A tale in four parts: Gaza's car industry

	A Gaza mechanic melts metal in kettle to make car parts, March 29, 2010
	Photo by: Getty

You can get a brand new BMW in the impoverished Gaza Strip, but it'll come in pieces which you'll have to weld together. 

And you'll have to pay about twice as much for the privilege. 

"I'm not joking," says Mahmoud Sallah, a 32-year-old Palestinian from the southern Gaza Strip town of Rafah, when he describes the grotesque process of how his 2010 model was delivered in four parts through the network of tunnels dug by smugglers under the border with Egypt. 

He took the pieces to a mechanic "and now I drive a new car." 

Since Israel declared Gaza a "hostile entity" shortly after the June 2007 take-over by the radical Islamist Hamas movement and imposed its stringent economic embargo, car prices have leaped by at least 50 per cent, and even more than doubled in some cases.

A Honda Civic, model 2000, for example, sold for about 11,000 dollars before 2007. 

"Now we sell it for 22,000 dollars," says Maher al-Oukka, who owns a car showroom in downtown Gaza City's Talatini Street. 

A Toyota land cruiser jeep costs about 120,000 dollars inside Gaza. Outside, it is only 58,000, including taxes, he says, as various models of second-hand cars, but clean and shiny, are parked outside his store.

"Cars in the Gaza Strip have become the most expensive in the world," the 40-year-old dealer said. 

One Gaza resident says that only last week he sold his silver, 2002 model Hyundai jeep for 35,000 dollars. He it bought for 20,000, just before Israel imposed the near-total economic blockade in 2007. 

Cars and their spare parts are not on Israel's list of basic food and humanitarian items exempt from the embargo. 

Over the past three years, only 50 new cars entered Gaza through its official border crossings with Israel and Egypt, as exceptional foreign donations allowed through the Rafah passage in the south. 

All the rest was smuggled in through the hundreds of tunnels under the border with Egypt, through which goods ranging from fuel to cows, sheep, refrigerators, candy and cigarettes make their way daily. 

The Hamas authorities in Gaza have decided to grant licenses to the smuggled cars, explains car salesman Mohamed Nasrallah. 

"I pay 10,000 dollars to the government in order to make the illegal smuggled car legal with an official license," he says. 

He buys the smuggled car for 25,000 dollars, pays the 10,000 dollars to the Hamas government, takes a 5,000-dollar profit - and sells it to the consumer for 40,000. 

"I really need a car, but I can't afford buying it now because cars are too expensive here," sighs Ahmed Helles, a grocery store owner in Gaza City. "I hope that the siege will be lifted and new cars will be allowed with normal prices." 

Not only cars are expensive, he explains, so are donkeys, or horses, which have become an increasingly omnipresent part of Gaza's street scenery, and whose owners make a livelihood out of transporting goods from vegetables to scrap. 

A donkey that would cost 500 dollars is now sold for 800 and a horse costs about 1,000 dollars. 

Zeyad Zaza, the minister of economy in the de-facto Hamas government, says there are 60,000 cars in the Gaza Strip, including trucks and bulldozers. 

"The government is not an importer of cars, therefore we depend on the free market system," says Zaza, seeming to justify the steep levy slapped by his cash-strapped administration on the already all-but-unaffordable vehicles smuggled in through the tunnels. 

With cars out of reach of the average wallet, only about one-third of Gaza families own one. The rest have to do without, using shared taxis to go to work or to school. Cab drivers take five passengers at a time and charge each just one Israeli shekel for a 10-minute ride crossing Gaza City. 

Says Gaza-based economist Mohsen Adnan: "We believe that lifting the Israeli siege will resolve not only the car crisis, but the entire economy."