Rusty Shackleford
8th June 2010, 01:37
http://online.wsj.com/article/SB10001424052748704749904575292733093715278.html?m od=WSJ_latestheadlines
GAZA CITY—Israel and Egypt began the blockade of the Gaza Strip three years ago in an effort to cripple Hamas, but the economic isolation has claimed a different victim: the territory's merchant class.
Western governments—including Washington—are clamoring for Israel to rethink its policy in the wake of last week's bloody seizure of a flotilla of activists attempting to reach Gaza's shore. Late last week, Israel signaled that it was considering ways of easing the flow of goods into Gaza.
Behind the Gaza Blockade
Israel defends the blockade as a way to prevent Hamas, the militant Palestinian group in charge here, from getting weapons. But Western officials, aid agencies and analysts have criticized the policy as a form of collective punishment that is doing little to weaken the group.
Hamas can get what it needs, including weapons and cash, via elaborate smuggling tunnels to Egypt. And Hamas's public resistance to the blockade boosts its popularity here.
The blockade has also decimated Gaza's private sector, key to weaning the territory from its dependence on imports and aid. The merchant class here has long provided a chunk of Gaza's employment, and it is one of the few sectors that fostered constructive contact with Israel, through trade.
"This is like a death penalty for us," says Mohammed Al Telbani, chief executive of Al Awda Factories Co., a cookie and ice-cream maker.
Businesses can't import raw materials or export finished goods. Since the blockade, more than 3,000 private-sector enterprises, including factories and small businesses, have closed, contributing to an unemployment rate of 44%, according to the United Nations Relief and Works Agency in Gaza.
Many of the businesses that have managed to stay open have turned to smugglers to bring in machines, spare parts and raw materials from Egypt, severing trade ties between Gaza and Israeli manufacturers and traders.
All this has bolstered Hamas, businessmen here and aid agencies say. Hamas exerts oversight over the tunnels and their operators. It has expanded its own public-sector payroll, earning local praise for creating new jobs. It has also extended economic tentacles into new businesses.
Yaser Alwadeya, chairman of Alwadeya Group, a 54-year-old trading and manufacturing conglomerate, calls the new economic reality here "the Hamas private sector." Before the blockade, his company made 171 different brands of food, including chips and candy. Some 60% of his products went to Israel or the West Bank.
Much of his manufacturing line was destroyed by Israeli airstrikes during the December 2008-January 2009 Gaza war, he says. Facilities that survived are now starved of basic raw materials like cocoa powder, reducing his product line to just 11 items. That includes ice cream sold in clear plastic bags, because, Mr. Alwadeya says, Israel won't allow in proper packaging.
He no longer exports anything, and he now employs 45 people, down from 276 before the blockade. "Where do you think they are?" asks Mr. Alwadeya of the employees he has had to fire. "Either on the streets or with Hamas."
Hamas denies any economic benefit from the blockade. "This is nonsense," says Ahmed Yousef, the deputy to Hamas's foreign minister. "How can sanctions help a government?"
Mark Regev, the spokesman for Israeli Prime Minister Benjamin Netanyahu, said Israel has boosted the amount of products it lets into the Gaza Strip by 20% over the last six months, a claim challenged by independent monitoring groups.
Israel applied the sanctions because of aggression by the government of the Gaza Strip against Israel, he says. Since the blockade was tightened in early 2009, after Israel's military offensive in Gaza, rocket attacks from the territory into Israel have fallen sharply. Israel has pointed to the drop in attacks as a sign its military action and blockade have been effective.
"In any sanctions regime, there are consequences," says Mr. Regev. Given Hamas's violent stance, he adds "is it fair to expect Israel to say 'business as usual?' "
As part of its blockade, Israel restricts cement imports into Gaza. Demand for construction material is high in the war-torn enclave of 1.5 million people.
In the last year, a series of small rock-crushing yards have sprouted across the territory. Concrete rubble and stones are broken into smaller rocks and then ground further to use in making low-quality cement.
At one of Gaza's biggest rock-breaking yards—2½ acres of dusty rubble mounds—contractor Rawhy al Geeg says he rents half his heavy equipment from the Hamas-controlled economics ministry. In exchange for the equipment, Hamas takes $2 of every $25 he gets from selling a ton of crushed rock to cement factories, he says.
Hamas also controls the tunneling business. The Hamas-controlled municipal government in the border town of Rafah charges each tunnel owner a fee of about $2,500 a year, according to tunnel owners. Hamas inspectors visit the tunnels to ensure contraband—alcohol, drugs and other illicit goods—aren't making their way in, tunnel operators say. Businessmen also say the government is now levying the equivalent of a customs tax on some items.
One business owner, a former ice-cream distributor in Rafah, says he brings in everything from chips and candy to refrigerators and cement through his half-mile tunnel. He turns over about two tons of cement a month to Hamas, he says, not as a tax per se, but to stay in the government's good graces.
the american bourgeoisie supporting palestinian sovereignty?!
honestly i think this is a huge step in the right direction. i mean, i know that the proletariat wont win yet but at least they will be on the road to palestinian sovereignty. economically and politically.
EDIT: basically, Ron Paul style foreign policy.
EDIT 2: i dont support ron paul btw.
GAZA CITY—Israel and Egypt began the blockade of the Gaza Strip three years ago in an effort to cripple Hamas, but the economic isolation has claimed a different victim: the territory's merchant class.
Western governments—including Washington—are clamoring for Israel to rethink its policy in the wake of last week's bloody seizure of a flotilla of activists attempting to reach Gaza's shore. Late last week, Israel signaled that it was considering ways of easing the flow of goods into Gaza.
Behind the Gaza Blockade
Israel defends the blockade as a way to prevent Hamas, the militant Palestinian group in charge here, from getting weapons. But Western officials, aid agencies and analysts have criticized the policy as a form of collective punishment that is doing little to weaken the group.
Hamas can get what it needs, including weapons and cash, via elaborate smuggling tunnels to Egypt. And Hamas's public resistance to the blockade boosts its popularity here.
The blockade has also decimated Gaza's private sector, key to weaning the territory from its dependence on imports and aid. The merchant class here has long provided a chunk of Gaza's employment, and it is one of the few sectors that fostered constructive contact with Israel, through trade.
"This is like a death penalty for us," says Mohammed Al Telbani, chief executive of Al Awda Factories Co., a cookie and ice-cream maker.
Businesses can't import raw materials or export finished goods. Since the blockade, more than 3,000 private-sector enterprises, including factories and small businesses, have closed, contributing to an unemployment rate of 44%, according to the United Nations Relief and Works Agency in Gaza.
Many of the businesses that have managed to stay open have turned to smugglers to bring in machines, spare parts and raw materials from Egypt, severing trade ties between Gaza and Israeli manufacturers and traders.
All this has bolstered Hamas, businessmen here and aid agencies say. Hamas exerts oversight over the tunnels and their operators. It has expanded its own public-sector payroll, earning local praise for creating new jobs. It has also extended economic tentacles into new businesses.
Yaser Alwadeya, chairman of Alwadeya Group, a 54-year-old trading and manufacturing conglomerate, calls the new economic reality here "the Hamas private sector." Before the blockade, his company made 171 different brands of food, including chips and candy. Some 60% of his products went to Israel or the West Bank.
Much of his manufacturing line was destroyed by Israeli airstrikes during the December 2008-January 2009 Gaza war, he says. Facilities that survived are now starved of basic raw materials like cocoa powder, reducing his product line to just 11 items. That includes ice cream sold in clear plastic bags, because, Mr. Alwadeya says, Israel won't allow in proper packaging.
He no longer exports anything, and he now employs 45 people, down from 276 before the blockade. "Where do you think they are?" asks Mr. Alwadeya of the employees he has had to fire. "Either on the streets or with Hamas."
Hamas denies any economic benefit from the blockade. "This is nonsense," says Ahmed Yousef, the deputy to Hamas's foreign minister. "How can sanctions help a government?"
Mark Regev, the spokesman for Israeli Prime Minister Benjamin Netanyahu, said Israel has boosted the amount of products it lets into the Gaza Strip by 20% over the last six months, a claim challenged by independent monitoring groups.
Israel applied the sanctions because of aggression by the government of the Gaza Strip against Israel, he says. Since the blockade was tightened in early 2009, after Israel's military offensive in Gaza, rocket attacks from the territory into Israel have fallen sharply. Israel has pointed to the drop in attacks as a sign its military action and blockade have been effective.
"In any sanctions regime, there are consequences," says Mr. Regev. Given Hamas's violent stance, he adds "is it fair to expect Israel to say 'business as usual?' "
As part of its blockade, Israel restricts cement imports into Gaza. Demand for construction material is high in the war-torn enclave of 1.5 million people.
In the last year, a series of small rock-crushing yards have sprouted across the territory. Concrete rubble and stones are broken into smaller rocks and then ground further to use in making low-quality cement.
At one of Gaza's biggest rock-breaking yards—2½ acres of dusty rubble mounds—contractor Rawhy al Geeg says he rents half his heavy equipment from the Hamas-controlled economics ministry. In exchange for the equipment, Hamas takes $2 of every $25 he gets from selling a ton of crushed rock to cement factories, he says.
Hamas also controls the tunneling business. The Hamas-controlled municipal government in the border town of Rafah charges each tunnel owner a fee of about $2,500 a year, according to tunnel owners. Hamas inspectors visit the tunnels to ensure contraband—alcohol, drugs and other illicit goods—aren't making their way in, tunnel operators say. Businessmen also say the government is now levying the equivalent of a customs tax on some items.
One business owner, a former ice-cream distributor in Rafah, says he brings in everything from chips and candy to refrigerators and cement through his half-mile tunnel. He turns over about two tons of cement a month to Hamas, he says, not as a tax per se, but to stay in the government's good graces.
the american bourgeoisie supporting palestinian sovereignty?!
honestly i think this is a huge step in the right direction. i mean, i know that the proletariat wont win yet but at least they will be on the road to palestinian sovereignty. economically and politically.
EDIT: basically, Ron Paul style foreign policy.
EDIT 2: i dont support ron paul btw.