Gaza economy: Squeezed by siege, weakened by war

Part two of a two-part series looking at life in Gaza. The first segment focused on the difficult circumstances for educated young people.

GAZA CITY — Gaza’s seashore is balmy and blue, a shock of beauty only a 20-minute drive from apocalyptic scenes of war closer to the border with Israel. Rows of fishing boats rock against a cerulean sea. The Mediterranean morning smells like saltwater and Turkish coffee, sipped from paper cups as elderly men sit and smoke. The port is bustling at 6:30 a.m., fishermen emptying nets of sardines and shrimp as merchants crowd around, offering prices to the eager auctioneer.

Six nautical miles into the sea, there are guns. The 1993 Oslo agreement designated a 20-nautical-mile fishing zone for Gaza’s 4,000 fishing families. But after Hamas took control in 2007, Israel unilaterally restricted the zone to one-third of that, cutting off most of the best fishing areas. In case anyone forgets, a poster of a dead fisherman is taped to the wall across from the market’s cash counter.

“His name is Tawfiq Abu Riyala. He was 32 years old,” said Abu Moutaz, 47, the fish auction accountant. The best fishing is farther out, he said, where the seafloor becomes rocky in deeper waters. Abu Riyala had been trying to build an artificial reef to attract more fish when Israeli forces shot and killed him, saying he had strayed outside the designated zone. That was in March. The fishermen have stayed even closer to shore since. “You see the auctions every day, but the fishermen and merchants are in debt,” Abu Moutaz said. “They are broken in their wallets and spirits.”

But the fishing community is just a microcosm of life in Gaza.

The four most commonly heard Arabic words in Gaza are hissar, bataleh, kassaf and mukta’eb. They sum up the economic situation: “siege,” “unemployment,” “bombing” and “depressed.” “They’re all related,” said Abu Ahmad, 38, an interpreter who works with foreign journalists. With its fertile land, seaport and young workforce, Gaza holds natural potential to be the economic powerhouse of the Palestinian territories. But Israel’s and Egypt’s blockade has strangled the Strip, physically separating Gaza’s population, land and products from the West Bank and the rest of the world, making life a daily struggle just to grind out an existence in a strangled economy.

Before 2000, unemployment in Gaza was under 15 percent, compared with 45 percent now. The wars between Israel and Hamas in 2008, 2012 and 2014 have exacerbated the crisis, destroying vital infrastructure while making recovery impossible. People in Gaza now are not defiant so much as depressed, Abu Ahmad said. They live on their own land caked in irony and war, free of Israeli settlements and rich with possibility, but are unable to use their resources, to recover from an endless cycle of destruction or to escape.

The worst-hit areas of last summer’s war, a 51-day conflict that killed more than 2,200 Palestinians and 71 Israelis, are all still in ruins. The neighborhoods are now infamous — Beit Hanoun, Shujaiya, Khuza’a, twilight zones of inside-out buildings and people living in tents behind and beside their former homes. Gaping holes dot their kitchen, bathroom and bedroom walls, like apertures in a computer game in which characters move up and down stairs, cooking on piles of rubble and hanging laundry on doorframes that open to empty sky. The buildings are half-eaten, and so are the people, missing arms, legs and family members.

Abu Ahmad moves through all this without emotion. He was here during that war and the previous one and the one before that, and he knows what the journalists want to see. He takes them from house to house, listing off statistics and death counts as though he were talking about the color of his socks. He said the war destroyed or damaged over 12 miles of water pipes, 11 reservoirs, 14 health facilities, 45 ambulances, 250 schools, the power plant’s primary fuel tank and 30 percent of agricultural land. More than 15,000 families are still living with relatives, in shelters or makeshift accommodations.

The estimated cost of relief, recovery and reconstruction after last summer’s war was $4 billion. International donors pledged $3.5 billion for Gaza’s reconstruction in Cairo in October, but only $954 million has been disbursed as of early April. Basil Nasser, the acting head of the U.N. Development Program’s Gaza office, said donors have been slow to fulfill their promises because of the political environment.

“If they want to pay, they can pay next week. But there must be a good commitment from Israel and Palestinian factions that guarantees a period of quiet,” he said. Funders talk about budget limitations and the financial cycle, he said, but their reluctance stems more from unwillingness to pour money into projects that lack building materials or may be destroyed within a year or two.

A larger hindrance to both recovery and development, before and after the wars, is the blockade. Abu Ahmad’s family is from Beit Lahia, a northern part of the Gaza Strip known for strawberries and good water. “Our land is fertile for almost all vegetables. But we can’t sell them,” said 35-year-old Fadel Zayed, a strawberry farmer who works 12 hours a day for 4 shekels ($1) an hour. Gaza’s strawberries used to sell for over $2 per pound back when they could export them to Europe, he said. Now they’re selling for one-tenth that, prices dragged down by a glut of produce that the farmers have trouble even sending to the West Bank.

“Take them for free,” Zayed said. “We’ll stop growing strawberries next year anyway.”

Israel and the West Bank used to consume more than 85 percent of Gaza’s outgoing goods. But the Strip now exports a tiny fraction of its potential, with the territory just last month sending its first produce to Israel since the 2007 Hamas takeover. Ninety percent of factories and workshops have been closed. Farmers cannot access 35 percent of their agricultural lands, costing tens of millions to the economy. The sea restrictions have been estimated to limit catchment of 1,500 tons of fish. If productivity had continued to increase at the levels of the mid-1990s, real GDP per capita across the Palestinian territories would be almost double what it is today, estimates a report by the Association of International Development Agencies.

Instead, the blockade is violating international humanitarian law and obstructing critical relief efforts, the report said. Egypt, which closed the Rafah crossing last fall, is also neglecting its responsibilities, critics argue. Israel has not lifted the blockade on the grounds of security, saying that free passage of goods would allow Hamas to acquire construction materials for rockets and tunnels under the border.

In the meantime, even those not directly hit by the last war are slowly suffocating. In Jabaliya, Kamal Abu Khater, 62, lives with the families of his six sons, 25 people in total, in a house of 750 square feet. He stopped watching the news 30 years ago, he said, because there’s no point in seeing or trying to reach the world outside. “How has the media ever helped?” he asked. “We are in a prison. Nothing has changed, and nothing will.” None of his sons have work, he said, so they rely on food parcels from U.N. Relief and Works Agency. 

When it rains in Gaza one morning, the roads flood. But Monther Shoblak, the director general of Gaza’s water utility, said water is in short supply. Gaza has only one water source, its aquifer. Although Gaza’s population is growing at 3 to 4 percent each year, the Strip’s water facilities have not expanded since 2006, so people are overdrawing from the aquifer.

The water utility wants to expand but needs funding and materials, which are stopped by the blockade, he said. “Donors followed Israel’s political will to boycott Gaza. Instead of pressuring Israel, they decided to stop their projects,” he said.

At GEDCO, the corporation that oversees Gaza’s electricity distribution, director general Awny Naim agreed. Unable to either unseat Hamas or acquire the necessary funding for long-term development, the water and electricity utilities are stuck in perpetual crisis management.

“We are fed up with temporary solutions,” Shoblak said. “Gaza’s water and energy problems are political. The wars must stop so we can develop.”

Palestinians’ fragmented political leadership only exacerbates the problem. One reason electricity is so expensive, for example, is that the Ramallah-based Palestinian Authority levies a 140 percent tax on fuel entering Gaza, Naim said. Wealthy donor nations helped shoulder this cost in the past, and it wasn’t so bad because Gazans turned to tax-free Egyptian fuel, smuggled through tunnels.

But now the tunnels are mostly closed, he said, and Gaza’s authorities cannot afford the fuel. “There is a conflict of interest between the local government here and in Ramallah,” he said. “Entrance of fuel is an Israeli problem. Taxes on fuel are a Palestinian problem.”

In Beit Lahia, Abu Ahmad stood on a farmhouse roof with his uncle Mostafa Hamdouna, 70. Their fields were lush and idyllic, with quiet rows of potatoes, corn and berries growing under buttery sun. But Israeli watchtowers were visible just beyond the farmland. Some of the fields ended abruptly in craters, evidence of last summer’s shelling. A destroyed water tank still lay in pieces on the roof.

“Gaza is paradise, if not for the siege,” Hamdouna said. He had left Gaza to marry and start a family in Jordan but returned to Beit Lahia in 2005, thinking he wanted his children to know their homeland. Then came the Hamas government, the blockade and three wars. The farms were not turning a profit, but he still goes to the fields every morning. During the war last summer, the strawberries still had to be irrigated every three days. So Hamdouna’s son Muntaser, 22, went out, ignoring the shelling to save the crops. He was killed.

“This is Gaza, life and death,” Abu Ahmad said. He used to teach swimming to Gazan children, holding lessons at the seaport because there were no pools. Then the blockade began, the municipality started dumping sewage into the sea, and Abu Ahmad stopped teaching.

But last year five children from Beit Lahia drowned, right before another 501 children died in the war. “I felt so guilty,” Abu Ahmad said, tearing up. “These are our children. I could have stopped [the tragedy], so I have to keep teaching.”

Later at his house, Abu Ahmad played videos of his old swim lessons. His 3-year-old son, glued to the laptop screen, pointed and begged, “Baba, again!” Abu Ahmad chuckled at his son’s laughing. “I wanted to teach them last summer, but — you know.” He picked him up and kissed his son. “This summer, inshallah, we’ll swim.”