Matthew Kalman: Gaza's Shadow Economy Plods On

Matthew Kalman: Gaza's Shadow Economy Plods On

Friday, Jun. 04, 2010

A Palestinian smuggler exits a tunnel that runs between Egypt and Rafah in the southern Gaza Strip on June 3, 2010 Said Khatib / AFP / Getty Images

By MATTHEW KALMAN / GAZA CITY

Days after the Israeli seizure of a flotilla of Turkish ships bound for Gaza that left nine pro-Palestinian activists dead and triggered worldwide condemnation, activists aboard an Irish-flagged aid vessel are bracing for the next round, while Israelis debate how to solve the problem. The 1,200-ton Rachel Corrie, named for the pro-Palestinian American activist who was killed in Gaza by an Israeli bulldozer, is heading south from Cyprus through the Mediterranean with a cargo of aid and banned building materials for the Hamas-controlled enclave.

Israeli leaders still stunned by the fallout from the May 31 flotilla raid are determined to stop the Rachel Corrie as well as not cause any more deaths that will hand Hamas and its supporters another p.r. victory. "We shall not allow the ships to reach Gaza — not now and not later on," Israeli Prime Minister Benjamin Netanyahu told his ministers. "We intend to direct the Rachel Corrie ship to the Ashdod port and transfer its civilian goods to Gaza following a security check." (See pictures of Israeli commandos storming the Turkish ships.)

Palestinians in Gaza eagerly awaited the drama unfolding off the coastline, hailing the Free Gaza Movement and the Turkish group IHH — which allegedly has jihadist sympathies — as heroes, with street marches and banners fluttering from buildings close to the tiny Gaza City port. The excitement is a change from the daily grind of survival, which can take many forms in the enclave's shadowy economy.

Every day, a long line of Palestinians queues outside the USAID distribution center in Beit Lahiya, north of Gaza City. Thursday was the turn of families with nine or more children; they have been issued with the relevant papers, allowing them to collect 3 kg of salt, 12 kg of sugar, 12 kg of beans, 16 L of olive oil and four 50-kg sacks of wheat flour. After 40 days, they will return for more. "The proportion of the population dependent on aid has risen to 80%, the number of the poorest of the poor has risen from 100,000 to 300,000 in the past year alone, and unemployment has reached 44%," says Chris Gunness, spokesman for UNRWA, the U.N. body that has been assisting Palestinian refugees since 1949. "How can anyone say there isn't a humanitarian crisis?"

At the Islamic University in Gaza City, two buildings on the campus are still in ruins nearly 18 months after they were bombed flat by Israeli jets during the war that ended in January 2009. Israel said the university's technology labs were being used for research and development to improve the 8,000 Qassam rockets that have been fired across the border since April 2001 — a charge the university flatly denies. University president Kamalain Sha'ath needs $50 million to rebuild the wrecked labs and replace damaged equipment, but Israel will not even let him bring in any building materials. (See pictures of life under Hamas in Gaza.)

Sha'ath continues to educate his 21,000 students, but he knows their chances of employment are slim. Last year, there were 20,000 applications for 2,700 teaching jobs advertised by the Ministry of Education and 1,700 applications for 50 English-language teaching positions at UNRWA. "The economy of Gaza cannot generate the number of jobs required for all of these people. With the blockade, it became more and more complicated," Sha'ath tells TIME.

The Israeli and Egyptian blockade was imposed in earnest after Hamas, the Islamist militant organization that came to power in parliamentary elections in January 2006, won control of Gaza and its population of 1.4 million in July 2007 after a vicious Palestinian civil war. The blockade was supposed to persuade Gazans to topple the Hamas government; secure the release of Israeli Corporal Gilad Shalit, who was abducted in June 2006; and end the firing of Qassam and other rockets across the border. None of those objectives has been achieved.

See the diplomatic fallout from the Gaza flotilla fiasco.

Israeli officials say the blockade must remain in place to stop Hamas from being supplied with rockets and other heavy weaponry by their allies in Hizballah and Iran. They reject the charge that they have plunged Gaza into poverty and food dependency, pointing to the first three months of 2010 that saw 3,828 trucks carry more than 95,500 tons of goods into the Gaza Strip, including food, medical supplies, wheat, rice, clothes, footwear, milk powder and baby food. Just days before the flotilla fiasco, the press office of Netanyahu sarcastically recommended the fine-dining restaurant Roots to foreign reporters sent over to chronicle humanitarian conditions. And indeed, in Gaza City, white-coated waiters do serve expensive meals at Roots. The beef Stroganoff has been unofficially dubbed "Bibi Stroganoff."

But much of the commerce that has managed to survive the blockade operates with rather shadowy mechanisms. At the small grocery run by Hani Abu Fadi in a refugee camp south of Gaza City, the shelves are stocked full of goods, from basic foodstuffs to chocolates. Many of the tins are Egyptian, but Hebrew packaging indicates that some items have been imported from Israel, including fresh milk and washing powder. Abu Fadi says prices have fallen by about one-third on some items in the past year. "There is no shortage of food; there are even stockpiles," he says. "I assume the wholesalers who used to work with the Israeli border crossings are now bringing their supplies through the [smugglers'] tunnels, but I don't ask." (See pictures of heartbreak in the Middle East.)

Down in the town of Rafah on the border with Egypt, a makeshift hut constructed from blue nylon sheeting nailed onto a frame covers the mouth of a smuggling tunnel underneath the frontier. A man who identifies himself only as Abu Ahmed dug his tunnel two years ago on the site of a destroyed house that he bought from the previous owner. It is 25 yards deep and half a mile in length. It took six months to build and is connected by cross-passages to five or six neighboring tunnels in case of emergency. He descends by rope down a 4-ft. square vertical shaft lined with wood to a passage that emerges in a gentle slope inside a building on the other side of the border. There is an emergency generator for electricity and a compressor to pump air through. "I bring in everything, but nothing that is illegal," he says. "From food and motorcycles to animals. I once brought in two lions for the zoo — small ones."

Abu Ahmed says that in a good month, he can make $300,000. His only tax was a one-off payment of about $2,500 to Rafah Municipality for electricity. A qualified doctor at a nearby hospital earns just $900 a month. Gazans are concerned that the new elite of tunnel smugglers have a vested interest in continuing the siege. (See pictures of 60 years of Israel.)

A poll conducted in March indicated that Palestinians were becoming fed up with Hamas: 37% of Gazans told the Palestinian Center for Public Opinion that they trusted the Fatah party of Palestinian Authority President Mahmoud Abbas to govern, while only 22% said they preferred Hamas. But with the actions against the aid flotilla last week, Israel may have inadvertently thrown the Hamas government a lifeline. "What happened this last week was a surprise for everybody," says Omar Shaban, president of PalThink, a Gaza-based strategic studies think tank.

Shaban says Israel's seizure of the flotilla brought the situation in Gaza to world attention and may trigger enough pressure on Israel to end its blockade. "The Gaza issue is totally different after the ships than before the ships. It's like a political tsunami, whether you support Hamas or not," he says.