Economic disobedience looms in Gaza

Gaza’s private sector is threatening to start acts of economic disobedience in a bid to pressure the Palestinian Authority and Israel into alleviating the economic crisis plaguing the enclave.

al-monitor A Palestinian security man stands outside the Kerem Shalom crossing, the main passage point for goods entering Gaza, after it was shut down by Israel after the Israeli air force destroyed a Hamas tunnel that passed below the crossing, in the southern Gaza Strip, Jan. 14, 2018. Photo by REUTERS/Ibraheem Abu Mustafa.

Apr 29, 2018

GAZA CITY, Gaza Strip — Private sector institutions in the Gaza Strip threatened April 23 to start acts of economic disobedience by closing commercial crossings and refusing to pay taxes to the Palestinian government authorities. The private sector institutions hope to put pressure on Israel to lift the blockade on Gaza in addition to pressuring the Palestinian Authority (PA) to cancel the sanctions imposed on the coastal enclave since April 2017, which culminated this month with the suspension of the salaries of public workers.

In a statement that Al-Monitor secured a copy of, the institutions said, “The Gaza Strip is on the verge of complete collapse in all its vital sectors. There is no longer any room for silence. Gaza is dying. The situation is crumbling down economically, socially and at the health level. The international projects have been disrupted, including projects by the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) as a result of the reduced US aid to Gaza as well as some municipal infrastructure projects. We requested an urgent meeting with President Mahmoud Abbas, but we have yet to receive a response.”

The statement continued that they have carried out several protests over the past months in a bid to convey messages to all parties, starting with Israel, the neighboring countries and the international communities as well as to the PA and Hamas. Their activities and calls fell on deaf ears.

The protest movements in Gaza started on Jan. 22 with a national strike, followed by the suspension of food entry through the Kerem Shalom crossing in the south of Gaza for an entire day on Jan. 28. This was in addition to other steps by these institutions to save Gaza’s economy. For instance, Ali al-Hayek, the chairman of the Palestinian Businessmen Association in Gaza, met with UN Middle East peace envoy Nikolay Mladenov to help "solve the basic problems of Gaza, such as electricity, unemployment and poverty."

Alaa al-Din al-Araj, the head of the Palestinian Contractors Union in Gaza, told Al-Monitor that the private institutions hoped to draw attention to the almost paralyzed economic and commercial situation in the coastal enclave. He expressed hope that the concerned parties will heed the warnings before these institutions carry out their threat of economic disobedience. He noted that the authorities are well-aware of the consequences of such a threat, mainly a complete economic shutdown. Araj also stressed that the goal is to put an end to the blockade and the sanctions that have affected every household in Gaza.

A Palestinian Central Bureau of Statistics report published April 14 shows that the poverty rate in the coastal strip has reached 53%.

Khalil Rizk, the head of the Federation of Palestinian Chambers of Commerce, Industry and Agriculture, told Al-Monitor that the federation has been in contact with the PA in an attempt to stop the punitive measures. He expressed hope that the private sector will succeed in pushing the authorities to take the necessary actions to prevent the collapse of Gaza’s economy.

Osama Nofal, the director general of the Planning and Policy Department at the Ministry of Economy in Gaza, stressed that Gaza is facing an “economics of war” should the private sector’s threat be carried out, which entails the closure of crossings, banning the entry of goods and consumables into Gaza, and calling upon all parties — i.e., Israel, the PA and officials in Gaza — to assume their responsibility and take action to prevent the economic collapse.

On April 24, 100 nongovernmental organizations (NGOs) in the Gaza Strip called on Abbas to disburse the salaries of public servants in Gaza and called on Israel to lift its siege on the Gaza Strip in order to stop what they deemed as “the rapid economic collapse plaguing the Gaza Strip.”

For his part, Mohamed Abu Jayyab, the editor-in-chief of the local Al-Eqtesadia newspaper, told Al-Monitor that the unprecedented steps that the private sector intends to take reflect the complete economic collapse in the Gaza Strip. He expected these steps to materialize given Israel's refusal to lift its siege and the PA’s refusal to lift the sanctions imposed on Gaza.

Also, he pointed out that the higher authorities in the PA, who made the decision to impose sanctions and withhold the salaries of public servants, are well-aware that the economy in the Gaza Strip relies on these salaries, and their goal is merely political as they want the Hamas movement to hand over Gaza to the government.

While Abu Jayyab said that the aim of the economic disobedience would be to draw international and regional attention to the Gazan economy, he ruled out that these steps would place pressure on Israel and the PA. The Gazan economy, he said, is no longer an important financial income for the PA given the collapse it is suffering from. This is evidenced by the fact that the number of trucks entering the Gaza Strip through the Kerem Shalom crossing has fallen to less than 350 trucks per day compared to 800-1,000 trucks per day in 2015 and 2016.

A report issued April 11 by the Gaza Chamber of Commerce and Industry showed a 15% decrease in Gaza’s revenues from the Kerem Shalom crossing in the first quarter of 2018 compared to the same period last year.

Mohsen Abu Ramadan, a member of the network of NGOs and an economic analyst, told Al-Monitor that the Gaza Strip cannot afford more economic shocks amid the depletion of cash, the cessation of vital projects and the heavy losses plaguing the economic sectors.

He pointed out that the PA provides $100 million in total to the Gaza Strip per month, $70 million of which is earmarked for the salaries of government employees. The absence of these funds this month paralyzed the financial cycle in Gaza’s markets and banks. He called on private sector institutions in the West Bank to support their counterparts in Gaza by taking steps to pressure the Palestinian officials to back down from the punitive measures against the Gaza Strip.

Continue reading this article by registering at no cost and get unlimited access to:
  • Al-Monitor Archives
  • The Week in Review
  • Exclusive Events
  • Invitation-only Briefings

More from  Palestine

Dahlan complicates Abbas' plans for Palestinian elections
Ahmad Melhem | Palestinian elections | Jan 23, 2021
Israeli settlers threaten Palestinian archaeology in historic town of Sebastia
Taghreed Ali | | Jan 24, 2021
Palestinian skeptics not yet sold on elections
Daoud Kuttab | Palestinian reconciliation | Jan 21, 2021
Israel provides Gaza with machines to extract water from air
Entsar Abu Jahal | Gaza | Jan 20, 2021