Israel’s decision this week to allow more goods into the Gaza Strip may well ease the international isolation of Prime Minister Bibi Netanyahu’s government. But it won’t substantially help Gaza. While the three-year-old ban on many imports has posed a hardship for most Gazans, smugglers have been able to deliver these items through a network of tunnels connecting Gaza with Egypt. An Israeli television news segment—aired last week and widely discussed here—shows Palestinian shop owners on the phone with their Israeli suppliers, coordinating the delivery of goods by sea to Cyprus and onto Sinai, where they’re carted to Gaza through the tunnels. The real impact of the siege has been on Gaza’s export market, which has all but collapsed since 2007—and with it much of the economy. Yet in the uproar over aid flotillas and humanitarian crises, this issue has been largely overlooked. The Israeli policy shift does not address exports at all.
The numbers tell the story. When Israel withdrew from the Gaza Strip and dismantled its settlements there, an American-mediated agreement allowed Palestinians to export up to 450 truckloads of goods a day from Gaza. But crossing points were targeted by Palestinian bombers on more than one occasion, and so for security reasons Israel waived through some 70 trucks per day before the siege was imposed. Since June 2007, when Hamas seized control of Gaza and Israel imposed its blockade, the total number of trucks carrying goods out of Gaza has been less than 300, according to the Israeli rights group Gisha, which collects data on Gaza’s besieged economy. In other words, in three years Gazans have been allowed to send out an amount equivalent to just four days of exports under the de facto pre-siege number (which itself was far less than originally envisioned). As a result, according to estimates by the Palestinian Federation of Industries, more than 90 percent of Gaza’s factories have closed down or working at minimum capacity, a statistic that says far more about the grim situation in Gaza than the commonly cited data on banned goods.
The near-total export ban tells us something about Israeli motives: the blockade is not aimed primarily at preventing weapons from reaching Gaza, as Netanyahu has portrayed it, but rather at debilitating Gaza’s economy in order to undermine the popularity of Hamas. Certainly, the group is a fair target for Israel. Hamas regularly fires rockets at the Jewish state and has been holding the Israeli soldier Gilad Shalit captive for four years without availing the Red Cross to him. But in reality, the siege has strengthened Hamas. It has shifted the bulk of commercial activity from official crossing points between Gaza and Israel—where the merchandise was tightly controlled and the tax revenue went to the Palestinian Authority—to the tunnels burrowed illegally between Gaza and Egypt, where anything goes.
Hamas did not invent the tunnels; they’ve been around since long before the siege. But the group has taken control of the smuggling industry, much the way a syndicate gains control of a business sector elsewhere in the world. In doing so, Hamas has been able to ensure all weapons smuggled into Gaza end up solely in the hands of its militiamen and not the rival Fatah, the group led by Palestinian President Mahmoud Abbas. It has also been able to charge a levy on the construction of tunnels and a tax on incoming goods—Chinese motorcycles are the latest import craze—making Hamas better off financially than it was three years ago. It’s little wonder, then, that the group has shown no enthusiasm for Israel’s concessions.
But while the tunnels have served as a substitute artery for imports, they have almost no value for Gaza’s exporters. Exporters need cheap raw materials they can use to manufacture goods. In Gaza, that might mean bulk foodstuffs for an industrial bakery or cheap textiles for a clothing factory. Buying goods brought in through the tunnels means paying extra for the distance the goods traveled, the bribes Egyptian middlemen charged, the fees imposed by tunnel owners, and the taxes levied by Hamas. The few manufacturers who could bear all that would still need a direct and reliable route to the buyer. Gazans had mostly exported to Israel, or through Israel to the West Bank and elsewhere. Very few of them have found substitute markets in Sinai or the rest of the Egypt. Some hoped they could shift their focus to the domestic market. But the sharp decline in the purchasing power of Gazans, again related the siege, has meant few consumers have money for anything but the necessities.
All this is known to Israeli officials and must be known to their counterparts in the United States and the European Union who deal with the Middle East. Yet when Israel announced it would relax the ban on imports, response was generally positive. Mark Toner, the State Department spokesman, said the shift reflects “the type of changes we’ve been discussing with our Israeli friends.…As these principles get further developed and implemented, we’re hopeful that the situation in Gaza will improve.” British Foreign Secretary William Hague described the relaxation as a “step in the right direction,” adding, “Israel’s long-term interests lie in creating an environment where Gaza’s economy can flourish.” The latter is quite probably true but Israel’s policy shift will do little to make it happen.