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Israel's easing of blockade helps Gaza's economy

By Ibrahim Barzak

Associated Press

Published: Tuesday, July 5 2011 4:10 a.m. MDT

Passengers are seen on the deck of a boat, shortly after the boat was returned to the port by the coast guard in Agiios Nikolaos, northeastern Crete, Greece on Monday, July 4, 2011. A boat taking part in a flotilla seeking to break Israel's Gaza Strip sea blockade tried to leave the southern island of Crete Monday but was turned back by Greek forces, as the Athens government warned that lives could be lost if the mission goes forward. The coast guard stopped the boat shortly after it set sail without permission from the port of Agios Nikolaos in northeastern Crete, and towed it back into port

Image Photo Services, Associated Press

BEIT LAHIYA, Gaza Strip — Maher Khoudari boasts that his Gaza grocery has a wide assortment of chocolates for sale — even some you couldn't find in the cosmopolitan Israeli city of Tel Aviv. The problem is, there is no one to buy them.

Israel eased its blockade of the Hamas-ruled Palestinian territory a year ago and now allows virtually all consumer goods in, meaning there are no longer acute shortages of foods or basic household items. Tiny construction projects have begun sprouting up, and Gaza is awash in big ticket items such as cars and refrigerators.

But deep troubles remain. Israel maintains restrictions on the key construction and export sectors, and the vast majority of Gazans are still barred from traveling in and out of the territory. Nearly half the work force is unemployed, and more than 70 percent of the population relies on food handouts, making fancy chocolates, like any other non-essential goods, a luxury most cannot afford.

"We have no customers," says Khoudari, 40, who owns one of Gaza's biggest supermarkets.

His predicament sums up Gaza's economic situation after blockade was eased amid an international outcry over Israel's deadly raid on a blockade-busting international flotilla. Now pro-Palestinian activists in Greece are laying plans to launch a new protest flotilla toward Gaza, drawing attention back to the plight of the impoverished territory of 1.6 million.

Israel dismisses claims by Palestinians and their sympathizers that there is a humanitarian crisis. Maj. Gen. Eitan Dangot, who oversees Israel's border policy with Gaza, told reporters last week that Israel has taken numerous measures in recent months to boost the Palestinian economy.

He said the number of trucks carrying goods into Gaza has more than tripled, cargo crossings with the area are being expanded and that Israel is now allowing dozens of building and infrastructure projects to move forward.

Palestinian officials say the Israeli measures are far too little. Most critically, Israel continues to tightly restrict the entry of construction materials — badly needed to repair the damage from an Israeli military offensive two years ago. Tight restrictions on exports, along with the entry of raw materials, mean that more than 80 percent of Gaza factories are either shuttered or working at limited capacity.

"Israel has made much of the fact that there is no starvation in Gaza," said Gaza economist Omar Shaban. "But the humanitarian crisis in Gaza is not about food," he added. "The humanitarian crisis is about education, it's about development, about imprisonment."

The international community has repeatedly expressed concerns about the blockade — but in a statement this week, the "Quartet" of Mideast peacemakers said conditions in Gaza have significantly improved.

The statement noted "a marked increase in the range and scope of goods and materials moving into Gaza, an increase in international project activity, and the facilitation of some exports." Nonetheless, it said "considerably more needs to be done to increase the flow of people and goods to and from Gaza."

The economy of Gaza, a crowded seaside strip sandwiched between Egypt and Israel, has always struggled.

Shaban said that even if Israel lifted all restrictions on Gaza, it would take years for the economy to recover.

"This is not something you can achieve in days or months," he said, suggested the territory would need an international bailout similar to the post-World War II Marshall Plan that rescued Europe.

Israel and Egypt imposed the blockade after Hamas-linked militants captured an Israeli soldier in 2006. The restrictions were further tightened after Hamas seized control of Gaza the following year.

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