Media coverage
Calcalist · 2010-11-01
Dani Rubinstein's weekly column on the Palestinian economy asks whether the growth the World Bank recorded in Gaza after Israel eased the entry of goods following the flotilla reflects real improvement. Shaban calls it an illusion — the economic siege continues; Gaza needs more, "but not what Israel lets us bring in… how much chocolate can one eat?" He explains that factories have reopened only partially for lack of raw materials and equipment, and that owners receive international funding they cannot use to buy machinery.
Dani Rubinstein's weekly column on the Palestinian economy asks whether the growth the World Bank recorded in Gaza after Israel eased the entry of goods following the flotilla reflects real improvement. Shaban calls it an illusion — the economic siege continues; Gaza needs more, "but not what Israe…
## The removal of the economic blockade over the Strip has led to there being no shortage of consumer goods, but the economic improvement is not arriving
More than four months have passed since the Government of Israel announced easings in the passage of goods into Gaza. The Israeli announcement from last June was published following the Turkish flotilla to Gaza, and in practical terms meant the removal of the economic blockade over the Strip. The change in Israeli policy was fundamental: instead of publishing the list of products permitted to enter Gaza, a list of products prohibited from entry was published. In other words, anything not appearing on the list may be brought into Gaza. It is, of course, forbidden to bring into the Strip items of a military nature, as well as civilian items that can be put to dual use (such as agricultural fertilizers that can be used to manufacture explosives, or lathes and optical equipment). It is also forbidden to bring construction materials into Gaza, except for materials intended for special projects of international organizations (UN schools, for example).
The economic change in Gaza was immediately evident. World Bank reports published about a month ago pointed to a dramatic rise in GDP, around 16%, indeed impressive growth. The improvement in Gaza stems from the entry of dozens of new products into the Strip - but can this be regarded as economic improvement? “This is an illusion; the economic blockade on Gaza continues,” said Omar Shaban, a resident of Gaza, one of the leading Palestinian economists, who visited East Jerusalem last week. His words sound puzzling in light of the marked increase in cargo entering Gaza, almost all of it passing through the expanded and renovated Kerem Shalom Crossing. Whereas before Hamas seized power about 700 consignments (trucks) entered Gaza each day, during the blockade only about 70 trucks passed through. Today Israel allows about 250 trucks to enter Gaza each day, but it turns out that the Palestinians are not making full use of the quota. They are transferring less, about 200 trucks a day. Why do they not need more?
“They do need more - but not what Israel allows us to transfer,” says Shaban. “How much chocolate can one already eat?”
The point is clear: for there to be even a slight economic improvement in Gaza, it is necessary to bring into the Strip construction materials, machinery and spare parts for workshops and industry, and raw materials. A small amount of these does indeed enter the Strip, but not to a degree that permits real economic activity. According to a survey by the Palestinian Trade Center, before the blockade nearly 4,000 workshops and industrial establishments operated in Gaza in fields such as clothing, furniture, and processed food. During the blockade almost all of them closed (about 100 remained operating). Over the past year, work has resumed in more than 1,000 workshops and factories - but most of them are operating only at partial levels of their full output. According to Shaban, factory owners receive financial aid from international institutions, but they have nothing to do with the money. They cannot buy equipment and machinery, so they simply waste the money.
The economic picture of what is happening in Gaza is therefore clear: the removal of the blockade has led to there being almost no shortage of consumer goods. There has also been some improvement in the electricity and energy sector. Whereas in the recent past there were about ten hours of scheduled power cuts every day, now the power cuts amount to only about five hours on average per day. A few days ago Israel approved the entry into Gaza of two electrical transformers for the Gaza power plant that will increase electricity production - but all this is far from restoring Gaza to normal economic activity, to the production and marketing of goods as before. In other words, it is difficult to speak of the removal of the economic blockade on Gaza, and it is more accurate to define this as a change in blockade policy. Yoav Stern, head of the economic department at the Peres Center for Peace, believes that the continuation of current Israeli policy is an invitation to the next flotilla.
Text © Calcalist — archived here with attribution to the source. — Machine translation for archival reference. — Original source