Agence France Presse (AFP) news agency recently published a report about two sisters from the Gaza Strip, aged 13 and 16, who went to work in the fishing industry to support their family following their father’s illness. The report drew much interest and was translated and published on several Arabic language websites. True, it is out of the ordinary for two girls in a conservative society to find themselves in a field, or sea, as it were, usually reserved for men, but considering the difficult situation in Gaza– 39.3% unemployment in the second quarter of 2010, with the number of people living in abject poverty rising in the last two years from 100,000 to 300,000 according to the UN Office for the Coordination of Humanitarian Affairs in the Occupied Territory–many women are taking the initiative to try and earn a living to help their families make ends meet.

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.

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 media last week heralded the opening of the first shopping mall in Gaza and immediately the blogosphere was atwitter. Some saw it as proof of the easing of the closure, which Israel had promised, and others saw it as a sign that there is no crisis in Gaza. Indeed, a two-story building converted into an air-conditioned shopping mall (restrictions on the transfer of construction materials into Gaza for the private sector are still in effect and would preclude the building of such a structure) does not correspond with the usual images of the Strip, nor with concerned reports about hunger arising from the closure, still in effect despite the easing of some restrictions. But Gaza is not and was never a place with a quantitative food shortage; rather it is a place where many people lack the means to buy food and other goods because of a closure policy whose tenets are “no development, no prosperity, and no humanitarian crisis”.

Prices at the new shopping mall are particularly low, clients say, and considering the limited buying power of Gaza residents, there seems to be no other choice. Sixty-one percent of households in the Gaza Strip suffer from food insecurity, where the UN defines food security as “a situation in which all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life”. Unemployment is at 34%, a figure that should come as no surprise due to the sweeping ban on exports from Gaza enforced since the beginning of the closure of Gaza in June 2007. Israel has emphasized that the recent cabinet decision announcing an easing of the closure does not apply to export (nor to the movement of people). Even the recent lifting of the ban on the transfer of raw materials and the slow trickle of spare parts into Gaza have not yet made their mark on economic activity, especially considering the crossings’ capacity limitations.

According to the mall’s directors, the vast majority of brands sold at the mall – 90% – are Israeli-made, in addition to a small percentage of items originating in the West Bank. This is another indication of the dearth of goods manufactured in Gaza itself. Indeed, how can you manufacture clothing, shoes, carpets and food products (items that have been manufactured in Gaza in the past), when, even after the cabinet decision to “lift the closure”, the amount of goods transferred into Gaza last week (979 trucks compared to 2,350 trucks a week in 2005) meets only 40% of needs?

The price is of the products at the mall may be low, but apparently not low enough for most of the residents of Gaza.

Israel’s declared objective: Political — to weaken (or overthrow?) the Hamas government in the Gaza Strip.

The means: Economic warfare: “The transfer of goods into the Gaza Strip will be restricted“. 

Implementation: Erasing the customs code ascribed to the Gaza Strip from the computer system of the Israeli Customs Administration and forbidding the import of any goods that are not defined as “humanitarian”.

The significance: Gaza is closed to the import of goods. Theoretically, goods exempt from customs (such as goods from the West Bank and Israel) could be imported, but in practice Israel does not allow the transfer of goods that are not humanitarian.

Consequences: The business sector that existed in Gaza on the eve of the closure in 2007 is precluded from importing raw materials and commercial goods, and the Palestinian Authority cannot collect on the taxes that would be imposed on these goods. Not to mention that 1.5 million people are suffering from a punishing closure, which severely limits their access to goods and to employment options.

And meanwhile in Gaza: The emergence of a “parallel market” in the form of approximately 1,200 tunnels, through which more than 4,300 kinds of items are imported (as opposed to the few dozen items which Israel allows in). Recently, the Hamas government took another step to institutionalize the tunnel economy when it decided to impose official taxes on some of the goods transferred through the tunnels, in addition to the taxes already imposed on those who apply for licenses to dig and operate tunnels.

Indeed, despite indications that the Hamas government is facing a cash flow problem and has even confiscated money, the public service sector in Gaza is now estimated to employ and provide a source of income for 30,000 workers and an estimated 180,000 family members who are sustained, among other things, by the taxes that the government collects in Gaza, including from the tunnel industry. And thus a new business class has emerged in Gaza, fast becoming wealthy from the tunnel economy.

So who, then, is Israel actually weakening?

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.

Articles recently published about the tunnel trade in the Gaza Strip describe the relatively new industry in an adventurous light, even daring – the Indiana Jones of the Middle East. However, the problem is that adopting this perspective may obscure the overall picture.

Indeed, the tunnels industry at the Gaza-Egypt border has become “one of the largest branches of Gaza’s economy”, if not the largest. Yet the industry’s success is directly linked to Israel’s closure policy, which allows for the passage of “humanitarian goods” only (“humanitarian goods” are yet to be defined). Ironically, this new economy is proving most profitable for the Hamas government, which oversees tunnel mining and operations, and which collects taxes from tunnel owners.  The hundreds of tunnels operating today in Gaza and the thousands of people employed in them account for about two-thirds of the goods entering Gaza.

Although there are a few making big bucks off of the tunnel trade, in contrast, most residents of the Gaza Strip face a grim reality. The industry, by its very nature, is a testament to this. Many young people are forced, because they have no alternative employment options, to work in the tunnels and sometimes remain working underground for days on end. Since the start of the closure, approximately 110 people have been killed on the job, among them 30 children. The total number of people wounded due to tunnel related incidents such as suffocation and entrapment as a result of explosions, air strikes and collapses stands at approximately 190.

A clip produced by B’Tselem endeavors to illustrate, if only a little, this reality.

On December 6^th, the Israeli Ministry of Foreign Affairs released a newsletter highlighting the economic situation in the West Bank and the Gaza Strip. Though there are some miscalculations, for the most part the MFA’s data are accurate. The real problem is that the numbers appear without context.

In this week’s post we provide context for the MFA’s (mostly) correct numbers.

Israel’s policy in the Gaza Strip: Permit the entrance of humanitarian aid ONLY – no development, no prosperity, no economic activity.

Food: No luxury, no production

True: “All food products are brought into the Gaza Strip, except for those that definitely constitute luxury items”.

More true: Did you know that honey and canned fruit, which have been banned since the beginning of the closure, definitely constitute luxury items? Or that, for 8 months, tea definitely constituted a luxury item, until it was suddenly permitted into Gaza about two months ago, indicating that maybe it is not a luxury item after all? On the other hand, pasta is definitely not a luxury item anymore, since Secretary of State Hillary Clinton expressed concern about obstacles to the entrance of aid in February. Margarine in small packets is not a luxury item, but margarine in large buckets is definitely a luxury item, because it could then be used as a raw material for local food production, giving Palestinian residents of Gaza the luxury of engaging in productive work.

There are no published lists of what kinds of goods can and cannot enter, and Israel has refused to explain which products constitute a luxury, and which don’t. Without some kind of list – how are we to know?

Unemployment: Revealing all the numbers

True: Unemployment in Gaza dropped from 45.5% in the second quarter of 2008 to 36% in the second quarter of 2009.

More true: According to the Palestinian Central Bureau of Statistics, the reason for the second quarter drop in unemployment may have been that temporary relief projects, especially for clearing rubble after the military operation, were initiated by international organizations and the local government. The MFA neglects to mention that in the third quarter of 2009 unemployment again rose to 42.3%, as these temporary relief projects ended. Compare this with 32.3% unemployment in June 2007, just before the closure began.

Fuel and electricity: Not meeting needs

True: Israel meets the minimum threshold set by the Israeli High Court for the passage of industrial diesel for electricity production at the Gaza power plant.

More true: The minimum threshold for industrial diesel set by the court is far below what Gaza needs. In fact, the industrial diesel that was transferred in the month of November met just 39.1% percent of needs, creating power outages.

Re-building projects: A drop in the bucket

True: “Israel is conducting discussions with the Palestinian Authority, the US, EU representatives in the area and others, with the aim of establishing an agreed-upon supervisory mechanism, subject to international standards, which will ensure, if and when a decision is made to that effect, that monies, materials and equipment that are brought into the Gaza Strip for vita humanitarian projects actually reach their destinations”.

More true: Israel has refused to allow reconstruction materials to enter Gaza, despite “discussions” that have taken place over the past 11 months. Gaza needs at least 25,000 tons of iron and 40,000 tons of cement for reconstruction. Since the war, Israel has blocked all but 19 trucks of construction materials permitted to enter on an exceptional basis for the humanitarian infrastructure (i.e. water and sewage systems), though restrictions on other materials mean that infrastructure continues to function below capacity (see below). Without reconstruction materials it is impossible to rebuild the more than 3,500 homes destroyed and the approximately 56,000 homes damaged, in addition to over a thousand businesses, factories, and other commercial establishments destroyed and partially damaged during the war. Even if construction materials were permitted in to fix the estimated $45 million in damage to private sector establishments, the ban on import and export ensures that these businesses would likely lay idle, as 97% of factories generally have done so for over two and half years. Some cement enters via the tunnels beneath the Gaza-Egypt border, but prices are beyond the reach of most residents, and many international organizations are restricted from using these materials.

Water, Sewage and Electricity Infrastructure

True: “Israel is conducting a dialogue with Robert Serry, special emissary of the UN Secretary-General, regarding vital humanitarian projects, primarily relating to sewer systems”.

More True: Dialogue notwithstanding, Israeli restrictions on supply of spare parts and materials for the devastated water and electricity systems mean that 10,000 people are without running water, 40,000 people are cut off from electricity, and power outages lasting 8 hours, four times per week are a common occurrence in most homes.

Education: Children paying the price

True: UNRWA schools recently received shipments of education materials, including notebooks and pencils.

More true: UNRWA is the only agency permitted to receive school supplies in Gaza, and only after Israel delayed the entrance of these items for several months. Israel continues to ban the entrance of supplies for two-thirds of the schools in Gaza, the private and government-run schools which educate 240,199 children.

The final section of the MFA newsletter includes a quote by EU Special Representative to the Middle East, Marc Otte. Find here another important statement made by Marc Otte recently in an interview for Al Quds newspaper, describing the EU position on the closure:

“[The] Gaza closure and denying entry to construction materials is morally unacceptable and is a failure. I was in Gaza last week, there were large quantities of cement in Gaza, but the only people who do not get it are the ones who most need it. For this, ban on constructions materials is not acceptable and I have explained this to the Israelis and told them that this is also not in their interest. Our position is clear, especially that winter is coming, and people can not live in tents in the cold and under the rain”.

Post-script: a perceptive reader pointed out to us that in a November 24^thbriefing to the Security Council, Assistant Secretary-General for Political Affairs Mr. Haile Menkerios, made comments in reference to the stalled Serry Plan mentioned in the MFA newsletter:

“Beyond immediate humanitarian needs and the water and sanitation sector, I regret to inform the Security Council that the United Nations has not yet received a satisfactory response from the Israeli government to the proposal, put forward in May, to complete $77 million of stalled UNRWA and UNDP projects in the area of housing units and school and health facilities. The UN has left no stone unturned in seeking approval of this package in extensive consultations with the Israeli authorities, and is confident of its capacity to ensure the integrity of programming. It is completely unacceptable that no meaningful progress has been made in kick-starting UN civilian construction activities essential for the well-being and recovery of a war- and blockade-affected population, half of whom are children”.

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?