Israel Matzav

In Gaza, life is good, for now

Life is pretty good in Gaza right now believe it or not. Fuel is cheap, cement for building is abundant (don't believe that nonsense about it not getting in). Yes, things are going great in Gaza. Really.

The tunnels that snake under Gaza’s border with Egypt have multiplied so fast that supply sometimes exceeds demand. So stiff is commercial competition that tunnel-diggers complain that their work is no longer profitable. As a British parliamentary report recently noted, Israel officially allows Gaza to import only 73 of more than 4,000 items that are available in the strip. The rest is home-made—or acquired illicitly. For instance, cement, which cost 300 Israeli shekels ($80) a sack two years ago, has dropped almost tenfold in price, precipitating a spate of building for the first time since Israel’s attack a year ago reduced 4,000 houses to ruins. And eyewitnesses say that flashy 4x4 vehicles can actually drive through tunnels built from shipping containers.

Israel’s siege still causes misery. Yet some economists say the strip is growing faster than the West Bank run by Hamas’s rival Palestinian Authority (PA), albeit from a far lower base. The petrol pumped into Gaza by underground pipes and hoses from Egypt costs a third of what it does in Ramallah, the Palestinians’ West Bank capital, where Israel supplies it. Free health care is more widely available in Gaza. Imports travel faster through the tunnels than via Israel’s thickets of bureaucracy. The web of Israeli checkpoints that still impedes Palestinian movements and commerce on the West Bank is absent in Gaza.

As well as lower prices, Gazans benefit from civil-service payrolls. Several outfits pump cash into the strip’s economy: the local Hamas government; the UN, which employs 10,000 Gazans; and Salam Fayyad’s West Bank government, which is the largest employer of all. Payments to Hamas and its connected tunnel-operators boost the economy too. A car-dealer bringing in a new Hyundai saloon through the tunnels stands to make a profit of $13,000.

Above ground things look better, too. In the 14 months since the war ended, Hamas has swept up much of the wreckage. The Islamic University, bombed by Israel’s aircraft, sparkles again. New cafés have opened across Gaza City. Power cuts dog Gazan life, but Hamas profits from the taxes it collects on the fuel that powers a noisy surfeit of generators. America recently imposed sanctions on the main Hamas-owned bank, but the informal hawala banking system that straddles the border keeps the strip solvent. Whereas Gaza was once plugged into Western economies, the siege has forced it to find other financial moorings. So confident is Hamas that it can survive without the PA’s banking system that it has just, for the first time, sent its police to raid a bank that had obeyed a PA order preventing a Hamas-run charity from having access to deposits.

So what could go wrong?

Hamas’s success in keeping Gaza’s economy and administration going testifies to its resilience. But old-timers speak of a familiar cycle. When Yasser Arafat returned to Gaza in 1994 to set up the Palestinian Authority, he brought a sense of order, security and hope. But his wayward henchmen began to spar over spoils, igniting feuds between rival security forces. Israel’s counter-attack against the intifada (uprising) that broke out in 2000 pulverised the PA’s security apparatus and punctured central authority. A year after Israel’s assault on Gaza, some in the territory fear a similar cycle may soon ensue.

Just give them a 'state' and everything will be solved - right?

posted by Carl in Jerusalem @ 4:40 AM