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The combination of diplomatic caution and British understatement threatened to turn my interview with John Holmes, UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, into a trap of boredom. However, perhaps due to his approaching retirement, Holmes came out with several incisive, even scathing remarks.

This summer, after three and a half years in office, Holmes will return to Britain to head an important research institute. He no longer has to fear the sharp tongue of Israeli officials, who see any criticism of Israel as a synonym for anti-Semitism.

This morning, after visiting the Gaza Strip and West Bank and meeting officials on both sides, including Hamas "technocrats", Holmes is going home dejected. As the official in charge of the UN's rescue mission in disaster areas such as Haiti, he knows what depression is.

In a previous interview with you more than a year ago, you suggested that Israel shake off the delusion that pressure on the Gaza Strip would lead to Hamas' downfall. In your visit to Gaza this week, did you have the impression that the blockade was weakening Hamas?

I don't think my voice alone would have changed Israeli policy. It is hard to be sure what exactly the objective of this policy is. Of the blockade, the siege, the collective punishment. It is hard to see that it has been achieved, because Hamas is still there, firmly in control. Meanwhile, the condition of the people there [in Gaza] remains grim.

How grim?

It depends on how you look at it. People are not starving in Gaza. There are plenty of goods available, some coming in through legitimate crossing points but mainly through the tunnels. While it relieves the pressure in a sense, it isn't good at all, because all it really does is encourage a smuggler-gangster economy, which incidentally benefits Hamas financially.

The smuggler-gangster economy is undermining some of the best legitimate forces in Gaza's civil society, which do exist, whatever people might think. It is therefore not in anyone's interest, certainly not in Israel's. So I think this policy continues to be ineffective and indeed counterproductive.

What the policy of the blockade is doing is not encouraging the forces you want to encourage. Gaza is not a nest of terrorists. For the most part there are people who just want to live ordinary lives, and they are being undermined by what's happening. So you are in danger of creating a generation of people who are nourished on despair.

Do you agree with Israel's claim that there is no humanitarian crisis in Gaza?

Even though there are plenty of goods available in Gaza, and that people should be able to get them, the problem is of course that most people have no money. Eighty percent of the people in Gaza are essentially dependent on outside food aid, either from UNRWA or the World Food Program. Not because there isn't food in the shops - there is - but they can't afford it, or they can't afford enough of it because any livelihoods that there were, any jobs that there were outside the government have effectively disappeared. Most private businesses have been destroyed, essentially by the blockade - bulldozed - and the rest finished off by Cast Lead.

Other than the people that work for Hamas, or are paid by the PA, there is no income, so people are forced to live on handouts.

What do you think will happen after Egypt completes its wall and closes the tunnels? How do you see Gaza's future?

If Egypt did complete the wall and effectively block all the tunnels, the amount of goods going in across the crossing points - if it remained at the current level - would be completely unsustainable.

The trouble is that most of the avenues that could lead to change are blocked.

If Gilad Shalit was released, although the link between his fate and the fate of 1.5 million people is not a reasonable one, that might at least lead to some improvement. It is unclear how great that improvement would be, but let's hope so. But that negotiation seems to have run into a dead end, and negotiations between Hamas and Fatah seem to be stuck, so it is hard to see how it can get any better.

I assume you've warned the Israeli authorities of the political implications. What response do you get from them?

The answer is A., Gilad Shalit, and B., we don't want to do anything that would benefit Hamas, or from which they would get credit, and C., we're not aiming to hurt ordinary Gazans. But they are being hurt.

Israel has certain responsibilities as to the siege in Gaza. Israel, as we see it, continues to be the occupying power. And it is not fulfilling those responsibilities as we believe it should.

The basic medical position [in Gaza] is not unreasonable, but there is a wider point which is not just about Gaza, but about the West Bank and East Jerusalem, where barriers, checkpoints and restricted movement means that access for many people to basic medical services is getting more and more difficult. The staff of hospitals in East Jerusalem can't get to work, and the patients can't get there either.

This is only one illustration of a much bigger problem of how restrictions of movement and difficulties of access to basic services is being cut off, and people can't do the things they used to be able to do.

Your division is responsible for many distressed areas worldwide. Why do you devote so much energy to this small place?

It is a small geographical area but also a very focused problem with very significant humanitarian problems - people facing eviction after living in one place for 60 years, because of settler pressure; the Bedouins in Area C increasingly being squeezed from all directions and finding it very difficult to survive.

But there are many more long-running problems, and every time I come back I don't find that things have improved. By and large the facts on the ground continue to go against the kind of settlement that everyone wants to see, which is the two-state solution.

What's your advice?

I feel depressed when I listen to and see what is going on, because I don't think it's going in the right direction. There is a need on the part of everybody to fully recognize that, but also to look to the long term. Where is this really going to finish off in the longer term, rather than thinking how I can manage the situation for the next six months.