Tuesday, June 08, 2010

How the Gaza blockade created a new legitimate "black" market

With the Gaza strip blockaded against any imported foodstuffs the Palestinians have created a black market to smuggle the food in via their underground tunnels. The blockade was meant to weaken the Hamas leadership of the territory but it has only strengthened it, as Hamas is now collecting taxes on the black market. It has created a new economy within the region that even legitimate businesses have to participate in.

From this Independent story, writer Catrina Stewart gives us more details.

Bursting with exotic foodstuffs, Hassan Hasuna's brightly lit grocery store appears like a beacon on a run-down street in central Gaza City. Cadbury Creme Eggs, a rare commodity in the Middle East, take pride of place next to the till.

Only a few locals can afford to buy any of it. All of the goods on display have come through a network of smuggling tunnels from Egypt that circumvent a three-year, Israeli-led blockade that has brought Gaza's once buoyant economy to its knees. The tunnels are a critical lifeline for ordinary Gazans, enabling the passage of fresh meat, soft drinks, condiments and other non-essential goods that Israel and Egypt won't let past the borders into Gaza. Unluckily for many Palestinians, they can cost twice the price.

The blockade, designed to weaken the Islamist group Hamas, has created an almost entirely black economy that has enriched and sustained Hamas while hurting the many Palestinians who have lost their jobs and live below the poverty line, subsisting on United Nations handouts. "We are now a nation of tunnel diggers," Palestinian economist Omar Shaban said.

He estimates that more than 20,000 Gazans are employed in the tunnel trade. "I don't need to work 20 months to buy a car. I just need to work two months in the tunnels."
At first reluctant to endorse the tunnels openly, Hamas nevertheless recognised the potential financial benefits and levied taxes on products coming through. It now charges smugglers a one-off fee of £1,900 for every site, while tunnel taxes have become ever more critical to propping up its one-party rule. "The people who own the economy own the political influence," Mr Shaban said.

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