Peer Pressure: How will Gaza Get Its Fuel As Egypt’s Military Blocks Underground Tunnels?

Peer Pressure: How will Gaza Get Its Fuel As Egypt’s Military Blocks Underground Tunnels?

Quick answer: Gaza might have to turn to Israel to meet fuel shortage needs. 

Given the renewed interest in jumpstarting U.S. Secretary of State’s, John Kerry, peace talks between Palestine and Israel, we can not forget the economic backdrop in Gaza, which faces more financial woes than the West Bank.  Gaza’s economy has been hit twice.  Since Egypt’s military closed about 80 percent of the tunnels that transport goods “underground” from the Sinai Peninsula, in Egypt, to Gaza, over $230 million have been lost since June.  Add to that: an estimated 20,000 Gazans have lost employment in the construction industry.  Also, let’s not forget the continued Israeli restrictions on fishing coasts as well as on the borders for “security” purposes, which ultimately limit imports of food stuffs into Gaza.

One solution is to open the Rafah crossing, suggests Gaza Economy Minister, Alaa Rifati.

Moreover, PITAPOLICY would love to hear from fellow pita-consumers regarding these observations…

  • Egypt bans fishermen from fishing in its territorial waters, reports Al Monitor.
  • Israel’s defense establishment prepares to expand operations at the Kerem Shalom cargo crossing between Israel and Gaza since more and more trucks are passing through–and approaching the 400 truck maximum capacity.
  • Israel Intelligence sources hint they “aren’t ruling out the possibility that Gaza’s worsening economic crisis might lead Hamas to launch another escalation against Israel” according to Ha’aretz
  • EU pushing for labeling Israeli settler goods, according to Ma’an News Agency.
    New EU guidelines on Israeli settlements enabled Abbas to say “yes” to Kerry… But, there is another explanation, argues Amira Hass (heard through Al Jazeera English Producer Rania Zabaneh in the West Bank @rzabaneh): “Encouraging the private sector” was a mantra that accompanied the Oslo Accords from the start. High-ranking Fatah officials were already in the Palestinian private sector when the Palestinian Authority was established, and others gradually joined them. Some of those with old money, as well as some of the nouveau riche, also played an important political role in the talks with Israel. The identity created between the political leadership and key people in the private sector, whose personal financial interests depended on keeping things calm, limited the Palestinian position in the talks early on and thwarted their ability to deal with land expropriations, settlement expansion and restrictions on free movement.”
  • If even half progress is achieved in negotiations, then some stakeholders will greatly benefit in both the construction industry as well as the donor category...
  • Encouraging the private sector in Palestine ? US offers version of via political pressure: “Support for entrepreneurship has to be matched by a large public construction project that would facilitate commerce in general. Now would be the ideal time for Kerry to get behind building Palestine’s transportation corridor, along the lines of what Rand Corporation proposed with its ARC project.” reports The Daily Beast
  • Survey: 55% of Israelis say they’re inclined to vote for peace deal.
  • In Gaza: Hamas employs 50,000 Government workers.

Gaza’s Economy Suffers From Egyptian Military’s Crackdown

Source: New York Times

JABALYA, Gaza Strip — The only sound that could be heard on a recent weekday at Abu Eida’s concrete-mixing plant in the north of Gaza was birdsong. The pumps, mixers and other heavy vehicles had been idle for days.


The factory floor was empty. In a prayer room inside the air-conditioned management section, five men were taking an afternoon nap. Work here has been at a virtual standstill since the Egyptian military’s ouster of President Mohamed Morsi early this month, staff members said.

Along with the takeover in Cairo, the Egyptian military stepped up its campaign against Islamic militants operating against its forces in the rugged Sinai Peninsula, which borders Gaza. The clampdown has resulted in the destruction or closing of around 80 percent of the tunnels that run beneath the Egypt-Gaza border, long used for smuggling weapons and fugitives but also for construction materials restricted by Israel, cheap fuel and other goods.

So now, Abu Eida has no cement or gravel to operate his factory, one of the biggest in Gaza, the Palestinian coastal territory. Manar al-Batsh, an accountant at the plant, said 40 employees were sitting at home.

“If the crisis lasts until the end of this month, we won’t be able to keep those workers on our payroll,” he added.

For Hamas, the Palestinian Islamic militant group that runs Gaza and has its roots in the Muslim Brotherhood, Mr. Morsi’s ally in Egypt, the upheaval next door means the loss of an important friend and a looming economic crisis if the tunnel restrictions continue.

Hamas, which refuses to recognize Israel and is considered a terrorist organization by much of the West, faces increasing physical and political isolation.

New restrictions at the Rafah border crossing, Gaza’s main gateway to Egypt and the outside world, limit travel to holders of foreign passports and to patients with official medical referrals from the Hamas-run Ministry of Health. Hamas officials are unable to leave Gaza, and given the security situation in Sinai, aid missions are not coming in.

More materially, Hamas relies on the taxes it collects from the underground trade. Experts have estimated the group’s annual budget at $900 million. Hamas employs almost 50,000 government workers in Gaza, and two-thirds of the budget is said to be spent on salaries.

Omar Shaban, a Gaza economist and the director of PalThink, an independent research institute, said taxes collected from the tunnel trade made up about a third of the budget. Additional income has come from taxes on local businesses, many of which also depend on cheap commodities from the tunnels that are now in short supply. Fuel from Egypt is sold here at half the price of fuel imported from Israel.

Hamas had already been suffering from a sharp drop in financing from Iran in recent months because it did not stand by President Bashar al-Assad of Syria, its former patron, in his struggle against rebel forces.

Yasser Othman, Egypt’s representative to the Palestinian Authority in the West Bank, told a Palestinian newspaper this week that the security measures along the border were not directed against the Palestinian territory but were to “protect Egypt’s national security.” He added that the measures would end “once the exceptional situation ended.”

But in Egypt, a news media campaign is under way against Hamas, as critics of Mr. Morsi associate the group with the violence along the Sinai border. Egyptian military officials have told state news media that scores of Hamas fighters and snipers have been making their way into Egypt to battle the anti-Morsi demonstrators, and newspaper columnists have accused Hamas of interfering in Egypt’s affairs.

Salah al-Bardawil, a Hamas official in Gaza, said in a telephone interview that the Egyptian news media were being “pushed by the enemies of resistance” and some Arab states that want to see Hamas toppled like the Brotherhood in Egypt. He acknowledged that Hamas’s options for dealing with the crisis were limited but said that the Palestinian people were used to putting up with hardship to preserve their “dignity and national principles.” [Click here to continue…]

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