What happens to industry when you open a market to consumer products but restrict raw materials and ban export? What doesn’t happen is economic recovery.

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

There is continued buzz this week over new commercial developments in Gaza. The shopping mall is a media favorite, as are reports of a new water park, a media center and new cafes and restaurants. Never mind that all these are housed in either existing buildings that were refurbished or were built anew with materials and money coming in via the tunnel economy; the mere existence of a few places of recreation would seem to point to the total absence of any problems with regard to freedom of movement. Not the case, as we reported last week. Unfortunately, a new mall and a few new humanitarian projects don’t point in the direction of the real reconstruction, recovery and development Gaza needs, especially in order for the economic market to absorb Gaza’s young people.

In late July, the Tawjihi post-high school exam results were announced to the dread or delight of Gaza’s 36,594 exiting high school seniors. Over the summer vacation, these youngsters are making plans for their future like young people elsewhere. Will they attend one of Gaza’s five universities, which don’t offer badly needed degrees in environmental science, medical engineering, veterinary medicine and occupational therapy? Or will they seek to travel abroad, since travel to West Bank universities remains banned? Will they join the ranks of Gaza’s 34% unemployed, or seek work elsewhere, perhaps underground?

Photo: Karl Schembri/Oxfam

In July, following the Israeli Cabinet decision to “ease” the closure, only 4% of the goods entering Gaza were raw materials destined for production, and of course, export remains banned. Under these conditions, it’s clear that the market couldn’t have suddenly bounced back and that not all is good and well.

The youth of Gaza continue to wait for the promised, renewed “economic activity” and hope for opportunities to begin building tomorrow’s future. A new resort or restaurant built from tunnel money can’t possibly employ them all.

The following guide was inspired by a report by the Government of Israel, summarizing Israel’s humanitarian activities for the Gaza Strip in 2009 and at the start of 2010, which was submitted yesterday to the Ad Hoc Liaison Committee.

1. Take things out of context. When you say that, “41 truckloads of equipment for the maintenance of the electricity networks were transferred”, you do not need to mention that those spare parts were waiting for many months for clearance, and that, at the end of 2009, the Gaza Electricity Distribution Company reported that 240 kinds of spare parts were completely out of stock or had dipped below the required minimum stock. Likewise, “There was a significant increase in the number of international organization staff entering the Gaza Strip” does not require explanation that, were the productive sector in Gaza not almost completely paralyzed, so many aid workers would not be needed and the number of aid recipients would not be so high. You also don’t need to explain that the high number of staff you quote might be misleading, since it’s likely you are counting individual entrances and not unique visitors (the same international aid workers enter and exit multiple times per month).
2. Demonstrate impartiality. Present the transfer of 44,500 doses of swine flu vaccine as having nothing to do with you. There is always a chance people will forget it is a border-transcending epidemic and that the head of the Gaza District Coordination Office himself said an outbreak in Gaza would endanger Israel.
3. Make it look like you are paying the bill. Use vague language such as “In 2009, Israel continued to supply electricity to the Gaza Strip”. Count on the fact that most people don’t know that Israel charges full payment for the electricity by deducting the amount from the VAT and taxes it collects for the Palestinian Authority via import into its territory.
4. Take credit for the work of others. Note that “Between April and October 2009, maintenance work was conducted on the power station by Siemens” and “In 2009, the international community transferred 141,390 tons of humanitarian aid” are your successes too. These actions were undertaken after you decided in a unique instance to lift the restrictions you imposed yourself. You deserve credit even for the summer camps UNRWA runs for children in Gaza: in an exceptional measure you did not prevent the transfer of musical instruments and other items you define as “non-humanitarian” (such as ice cream machines and swimming pools).
5. Make sure to even present your failures as successes. “As part of the preparations for winter” you approved the transfer of glass. Even if you did so only after external parties exerted heavy pressure on you, even if you had to make an exception to a prohibition you imposed for two winters, even if you started transferring the glass only on December 29 (long after winter weather had already begun battering destroyed homes in Gaza), and even if you continue preventing the transfer of heaters – present the transfer of glass as your success.
6. Make sure to use headlines that will stun your readers. “The activities of the private and banking sectors in the Gaza Strip are maintained”. With a headline like that, few are likely to realize you are talking about maintaining an economy that has been at an almost complete standstill for nearly three years, with more than 90% of the factories closed or working at minimal capacity, because Israel has been preventing the transfer of raw materials. The headline “Over the years, Israel has kept the issue of public humanitarian infrastructure out of the conflict” will also obscure the Cabinet Decision to restrict the transfer of industrial diesel fuel to the power plant, which is crucial to the functioning of the water and sewage systems and other vital infrastructure, in an attempt to pressure the Hamas government.
7. Use vague terminology. Choose words such as “transferred” and “were transferred”. This way, some people will understand that “Over 1.1 billion NIS were transferred to the Gaza Strip to cover the salaries and activities of international organizations” came out of Israel’s pocket and not, as actually happened, that Israel simply did not prevent the PA and international organizations from transferring the money through the border crossings under Israel’s control, in a rare exception to its restrictions on cash transfers and on the banking system in Gaza.
8. Use visual tricks. State the number of individual flowers you allowed to Gaza farmers to export (9,782,076). This method can become problematic only if you mention that the potential for export is 55 million individual flowers per year, or that in 2006, 2,089 tons of strawberries were exported (compared to only 54 tons in 2009). 105,701,740 liters of industrial diesel fuel (according to COGAT’s 2009 report) sounds like a respectable amount when you state it in individual liters, but is a little less respectable when you discover that it amounts to only 57% of the amount required for maximum electricity production at the Gaza power plant.
9. You do not have to reveal everything. Play down the extent and nature of your control of the Gaza Strip’s border crossings, including indirect but substantial control of the Rafah Crossing.

 Don’t be so modest! You play a central role in the humanitarian situation in Gaza.

On the occasion of International Woman’s Day this week, we decided to look at situation of women in the Gaza Strip. Out of 1.5 million people in the Gaza Strip, women comprise 49.2% of the population. The percentage of women in the labor market today is 12.2% of the total workforce, a percentage that is considered low when compared to other countries in the world.

We interviewed Muna Al-Almi, Manager of FATEN, an organization that provides loans and business development advice to women, in order to understand the unique situation of women in Gaza.

When was FATEN established and what are its aims?

The organization was established in 1998 with the aim of providing financial services to low income Palestinians, principally women. We support projects that can help women improve their lives and position.

Whoever receives a loan from the organization undergoes training that we provide with the help of civil society organizations, with the goal of helping women in different areas, for example: time management, marketing, pricing of goods and women’s rights. This is with the aim of educating women about their rights as women and as workers.

Our loans vary between $500- $5000 and are paid back over a period of 24 months. The criteria that guide us in our decision to finance a business are mostly good management and planning, and also the extent to which the business is intended to serve women. Examples of businesses that have received loans include: candle and jam manufacturers, agricultural businesses, a poultry farm, a cosmetic business, and financing a women-run pharmacy. Other projects that mainly employ or provide services to women include: embroidery, home cooking and sales. 

Muna Al-Almi, Manager of FATEN

We focus on women because they comprise the weakest section of society. We have many families who are financially dependent on women, where their husbands have died, been killed or have been disabled as a result of the difficult circumstances of the conflict or are completing prison terms in Israeli jails.

Many women turn to us for help, they don’t feel that there is a risk in taking a loan to open a business because in our society it is acceptable that women are forced to work and support their children. The women compete with men in the sense that they go out to work in order to support their family and this empowers them. Sometimes women do this better than men.

How has the closure impacted FATEN and its clients?

The closure has affected all residents of Gaza and impacted a big percentage of the women that have taken out loans. These women in the past purchased their raw materials from Israel, whether these were textiles or industrial goods. Since the closure, these materials are not permitted to enter Gaza. In addition, a lot of men have stopped working in Israel. This also impacts women greatly, and requires them to have to look for work. They are forced to become integrated in the job market in order to support their families.

At the start of the closure, the women did not honor the loan repayments which they were supposed to return to FATEN. Some of the businesses did not receive projected profits, because the business plan was conceived according to the conditions in place before the closure. We helped women via training and financial support for businesses that were on the verge of bankruptcy.

We started to think about alternatives as a means to adjust to the new conditions and the rising prices of raw materials as a result of the closure, such as providing limited finance to established businesses in order to prevent bankruptcy.

Moreover, instead of supporting industries requiring raw materials, we financed businesses that do not need raw materials that are not available in Gaza. So, for example, there is a preference for embroidery instead of jam manufacture that requires jars that cannot enter Gaza. We have been forced to be creative in order to operate in a manner that suits the conditions in Gaza. Despite everything, we continue to encourage women to become integrated into the labor market because of the rise in the unemployment rate and the decline in per capita income in the Strip as a result of the closure.

What are the needs of women in Gaza?

For women in the Gaza Strip there is a need for stability and security in order to realize their dreams and to provide a dignified life for their children. Women in Gaza also need to work in order to advance equality between women and men. They need society to look at women differently, and for views that do not support women going out to work, not to be encouraged. We need to promote women to aspire to be even more active.

Women in Gaza need more opportunities for work, but not only this. They also need opportunities to express themselves and for new opportunities to open up for women.

As the manager of an organization that supports women, what is the message that you give to the women of Gaza on International Women’s Day?

Our message is that women have an important role in breaking the closure. She needs to go out to work and to show the world that despite the hardships, she has the power to change the situation. Our work assists women in all respects, from loans to training, business management and the rights of women in general. I hope that the closure will end and that we will see stability in the Palestinian Territory, especially in the Gaza Strip. We hope that the borders will be open so that women will have opportunities to change the economic situation of our society.

Building the “perfect home” is a dream shared by many people, especially if you are one of the tenants of the 3,500 homes that were destroyed or of the 56,000 homes that were damaged in last year’s military operation in the Gaza Strip. This week, we’ve pulled together some instructions to help you build your dream house in Gaza. Make sure to keep these useful tips handy! 

First of all, because of Israel’s prohibition on the entry of building materials to the Strip since the June 2007 start of the closure, we will need to use locally available materials. Mud will be used to build the foundation and the walls of the house, easily found during the wintertime in Gaza’s natural surroundings. Make sure to avoid collecting mud from areas where raw sewage flows. Have patience, once the ban on the entry of spare parts, equipment and fuel is lifted, the water and sewage systems will operate at better capacity.

We’ll need to mix the mud with gravel. Due to Israel’s ban on the entry of this material, we will use limestone instead. To the limestone-mud mixture, add rocks found scattered around the area and mix for a long time until a thick mass is formed. In order to hasten the hardening of the mud, approach the nearest wheat field, cut off some shafts of wheat, and add them to the mixture. Place the mud into a baking dish, wait until it dries and presto — you now have material to make bricks and begin construction!

One of the mud houses recently built in Gaza, which serves as an example of the way the Strip's residents are coping with the ban on the transfer of raw materials.

Now, to build the house. For the support structures we will need iron. However, as you can already guess, since June 2007, Israel has prevented the entry of iron to the Gaza Strip. If you can afford to pay for the iron available in Gaza coming in via the tunnels at 4000 shekels ($1,060) a ton compared to only 2600 ($690) before the closure, fantastic! If not, you will need to mix sand, straw and glue and then roll the mixture into long beams.

Next, we will use the most basic building material, which we have avoided using so far: cement. Cement, the entry of which is also banned by Israel, will be purchased from the tunnel operators. Due to the fact that cement is extremely expensive — 900 shekels ($238) a ton, compared with about 450 shekels ($119) before the closure — we will only use it to build the bathroom, though we’re itching to use it for the rest of the house! 

We’re almost finished. All that’s left to build is the roof and for this we will use plates of glass. Finally, something that is found in Gaza! Despite the prohibition on the transfer of glass to Gaza for two and a half years, since the end of December 2009, glass is no longer considered a security threat, and so far about 100 trucks of glass have entered the Strip.  

Now, after all your hard work, turn on the light switch that you’ve just installed and look around at the fruits of your labor. Oh, is there a blackout in the area again? At least you can enjoy the magnificent view of the sky and the light of the stars shining through the glass ceiling of your cozy, little house.  

Gisha reiterates its call on Israel to lift the ban on the entry of building materials so that people in Gaza may rebuild their homes with dignity.

In Gaza, even scrap metal collection has its hazards.

OCHA reminds us this week in its monitor of the “buffer zone” in place inside Gaza, an area in which the Israeli military prevents Gaza residents from getting within 300 meters of the border between Israel and Gaza – even those trying to earn an unlikely livelihood. This week, OCHA reports, Israeli soldiers entered Gaza and arrested 10 Palestinian civilians who were collecting scrap metal near the border; they were later released.

Arrests in this area and sporadic incursions are of course a clear reminder to Gaza residents that Israel still exercises control over their lives, even if control over the movement of goods and people, felt via an invisible hand, has a greater effect on their lives.

A ban on the entrance of raw materials, for example, has closed factories and contributed to Gaza’s X% unemployment rate – which may have driven those 10 people to risk nearing the border for the few shekels they could earn selling scrap metal. Other job-seekers are looking to the public sector, as the Hamas government is one of the few employers hiring. It was reported last week that 14,000 candidates responded to a call for 1,000 positions in the police – also a risk, given the fact that civilian police have been targeted in Israeli airstrikes.

These job-seekers in Gaza may not have dreamed of a career in metals-trading or law enforcement, but without the raw materials necessary to engage in gainful production – it looks like they will risk their lives to pursue it.

The closure of the Gaza Strip is tight enough to make life difficult for residents, but fences and checkpoints don’t prevent viruses from passing through, as became apparent earlier this month. Despite predictions that the closure of Gaza might protect it from exposure to the Swine Flu, the virus was identified in the Gaza Strip two weeks ago, and already some 185 people have been diagnosed as infected, 13 of whom have died.

Not only has the closure of Gaza failed to protect it from the virus, but the restrictions on the passage of equipment and fuel are making it difficult to contain the virus’s spread.

During the military operation last winter, 15 hospitals and 34 medical institutions were damaged, and their repair has not been possible due to Israel’s refusal to allow building materials into the Gaza Strip. While Israel boasts of permitting increased quantities of humanitarian aid to Gaza, it continues to restrict the entrance of medical supplies, claiming security risks. Thus, Israel is making it difficult to send batteries needed for the UPS systems that protect sensitive hospital equipment during the frequent power outages and is limiting the supply of additional medical supplies, such as X-ray equipment.

The Swine Flu, however, known for its tendency to breach borders, is not treated like other illnesses, and Israel has allowed 6,000 vaccinations purchased by the Palestinian Ministry of Health in Ramallah into Gaza. The vaccinations are destined for Gaza residents who participated in the pilgrimage to Mecca (the Hajj) and for the medical professionals treating patients diagnosed with the virus. It is estimated that more than 400,000 vaccinations are needed for people in high risk groups.

Allowing vaccinations through to Gaza residents is surely a nice public relations photo opportunity, but preventing the outbreak of an epidemic requires appropriate sanitary conditions and infrastructure, too. Frequent and extended blackouts (8 hours a day, 4 days a week), due to Israel’s refusal to allow the transfer of the required amount of industrial diesel to the Gaza power station, interfere with the proper functioning of local hospitals. Hospitals rely on back-up generators during the power outages, but limitations on their power production interferes with the heating and ventilation systems that are vital for maintaining proper air-pressure.  Likewise, the ongoing shortage of gas limits the ability to run hospital washing machines needed for basic hygiene. This past week, only 34% of the gas needed by Gaza residents was supplied (518 tons out of the 1,500 tons needed per week).

Other types of infrastructure systems which are needed to deal with infectious diseases are the sewerage and water purification systems, which also rely on fuel and supplies limited by Israel. A roof over the heads of the thousands of residents uprooted from their homes and the hundreds still living in tents since their homes were destroyed in the war is another basic requirement.

Some people resort to prayer to protect them from the Swine Flu. We would make do, for starters, with policies that allow the ongoing transfer of equipment required for sanitation and the proper functioning of the health system – out of respect for the rights of the 1.5 million people who live in the Gaza Strip.

Last week Israel proudly boasted of a sharp increase in the transfer of humanitarian aid to the Gaza Strip. This announcement coincided with the publication of a statement of concern by the European Union regarding the humanitarian situation in Gaza, noting that there has been no improvement since January 2009, when the war ended.

One can’t help but wonder if an increase in the supply of aid is really something to be proud of. Israel isn’t the one paying for the aid. On the contrary, international organizations claim that due to the problems and restrictions created by Israel, they are forced to spend millions of dollars on logistics to work around the restrictions, instead of investing all their resources on the aid itself. They also say that the increase in supply over the past year stems from the drastically increased need for aid following the war.

Besides the fact that Israel is once again proud of itself for overcoming obstacles of its own creation, and that it deliberately chose a point of reference which is very low, the connection between the closure policy and the increased need for humanitarian aid should also be taken into consideration. In 2007, aid represented only 3% of all imports into the Gaza Strip. Yet in 2009, aid now represents 26% of all imports.

So long as the economy is paralyzed – with 95% of factories closed, Israel continuing to prevent the import of raw materials for industry, and the unemployment rate having risen 30% since the start of the closure to its current rate of 41.5% – it is doubtful whether there is any possibility that the need for aid will decrease.

Is this what the future has in store for the Gaza Strip – its residents left dependent on aid while the process of de-development continues?