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Israeli Policies Are Destroying the Palestinian Economy

Friday 6 July 2007

Israeli latest policies, sealing off Gaza and barring the import of goods to the Strip, violate international law as they destroy Gaza’s industrial and commercial sectors and further impoverish Palestinians, according to report released this week by Gisha, an Israeli non-profit legal organization.

Three weeks after Israel enforced a complete ban on importing commercial goods to Gaza, the industrial sector is collapsing. Over 2,900 factories out of 3,900, or about 75%, have been shut down due to shortage of raw materials, which used to enter Gaza through the now closed Karni crossing, said the report “Commercial Paralysis: Deleting Gaza’s Economy from the Map.”

Approximately, 30,000 factory workers may lose their jobs, if businesses are not revived soon. Industrial workers are about 10% of employed Gaza residents, and support about 210,000 dependents, according to Gisha.

“Israel is not punishing the government; instead it is punishing the people …Israel must understand that we have basic needs that must be met,” said Ali Al-Hayak, director of the Palestinian Federation of Industry. ”There are a lot of people that have been hurt by this closure, lost their jobs, and their livelihood."

Israel has sealed off Gaza by closing its travel and commercial passages. Rafah crossing between Gaza and Egypt has been shut down by Israeli troops since June 10, and the Gaza-Israel Karni crossing, Gaza’s primary artery for commerce, has been closed since June 12. The crossing for travel, Eretz, between Israel and Gaza was sealed off on June 14, and since then opened only for humanitarian efforts.

Israeli policies to trap Palestinians in Gaza and to paralyze the industry has created an artificial welfare system, turning 1.4 million residents into charity dependents. Gisha reports that 85% of the population receives all its food and supplies from the UN and religious organizations. As a result, 87% of Gaza residents now live below the poverty line.

Due to the uncertain flow of products into Gaza, prices of raw materials for household and industrial consumption have increased. The price of flour has grown with approximately 34%, of powdered milk with 30%, and of rice with 20%.

"The prices are impossible, it’s murder, where will we find the money for food? “ said Fatma, 47, at the Alzawieh Market in Gaza. “Things are usually difficult, anyway, but now the prices are getting more expensive.”

According to Sari Bashi, Director of Gisha, "Israel is attempting to achieve political objectives by exerting pressure on 1.4 million women, men and children, whose suffering is supposed to bring about the change it wants – toppling Hamas control in Gaza.”

Israeli policies for Gaza violate international law and experiment with people’s livelihoods, said Bashi. Destroying Gaza’s economy will drive more desperate people into the hands of extremists, concluded the report.