Majid al-Mashharawi, 24, grew up in the Gaza Strip in a life of intifada, closure and blockade. One particularly painful event happened when she was 13 – she saw a man about to throw a bomb out a window, but the bomb blew up in his hands. Despite the harsh reality, she went on to study engineering at the Islamic University of Gaza, after which she decided to become an entrepreneur.
A year ago Mashharawi and partners launched their SunBox project — an inexpensive and lightweight solar-powered system that can provide energy to things like small refrigerators, laptops and smartphones. She invested a lot of time and thought into the project and traveled to Japan to meet with experts. She installed the system for free in a few homes in Gaza and is now raising money to enable subsidized sales of the device; this would decrease the price in the Strip to $250 from $350.
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About a month ago the initiative was slated for launch: 200 kits arrived from China and were supposed to enter Gaza via the Kerem Shalom crossing — the major transit point between Israel and the Strip. But that happened to be the day Prime Minister Benjamin Netanyahu and Defense Minister Avigdor Lieberman announced the closure of the crossing. The five employees who had already been hired and were supposed to install the systems were left without work.
Mashhawari thus planned to change the definition of the technology — to humanitarian aid. Some customers were disabled people in motorized wheelchairs and planned to use the electricity from the device to charge their chairs.
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But two weeks ago salvation came from a different direction. After more than a month, Lieberman, in view of the relative calm, decided to reopen the crossing and hundreds of trucks made their way into Gaza. Still, merchants on both sides know that after an opening, the crossing can close any day again.
Mashharawi’s story stirred interest around the world and she was interviewed in The Guardian. When she spoke to Haaretz she was in the United States for a conference. “I’m seeing what life is like with electricity 24 hours a day, and there’s no reason why we shouldn’t have that life in the Gaza Strip,” she says.
The difficulties Mashhawari faces are just one example of the distortions in Gaza and its economy. Since the abduction of Israeli soldier Gilad Shalit in 2006 (he was freed in a 2011 prisoner swap) electricity has been supplied for just a few hours a day. And since 2007, when Hamas took over the government, Gaza is also under heavy closure. Hamas doesn’t look kindly on cooperative ventures between Gaza entrepreneurs and Israeli businesspeople, to say the least.
The organization, which taxes the people heavily, also refuses offers like that by the Israel Water Authority to lay large pipes in Gaza so that Israel could sell its water at cost. Moreover, the restrictions on the entry and exit of goods and the fact that Israel only lets 5,000 merchants, most of them with large businesses, leave Gaza are also strangling the economy.
“To talk about an economy in the Gaza Strip nowadays is utopia,” says Lt. Col. (res.) Michael Sirulnik, a former economics liaison for Israel with Gaza. “It used to be that they would manufacture in Gaza for the Israeli textile and furniture industries, but after 2007 the state wiped out any possibility of economic development. All the Israeli governments implemented a harsh strong-arm policy of starving and harming the Gaza population in order to hurt Hamas, but the reality proves that this simply doesn’t help.”
Between 2007 and 2010, Israel also determined which products were allowed into the Strip, including food. At certain periods cattle weren’t allowed in. Maj. Gen. Amos Gilad, at the time coordinator of government activities in the territories, used to tell associates: “I don’t want the Hamasniks in Gaza to eat entrecôte.” (Gilad has told Haaretz in response: “The context was Shalit’s abduction. I thought it was immoral, in the circumstance of a living soldier in their hands, to allow the entry of food that’s a luxury.”)
Today goods are entering Gaza but very little is coming out. In the first half of 2018, nearly 50,000 loaded trucks entered the Strip whereas only 1,580 came out. Most that came out carried agricultural products to the West Bank, and only 396 had their final destination as Israel, most hauling scrap metal. Last week, with the opening of the crossing, Israel allowed 700 trucks into Gaza. The Defense Ministry announced that the trucks were carrying products including construction materials, textiles, fruits and vegetables, diesel fuel, cooking gas, gasoline and hygiene products.
Beginning in 2010, because of the Mavi Marmara incident (in which 10 passengers on the ship trying to break the Gaza blockade were killed and 19 Israeli soldiers were wounded), the rules for moving goods in and out of Gaza changed again. There was an easing, mostly for food, but no clear policy was implemented regarding restrictions and prohibitions on trade that didn’t have to do with food.
“The whole system of decisions and what was behind it remains unknown. Until this week, for example, it wasn’t possible to bring goods in through Kerem Shalom, with the exception of a few items that Israel defined as humanitarian,” says Shai Grunberg, spokeswoman for the Gisha Legal Center for the Freedom of Movement.
“After the 2014 Gaza war it became possible to market textiles, furniture and scrap metal to Israel. Why these things and not what there’s a market for? The export of processed foods, for example, is under a prohibition, and out of all the things that are grown in Gaza, they only allow tomatoes and eggplants to be sent to Israel, and in limited quantities. The decisions are arbitrary and totally unconnected to security.”
There’s also a list of goods defined as dual use; that is, items that can help make weapons like toilet air-freshener balls, which are prohibited entry into Gaza. Merchants not up to date with the list often find themselves with their merchandise confiscated because it has been defined as dual use or was sent in the same truck as dual-use products.
Attorney Guy Zahavi, who represents merchants in Gaza, says that in the near future the Supreme Court will consider whether it’s permissible for the state to draconically confiscate goods only because they were alongside some other merchandise in a truck.
“At the Kerem Shalom crossing they once seized a shipment of 32 generators produced by Caterpillar worth $2 million, and they claimed it was for terror. Only after a year and a half of court deliberations did the state agree to release the generators,” Zahavi says.
“There are dozens of stories like that. The ones who are harmed most are the merchants who ship goods about which there’s no suspicion at all. Sometimes they have no choice but to join up with other merchants to transport their goods in a truck in order to reduce costs, but then they might risk that all the truck’s contents will be confiscated.”
During the period when the Kerem Shalom crossing was closed starting on July 9, only goods defined as humanitarian, like food and gasoline, entered Gaza. Instead of reaching their destinations, goods that were on their way to Kerem Shalom were transferred to storage at Ashdod or warehouses of private businessmen near Gaza. Meanwhile, Gazans began to calculate their losses because in a situation like that, the Palestinian importer suffers a double loss — both the payment for storage and a drop in income because he has no goods to sell in Gaza.
Gaza businessman Nabil Bawab, who owns a sewing workshop that provides goods to Israeli clothing chains, says that since the crossing closed he has lost 2 million shekels ($550,000). According to him, when the crossing is open, he employs 600 workers, but when it’s closed, only 100. About three weeks ago, when the limited opening of the crossing was announced, Bawab went there in the hope that his trucks full of clothing would receive a permit to cross — but in vain.
Last week, however, after more than a month, Bawab finally got his goods into Israel. He says that the opening of the Kerem Shalom crossing is a positive development but not enough.
“We’re hoping for the best but in the current situation in the Gaza Strip, more is needed. After a whole month, 700 trucks a day,” he says, adding that this “is only natural” after the 400 to 500 a day that entered last year. “For Eid al-Adha we need more than 2,000 trucks a day — and also to make up the shortfalls resulting from the closure.”
Mohammed Abu Nahla, a small business owner who imports telecommunications equipment for large switchboards into Gaza (such as for hospitals), says that when the crossing was closed, he laid off all 11 of his workers.
“You count on there being money coming in all the time, and until two days ago everything was stuck,” he says. “To that I have to add payment for storage. To minimize losses, I prefer to send the merchandise to the West Bank.”
On the Israeli side, near Gaza, dozens of small business owners provide transport and storage services for Gaza — and in fact earn their living from the activity at the Kerem Shalom crossing. Yair Moshe owns the largest business in the area, storehouses at the Magen junction. When Kerem Shalom is open, he makes money by transporting goods to the crossing. During a closure, he makes money from the storage, though that brings in less.
Moshe says that he too has been hurt by the situation; when the crossing was closed, he lost 2.5 million to 3 million shekels. “Lieberman declared that he wasn’t letting disposable diapers and cleaning products or all kinds of nonsense he invented into the Gaza Strip, and he forgets that this is our only source of income,” Moshe says.
“What am I supposed to do, fire my 60 employees? Thousands of people make their living from Kerem Shalom — drivers, garages, gas stations — and the state doesn’t think at all about compensation.”
But not everyone loses from the situation. The ones who nearly always profit are the fuel companies, which throughout the years of tension between Israel and Gaza have been the ones selling gasoline, diesel fuel and cooking gas to Gaza. Currently the fuel market for the Strip is split evenly between Paz and Oil Refineries Ltd., while Paz accounts for 85 percent of the cooking-gas market and the rest goes to Oil Refineries. In 2017, according Paz’s annual report, sales to the Palestinian Authority reached 1.24 billion shekels; it’s estimated that 20 percent of that amount was from sales to Gaza.
But those companies haven’t always enjoyed exclusivity. Until a few years ago, a lot of cheap gasoline came into Gaza through the tunnels from Sinai; this route, however, has been blocked by the Egyptians.
The market for fuel in the Strip operates according to its own rules. On the one hand, the people and public institutions buy fuel for generators because of an acute shortage of electricity from the one power plant there, which barely operates. On the other, since Hamas refuses to pay the PA for the fuel, the latter often curtails the quantities of fuel it buys for Gaza. However, reductions in the amount of fuel are done with care — both because fuel is a lifeline in Gaza and the PA makes money from the taxes on it.
From the average citizen’s perspective, and certainly from the businessman’s, Gaza’s fuel and electricity situation is nothing less than a catastrophe. Bawab, for example, pays an electricity bill of 8,000 shekels a month when his factory is hooked up to the Palestinian power network. If he runs the generator he owns, this number surges to 35,000 or 40,000 shekels.
Another industry that has suffered because of the tension between Gaza and Israel is agriculture, which for many years was a major pillar of the Gaza economy. In the ‘90s, about 8 percent of the vegetables consumed in Israel came from Gaza, but the Israeli army’s clearing of vegetation in northern Gaza has helped sting the industry.
Gazans export an abundance of fruits and vegetables to the West Bank including peppers, eggplants, tomatoes, cucumbers, sweet potatoes, dates and strawberries. To Israel they’re only allowed to export tomatoes and eggplants, and in limited amounts — 200 tons of eggplants and 250 tons of tomatoes each month, which isn’t very much.
In recent years, amid increases in tomato prices, the finance and agriculture ministries have permitted tomato imports from Turkey and Jordan. Why not export from Gaza all kinds of vegetables all year round, helping both the Gazans and Israeli consumers? According to the Agriculture Ministry, the reason is public health.
“The decision on what produce comes into Israel considers protection from diseases and pests that could infest Israeli agriculture,” the ministry said. “In a risk-management survey conducted at the ministry, it was determined that the risk of transmitting pests and disease via imports of tomatoes and eggplants is small relative to the rest of the plant produce.”
However, people familiar with the situation in Gaza say the reason for limiting imports stems from political considerations. For example, Avraham Herzog, who with a Palestinian partner has been marketing fruit to Gaza and is well acquainted with the Kerem Shalom crossing and the agricultural trade between Israel and Gaza, calls the Agriculture Ministry’s answer “cynical politics.”
“They say that in Gaza they water crops with wastewater, but they’ve never pooled sewage water there, so it’s impossible to water with wastewater,” Herzog says.
“It’s also possible to talk about pesticides and chemicals, but Israel restricts the entry of those substances into Gaza because they’re considered dual use. The bottom line is that whatever has to do with the Gaza Strip is all politics.”
Gershon Baskin, the founder of the Israel/Palestine Center for Research and Information, is very familiar with Gaza’s agricultural potential. “There’s no doubt that it’s possible to grow a lot more tomatoes in the Gaza Strip if they wanted to,” he says.
“Even in the good days of Oslo, when the price of tomatoes dropped too much, suddenly they discovered some sanitary problems in the tomato fields or all kinds of other problems making it necessary to restrict the entry of vegetables.”
But when fruit prices in Israel are too low, Gaza is where they’re sent. Herzog expects that in the coming year plenty of fruit will flow into the Strip. “Next year there will be a lot of apples, bananas and avocados,” he says.
“All four of the large growers’ organizations are organizing this through the production council. Next year there’s going to be so much fruit that I wouldn’t be surprised if some of the produce is sent into Gaza for free to maintain price levels in Israel.”
“Clearly,” adds Sirulnik, “the moment there are surpluses of agricultural produce, they send it into Israel’s garbage can — which is called the Gaza Strip. At the Coordination and Liaison Office they also deal with regulations having to do with fruit and vegetable prices in Israel. True, the army is supposed to address security matters and not meddle in fruit or vegetable prices, but when it comes to the Gaza Strip, these are basic arrangements.”
“Gaza is a market of surpluses,” says Avraham Ehrlich, the director of the vegetable department at the Plant Council and himself a farmer. Since the prices of fruits and vegetables in the Strip are high for many Gazans, it’s natural for inferior goods to go in that direction, even if the problem is simply size or shape, he says.
“A few years ago I and other growers had a citrus crop of a variety called Odem, which the Agriculture Ministry encouraged us to grow,” Ehrlich says. “We found out that Israelis didn’t like it because even though the fruit is sweet, it’s small. A lot for growers sold it to Gaza for the ridiculous price of 60 agorot to 1 shekel a kilogram, and that way at least they cut their losses.”
Trade between Israel and Gaza — agricultural trade in particular — doesn’t operate under clear rules, and into this vacuum come middlemen and machers, both Israeli and Palestinian. The chaotic situation in Gaza and the fact that merchants often find themselves refused entry into Israel also lead to exploitation by Israelis, such as customs agency companies. Sometimes complaints are voiced on the Israeli side that Palestinian businesspeople exploit Gazans’ dire situation.
The Coordinator of Government Activities in the Territories has responded: “Since 2007 the Gaza Strip has been controlled by the terror organization Hamas, which is trying to damage Israel’s sovereignty and security through cynical manipulation of the population of Gaza and making it into a human shield for murderous acts of terror against Israeli citizens.
“In recent weeks, in light of the intensification of the terror activity against Israel, the defense minister has ordered the imposition of restrictions on the activity of the Kerem Shalom crossing, except for the entry of food, medicine, gasoline and cooking gas, which continue to go through into Gaza.
“Concerning export of goods from Gaza, we stress that any merchandise that can be cleared for security is approved for marketing. As for marketing processed foods from the Gaza Strip to Israel, the products must adhere to the compulsory standards set by the Health Ministry.
“There is no restriction on submitting an application for purposes of trade. However, every application must fit the detailed criteria listed on the website of the Coordinator of Government Activities in the Territories and will be approved subject to a security check. Concerning dual use merchandise, applications of this sort are approved subject to a license and are examined on a case-by-case basis. We are not aware of a phenomenon of delaying the entry of merchandise when such goods are in the same truck as dual-use products.”