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The Economic Destruction of Gaza

Thursday, 10 April 2014 00:00 By Ali Abunimah, Haymarket Books | Book Excerpt

Ali Abunimah. (Photo: Ali Abunimah)Ali Abunimah. (Photo: Ali Abunimah)In an incisive analysis of the plight of Palestinians, journalist Ali Abunimah offers lucid insight into a people denied a national identity. Get this book from Truthout now by clicking here.

The following excerpt focuses on how the Gaza Strip, decimated by attacks and a collective punishment imposed boycott by Israel, is becoming increasingly an economic appendage of Israel. In the process, the independent business and farming structure of Gaza is collapsing:

The Battle for Justice in Palestine

Given what I knew about the effects of the siege and the economic situation in Gaza, I was struck when I visited at how supermarket shelves in the territory are stocked with Israeli goods, priced beyond the reach of many impoverished families. This is the result of a strategy more radical than anything seen in the West Bank to destroy Palestinians' economic self-sufficiency while directly benefitting Israel. Gaza is at the leading edge of what Harvard scholar Sara Roy calls Israel's "deliberate, considered and purposeful" effort to transform the Palestinian economy from "a captive economy restricted to fluctuating levels of growth (at best) but still possessed of the capacity to produce and innovate (within limitations), to an economy increasingly deprived of that capacity." During Operation Cast Lead, for instance, the Israeli forces invading Gaza destroyed the chicken farms of Sameh Sawafeary and his family in the Zaytoun area. Over several days in early January 2009, the UN-commissioned Goldstone Report records that Sawafeary and other witnesses hid in terror as they watched "Israeli armoured bulldozers systematically destroy land, crops, chickens and farm infrastructure." In all, thirty-one thousand of Sawafeary's chickens were killed. He estimated that a hundred thousand chickens had been killed at other farms. This widespread destruction was confirmed by UN satellite imagery. In discussing the army's assault on the farms in the Zaytoun area, the Goldstone Report states: "The systematic destruction along with the large numbers of killings of civilians suggest premeditation and a high level of planning."152 It finds that "the Sawafeary chicken farms, the 31,000 chickens and the plant and material necessary for the business were systematically and deliberately destroyed, and that this constituted a deliberate act of wanton destruction not justified by any military necessity."

The Israelis could offer no explanation that contradicted these factual findings. But where there was no "military necessity," there was certainly a commercial opportunity. Sawafeary told the UN investigators that he and his family had supplied approximately 35 percent of the eggs on the market in Gaza. Egg prices soared due to the large number of chickens Israel destroyed; Gaza's stores are now full of frozen chickens supplied by Israeli firms.

Israel has also repeatedly destroyed dairy processing plants (Israeli yogurt is a big seller in Gaza) and on January 4, 2009, bombed the El-Bader flour mill—the last one still operating—destroying it completely.154 Again, UN investigators found no "military necessity," but as the Goldstone Report states, the "consequences of the strike on the flour mill were significant...The population of Gaza is now more dependent on the Israeli authorities' granting permission for flour and bread to enter the Gaza Strip." The family that owned the El-Bader mill also ran a tomato-canning factory and a diaper factory, both of which had closed down before the attack because Israel would not allow empty cans and other needed raw materials into Gaza.

The fates of these and hundreds of other shuttered Gaza businesses illustrate that whatever economic destruction Israel could not achieve with the blockade, it finished off with air strikes. Indeed, such is the chilling meticulousness of Israeli planning that in January 2008, almost a year before the invasion of Gaza, the Israeli defense ministry prepared a document detailing the minimum number of calories that Gaza residents would be permitted to consume, according to demographic data such as sex and age. The defense ministry concluded that 106 truckloads of food per day would be just enough to meet a level of "nutrition that is sufficient for subsistence without the development of malnutrition." The military's analysis, published after a three-and-a-half-year court battle waged by the Israeli monitoring group Gisha, includes detailed tables of how much domestic food production existed in Gaza before the invasion. Israeli military planners were very familiar with how many chickens laid how many eggs and recommended setting a "minimum bar" for the quantity of agricultural inputs, including eggs for breeding allowed into Gaza. The military planners were also fully aware of the damaging effects of Israel's restrictions on imports of supplies and of the prohibition on exporting goods out of Gaza. The defense ministry calculated, for instance, that Gaza's production of fruits and vegetables would decline from a thousand tons per day to five hundred tons within a few months, meeting only 30 percent of the territory's needs. Gisha calculated that between 2007 and 2010, the amount of food Israel allowed into Gaza often fell far short of the minimum the defense ministry had set.

While Israel eased restrictions on food imports in 2010, the main impact of the siege never disappeared: destruction of productive capacity, poverty, unemployment, isolation, and dependence. It should be recalled whenever Israel boasts, as it often does, about how many hundreds of truckloads of supplies it allows into Gaza on any given day that much of what comes in are Israeli consumer goods, profiting Israeli companies. Even the food supplies bought by UN agencies for the majority of Palestinians in Gaza who rely on humanitarian assistance are purchased predominantly from Israeli companies and paid for with international aid money—another direct benefit to Israel. Overall, the value of Israeli exports to the "Palestinian Authority"— the West Bank and Gaza Strip—grew from just over two billion dollars in 2006 to $3.6 billion in 2011. This puts the captive Palestinians among Israel's top ten export destinations, ahead of the United Kingdom, Germany, France, India, Japan, and China. This bonanza, in the words of Shir Hever, allows Israel's government and various Israeli companies to "reap the profits, while the international community pays the bill. The Palestinians' desperate need is turned into a lever to promote the prosperity of their occupiers."

Meanwhile, restrictions on raw materials and so-called "dual-use" items remain in place, leaving much of Gaza's productive capacity and workforce idle. A stark indicator of what Israel has done to Gaza's economy is the number of truckloads of exports it allows out from those farms or factories that can still produce even under siege. In 2000, before the Second Intifada, exports from Gaza peaked at more than fifteen thousand truckloads in a year, with hundreds of thousands of tons of fresh fruit and cut flowers being shipped to Israel, the West Bank, and markets across Europe. Exports declined as the economy plunged, hovering at just over 9,300 truckloads by 2005. In 2006 and 2007, the years of Hamas's election and the subsequent struggle with Abbas's Fatah faction, only five thousand trucks left Gaza each year. But that was still far more than what has been allowed since the tightened blockade began: from 2008 to 2012, Israel has permitted an average of just 162 truckloads of exports out of Gaza per year. That's about a dozen trucks per month.

The destruction Israel has wrought on Gaza's economy is not incidental to its "security" policies; it has been a deliberate goal. As Sara Roy points out, Israel has "explicitly referred to its intensified closure (or siege) policy in Gaza as a form of 'economic warfare.'" Israeli officials even argued that "damaging the enemy's economy is in and of itself a legitimate means in warfare and a relevant consideration even while deciding to allow the entry of relief consignments." "Israel's goal is no longer simply Gaza's isolation and disablement," Roy states, "but its abstraction and deletion. Israeli policy has shifted from addressing the economy in some manner (whether positively or negatively) to dispensing with the concept of an economy altogether." Israel now treats the economy in Gaza as "a dispensable luxury"; its impact has been the "near total collapse" of the private sector, the traditional engine of economic growth there.

Palestinians in Gaza have found creative ways around the formidable obstacles. One of the more spectacular sites I've visited was the tunnels dug deep under the border between Egypt and Gaza. My companions and I stood on the wooden planks of a large, circular platform, big enough to park two cars. The operator pressed the button and a warning horn sounded. A few seconds later the platform began to descend down the deep cement-lined shaft, guided by steel rails, cables and motors on two sides. In less than a minute we were at the bottom of the shaft, some thirty meters below, the bright sky a mere circle high above. The air was cool and clammy and got cooler still as we walked off the platform into the tunnel mouth, which was wide enough for one car and felt perfectly secure, reinforced by steel I-beams and lit with electric lamps. This was only one of hundreds of tunnels serving as lifelines, although the vast majority were much smaller.

The goods I saw entering Gaza included gravel, steel rebar, bags of cement, and bricks for construction. Some tunnels brought in gasoline, pumped through hoses and then discharged into large plastic water tanks to be transported all over Gaza. Electric winches suspended over deep shafts hauled up large canvas baskets of gravel. Then workers slid the baskets sideways along an overhead rail and dumped the gravel into pits below. Trucks rolled down ramps into the pits to load up and take the cargo away. It was all cleverly engineered for maximum efficiency. Other essentials brought in through the tunnels include food, generators to help cope with the blackouts that still leave Gaza dark for eight to twelve hours per day, and the Chinese-made moto-taxis that are replacing many of Gaza's ubiquitous donkey carts to transport goods and people. This underground economy has helped Gaza remain resilient, but at a desperately high price: since 2006, at least 232 Palestinian workers have died in the tunnels and hundreds more have been injured in what some call "graveyards for the living."165 Nine of the dead were children. At least twenty of the workers were killed as a result of Israeli airstrikes intended to collapse the tunnels, but the poverty and unemployment in Gaza ensure that the lure of paid work, even under such dangerous conditions, remains irresistible. I visited the mouth of a tunnel that had collapsed just a day earlier, killing nineteenyear- old Hamada Abu Shalouf from Rafah.

Although Hamas-controlled authorities have regulated the tunnels to some extent on the Gaza side, including requiring tunnel owners to pay compensation for deaths and injuries, the long-term consequences of the move from a formal to an underground economy are likely to include further decay of Gaza's economy while significant parts of it shift into the hands of unaccountable, clandestine organizations. The political motivations of the siege are underscored by the tacit support the blockade has always received from the Western-supported, Fatah-controlled Palestinian Authority leadership in Ramallah, who bet that misery would help bring down Hamas and return them to power in Gaza. In meetings with Israeli and American officials (the content of which was leaked as part of the Palestine Papers), PA officials repeatedly complained that not enough was being done to keep Gaza isolated. An exasperated PA chief negotiator Saeb Erekat reported in October 2009 to US presidential envoy George Mitchell how he had chided the Israelis for not doing enough to enforce the siege and complained that US aid to Egypt to build an underground steel wall to thwart the tunnels was having no effect: "It's business as usual in the tunnels—the Hamas economy." But the tunnels still leave Gaza's economy vulnerable to political shocks: following the July 3, 2013, military coup in Egypt, the Egyptian army renewed with unprecedented ferocity its periodic campaign to destroy the tunnels to enforce the siege, including flooding them with sewage. Within weeks, the volume of building materials and affordable food entering Gaza through the tunnels had plummeted by 80 percent, leading to an immediate spike in prices and a sharp slowdown in construction, with an estimated loss of thirty thousand jobs.

All documentation can be found footnoted in the back of "The Battle for Justice in Palestine."

Ali Abunimah

Ali Abunimah is the author of One Country: A Bold Proposal to End the Israeli Palestinian Impasse, and co-founder and director of the widely acclaimed publication The Electronic Intifada. Based in the United States, he has written hundreds of articles and been an active part of the movement for justice in Palestine for 20 years. He is the recipient of a 2013 Lannan Cultural Freedom Fellowship.


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The Economic Destruction of Gaza

Thursday, 10 April 2014 00:00 By Ali Abunimah, Haymarket Books | Book Excerpt

Ali Abunimah. (Photo: Ali Abunimah)Ali Abunimah. (Photo: Ali Abunimah)In an incisive analysis of the plight of Palestinians, journalist Ali Abunimah offers lucid insight into a people denied a national identity. Get this book from Truthout now by clicking here.

The following excerpt focuses on how the Gaza Strip, decimated by attacks and a collective punishment imposed boycott by Israel, is becoming increasingly an economic appendage of Israel. In the process, the independent business and farming structure of Gaza is collapsing:

The Battle for Justice in Palestine

Given what I knew about the effects of the siege and the economic situation in Gaza, I was struck when I visited at how supermarket shelves in the territory are stocked with Israeli goods, priced beyond the reach of many impoverished families. This is the result of a strategy more radical than anything seen in the West Bank to destroy Palestinians' economic self-sufficiency while directly benefitting Israel. Gaza is at the leading edge of what Harvard scholar Sara Roy calls Israel's "deliberate, considered and purposeful" effort to transform the Palestinian economy from "a captive economy restricted to fluctuating levels of growth (at best) but still possessed of the capacity to produce and innovate (within limitations), to an economy increasingly deprived of that capacity." During Operation Cast Lead, for instance, the Israeli forces invading Gaza destroyed the chicken farms of Sameh Sawafeary and his family in the Zaytoun area. Over several days in early January 2009, the UN-commissioned Goldstone Report records that Sawafeary and other witnesses hid in terror as they watched "Israeli armoured bulldozers systematically destroy land, crops, chickens and farm infrastructure." In all, thirty-one thousand of Sawafeary's chickens were killed. He estimated that a hundred thousand chickens had been killed at other farms. This widespread destruction was confirmed by UN satellite imagery. In discussing the army's assault on the farms in the Zaytoun area, the Goldstone Report states: "The systematic destruction along with the large numbers of killings of civilians suggest premeditation and a high level of planning."152 It finds that "the Sawafeary chicken farms, the 31,000 chickens and the plant and material necessary for the business were systematically and deliberately destroyed, and that this constituted a deliberate act of wanton destruction not justified by any military necessity."

The Israelis could offer no explanation that contradicted these factual findings. But where there was no "military necessity," there was certainly a commercial opportunity. Sawafeary told the UN investigators that he and his family had supplied approximately 35 percent of the eggs on the market in Gaza. Egg prices soared due to the large number of chickens Israel destroyed; Gaza's stores are now full of frozen chickens supplied by Israeli firms.

Israel has also repeatedly destroyed dairy processing plants (Israeli yogurt is a big seller in Gaza) and on January 4, 2009, bombed the El-Bader flour mill—the last one still operating—destroying it completely.154 Again, UN investigators found no "military necessity," but as the Goldstone Report states, the "consequences of the strike on the flour mill were significant...The population of Gaza is now more dependent on the Israeli authorities' granting permission for flour and bread to enter the Gaza Strip." The family that owned the El-Bader mill also ran a tomato-canning factory and a diaper factory, both of which had closed down before the attack because Israel would not allow empty cans and other needed raw materials into Gaza.

The fates of these and hundreds of other shuttered Gaza businesses illustrate that whatever economic destruction Israel could not achieve with the blockade, it finished off with air strikes. Indeed, such is the chilling meticulousness of Israeli planning that in January 2008, almost a year before the invasion of Gaza, the Israeli defense ministry prepared a document detailing the minimum number of calories that Gaza residents would be permitted to consume, according to demographic data such as sex and age. The defense ministry concluded that 106 truckloads of food per day would be just enough to meet a level of "nutrition that is sufficient for subsistence without the development of malnutrition." The military's analysis, published after a three-and-a-half-year court battle waged by the Israeli monitoring group Gisha, includes detailed tables of how much domestic food production existed in Gaza before the invasion. Israeli military planners were very familiar with how many chickens laid how many eggs and recommended setting a "minimum bar" for the quantity of agricultural inputs, including eggs for breeding allowed into Gaza. The military planners were also fully aware of the damaging effects of Israel's restrictions on imports of supplies and of the prohibition on exporting goods out of Gaza. The defense ministry calculated, for instance, that Gaza's production of fruits and vegetables would decline from a thousand tons per day to five hundred tons within a few months, meeting only 30 percent of the territory's needs. Gisha calculated that between 2007 and 2010, the amount of food Israel allowed into Gaza often fell far short of the minimum the defense ministry had set.

While Israel eased restrictions on food imports in 2010, the main impact of the siege never disappeared: destruction of productive capacity, poverty, unemployment, isolation, and dependence. It should be recalled whenever Israel boasts, as it often does, about how many hundreds of truckloads of supplies it allows into Gaza on any given day that much of what comes in are Israeli consumer goods, profiting Israeli companies. Even the food supplies bought by UN agencies for the majority of Palestinians in Gaza who rely on humanitarian assistance are purchased predominantly from Israeli companies and paid for with international aid money—another direct benefit to Israel. Overall, the value of Israeli exports to the "Palestinian Authority"— the West Bank and Gaza Strip—grew from just over two billion dollars in 2006 to $3.6 billion in 2011. This puts the captive Palestinians among Israel's top ten export destinations, ahead of the United Kingdom, Germany, France, India, Japan, and China. This bonanza, in the words of Shir Hever, allows Israel's government and various Israeli companies to "reap the profits, while the international community pays the bill. The Palestinians' desperate need is turned into a lever to promote the prosperity of their occupiers."

Meanwhile, restrictions on raw materials and so-called "dual-use" items remain in place, leaving much of Gaza's productive capacity and workforce idle. A stark indicator of what Israel has done to Gaza's economy is the number of truckloads of exports it allows out from those farms or factories that can still produce even under siege. In 2000, before the Second Intifada, exports from Gaza peaked at more than fifteen thousand truckloads in a year, with hundreds of thousands of tons of fresh fruit and cut flowers being shipped to Israel, the West Bank, and markets across Europe. Exports declined as the economy plunged, hovering at just over 9,300 truckloads by 2005. In 2006 and 2007, the years of Hamas's election and the subsequent struggle with Abbas's Fatah faction, only five thousand trucks left Gaza each year. But that was still far more than what has been allowed since the tightened blockade began: from 2008 to 2012, Israel has permitted an average of just 162 truckloads of exports out of Gaza per year. That's about a dozen trucks per month.

The destruction Israel has wrought on Gaza's economy is not incidental to its "security" policies; it has been a deliberate goal. As Sara Roy points out, Israel has "explicitly referred to its intensified closure (or siege) policy in Gaza as a form of 'economic warfare.'" Israeli officials even argued that "damaging the enemy's economy is in and of itself a legitimate means in warfare and a relevant consideration even while deciding to allow the entry of relief consignments." "Israel's goal is no longer simply Gaza's isolation and disablement," Roy states, "but its abstraction and deletion. Israeli policy has shifted from addressing the economy in some manner (whether positively or negatively) to dispensing with the concept of an economy altogether." Israel now treats the economy in Gaza as "a dispensable luxury"; its impact has been the "near total collapse" of the private sector, the traditional engine of economic growth there.

Palestinians in Gaza have found creative ways around the formidable obstacles. One of the more spectacular sites I've visited was the tunnels dug deep under the border between Egypt and Gaza. My companions and I stood on the wooden planks of a large, circular platform, big enough to park two cars. The operator pressed the button and a warning horn sounded. A few seconds later the platform began to descend down the deep cement-lined shaft, guided by steel rails, cables and motors on two sides. In less than a minute we were at the bottom of the shaft, some thirty meters below, the bright sky a mere circle high above. The air was cool and clammy and got cooler still as we walked off the platform into the tunnel mouth, which was wide enough for one car and felt perfectly secure, reinforced by steel I-beams and lit with electric lamps. This was only one of hundreds of tunnels serving as lifelines, although the vast majority were much smaller.

The goods I saw entering Gaza included gravel, steel rebar, bags of cement, and bricks for construction. Some tunnels brought in gasoline, pumped through hoses and then discharged into large plastic water tanks to be transported all over Gaza. Electric winches suspended over deep shafts hauled up large canvas baskets of gravel. Then workers slid the baskets sideways along an overhead rail and dumped the gravel into pits below. Trucks rolled down ramps into the pits to load up and take the cargo away. It was all cleverly engineered for maximum efficiency. Other essentials brought in through the tunnels include food, generators to help cope with the blackouts that still leave Gaza dark for eight to twelve hours per day, and the Chinese-made moto-taxis that are replacing many of Gaza's ubiquitous donkey carts to transport goods and people. This underground economy has helped Gaza remain resilient, but at a desperately high price: since 2006, at least 232 Palestinian workers have died in the tunnels and hundreds more have been injured in what some call "graveyards for the living."165 Nine of the dead were children. At least twenty of the workers were killed as a result of Israeli airstrikes intended to collapse the tunnels, but the poverty and unemployment in Gaza ensure that the lure of paid work, even under such dangerous conditions, remains irresistible. I visited the mouth of a tunnel that had collapsed just a day earlier, killing nineteenyear- old Hamada Abu Shalouf from Rafah.

Although Hamas-controlled authorities have regulated the tunnels to some extent on the Gaza side, including requiring tunnel owners to pay compensation for deaths and injuries, the long-term consequences of the move from a formal to an underground economy are likely to include further decay of Gaza's economy while significant parts of it shift into the hands of unaccountable, clandestine organizations. The political motivations of the siege are underscored by the tacit support the blockade has always received from the Western-supported, Fatah-controlled Palestinian Authority leadership in Ramallah, who bet that misery would help bring down Hamas and return them to power in Gaza. In meetings with Israeli and American officials (the content of which was leaked as part of the Palestine Papers), PA officials repeatedly complained that not enough was being done to keep Gaza isolated. An exasperated PA chief negotiator Saeb Erekat reported in October 2009 to US presidential envoy George Mitchell how he had chided the Israelis for not doing enough to enforce the siege and complained that US aid to Egypt to build an underground steel wall to thwart the tunnels was having no effect: "It's business as usual in the tunnels—the Hamas economy." But the tunnels still leave Gaza's economy vulnerable to political shocks: following the July 3, 2013, military coup in Egypt, the Egyptian army renewed with unprecedented ferocity its periodic campaign to destroy the tunnels to enforce the siege, including flooding them with sewage. Within weeks, the volume of building materials and affordable food entering Gaza through the tunnels had plummeted by 80 percent, leading to an immediate spike in prices and a sharp slowdown in construction, with an estimated loss of thirty thousand jobs.

All documentation can be found footnoted in the back of "The Battle for Justice in Palestine."

Ali Abunimah

Ali Abunimah is the author of One Country: A Bold Proposal to End the Israeli Palestinian Impasse, and co-founder and director of the widely acclaimed publication The Electronic Intifada. Based in the United States, he has written hundreds of articles and been an active part of the movement for justice in Palestine for 20 years. He is the recipient of a 2013 Lannan Cultural Freedom Fellowship.


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