Gaza’s economy, March 2015. Confusing the facts

If you stand on a vantage point, near the Erez Crossing Post in Israel and then gaze over into Gaza, it is still possible to see streets of destruction in the northern part of the region. The war last year between the two sides left countless without homes, a woeful economy weakened further, and relief agencies screaming for extra resources which are drying up in the winter mud.

As far as UNRWA is concerned, only about 5% of all aid pledged is actually donated. And in the meantime, Israel is to blame. The regional superpower, whose guns caused the destruction and with a Prime Minister, Netanyahu, despised by Obama et al, the government in Jerusalem makes for an easy target of the verbal hate for those trying to help the Palestinian cause.

Of course Hamas had provoked Israel into a massive retaliation, having launched hundreds of missiles from Gaza earlier in 2014. Moving on from the war of words, key facts have emerged this week that demand us to consider an alternative understanding to what has caused the economic demise of Gaza.

1) The blockade of Gaza. While Egypt has maintained a complete blockade of Gaza for about 12 months, Israel continues to let in humanitarian aid. In fairness, nobody claims that this is enough, especially to rebuild the homes in a reasonable space of time.

However, I was struck by a recent BBC report, which clearly showed how Hamas is reconstructing its offensive tunnels against Israel. In other words, Hamas is yet again taking materials that arrived via Israel, which are designated for civilian use but are in short supply, and then they are using them for military purposes. What the BBC film in effect demonstrated was why the autocrats in Hamas are thrilled that Israel embraces the economic theory of free trade!

2) Power supplies. On an average day in Gaza, few people will receive more than 12 hours of electricity . According to Israeli military authorities:

Israel supplies 125 MW of electricity via 10 power lines. Egypt provides 32 MW, and the power plant in Gaza provides 60 MW. Currently, the power plant has the capacity to produce 80 MW, but is not operating at full capacity due to the PA’s lack of financial resources to buy fuel. In 2014, 62,520,470 liters of diesel fuel were transferred from Israel to Gaza via Kerem Shalom for use in the power plant. So far in 2015, 13,866,880 liters of fuel for the plant have been transferred. Plans to upgrade the abilities of the power plant, such as operating on natural gas instead of diesel fuel, and currently being investigated.

Now, we know that a Hamas rocket attack on Israel during the 2014 war cut the power line between Gaza and Ashkelon. And it is accepted that a Qatari grant to support the power plant in Gaza has been used up. What is not clear is why, despite such hardships, Egypt does not provide more support nor why the Hamas military remain able to manufacture new Kassam missiles.  The facts are at odds with established norms.

3) Water reserves. One of the true tragedies for Gaza has been the correlation between the Hamas investment in an offensive military infrastructure and the parallel destruction of the water levels in the region. Nothing, but nothing, has been done to preserve the precious few supplies left and which are in danger of becoming salinised permanently. Under the 1994 Oslo Accords, such tasks are the responsibility of the local government.

Ironically, the Ma’an News Agency in Ramallah reported this week that Israel is to double the amount of water it releases to the Gaza Strip. This is possible, because Israel is considered a world leader in building desalination plants, such as in Ashkelon and now has spare capacity.

So if the facts do not correspond to the ‘let’s accuse Israel game’, here is another misfit. Gazans are openly buying products made in Israel.

Various kinds of Israeli-made snacks, juices, soft drinks and biscuits were accumulated on the shelves and in large refrigerators at Metro mall and other supermarkets all over the Gaza Strip, while in the West Bank, the Palestinians had decided to boycott these products.

And one final idiosyncrasy: Contrast all the despair and poverty in Gaza to Rawabi, a brand new Palestinian city. Located west of Ramallah, the contractors have not shied away from using Israeli building products. The city is about to be connected to Israel’s key water reservoirs. Many of the first 450 families are under 50 in age. Bottom line – Rawabi shows what Gaza should have been and what it still could become…through cooperation and a willingness to accept Israel.

In the meantime? The Gaza economy is a ruin, fostering little hope for its people. The reasons for this disaster just do not reside with Jerusalem, nor Mr. Netanyahu, nor the Israeli army. As long as Hamas continues to divert core resources for its military needs, residents in Gaza are unlikely to confront the phenomenon of lasting economic growth.

About the Author
Michael Horesh is a recognised business coach and mentor, and has helped clients collectively to create millions in added value over the past decade. He has substantial understanding of the workings of the Israeli economy and the financial situation of the Palestinians, as well as an incisive way of looking at Middle East issues.
Related Topics
Related Posts