How To Kill An Economy

By Nicole Johnston

On July 3rd, 2010

Courtesy Of "Al-Jazeera"

Al Jazeera photo

While a few more products are allowed to enter Gaza since Israel 'eased' the blockade, the siege on businesses is getting worse.

First close down the borders and refuse to allow any exports out.

Then ban the importing of any raw material for factories and businesses.

Force the commercial class to rely on expensive underground smuggling tunnels to procure what the community needs. This in turn enriches the tunnel owners.

Prevent businesspeople from travelling abroad.

And then, if the economy still has a breath of life left in it, go to war. Bomb the region and destroy its factories.

Finally refuse to allow any building material in so that those businesses cannot be rebuilt.

De-Development

The result is the economy goes backwards in a process called de-development.

Businesses close, jobs are lost and families become dependent on food aid.

This is what has happened in Gaza.

It is suffering from a four year old siege, the destruction from Israel's war and now a continued siege, with no sign of any real abatement.

While a few more products have entered Gaza since Israel killed nine people on board the Gaza-bound aid ship, the Mavi Mamara, raw materials for businesses have not.

And in some respects the blockade on business is getting worse.

Now Gaza's manufacturers have to compete with Israeli products.

And Israel's goods are cheaper and better quality because they are not produced under siege.

Truckloads of Israeli biscuits are entering Gaza. Israel says this is part of its so-called decision to "liberalise" the siege.

Al-Awda Biscuit Factory

This could put a company like Al-Awda biscuits in Gaza out of business.

Its owner, Mohammed al-Tilbani, has to depend on tunnels to bring in sugar, flour, cocoa. Imports are banned by Israel. So everything he needs for his factory is carried through a dirt underground passage.

The costs are high, the quality poor and the goods often arrive damaged and unusable.

Al-Tlibani started his business with nothing. Now he has a biscuit and ice cream factory. He could operate 24 hours a day, seven days a week. Imagine the jobs this would create in Gaza where unemployment is greater than 40 per cent.

But since the siege, his 350 employees have only worked up to eight days each month. This is barely enough money to keep their families alive.

As for the ice cream factory, with electricity cuts of eight to 16 hours a day, it is too difficult to keep the ice cream frozen and this part of the factory permanently running.

So al-Tilbani is watching his hard work fall apart.

Before the siege he planned to open another factory, for chips. He travelled abroad, bought the machinery and shipped it to Israel.

Cruel Joke

But since Israel imposed the blockade he has not been allowed to import the equipment to Gaza. It is stuck in a warehouse in Israel.

Destroy the businesses and destroy the job market. This collective punishment of Gaza's population is illegal under international law, but it continues.

Somehow the al-Awda factory has managed to stay open throughout the siege. But now it faces its greatest challenge - competition from Israeli biscuits.

The Israeli biscuits have the advantage. Israeli factories can import anything they like and now they can also export into the strip. It is likely this will displace the local product which only has one market, Gaza.

The biggest market for Al-Awda biscuits used to be the West Bank.

It seems like a cruel joke. Israel attempts to assuage the international community by "easing" the siege.

So it allows Israeli goods to be sold inside Gaza; while blockading goods made in Gaza.

This is one more step in killing an economy.