January 12, 2010
In News The Israel-Palestine Conflict
The Hamas government approved last week a $540 million budget for 2010, which was referred to as an aid budget rather than a development one. Hamas sources said they hoped donations from “sister countries” would help reduce the deficit, which is expected to total at least $90 million.The Hamas budget is very small compared to the Gaza residents’ needs, particularly when taking into account the fact that 2009 was one of their worse years. Even Hamas sources have admitted that up until the movement took over the Strip in the summer of 2007, the economic situation was “reasonable”. Similar remarks were made recently by Hamas’ economy minister Ziad Zaza in an interview to a leading Arab website. It appears that the Palestinians have managed to deal with the blockade, particularly thanks to the prosperous smuggling activity in Rafah’s underground tunnels, but Operation Cast Lead and its ramifications (led by the new Egyptian barrier) have disrupted Hamas’ economic plans. The Arab press has been dealing with the harsh economic reality in the Strip these days. There is no dispute over the fact that the situation in Gaza in the end of 2009 was bad, even if Hamas’ spokespeople tend to exaggerate in some cases. The Hamas government says the damages of the war amount to $4 billion, including the destruction of 14% of all buildings in the Strip – data which cannot be verified. Everyone agrees, however, that in the past two and a half years – and especially in 2009 – thousands of Gazans have lost their jobs and sank deep into poverty and distress. According to World Bank figures, some 4,000 factories and workshops operated in the Strip before the Hamas takeover, but the activity in 95% of them has been halted frequently due to the siege, because of the shortage in raw materials. According to the Palestinians, the problem worsened during the fighting, when 700 factories and workshops were destroyed. According to unofficial estimates, the unemployment rate currently stands at 60%, and therefore about 80% of the Strip’s residents are living under the poverty line (about $2 per capita a day). One of the fields most hurt by the fighting was the concrete industry. Owners of concrete facilities in the Strip say that the Israel Defense Forces has been focusing on destroying the factories in the past few years, including during Operation Cast Lead. A total of 19 concrete facilities were destroyed in Gaza, out of 30 operating in the Strip until mid 2007. The 11 facilities which are still standing are not operational due to a shortage of raw materials. A similar situation is taking place in the Gazan textile industry, which was mainly employed by Israeli companies before the Hamas takeover. The infrastructures, agriculture and public services have also been damaged. By the look of things at the start of 2010, Hamas prime minister Ismail Haniyeh’s “vision” that the Strip’s residents will have to settle for “salt and zaatar” appears more realistic than ever.