Employees in a furniture factory in Gaza.

As opposed to the textile factory we wrote about last week, al-Isi’s factory did not export to the West Bank before 2007, instead focusing on the local market. But since the sweeping ban on export was imposed in June 2007, al-Isi has found himself competing for the small local market in Gaza with all of the vendors who cannot export to the West Bank. The market is flooded with local merchandise, in addition to Israeli merchandise that is allowed in, and as a result, prices have dropped to the point where merchants hardly make any profit.

But that’s not the only problem. Al-Isi explains that when Israel banned the import of wooden boards, he bought expensive boards smuggled through the tunnels. When the ban was lifted, al-Isi discovered that the price of the boards he was buying was three times higher than the price of those recently brought into the Gaza Strip through the crossings from Israel. And so al-Isi found himself having to compete with other furniture-makers who had paid less for their materials, which in turn forced him to reduce production by 50%. If he had continued producing at the normal volume, says al-Isi, his losses would have reached $50,000.

Furniture factory in Gaza

The ban on export not only floods the market with cheap products but also causes a steep rise in unemployment. Whereas in the past al-Isi had 18 carpenters working in the factory’s workshops, today he has only five workers. Al-Isi says that the workers suffer from the situation the most. So much so that most of them now rely on the aid of local and international organizations: “Most are frustrated and desperate about the economic situation”, al-Isi says sadly, “and we merchants do not have a magic wand to change the situation in Gaza”.

Therefore, the ban on export, which is one of the most important aspects of the closure on Gaza, affects directly the citizens’ right to live with dignity.

Source: PalTrade and the Palestinian Crossings and Borders Committee in Gaza

Annual graph and background information»

Source: PalTrade, the Office for the Coordination of Humanitarian Affairs (OCHA) and the Coordination Committee in Gaza

Annual graph and background information»

The Israeli cabinet decision to ease the closure on the Gaza Strip did not change the sweeping ban on Gaza exports. While industrial raw materials were allowed into Gaza beginning in July, the limited capacity of the crossings meant only small quantities entered (raw materials were 4% of the total amount of goods that entered in July), while at the same time Israeli-made consumer products, no longer banned, flooded the market. The combination does not bode well for manufacturers in particular and the economy in general, as evidenced by the story of Jihad Abu Dan, aged 22, married and the father of two, whose family owns a textile factory in the northern Gaza Strip town of Beit Lahiya. His father was a textile worker who built a two-story factory that spans an area of 1,500 m², meant to support the extended family. Says Jihad:

“Not only did the ‘easements’ Israel declared not help us, they have even harmed us. Exports are still banned, and that is a problem because the Gaza market is very small, and a large amount of ready made clothes have been brought in from Israel and China. The Gaza market was flooded with products, there is a lot of supply and less demand, and because of the stiff competition, we are forced to lower prices. As long as there is no export, it is hard for workers in the clothing and textile sector to profit and produce. After three years of closure, we lost the contacts we had developed with clients from Israel, and they went elsewhere”.

“Before the closure, we worked at our full manufacturing capacity, producing 2000-3000 pieces a day. We did not manufacture for the local market; all of our products were for export to Israel and abroad. Back then, we imported between one and one and a half trucks of raw materials a day through the Karni Crossing, three days a week, and we exported between one and one and a half trucks of goods a day, two or three days a week”.

Mohammad Abu Dan and Co. Textile and Clothes Company. ‘These days the factory operates at only about 10% of its production capacity.’

“Right before the closure began, we received an order from an Israeli client, who asked for 100,000 items, which we had to make in three months. We managed to send him 30% of the order before Israel closed the crossings, and the rest of the goods remained in Gaza; he did not benefit from them, nor did we. Because clothing on the local market is sold more cheaply, we had to lower prices in order to sell the goods, and we lost money”.

“Today we employ 25 workers. There is not much work. The Gaza market is very small, and profits are minute. We mostly just cover manufacturing costs, but we continue to operate out of a desire to maintain the factory my father built. Out of 180 sewing machines, these days we are working with just 20. More than half of the machines broke down, partly due to remaining idle for a long period of time. These days we manufacture about 300 pieces a day, 10% of our capacity and our actual production before the closure. For many hours a day we have no electricity, and during that time we don’t work. We adjust our daily schedule to the power supply – Sometimes we work from 6 in the morning until 1 pm, we then stop working, because there is no electricity, and go back to work when the power returns, sometimes from 10 at night to 5 in the morning.”

Mohammad Abu Dan and Co. Textile and Clothes Company. ‘Out of 200 workers prior to the closure, only 25 are employed today, and 20 sewing machines out of 180 are operational.’

The sewing and textile industry in Gaza – general information

In 2005, prior to the closure, the production value of the sewing and textile industry in the Gaza Strip was estimated at $39 million, and approximately 70% of the manufactured goods were designed for sale to Israel and West Bank. In 2000, 37,000 people worked in this industry, whereas today the number of workers is estimated at 1,500. In the past there were 600 textile and sewing companies in the Gaza Strip, however it is estimated that only 10% are active today.

Source: Paltrade and the Textile Industry Association

Source: PalTrade and the Palestinian Crossings and Borders Committee in Gaza

Annual graph and background information»

Source: PalTrade, the Office for the Coordination of Humanitarian Affairs (OCHA) and the Coordination Committee in Gaza

Annual graph and background information»

In addition to testimonies from the field, statistics are also pointing towards a change. According to the Palestinian Central Bureau of Statistics, the percentage of women working outside the home in Gaza in 2009 was 11%, low compared to other countries, however there has been a gradual rise. In 2005, before the closure, only nine percent of women were present in the workforce.

Source: PalTrade and the Palestinian Crossings and Borders Committee in Gaza

Annual graph and background information»

Source: PalTrade, the Office for the Coordination of Humanitarian Affairs (OCHA) and the Coordination Committee in Gaza

Annual graph and background information»

“Even though there was not a humanitarian crisis in Gaza, I decided to gradually ease the limitations and the movement of goods through the land crossings. I did so because gradually these limitations turned into a diplomatic and public relations burden”.

If the limitations really were, as Netanyahu claimed, necessary “to prevent the entry of weapons and war materiel into Gaza”, easing them just in order to improve Israel’s public relations would seem grossly irresponsible. If they weren’t necessary for security – why were they imposed in the first place?

We also found puzzling Netanyahu’s claim that “Israel increased the number of trucks entering Gaza by approximately 30% over the five months preceding the flotilla incident”.  According to the Israeli Ministry of Foreign Affairs, in the first five months of 2010, Israel actually decreased the volume of trucks permitted into Gaza by 9%, relative to 2009 (see the first and last pages of the MFA report, which show that the monthly average of trucks allowed into Gaza in 2009 was 2,576, compared with just 2,329 in the first five months of 2010).

The real change in the volume of trucks permitted into Gaza came only after the flotilla incident, when Israel was pressed to justify its policy blocking the movement of people and goods into and out of Gaza: Last week, Israel allowed Gaza residents to receive 1,126 truckloads of goods, approximately 45% of need, as compared to about 25% of need prior to the flotilla incident.

Export and the movement of people, critical for economic recovery and normal life in Gaza, are still blocked. Perhaps these restrictions do not constitute a sufficiently heavy “diplomatic and public relations burden”?