Flowers and Vegetables. Munther Budi Farm , Gaza , Biet Lahia

Three days ago two truckloads of strawberries exited Gaza and passed through Israel on their way to Europe. They were the first truckloads of export allowed out of the Strip in over six months, part of a program funded by the Dutch government to bring Gaza produce to European markets.

To mark the occasion, we recall an animated clip about the volume of goods entering the Gaza Strip released by the Coordinator of Government Activities in the Territories (COGAT) in June of this year.The numbers seem impressive – every day about 260 trucks enter Gaza from Israel, carrying about 6,000 tons of goods. According to the clip, Israel can transfer double that volume into the Gaza Strip, about 400 trucks per day, carrying 12,000 tons of goods, however “demand is ultimately determined by the Palestinians”.In other words, what closure?

As usual, our main dispute is not with the figures released by COGAT,we just wish to fill in the blanks and give a more complete picture of the situation. For example, alongside the relaxation in restrictions on entrance of goods to Gaza since mid-2010, the ban on sale of goods out of Gaza has remained in place. The two truckloads of strawberries that left in Sunday come on the heels of more than six months during which no product of any kind left the Strip. So can we call it an end to the restrictions on export? Doesn’t look like it. Are the restrictions for security reasons? You make the call.

So is there export? Very little and with great difficulty

Produce from Gaza enters Israel, where it is transferred to the Ashdod seaport or Ben Gurion airport for travel on to Europe. Marketing Palestinian produce all the way in Europe is naturally more costly, so much so that it’s simply not profitable. In other words, the export isn’t a product of a functioning economy, more like the outcome of a humanitarian aid project.

Sale of goods to the West Bank or Israel from Gaza has been strictly prohibited since June of 2007, despite the fact that the produce that is exported to Europe enters Israel and undergoes full security screening en route to the port and airport. Before Israel tightened the closure in 2007, some 85% of the goods leaving Gaza were destined for Israel and the West Bank.

“Over the past year”, COGAT’s website states, “Palestinian exporters brought more than 399 tons of strawberries, 10 million carnations, 6.5 tons of cherry tomatoes, and 6 tons of yellow, red, and green bell pepper to European markets”. Sounds great, right? This is the entire quantity of export from Gaza for a whole year. Gaza’s strawberry export potential is some 2,300 tons per year. In 2005, 904 tons of cherry tomatoes were exported from Gaza, 140 times the amount planned for the upcoming season.

Let the goods go

Let’s get back to COGAT’s animated video clip. It says that Israel doesn’t transfer more goods into the Strip because Palestinians aren’t asking for more. This is partially true. Israel doesn’t “transfer” goods to Palestinians. It only allows goods to be bought by Palestinians. Palestinians are not demanding more goods in part because of continued restrictions on the entrance of some raw materials (including construction materials) and in part because purchasing power is weak in the Strip. And purchasing power will remain weak as long as Israel continues to severely restrict export.

In the second quarter of 2011, unemployment in the Gaza Strip stood at 28%. Unemployment is particularly high in the 20 – 24 age bracket, where it reached 42% in the first half of 2011. Without a vibrant and profitable manufacturing sector – industrial and agricultural – it is hard to see how the situation might improve.

What does Israel have to gain by continuing to paralyze the private sector in the Gaza Strip? According to Prime Minister Benjamin Netanyahu, the answer is clear – nothing. This is what Netanyahu said in February:  “… [S]tability is important at all times, but it’s especially important now and the first set of steps that we’re taking are to continue the policy we’ve advanced to enable economic growth in the Palestinian areas…. it’s contributed to a better life for the Palestinians and I think it’s contributing to peace and security in the long term”.Well spoken indeed, but it is time to put words into action.

Stay tuned, in the next post we share three export stories: dangerous potatoes, burning furniture, and the runaway cherry tomatoes…

Get updates on Facebook »
Get updates in Twitter »

On December 8th, the Israeli Security Cabinet decided to ease some of the restrictions on export of goods from Gaza. It announced that Israel would increasingly allow export of textile, furniture and agricultural produce from the Strip. These promises were reiterated as part of a package of gestures that the prime minister announced in February. The same promises reappeared in an April report to donor countries which also included the news that Israel was installing special inspection equipment at Kerem Shalom that would allow for increased exports. However, six months after the cabinet decision, the volume of exports from Gaza has only decreased.

From January to May 2011, Israel allowed only 187 truckloads of goods to leave Gaza – an average of two truckloads per day. Since May 12th, not a single truck has left Gaza. Since goods cannot be transported through the Rafah Crossing, there is presently no way to export goods from the Strip. More than one and a half million people – zero export.

A policy that categorically bans the export of civilian goods from the Gaza Strip is, at the very least, puzzling. Why, during the last harvest season, were Palestinians in Gaza allowed to export strawberries, peppers, cherry tomatoes and flowers via Israel to Europe but are now forbidden to export furniture, textiles and other food products in the same way? And why was the export Israel did allow to be transferred through its territory restricted to Europe and not allowed to be sold to closer markets in Israel, the West Bank or Jordan? Is that what the government meant when it claimed it was making efforts to “improve the economic situation of the population in the Gaza Strip”?

The damage caused by restrictions on export is significant. The restrictions are the main reason why 83% of Gaza’s factories are closed or are operating at less than half their capacity, according to the Palestinian Federation of Industries. The restrictions also result in high unemployment rates, which stand at some 30.8%.

The export ban has paralyzed whole sectors of the Gaza Strip. The fashion and textile industries in Gaza used to sell 70% of their products outside of the Strip. Today, due to the ban, the industry has suffered a near fatal blow. The same is true for other sectors, such as furniture and food, which depend on markets outside of the Gaza Strip for their survival.

What can explain the harm that’s been done to the ability of residents of Gaza to earn a dignified living? In an interview (Hebrew) a year ago, the prime minister said that the civilian closure must be lifted, leaving in place only a “security closure”, but it is hard to find a security argument that would justify a complete ban on export. Just like all goods entering Israel, goods transferred from the Strip undergo security inspections. The sale of Gaza-made armchairs in the West Bank will not supply weapons to Hamas and selling socks made in Khan Younis in Israel will not help build bunkers in the Gaza Strip. If there is a reason, security or otherwise, preventing the government from keeping its promises and from implementing a policy it defined as an Israeli interest, then it owes the public an explanation.

No economy can survive over time without trade and export, and the present condition of Gaza’s economy is a painful reminder of that fact. A stable economy is one of the conditions for a functioning society – a vital interest both for Palestinians and Israelis. Without export there can be no independent private sector and the only alternative that leaves is an economy in which money flows only from top to bottom – from the government and foreign donors to citizens. This is exactly what is happening today in Gaza where the public sector has become the biggest employer. Whereas in the past 60% of the workforce was employed in the private sector and 40% in the public sector, today the ratio has been reversed.

Israel began the closure of Gaza with the declared goal of ending Hamas rule. Four years later, it is clear that this policy has failed. Restrictions on export have brought increasing harm on residents of the Gaza Strip and made them more dependent on Hamas than ever.

Recently there has been an improvement in the situation in the Gaza Strip: while unemployment remains high, it dropped some in relation to 2010, and new building projects have begun. This is a welcome development, but there is nothing that will help more than allowing Gaza’s businesses to access markets beyond the Strip. Four years on, maybe it is time to finally consider a change in policy.

So what exactly are we asking for? That the welcome but unfortunately limited measures taken to ease the closure be expanded, so that civilians and civilian goods can enter and leave Gaza. This week, we present three easy steps for how Israel can lift the closure while protecting legitimate security interests:

Step #1: Lift restrictions on exports from Gaza:

Recently, Israel allowed the export of tomatoes for sale in Europe. This was in addition to the permission given in the last two months for the export of strawberries, flowers and peppers, to the tune of an average of four trucks per day of exports – as opposed to the 400 trucks per day promised by Israel in 2005. Israel should now lift restrictions on the export of all goods, subject only to appropriate security checks. Export should be allowed not only to Europe (a market with limited profitability), but also to markets in Israel and the West Bank. Export is vital in order to inject money into the private sector in Gaza and consequently to lower unemployment (currently at 37.4%) and raise consumption. Only then will the entire economy recover – industry, agriculture, trade and services.

Step #2: Cancel the ban on the transfer of construction materials:

As part of the package of measures to ease the closure, presented by Prime Minister Netanyahu a month ago, Israel promised to allow the entry of 40,000 tons of gravel into the Gaza Strip, about 1000 truckloads, as an exception to the ban on the transfer of building materials. Approximately 400 trucks have already entered through the Sufa crossing in the last week. This should only be the first step however: we note that since the “easing” of July 2010, Israel has allowed just 4.4% of the building materials (gravel, cement and steel) needed by Gaza residents – not nearly enough to rebuild.

There is an urgent need in the Gaza Strip to build schools, hospitals and homes, some of which have been in ruins for two years, following Operation Cast Lead. If we really want to rebuild Gaza, we need to end the ban on construction materials and re-open closed crossings to allow for their transfer. Israel argues that Hamas will use cement to build bunkers but meanwhile, the government in Gaza buys cement freely through the tunnels. Rather, it is international organizations and poor families who wish to rebuild their homes who are unable to purchase cement.

Step #3: Allow people to travel into and out of the Gaza Strip subject only to individual security checks:

In the last few months, Israel has indeed allowed more businessmen (but not women!) to leave the Gaza Strip for commercial purposes, which certainly aids the recovery of Gaza’s economy. However apart from businessmen, travel between Gaza and the West Bank remains limited to “exceptional humanitarian cases”. Israel must now increase the number of exit permits for all kinds of commercial purposes (men and women alike!), allow students to travel to study in the West Bank, let educators and academics travel for professional courses and training and, in fact, allow travel between Gaza and the West Bank subject only to individual security checks.

]]> http://www.gazagateway.org/2011/03/how-to-lift-the-closure-of-gaza-in-three-easy-steps/feed/ 3 http://www.gazagateway.org/2011/01/gaza-youth-fire-words-in-all-directions/ http://www.gazagateway.org/2011/01/gaza-youth-fire-words-in-all-directions/#comments Mon, 10 Jan 2011 08:32:55 +0000 admin http://www.gazagateway.org/?p=1838 Continue reading →]]> About three weeks ago, quietly and with no advertising, a new Facebook group opened, called “Gaza Youth Breaks Out”, featuring their “Gaza’s youth manifesto for change”, a brave, frank and direct call for human rights, freedom, normal life and peace. Before we could say “end the closure of Gaza” the group already had 8,365 “likes”. Calls of support appeared on the group’s page from Canada, Iceland, Italy, Belgium, England, the Netherlands and even Kashmir, India.

As the Guardian reports, The Gaza youths behind the group and the manifesto — five men and three women — refuse to identify themselves by name out of fear for their lives. They are students, secular, and say they are not identified with any political party.

From the group's Facebook page

Life in Gaza is not easy for anyone, but young people have their own particular concerns, troubles and frustrations: the ban on leaving the Gaza Strip to study in the West Bank, unemployment, the lack of employment opportunities, and what the young people refer to as persecution by the government.

It appears that the manifesto reverberated throughout the world not only because of its call for human rights, freedom and peace, but mainly because the young people behind it translated their rage and frustration into poignant, direct language that makes no attempt to be polite or apologetic. Behind the curse words and the crude language lies profound anguish. Hamas, Israel, Fatah, the UN, the US — no one is spared the young people’s sharp language. They do not want to hear any more nice words and promises. They want to shout until they are heard: “We say stop! This is not the future we want! We want to be free. We want to be able to live a normal life. We want peace. Is that too much to ask?”

To read the full manifesto, click here.

Since the closure was imposed, aid dependence in Gaza has increased from 63% to 80% because of the paralysis of the private sector, reports OCHA. The International Monetary Fund reported three months ago that the Gross National Product in Gaza is still 40% less than it was in 1994 and has yet to recover to 2007 levels.

Why is there so little economic activity and so much dependence on international aid? There is a very simple explanation: the closure of the Gaza Strip. The closure of Gaza is not just about shortages of products – coriander became the star-of-the-moment when it was discovered that its transfer into Gaza was banned by Israel – it is also about restrictions on selling of Gaza’s goods outside of the Strip, about bringing in construction materials, and about movement of people.

Before 2007, some 70 truckloads of consumer and agricultural products left Gaza for marketing outside Gaza each day. Since the Cabinet decision declaring an easing of the closure and until December 23rd, 70 trucks left the Gaza Strip, in other words, 2/3 of a truck per day.

A truck near Kerem Shalom. Photo: Mohammed Azaiza, Gisha

Another reason for the low economic activity is the ban on construction materials. Before the ban, residents of Gaza brought in 5,000 truckloads of gravel, cement and steel per month, compared to an average of 149 trucks per month since Israel declared the easing of the closure. As a result, there was a drastic decrease in the number of people employed in construction.

It is therefore no wonder that those who do have jobs in Gaza are more often than not working in the public sector. According to a recent report by the British think-tank The Portland Trust, jobs in the private sector shrunk from 100,000 to 30,000 over the years 2006-2010 – while in 2006 only 28% of those employed worked in the public sector, today 70% of those employed work in the public sector. Those who lost their jobs found work mainly in the public sector: in local government offices, international organizations and non-governmental organizations. Whereas the population of Gaza grew from 1.41 to 1.54 million between the end of 2007 and mid-2010, the number of jobs remained static. There has also been a shift from employment in factories, agriculture and construction towards employment in the Palestinian Authority, the Hamas government and international organizations. Work in the public sector is vital for sustaining a society – the public sector includes teachers, doctors, aid workers – but the private sector is the engine for development.

The question that should be asked, therefore, is not whether there is a humanitarian crisis in Gaza, but whether deliberate harm is being done to the economy and by extension to the well-being of residents of the Strip, and whom this serves. What is the likelihood that the percentage of residents living beneath the poverty line will decrease and that Gaza’s economy will enter a period of significant growth, without marketing Gaza’s goods outside of the Strip, without movement of people, and without construction?

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.

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.

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.

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?