Gaza Bustling Under Hamas Despite Economic Isolation

Israel's attempt to economically isolate the Gaza Strip with the aim of weakening Hamas has so far strengthened the organization. Danny Rubenstein reports that while there is no industry there and the residents live off aid money, the area is bustling with construction and Hamas is in control, enforcing law and order, building roads and upgrading utilities.

al-monitor A Palestinian labourer carries wood planks as he works on a United Nations-funded construction site in Rafah in the southern Gaza Strip December 20, 2011. Photo by REUTERS/Ibraheem Abu Mustafa.

Topics covered

israel, isolation, hamas, gaza strip, gaza, economic, blockade

May 31, 2012

The isolation policy applied by Israel, separating the Gaza Strip from the West Bank both economically and socially, is designed to weaken and possibly even bring down the Hamas government.

The isolation is primarily economic. There is a ban on exports of industrial products (to the extent that they are manufactured) and agricultural produce from the Gaza Strip. In the absence of exports, a highly irregular economic system has evolved in Gaza. On the one hand, imports to Gaza from Israel are virtually free. Goods and raw materials whose importing to Gaza is banned by Israel are smuggled through the tunnels. The limitations on the passage of people in and out of the Gaza Strip are, for the most part, no longer in force since the change of regime in Egypt and the opening of the Rafah border crossing to the passage of people, although not of goods.

On the other hand, exports from Gaza are prohibited. The option of exporting through the tunnels, via the Sinai Peninsula, is not really feasible or economically viable, as 85% of all exports from Gaza have been traditionally destined for the West Bank and Israel.

Gaza is bustling with construction activity, but there is virtually no production

Mukhaimar Abu Sa'da, a professor of political science in Gaza's al-Azhar University, told me last week that on the whole, life in the Gaza Strip was not too bad. True, 83% of the industrial plants have been shut down or are running in a limited-output mode and unemployment rate is as high as 30%. However, about 200 thousand wage earners in Gaza can count on a regular monthly income. Some of them are paid by the Palestinian government in Ramallah, while others are on the payroll of the Hamas government. The wages of many others are paid by the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) and other relief organizations.

In other words, there is virtually no production in the Gaza Strip and the local residents are living off aid money that enables basic subsistence, not much more. At the same time, the area is bustling with construction activity; the Hamas is in control, enforcing law and order, and even building roads and upgrading public utilities.

The isolation policy obstructs economic growth

From time to time, Israel allows some limited exports from the Gaza Strip. In addition to exports of strawberries and flowers, Israel has recently let two trucks loaded with date-based energy bars to leave for the West Bank. Some exports of tomatoes to Saudi Arabia have also been approved. And a couple of days ago, for the first time in five years, a shipment of clothing made by Kamal Ashour's company for the British market left Gaza aboard a truck headed for the Ashdod port. Another truck loaded with furniture left Gaza a few weeks ago on its way to an exhibition in Jordan via Israel.

The question is, where does the isolation policy lead? Obviously, it blocks any possibility of economic development in the Gaza Strip — a frustrating situation for the local population, especially the youth who cannot find work. And it is doubtful whether it has any advantage politically. The Hamas seniors in Gaza seem self-assured recently, having foiled the reconciliation agreement between exiled Hamas leader Khaled Meshaal and President of the Palestinian National Authority Abu Mazen in Qatar three months ago. On the bottom line, judging by the results so far, it appears that, rather than weakening Hamas, the isolation policy employed by Israel has in fact strengthened the organization.

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