AGRICULTURE
Development Problem
Thirty percent of the West Bank and Gaza population is dependent upon agriculture and small-scale livestock production. The political instability in the West Bank and Gaza has created an economic contraction resulting in a “new poor:” unskilled or unemployed laborers, Bedouin communities, and large households with limited income. This has reduced economic opportunities for, and incomes generated by, the private sector. The economic contraction as well as the political constraints have created hardships for the majority of the Palestinian population, obliging them to cut food purchases, seek direct food assistance, or produce food for household consumption.
USAID Intervention
USAID/WBG provides drip irrigation, agricultural inputs and training/extension to assist needy households with the production of their own food and food for retail sale in order to earn cash to meet other household expenses. To supplement Gazan families’ dietary intake with protein, the mission assist small-scale fisherman with boat rehabilitation, small nets, fishing threads and feasibility studies on aquaculture projects. USAID continues to promote employment in rural areas through the promotion of mutually beneficial commercial relationships between Palestinian and Israeli firms in a wide variety of business ventures.
USAID augments agricultural productivity on both smallholder and commercial plots to increase poor families’ income and enhance food security. USAID also promotes stronger commercial relationships between Israeli and Palestinian agri-business firms.
Latest Results
During 2007, USAID targeted three levels of the value chain: farmers, olive press facilities and filling/bottling companies. USAlD trained 2,917 local farmers on best practices in olive harvesting, pressing and storage; distributed 56,544 olive harvest crates in 53 rural locations to prevent deterioration in fruit quality prior to pressing; installed 36 stainless steel tanks at 21 pressing mills to separate various oil types and maintain oil quality; and installed stainless steel storage tanks, filling/bottling and raking systems at three companies.
Microfinance
Development Problem
Strengthening micro-enterprise productivity will help both micro finance institutions (MFIs) and small to medium sized enterprises remain solvent during the current economic crisis. Income generated by micro enterprises is often saved, invested and spent in the country and is an important contributor to local economic growth. However, the potential to expand micro businesses is constrained by limited access to credit from financial institutions, limited business opportunities and limited supporting professional management. USAID will expand the outreach of the network of MFIs to make lending services available to the disadvantaged and poor, to strengthen the capacities of these institutions, and to support the achievement of sufficient scale. USAID believes that MFIs in the West Bank and Gaza can become more responsive to customers’ needs and can make important local economic contributions. In the future, the client base of existing and new MFIs linked to the program is expected to increase by approximately 30,000 clients. Such an expansion will result in increased real incomes, job creation, as well as measurable increases in capital investments in micro enterprise.
USAID Intervention
The Palestinian Microfinance sector reduced lending substantially as a result of an economic downturn following the 2006 elections. USAID engages commercial banks in the micro finance sector. USAID program provides technical assistance to enable micro finance institutions (MFIs) to emerge on a path to renewed growth, preserving the human and financial infrastructures of the MFIs. USAID works with commercial banks to expand their microfinance lending through appropriate financial instruments.
Latest Results
USAID supported five MFIs) that serve 15,500 micro enterprises and households with technical and financial assistance. By providing packages of guarantees, grants, loans and tailored technical support to MFIs, USAID was able to expand the outstanding credit portfolio of the five MFIs by 3,592 loans at a value of $4.5 million. USAlD also decreased the default rate for three out of the five institutions that USAID worked with: from 65% to 33% default rate in the West Bank and from 80% to 55% in Gaza. These loans were disbursed to 1) improve homes 2) enable employees to purchase goods and services, and 3) improve and expand the businesses of micro entrepreneurs. Through its technical support to the microfinance sector, USAID helped to preserve and develop a more resilient microfinance infrastructure of stronger institutions that are becoming more capable of serving micro and small enterprises and poor households.
Modernizing Financial Institutions
Development Problem
The Palestinian Authority has identified a need to update the financial sector’s automated capability.
USAID Intervention
As an integral element of strengthening the Palestinian Monetary Authority (PMA), an independent agency within the Palestinian Authority ’s Office of the President, the Modernizing Financial Institutions will provide technical training and procurement of information technology systems. With access to computer systems and sophisticated software, the PMA’s management will be able to manage PA resources more effectively.
Palestinian Enterprise Development
Development Problem
Small and medium-size enterprises (SMEs) are a critical source of jobs for Palestinians. Thousands of Palestinian families in the West Bank and Gaza depend on SMEs for generating jobs and modest household incomes. USAID assists struggling SMEs to revise business plans and apply for credit so that they can engage productive private assets in their respective communities.
USAID Intervention
USAID focuses on Palestinian Enterprise Development and Investment Promotion by enhancing the competitive environment for the private sector through firm-level technical assistance designed to enhance firms’ competitiveness, technology, and management. The program assists small and medium enterprises in identifying or training employees with critical shortage category skills. The program also builds an enabling environment for the private sector by working closely with both public and private sector stakeholders with emphasis on trade policies, regulatory reform, market access and compliance, registration and good business practices. USAID also sponsors an apprenticeship program that shepherds new job market entrants into long-term private sector jobs. In addition, the SME sector is a valuable change agent that pursues progressive economic practices and policies and engages with Israeli counterparts. USAID has also assembled an information and research network to monitor conditions in the Palestinian economy and society. The network is capable of mobilizing surveyors and analysts quickly to better comprehend a variety of concerns regarding the condition of the Palestinian political economy. This information is invaluable as it enables the USG to anticipate economic crises that may further adversely affect the poor and be in a position to respond quickly in an informed manner.
Latest Results
During 2007, USAID sustained 1,615 existing jobs and created 450 new jobs and facilitated $10.5 million in external financing for private sector firms through assisting businesses with detailed business plans which then allowed them to communicate with the potential investors, identify the financial resources needed and to start all lines of business. The business plans also provided businesses with implementation tools such as marketing and financial plans. USAlD also trained and placed 513 interns of which 224 have been hired in permanent jobs; and assisted 5 firms to acquire quality standard certifications. USAID facilitated the development of a shared vision of competitiveness through association-building that, through political advocacy, stimulated an enabling business environment. Improved productivity at the firm level helped sustain the private sector work force through the creation of new jobs. In addition, USAID employment generation program contributed to the productivity of firms that employed the trained graduates.
Trade
Development Problem
The economy of the West Bank and Gaza is wholly dependent upon its ability to import and export goods and services with Israel and beyond. USAID's trade facilitation program was designed to provide advisory services, technical assistance, and equipment and technology to facilitate the secure movement of commercial cargo through critical trade corridors into and out of the West Bank and Gaza.
USAID Intervention
USAID aims to increase the flow of trade from Gaza and the West Bank by promoting a more orderly flow of merchandise at border crossings through cargo consolidation at sites remote from the border and improved security inspection by Palestinians.
Latest Results
Through advisory services, technical assistance, and equipment and technology USAID has facilitated the movement of Palestinian commercial, agricultural, and industrial goods destined for domestic and export markets.
