A Non-Economy

A leading Israeli business newspaper this week provided a window into a different Palestinian economy – “a tunnel economy.” Meanwhile, in the Gaza Strip, the status quo continues this week – with Israel blowing up more tunnels under the Gaza-Egypt border in response to rocket fire on Israel.

Perhaps the Israeli business sector understands something that Israeli politicians simply don’t comprehend – that the Palestinian economy in Gaza, which has collapsed due the 27-month-long closure imposed by Israel, has changed beyond recognition: hundreds of tunnels are currently operational in the Strip (between 600 and 1,000) and thousands of people are risking their lives to work in them. These tunnels are supplying about two-thirds of the goods required by the residents of the Gaza Strip. Thousands of dollars in permit fees and millions of dollars in taxes are being collected by the Hamas government. 

While in Israel they are saying that the last Gaza war gave Israel an economic boost, in Gaza, besides the other kinds of damage sustained, thousands of people who chose to invest in operating the tunnels blown up by Israel have sustained a financial loss.

Israeli security officials view the tunnels as a security threat, due to the concern that arms will be smuggled through them, and this is the reason given for their destruction. Palestinian traders would also prefer to avoid the high costs of transporting goods via the tunnels and resume overland trade, via the border crossings that have remained closed now for over two years.

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