peace dividend marketplace timor-leste: impact assessment report - baucau

8/7/2019 Peace Dividend Marketplace Timor-Leste: Impact Assessment Report - Baucau

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Peace Dividend Marketplace Timor-Leste Micro Matchmaking Impact

Assessment Report:

BAUCAU

A Report By:Peace DividendTrust

Scott McCordDili, Timor-Leste

[email protected]


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Peace Dividend Trust 2010 i

Table of Contents

Table of Contents and Acknowledgement: ...................................................................................... i

Executive Summary ........................................................................................................................ ii1. Introduction ................................................................................................................................. 1

2. Micro Matchmaking Impact Assessment Overview ................................................................... 1

3. Micro Matchmaking .................................................................................................................... 2

4. The Results .................................................................................................................................. 3

4.1 Baucau District Overview ..................................................................................................... 4

4.2 Timeline of Matches Closed over $1,000 ............................................................................. 4

4.3 Eight Represented Sectors .................................................................................................... 5

4.4 Employment Landscape Prior to Matchmaking Involvement ............................................... 6

4.5 Jobs Created .......................................................................................................................... 7

4.6 Jobs Matched ........................................................................................................................ 9

4.7 Tracking Income Derived from Matchmaking ..................................................................... 9

4.8 A Story from the Field ........................................................................................................ 11

5. Conclusion ................................................................................................................................. 11

Acknowledgement

The Peace Dividend Marketplace Timor-Leste project is supported with generous contributionsfrom the Arsenault Family Foundation, AusAid, the Canadian Fund for Local Initiatives, and Eni.

Micro matchmaking in Baucau was made possible by support from the Arsenault Family

Foundation and AusAid.


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Peace Dividend Trust 2010 ii

Executive Summary

Peace Dividend Trust (PDT) is a unique non-profit organization, dedicated to making peace andhumanitarian operations more effective and equitable so that they deliver cheaper, faster, smartermissions resulting in a stronger peace and a larger peace dividend. The Peace DividendMarketplace projects, designed to facilitate local procurement and increase market awareness, are

the instrumental tools in achieving these objectives.PDT currently has marketplace projects inthree countries across the globe: Afghanistan, Haiti and Timor-Leste.

This report presents the findings of the Peace Dividend Marketplace Timor-Leste (PDM-TL)impact assessment survey on micro matchmaking activities in the district of Baucau. Data wascollected for matches closed over $1,000 and analyzed as to the impact on job creation and thelocal private sector (all monetary values are reported in US dollars). A total of 72 separatetransactions were analyzed, which were valued at $186,841. These transactions range across atotal of eight sectors; the three sectors with the highest dollar values are: Real Estate andInsurance; Food and Beverages; and Automotive.

Key Findings of Baucau Impact Assessment Study

Total Number of Jobs Created 44

Male 25 Female 19

Permanent 29 Temporary 15

Skilled 6 Unskilled 38

Number of Individuals Matched to a Job Opportunity 8

Number of Instances Funds Generated through Matchmaking were Spent on:

Education 25

Equipment 26New Business Ventures 21

Personal Needs / Wants 18

Sectors with the Highest Value Transactions Total Value

Real Estate and Insurance $78,000

Food and Beverages $58,004

Automotive $19,619

The complete report provides the context and methodology for gathering the information. Thecompiled results indicate the PDM-TL project has been responsible for promoting private sectordevelopment, creating jobs, and stimulating the economy on a district-by-district level.

The micro matchmaking impact assessment report series will include two to three moreindividual district reports, as well as an aggregated report to demonstrate PDM-TL results acrossthe 9 districts where PDT provided micro matchmaking. Coinciding with this series will be animpact assessment study and report on the Tender Distribution System. This program works withlarger businesses that typically have larger contract values, but operates primarily in Dili, Timor-Lestes capital.


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Peace Dividend Trust 2010 1

1. Introduction

According to a World Bank report published in 2007, Timor-Lestes formal economy created 400 jobs per year for approximately 20,000 school leavers.1 Two years later the countrys youth

unemployment rate (ages 15-29), particularly in the district centers, is cripplingly high. Timor-Leste currently has an estimated unemployment rate of above 20% in rural areas, with theunemployment rate as high as 43% in urban centers.2 Without specific programs targeted todevelop the private sector and create jobs, economic stagnation will continue to be a seriousproblem for the countrys well being.

The work accomplished by Peace Dividend Trust (PDT) through its marketplace project inTimor-Leste is aligned to address the disparity between the number of job seekers and the numberof jobs available. The Peace Dividend Marketplace Timor-Leste (PDM-TL) project isunderpinned by the philosophy that helping businesses win business helps establish a sustainableprivate sector. With a sustainable private sector providing lasting job opportunities, progresstowards a secure and enduring peace can be solidified.

2. Micro Matchmaking Impact Assessment Overview

For over two years, Peace Dividend Trust has provided matchmaking services to microbusinesses in Timor-Leste, through its Peace Dividend Marketplace project. This service isintended to fill the informational gap that exists between those seeking to buy and those seekingto sell goods and services in Timor-Leste and, by enhancing the flow of information betweenbuyers and sellers, to create opportunities for private sector growth and job creation.

Historically PDT has monitored the success of the program by tracking the total dollar value ofeach transaction facilitated, as well as the total number of transactions. While this offers a useful

depiction of the monetary value provided by the service to Timorese businesses, it is by no meansa comprehensive measure of the services overall impact on the local economy. This is the first ina series of reports that will broaden impact assessment by probing deeper into the benefits ofmicro matchmaking on the business communities where it operates. For the purposes of thisreport, micro matchmaking refers to all non Dili based matchmaking activities, or the linking of abuyer to a supplier which facilitates a transaction where money is exchanged for goods orservices. This report on Baucau is one sample of the impact the program has had on a districtlevel. PDT will publish reports on two or three additional districts, as well as an aggregate reportthat synthesizes information from all nine micro matchmaking districts.

Drawing on a tested survey used by the Peace Dividend Marketplace Afghanistan project tomeasure job creation in Helmand province, Peace Dividend Marketplace Timor-Leste (PDM-TL)

developed a survey to assess the impact of its micro matchmaking program on job creation andprivate sector growth. Appropriate modifications from the Afghanistan survey were made toadapt to micro level businesses as well as other conditions specific to Timor-Lestes economicenvironment.

1The World Bank Group and the Asian Development Bank, in consultation with Development Partners,Economic and

Social Development Brief, August 2007, page 3.2 Secretaria de Estado da Formao Profissional e Emprego (SEFOPE), Timor-Leste National Youth Employment

Action Plan (NYEAP) 2009, 2009, page 4.


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A survey of this kind is difficult to implement for several reasons. First, due to the amount of timethat has passed between the completion of a match and the survey interview dates, theinformation gathered reflects what the interviewee could remember at present, which may havechanged slightly from the past results. Second, the countrys lack of infrastructure (namely poorroad conditions and limited telecommunication reach) has made it difficult for surveyors to

relocate and make contact with suppliers living outside the district hubs.

Third, many of the suppliers involved in these matches are individual entrepreneurs, notnecessarily registered businesses, who have since changed their residence or phone numbers (anumber of individuals, particularly in the rural regions, had no phones to begin with). As such,the PDT surveyors were unable to track down a portion of the intended interviewees and severaltransactions that were initially targeted to be analyzed could not be evaluated. The success ratesof interviews vary from district to district. In Baucau, where most matches were in the urbancenter, surveyors tracked down 96% of the intended recipients. Despite the challenges, theinformation offers valuable insight into the impact of the business matchmaking program inTimor-Leste, if viewed as a sample of the overall data.

The data provides largely unprecedented information outlining the types of business opportunitiesthat exist at the district level. The data looks past the monetary value of each match by describingwhat type of matches were most prevalent, how many jobs have been matched or created, andhow the money earned from each match has been spent.

3. Micro Matchmaking

Peace Dividend Marketplace Timor-Leste began its micro matchmaking program in 2008 afterwitnessing high demand for a service that would connect local supply to demand frominternational actors working in Timor-Leste. Navigating the local marketplace in the countrysrural districts can leave international institutions or individuals frustrated by the lack of up-to-date

market information and the idiosyncrasies of each areas marketplace. The matchmaking serviceis the missing link between district suppliers and potential buyers. The matchmakers familiaritywith the local market environment and understanding of both parties needs greatly facilitateslocal purchasing in the districts. Local purchasing in turn generates several benefits in the districteconomy.

The service has evolved since its inception as the needs and types of business transactions havechanged. One noticeable difference is that the matchmaking program now includes nationalbuyers, rather than just international institutions or personnel, in its list of clients. The 2006 crisishad a devastating effect on the country, essentially destroying longstanding networks acrossTimor-Leste. By connecting, or at times reconnecting, national buyers and national suppliers, thematchmaking program is strengthening sustainable business relationships in Timor-Leste.

Recently, special focus has also been placed on cross border trade with the countrys largesttrading partner, Indonesia.

Since its creation in 2008, the rural matchmaking program has directed over $7 million to locallyowned businesses (all monetary values are reported in US dollars). Over 12,000 unique businesstransactions have been facilitated to achieve this sum across 9 districts: Ainaro, Baucau,Bobonaro, Covalima, Lautem, Manatuto, Manufahi, Oecusse and Viqueque. Unfortunately, dueto funding constraints, PDM-TL suspended its matchmaking services in the districts of Baucauand Manatuto at the end of September 2010. Services in Ainaro, Manufahi and Lautem were


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suspended earlier in 2010. Unless further funding is secured, all matchmaking activities in thedistricts will be closed down at the end of March 2011.

4. The Results

All data was gathered from matches closed over $1,000, as the PDM-TL team deemed this anappropriate sum to expect tangible, measurable results.

The reports focus on the effects of the PDM-TL project on employment, as job creation is one ofPDTs key objectives. As mentioned in the introduction, Timor-Lestes employment rate isestimated to be above 20% in rural areas, reaching as high as 43% in urban centers.3

In this report, employment through the assistance of PDM-TL is measured in two ways: 1) Jobscreated and 2) Jobs matched. The first reflects an instance in which a transaction has required, orallowed, a business owner to hire additional labor, hence creating a job that did not exist before.The second reflects an instance in which a project or an employer was seeking labor and thematchmaker found a suitable candidate(s) to fill the position, hence matching a job seeker with a

job.

The report differentiates laborers in three ways. The first differentiation is by gender. The secondmakes a distinction between skilled and unskilled workers. For the purposes of the survey, skilledworkers represent all laborers who had received education at, or above, the secondary level or hadreceived job-specific training. Unskilled workers represent all workers who had not completedsecondary education or received specialized training. The third differentiation breaks down theduration of each labor contract to permanent and temporary. Permanent workers are expected tostay at the job for over 6 months, while temporary workers are expected to complete theircontract prior to the 6-month mark.

Although this impact assessment report focuses on the largest transactions, it is important to note

that the regions in which they take place are still relatively less developed compared to thecountrys capital, Dili. According to the International Labor Organization, around 70% of thepopulation of TimorLeste lives in the rural areas where the incidence of poverty is high ascompared to that in the urban centres. As a result, almost 90% of the poor are in rural areas andpoverty has become primarily a rural phenomenon.4 When reviewing this information, it isimportant to remember that every job matters and even small dollar amounts can go along wayinto alleviating poverty and generating business.

3 Secretaria de Estado da Formao Profissional e Emprego (SEFOPE), Timor-Leste National Youth EmploymentAction Plan (NYEAP) 2009, 2009, page 4.4 International Labour Organization, Timor-Leste: Decent Work Country Programme 2008-2013, June 2009, page 5.


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Sector BreakdownSector Number of Matches Value of Matches

Real Estate and Insurance 13 $78,900Food and Beverages 37 $58,004

Automotive 9 $19,619Travel, Accommodations and Rentals 9 $15,438

Office Furniture, Equipment and Supplies 1 $8,100

Oil, Coal, Fuels and Natural Gas 1 $4,080

Construction and Renovation 1 $1,600

Restaurants and Catering 1 $1,100

The spread of sectors for matches over $1,000 differs in comparison with the spread of sectors forall matches closed, regardless of value. The first difference was that the Food and Beveragessector holds the largest quantity and value of matches with the inclusion of all facilitatedtransactions. This sector accounts for 4,299 matches and a value of $1,141,396. The second

difference is that the Heavy Machinery/Equipment, Generators, A/C and Solar Power sector wasnot represented in the eight sectors with matches over $1,000. When looking at all matches closedregardless of value, this sector trails Food and Beverages as the second highest valued sector with275 matches closed and worth $109,922. The final consequential difference was that the Training,Consulting, and Scientific Services sector, which is not accounted for in the table above, is one ofthe highest grossing sectors overall. It is this sector that includes the results from individual jobsmatched, as described above. As such, the matches over $1,000 for this sector were accounted forin a different way than all other matches, which is why they are not included in the table abovebut they will be discussed in a separate section below.

4.4 Employment Landscape Prior to Matchmaking Involvement

Prior to the matchmaking transactions, the aggregate number of unique jobs among PDM-TLsupplier clients, including business owners was 178. This means that of all the businesses thatPDM-TL matchmakers worked with in Baucau that resulted in transactions over $1,000, therewere 178 people employed or active leading up to the matchmakers intervention. Of these 178persons, 71% were male (126) and 29% were female (52), and 21% of persons were classified asskilled labor (37) while 79% were classified as unskilled labor (141).


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Personal Needs/Wants

Finally, a number of responses indicated that the money was used to contribute to a householdsdaily necessities. Many entrepreneurs responded that the funds were used to halo adat or tobuild an uma adat. Adat is the Bahasa Indonesia word for tradition, but can be applied to manydifferent social activities when used in Tetum. Halo adat roughly translates to make tradition,

which can involve throwing a party or hosting a cultural event. Building an uma adat, or thetraditional East Timorese house, was also a very common use of funds.

4.8 A Story from the Field

One common request PDT Matchmaking Assistant Mr. Helven Bento receives is to findaccommodation for travelers or international workers. With no previous experience in Timor-Leste and no language skills, this task can be quite daunting. One of Helvens many tasks is tomake this experience, and other procurement necessities an international (or national) requires, aspainless as possible.

In one such instance, Helven received a request from a group of international aid workers arrivingfrom Dili to find a guesthouse or a hotel that would have enough rooms available toaccommodate a large group. Melita Guesthouse was the winning business. The match was largeenough that the manager, Mr. Mino Bruno, was able to hire 6 additional permanent employees,more than doubling the staff. Since the match, Melita Guesthouse has also been able to use thefunds to make repairs and open new guestrooms.

After the match, Helven was also able to provide the staff of Melita with informal training on thetype of services international travelers expect when coming to the districts. After completingmatches such as these, Matchmaking Assistants receive a variety of different feedback that can beredirected to the appropriate suppliers. Helven was able to talk to Melita about the importance ofsanitation and cleanliness and the effect it has when it does not meet travelers expectations. The

guesthouse was grateful for his feedback, and has since incorporated his suggestions.

5. Conclusion

The findings of this study provide a closer look at the impact of PDM-TLs micro matchmakingservice. The district of Baucau, as shown through the data collected in 73 separate interviews, hasexperienced job creation as well as investment in education and short and long term capital.

The micro matchmaking program remains one of Peace Dividend Marketplaces most valuablecontributions to building the local economy. One of the reasons for its success is that itconcentrates on micro businesses, where even the smallest of matches can make a significant

difference, especially when the majority of people living in the districts survive on less than adollar a day.

peace dividend marketplace timor-leste: impact assessment report - baucau

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