Foreign Aid to the Gaza Strip Between Trusteeship and De-Development by Ahmed Tannira

Author:Ahmed Tannira [Tannira, Ahmed]
Language: eng
Format: epub
Tags: Political Economy, Developing & Emerging Countries, Middle Eastern, Social Science, Peace, Political Science, World
ISBN: 9781785275722
Google: tcUOEAAAQBAJ
Goodreads: 54487424
Publisher: Anthem Press
Published: 2020-11-13T00:00:00+00:00

4.4.4 Hamas, the Tunnel Economy and the Further Reconstruction of Socio-economic Realities

In the period following the political division between Gaza and the WB in 2007, the private sector became the key sector in the Gaza Strip in terms of necessary supplies and services. This sector was once again left struggling to survive after the strict blockade was imposed on Gaza following the Hamas takeover of the Gaza Strip in 2007. More than 90 per cent of the sector was reported as paralysed (UNISPAL, 2009). The construction sector had completely stopped its operation, causing unemployment to soar, and the inflation for some goods ran to nearly 200 per cent per month between 2007 and 2009 (UNISPAL, 2009).

Additionally, there were warnings of possible lasting damage to the private sector as some manufacturers had already relocated their services and companies to Egypt, Jordan and the WB (Portland Trust, 2012). The relocation of some of the private sector was also an indirect result of the relocation of a large number of the Fatah and PLO-affiliated PA officials and their middle class associates that no longer felt safe after Hamas had control of the Strip.

As mentioned in Chapter 3, the sector revived after Gaza saw increased tunnel trade following Israel’s Operation Cast Lead in 2008/2009 and the collapse of the Mubarak regime in Egypt. Gaza received its main supplies from Egypt through a network of tunnels that were controlled by the Hamas government and its affiliate militant branch Izzi Eddin Al-Qassam. The ‘tunnel trade’ between Gaza and Egypt was estimated at tens of millions of dollars a month, and it succeeded in creating thousands of employment opportunities.44 The major consequence of the tunnel trade was that it created a good source of income for Hamas as a government and for the members of the party, who generally played the biggest role in operating and owning these tunnels. This income gave Hamas the opportunity to once again reconstruct Gaza’s middle class and control the way the private sector operates in the Gaza Strip.

Due to the increasing economic impact the tunnel had, eventually, according to the Hamas government official, Hamas formed what became the Tunnels Committee, whose role was to monitor and control tunnel trade and operation. In line with this, the Hamas government applied formal taxes on goods coming through tunnels, similar to how goods coming through formal commercial crossings with Israel were handled, which meant that Hamas succeeded in generating high income for its government and party. The formal traders and factory owners struggled to operate through formal commercial crossings with Israel as the latter continued to impose high restrictions on the number of commercial items allowed into the Gaza Strip. As a result, they had no alternative except to shift their trade to the tunnels and cooperate with the new tunnel traders and owners.

The tunnel trade had created new rules of the game for Gaza’s private sector. It was easy money, and Gaza was thirsty for supplies. The new traders, who were mostly Hamas

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