World Economy

Gaza Economy ‘All But Dead’

Palestinians in a Hamas jail in Gaza City.Palestinians in a Hamas jail in Gaza City.

The economy of Gaza, a Palestinian enclave of two million people sandwiched between the Zionist regime of Israel, Egypt and the Mediterranean, is “all but dead”, said Maher Tabba, an official at the territory’s Chamber of Commerce.

As Gazans’ buying power has collapsed, the amount of goods being imported into the Gaza Strip has more than halved in just seven months, according to border officials, AFP reported.

Tabba said some $112 million-worth of cheques bounced in 2017, up from $62 million in 2016. That, he said, is “clear evidence of an economic collapse”. Tabba estimates that several hundred of those currently in prison are owners of struggling or failed businesses.

In an attempt to contain the crisis, the Public Prosecutor’s Office in Gaza recently announced it would give people an extra month to find the money to service their debts. Much of the world has dropped the policy of imprisoning debtors, but in Gaza it is still common.

The occupying regime of Israel has maintained a blockade of Gaza since 2007, which it says is necessary to isolate Hamas, with which it has fought three wars since 2008.

Rights groups and UN officials say it amounts to collective punishment and strangles the economy in the enclave, where unemployment is around 40%.

But the Palestinian Authority has also sought in recent months to harm Hamas by damaging Gaza’s economy, including by cutting the salaries it still pays to civil servants there despite Hamas taking over the territory in 2007.

Hamas has also largely stopped paying civil servants after an attempted reconciliation with the Fatah movement of President Mahmud Abbas stalled.

  Market Collapse

The United Nations’ top official for the Zionist Israel and the Palestinian territories says Gaza is facing a “full collapse”. Even Israelis are publicly raising the alarm.

The head of the army reportedly warned Israel’s Cabinet recently that a conflict could break out if humanitarian conditions continue to worsen in the Gaza Strip.

A trader jailed in November, who did not want to be named, said 35 people had been laid off when his company went bust. “Everything I have built since I set up the company in 2002 was lost last year. My debt reached more than a million and a half dollars,” he said. “I was selling property to service the debt, but I wasn’t able to pay it fully.”

The trader said Gaza’s financial woes are a result of the political situation—and that nothing less than a solution will enable the economy to recover. “The market collapsed because of the siege and the crisis with PA salaries,” he added.

“While there is no political stability, there will not be economic security here and the market will not rise again.”

  Hundreds in Jail

Sameh al-Madhoun’s eyes fill with tears as he recalls his fall from successful businessman to prisoner in a Hamas jail in Gaza.

Once the owner of a flourishing car dealership, he is one of more than 40,000 Gazans charged last year with failing to keep up debt payments.

Madhoun, a 40-year-old father of four, has sold most of his possessions, including his house and some of his cars, in a bid to pay back the $3 million debt that dragged his business into bankruptcy. “I have paid off half of it until now. I do not know how I will pay off the rest,” he told AFP from his jail cell. “I don’t own anything else now except these debts.”

Some 42,500 people were arrested last year for failing to pay debtors, according to Hamas police. At least 600 are currently in jail on similar charges.

Madhoun has been detained since September, but is allowed to leave two days a week to see his young children and search for the money to pay back his debtors.

AFP met him both in prison, after being granted access by Hamas, and during one of his leave days at his former company—now just a few cars gathering dust.

“The market collapsed. Even though prices fell, there were no customers,” Madhoun said. “If it continues, all the businesses in Gaza will fail.”

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