etnam will

endeavo r to incorpora te climate risk, climate adaptation, and soc ial environmental safeguards,

into the technical assistance and training, particularly related to economic planning. Accordingly,

the climate risk managem ent actions outlined in the assessment below will be discussed with the awardee.

USAID/Vietnam, under previous programs, has established a climate change curriculum at the

Ho Chi Minh Academy , which is required for all Government of Vietnam (GVN) employees.

These courses will serve as a reference to the work of Indiana University and provide

background for provincial officials as they seek to reform the competitiveness of private sector

investment in their respec tive regions.

A high-level , revised climate risk screening of these activities has been conducted and is below.

Revisions and Limitations

If during implementation , project activities are considered outside of those described in this document, an amendment shall be submitted. Pursuant to 22 CFR 2 l 6.3(a)(9), if new activities are added and/or information becomes available which indicates that activities to be funded by the project might be "major" and the project' s effect "s ignifican t," this determination will be reviewe d and revised by the Contract/Agreement Officer's Representative of the project , and submitted to the Mission Environmental Officer and Bureau Environmental Officer for approval and, if appropriate, an environmental assessment will be prepared.

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Tasks/ Defined or Climate Risk How Climate Risks Risk Addressed or Opportun it ies to

Anticipated Task~ or Climate Risks .

Rating .

are Addressed in the Further Analysis to be Strengthen Climate

Interven t ions Activity conducted in Activity Resilience

Design NeKt Steps for

Activity Design/. Implementat ion

Str ength enin g P ro vi ncia l Capac ity

denti fy capacity building Low The Mission accepts these Not Appl icable (N/ A) Promote climate awareness and

opportunities for local offic ials As per guidance in low risks as this activity is adapt ation capab il it ies in

o strengthe n officials' capacity the ADS 201, no focused on public strategic plann ing.

o implement and measure potential climate risk administration and

is identified that will leadership relevant to !economic governance reforms directl y impact the economic governance. more effectively achievement of the However, as the tra inings

project or activity are meant to be demand -outcomes. dr iven, to respon d to

province's needs, the Mission anticipates that

should the re be

opportunit ies to address climate risk, this wo uld be

included in t he train ing.

Str engthen the capacit ies of As per guidance in Low N/A N/A N/ A - the focus of this activity is

hree existing Vietnamese the ADS 201, no insti t utional strengthen ing e.g.

inst itut ions (wit h the mandate potential climate risk strategic communicat ion,

o provide capacity is identified that w ill market research, financia l

development opportunities t o directly impact the management.

achievement of the provincial officia ls) project or activity

outcomes.

Vie tn am L ead s

Redesign and improve the Low The M ission accepts these Promote integratio n of climate

Auality training programs wit h a low risks as t his act ivity is adaptation In training .

Jocus on market economy and As per guidance in focused on public N/A

leadership t he ADS 201, no administra t ion and

potentia l climate risk leadership relevant to However, USAID will

is ident ified that will economic governance. encourage integrat ion of pre-

directly impact the Given expert ise with exist ing USAID-funded Climate

achievement of the Indiana Universit y in Public Change curriculum fo r Ho Chi

project or activit y Policy related to climate M inh Academy if approp riate.

outcomes. change, USAID will encourage integrati on of

climate issues, when and if appropr iate.

Conduct Joint research to As per guidance in Low The Mission accepts these Promote integratio n of climate

1Provide policy advice to the ADS 201, no low risks as th is activit y is adaptation in jo int ly-r esearched

relevant GVN agencies potent ial climate risk focused on public N/A policy guida nee.

is identified t hat will administration and

d irect ly impact the leadership relevant to

achievement of the economic governance.

project or activity Given expert ise with

outcomes. Indiana University in Publlc Policy relat ed to climate

change, USAID will encourage Integ rat ion of

climate issues, when and if

approp riate.

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Extension of the Provincial Competit iveness Index (PCI) program

K:onduct annua l PCI survey As per guidance In Low The Mission accepts these N/A Promote Inclusion of relevant

Md report and Improve the ADS 201, no tow risks as this activity Is limate questions in survey

i!wareness of business potential climate risk focused on publ ic instrument.

~ssociations for building is identified that will administration and directly Impact the leadership relevant to

heir capacity achievement of the economic governance. project or activity

outcomes .

Conduct PCI diagnostic As per guidance in Low The Mission accepts these N/A Work ing with Vietnam Chamber

worksho p for individual the ADS 201, no low risks as this activity is of Commerce and Industry, the

provinces/regions potential climate risk focused on public local organization that Is Identified that w ill administration and implements the PCI, promote directly impact the leadership relevant to integration of climate smart achievement of the econom ic governance. modules to accompany project or activity diagnostic workshops .

outcomes.

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12/03/2018

APPROVAL OF REQUEST FOR CATEGORICAL EXCLUSION FOR TRADE AND GROWTH PAD AMENDMENT

Office Director, Clearance cleared by emai I October 25, 2018

Michael Trueblood ~ Date

Mission Environmental Officer Clearance cleared by email October 26, 2018

Tran Chinh Khuong Date

Program Development Officer Clearance cleared by ernai I October 26, 2018

Jeremiah Carew Date

Climate Integration Lead cleared by email October 26, 2018 Christopher Abrams Date

Regional Legal Advisor Clearance cleared by email October 29, 2018

Christopher Kelly Date

Regional Enviro nmental Advisor Clearance cleared by email ovember 30, 2018

Mark Childerhose Date

APPROVAL:

Mission Director

~~~ U/2/2r Michael Greene Date 7

CO CURRENCE:

Bureau Environmental Officer

Date

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