Donald Macintyre: Gaza Economy on the Brink

By Donald Macintyre

Gaza’s industry is in a state of collapse because imports and exports to the Strip have been blocked by Israel since Hamas won internal control of the territory three weeks ago after the civil conflict.

The emergency Palestinian government in Ramallah, in the West Bank, is being urged to do more to avert an economic collapse in the Gaza Strip; 75 per cent of its factories are unable to function because of Israel’s closure of the Karni cargo crossing. The emergency administration was set up by President Mahmoud Abbas after the formal dismissal of the Hamas Prime Minister, Ismail Haniyeh.

The dire prospects for Gaza’s economy since Hamas assumed control of security there is underlined in a report by Gisha, the Israeli human rights agency, which says that 85 per cent of Gaza residents are now dependent on humanitarian aid while production inside the Strip runs down.

The report says that the price of raw materials for household and industrial consumption has already risen by between 15 per cent and 34 per cent and that 30,000 factory workers are likely to lose their jobs. The figure constitutes one-tenth of those in work, supporting 210,000 dependents.

The closures, backed by the international community, which is continuing to boycott Hamas, have affected exports, including those of fruit and vegetables, and imports since 12 June. There are now shortages of flour and sugar for food manufacture. A further shortage of cement is halting construction and the UN Development Programme has announced a freeze on development projects as a result.

Some politically unaffiliated businessmen in Gaza say that ministerial opposition in Ramallah to a Hamas-led administration in Gaza is scuppering efforts to reopen the crossings. Israel argues that Hamas’s takeover of internal security, and militants’ continuing attacks on the crossings, has also left a vacuum on the Palestinian side which makes it impossible to re-open the crossings.

Two mortar shells fired by Palestinian militants yesterday landed near the Erez crossing, between Israel and Gaza. But the Gisha report argues that the continued delivery of humanitarian aid into Gaza demonstrates that "it is possible to open Gaza’s crossings and to permit Gaza residents the passage of goods necessary to live in dignity".

Ahmed Youssef, an aide to Mr Haniyeh, said this week that efforts were under way to find a private-sector solution to the provision of security on the Palestinian side of the crossings, but Israel would need to agree to such a solution.

Sari Bashi, Gisha’s director, said that Israel "is attempting to achieve political objectives by exerting pressure on 1.4 million women, men and children, whose suffering is to bring out the desired change – the overthrow of the Hamas". The report cites as evidence a decision by the Israel Customs Authority to delete from its computers the codes required to allow imports into Gaza. "Cargo intended for the Gaza Strip will not be released until further notification," said Reuven Meltzer, the deputy head of customs.

The collapse of the Gaza economy is also hitting Israeli businesses. The report quotes the chairman of Israel’s Association of Industrialists, Shraga Brosh. "The economic boycott on the Gaza Strip… will result in a humanitarian disaster, fueling flames and leading to deterioration of the security situation – a situation that will be destructive to the Israeli economy," he said.

-Mark Regev, Israeli Foreign Ministry spokesman, said: "The alternative is for the Palestinian side to get its act together and revert to previous agreements." (This article was published in the UK Independent newspaper on July 6, 2007 –

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