Palestine's economy loosing blood

Published November 14th, 2000 - 02:00 GMT

A deep economic depression hangs over the Gaza Strip, where industry lacks material and workers are without employment because of the Israeli blockade in retaliation for the Palestinian uprising. Gaza's industrial zone looks like a ghost town. The pride of the local economy, it has seen 26 businesses close or operate on short time. 


The young clothing company Al-Bawwab is a typical example. Before the intifada, which started September 28, it was producing around 700 pairs of trousers per day. Today it struggles to reach 400. Like many Palestinian businesses, it receives its supplies in dribs and drabs. Two days a week delivery trucks are blocked from coming in from Israel, upon which Gaza depends for 85 percent of its imports. 


"It's better than at the start, when commercial traffic was completely blocked for three weeks," says company director Hussain al-Bawwab. But other problems have cropped up. As the population is stuck in Gaza, and has seen its income collapse, "it is harder and harder to recover our investment," Bawwab complains. "On the telephone, the Israelis keep on putting off payment dates, up to four or five months after delivery." 


Furthermore, the workforce has dropped from 100 to 65 and can no longer concentrate, quitting work at 4:00 p.m. instead of 8:00 p.m. "I am worried that Israeli soldiers are going to come at any moment," says one worker. The industrial zone is situated at the Karni crossing point, which has been a regular site for deadly clashes between Israeli troops and Palestinian demonstrators. 


The building sector is equally hard hit. "The Israelis don't let through more than 100 tons of cement a day, although our economy uses 300. "As a result, the price has risen from 320 shekels (nearly $80) a ton to 600 shekels, explains Sala Abdel Shafi, director of the Palestine Trade Center. 


Unlike raw materials, food is hardly affected by the blockade, no more than petrol, water or electricity, the supply of which depends on Israeli goodwill and has not been hit. The area is rich in citrus fruit, tomatoes, cucumbers, grapes, strawberries, dates and melons, and the problem now is one of over-production because of the slap on exports, with the result that prices have tumbled. 


The shops are still fairly well stocked, but with people not able to go to work in Israel, money is increasingly tight. So the low prices do not solve the problem of 'intifada joblessness'. Some 35,000 Palestinians who had been leaving Gaza each day to work in Israel have been left short by 160 shekels ($40) a day. 


In Gaza's industrial zone, a dozen or so workers just twiddle their thumbs. "Before the intifada, there were 350 workers building 11 new depots", explains Mohammed Abass, an architectural engineer with the largest local construction firm Peidco. Today, because of the lack of cement, gravel for concrete and tiles, building sites have stopped work just about everywhere, leaving rust to cover the steel bars of the reinforced concrete and making them unusable. 


Along with the problems of supply, those investors who had timidly dipped their toes back in the water here after the 1993 Oslo accords on Palestinian autonomy, have now headed out. The US firm Enron, which was to open the first Palestinian power station in November to enable Gaza to start reducing its dependence on Israel, has pulled out, and work there has stopped. 


But the most obvious sign of the effects of the intifada and ensuing blockade is the simply inactivity — streets filled with idle men passing the day astride sad-looking chairs. "The official unemployment rate was around 12 percent, now it is hitting 40 to 45," says trade center director Shafi. 


Taxi driver Mohammed describes the sad sight of a car park full of fine cars intended for shopping trips outside of Gaza. "Before, it was empty here," he recalls. "There was always someone to take across to Israel. Now, it's over. And the result — my income is a third of what it was. From around 1,000 kilometers (600 miles) per day, I am down to no more than 150," he complains. — (AFP, Gaza City) 


by Guillaume Bonnet 


© Agence France Presse 2000

© 2000 Mena Report (

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