Gaza’s hidden boom boosted by 1,000 tunnels, Israeli cash
Foreign visitors to the Gaza Strip, most recently UN Secretary Ban Ki-moon and European Union foreign executive Catherine Ashton, depict its 1.2 million Palestinian inhabitants with great pathos as living in wretched conditions, starving and homeless – and all because of the Israeli embargo. In fact, a new Egyptian report, to which debkafile's Middle East sources have had access, shows that the one-day observers were hoodwinked or willing to be misled.
The Egyptian authors count more than 1,000 tunnels, some broad enough for loaded trucks, through which a large array of basic and luxury goods flow to the markets and shops of the Palestinian enclave – and have done ever since the end of 2009. The latest hit in Gaza is the new Gold Market, which has been crowded with shoppers for trinkets, ornaments and glittering gifts since it opened.
Yet Ashton, after a day in Gaza, reported: "Moving from Israel into Gaza, you go from a 21st century country to a landscape that has been disfigured. Rebuilding is impossible while Israel blocks goods from entering. People have little more at their disposal than the ruins that surround them."
And the UN secretary never tires of demanding that Israeli lift its embargo, as though the Gaza Strip's plight was unmatched anywhere in the world.
The stage props they witnessed in their fleeting visits were bolstered by the accounts of local UN Works and Relief Agency personnel who have a vested interested in presenting a picture of profound poverty – both to stimulate donations and to justify their jobs. They and the Hamas rulers share an interest in keeping this distorted impression before the world media.
The new Egyptian report finally exposes this fraudulent picture with hard facts and figures.
For instance, the oversupply of building materials has in fact depressed the market price per ton of iron from $1066 in 2008 to $533 in March 2010; cement has dropped even more steeply, from just over a thousand dollars then to $240 today, because of an overabundance.
If the buildings damaged in Israel's operation Cast Lead in 2009 have not been rebuilt, it is not because of the ineffectual Israel embargo.
In fact, the Hamas rulers make a tidy profit from embargo: They impose duty on every item of goods "imported" via the tunnels which honeycomb the Egyptian-Gazan border area. This revenue not only keeps them in silk ties but also in power.
Their other main source of income is, unbelievably, the 200 million Israeli shekels (app. $50 m), Israel deposits in cash in Gazan banks every month. This income – which provides the oxygen for keeping Gaza's economy and financial sector afloat – is in fact spent on building more and better tunnels for more high-end goods, in order to further boost Hamas revenues – as well as weapons, which are then used for attacking Israel. The Strip is awash with every type of hardware.
Keeping Gaza's banks supplied with Israeli currency, an Israeli concession to foreign demand, fuels one of the craziest and destructive cyclical processes ever seen even in this irrational region.
Some of those shekels are spent to upgrade the underground conduits with concrete walls and efficient lighting to resemble European highway tunnels, through which trucks and other vehicles flow. The "tunnel industry" – as it has become – employs 20-25,000 workers.
Because the markets of Gaza are swamped with an enormous variety of cheap luxury items, unavailable in many other Middle East countries, the tunnel managers have recently slowed down the traffic to support prices. As a result, Hamas' revenue from "import duty" declined by 60 percent in the first two months of 2010.
There are certainly poor people in Gaza, like anywhere else – but the obvious causes, which anywhere else would be first assigned to poor government and social malaise, never seem to occur to observers who look at this reality through the prism of their agendas.