Programme Index Listing

Location
Palestine
Main implementer
DAI
Donor
DFID / EU
Duration
2013 - 2018
Total budget
£20m (total) / £1m (market system component)
Annual budget
£4m / £0.25m
Contact
arsalan_faheem@dai.com / maha_hayek@dai.com

Project description / objective

PMDP stimulates a more competitive Palestinian private sector by encouraging companies to grow and export, tackling systemic market constraints and fostering an improved trade and investment environment.

While PMDP works with businesses across sectors, its Market Systems Development component focuses on IT services, agriculture and tourism.

Through a combination of technical facilitation, results-based grants and partnerships, PMDP works to introduce innovative business models and improved practices to companies and institutions, in the process generating income and employment.

Market system focus

1. Grafted seedlings

Gaza’s 15,000 vegetable farmers produce around 266,283 MT of vegetables each year, worth approximately $120m.

Lack of high quality seedlings that can resist disease, soil conditions and salinity pushes farmers to use harmful fertilisers, pesticides, and expensive treatment for soil deficiencies. This constraint increases production costs, reduces yields and profits for small scale farmers. Unregulated use of pesticides also harms human health.  

2. Alternative animal feed

There are an estimated 550,000 sheep and 200,000 goats in oPt. Due to lack of feed alternatives, shrinking grazing ground and military restrictions on movement, herders are increasingly dependent on expensive imported concentrated feed.

The high cost of feed is pushing herders to increase meat and dairy prices - also resulting in reduced profits.

3. IT/IT-enabled services

The IT services sub-sector in oPt includes more than 100 firms involved in software development, IT and business process outsourcing. It accounts for around $15-20m in sales per annum and employs 400-500 software engineers.

Given the small export base, companies lack access to opportunities in international markets, leading to limited information and awareness and hampering growth efforts.

4. IT education

The disconnect between the IT services industry and Palestinian Universities foments one of the main systemic constraints in the sector – quality of undergraduate IT education.

While the IT services industry requires software engineering talent with strong language and critical thinking skills, academia is focused on training computer hardware engineers. There is under-investment in critical thinking and language capabilities.

5. Tourism vocational training

Although experiencing a rebound, the tourism and hospitality sub-sector is being hindered by the quality of skills in the workforce. In particular there is a shortage of quality, trained frontline staff that deal with customers and manage institutions such as hotels, restaurants and tour companies.

Vocational training offered at local institutes is often low quality and lacks diversity. It also does not expose graduates to new emerging opportunities in tourism such as ecological and culinary tourism.

Programme interventions

Grafted seedlings

PMDP introduced grafting as an established technique that provides high quality seedlings. It built the capacities of the local nurseries and expertise in this field.

  • PMDP has partnered with Gazan nurseries to introduce the commercial production of grafted seedlings. These offer higher yields, reduce disease susceptibility and pesticide requirements.
  • PMDP co-invested with nurseries to establish grafting units, upgrade greenhouses and acquire technical training in grafting. Starting with one crop (watermelon), success has led to crowding-in by three additional nurseries and expansion to multiple crops (melons, cucumber, tomatoes).   

Alternative animal feed

PMDP has pioneered the introduction of commercial production of alternative fodders such as Total Mixture Ration (TMR) and silage in oPt. These are lower-cost substitutes for concentrated feed.

  • Partnered with six companies in West Bank and Gaza to co-invest in technical assistance and equipment to launch commercial production of TMR and silage for sheep and goat herders. Both fodder types are using significant quantities of local crops such as corn waste and tomato stalk, creating income for Palestinian crop farmers.  

IT/IT-enabled services

PMDP works to unlock growth in services by linking ITO and BPO companies to export markets and assisting them to enhance service delivery.

  • Partnered with four leading local companies to link them to regional buyers (semiconductor companies) of microchip design testing and verification services. The intervention facilitated market access and mobilised investment in training. Chip design verification services are a $400b+ growing global market. PMDP has also partnered with companies to grow cybersecurity and software development services.
  • Partnered with three local ITO firms to introduce a private-sector led training model ICT Skills Bootcamp. It trains recent graduates in software development and business skills in order to meet company requirements and boost employment.

For IT education

PMDP is inducing change in Palestinian IT education. It aims to increase graduate quality, developing a focus on computer science and software development and deepening partnerships with the private sector.

  • PMDP’s intervention strategy is based on three elements.
    1. Assisting leading institutions such as Birzeit University to review their IT education strategy and upgrade curricula.
    2. Introduce new programmes, such as a bachelor’s degree in software engineering at Bethlehem University.
    3. Invest in applied labs that link universities with the private sector and focus on high-end emerging technologies such as chip design and virtual reality.

Tourism workforce skills

PMDP is collaborating with universities and institutes to upgrade the quality and diversity of training in tourism vocations.

  • PMDP’s collaboration with training institutes in Bethlehem has led to the upgrading of the quality of training in vocations such as culinary arts and housekeeping. Efforts are also being made to train tour guides that can open up new service areas such as culinary tourism and ecotourism. PMDP is also working with hotels to encourage investment in training of frontline staff. By working on both the supply and demand side, PMDP is trying to facilitate the emergence of a more dynamic market system for tourism workforce skills.
  • On-the-job training was organised for 30 employees in five local hotels on the following topics:
    -  Restaurant services: chef & serving ways and techniques
    -  Front desk: languages, reservation channels & technology skills
    -  Housekeeping (to enhance quality of services): safety cleaning, environment-friendly ways of cleaning & standards for organising the rooms.

Notable results (systemic change, poverty impact)

Grafted seedlings

Commercial production of grafted seedlings has reduced cultivation costs. This new technology reduces vulnerability to disease and salinity, thus decreasing the use of disease control material while delivering higher yields and profits to farmers and nurseries.

  • 1,750,295 grafted seedlings sold
  • 522 farmers are now using the grafted seedlings
  • 4 nurseries have adopted this technique and are producing 4 types of crops
  • 94 individuals have participated in the capacity building programme
  • An additional £818,864 in sales for partner nurseries
  • £2,864,424 additional sales for farmers
  • 41 jobs opportunities have been created

Alternative animal feed

Commercial production of silage-TMR led to the availability of affordable alternative feed for livestock herders. This helpted them to reduce costs and increase profits.

  • 6 local firms are producing alternative feed
  • 4,254 tons of TMR/silage were sold
  • 144 herders are now using TMR/silage
  • 30 per cent lower feeding costs
  • 20 per cent higher milk production
  • 98 individuals increased their understanding of TMR/silage
  • £861,792 additional revenue for suppliers
  • £468,875 additional revenue for herders
  • £60,662 increased sales for crops farmers
  • 12 jobs created

IT outsourcing

Assisting local ICT companies to invest in developing their outsourcing portfolios led to overall growth in the outsourcing services sector.

  • 25 beneficiaries using the improved services
  • 115 individuals increased their knowledge and skills
  • 6 services/products improved/developed
  • 3 new IT segments introduced
  • 59 jobs created
  • £274,500 additional sales

IT education

Cooperation between academia and the private sector improved their alignment and contributed to the upgrading of human capital.

  • 130 individuals increased their knowledge and skills
  • 11 service providers adopted the introduced services
  • 65 students benefited from access to better quality IT education in Palestine
  • £64,000 additional sales

Tourism vocational training

An expanded, more market-relevant and better quality vocational training offering - also delivered in more locations - improved the quality of human capital.

  • 14 services/products improved/developed
  • 205 individuals increased their knowledge and skills
  • 7 service providers adopted the introduced services
  • 170 students gained access to better quality vocational training
  • 50 jobs created
  • £146,285 additional sales

[published Sept. 2018]