Reuters
GAZA: Businessmen in Gaza, facing steadily worsening economic conditions since Israel limited trade in and out of the poor coastal strip, are trying to move their operations across the border into Egypt. Unable to import raw materials or export finished goods because of the near embargo, many factories are having to lay off workers and may shut down entirely if they can t relocate. Mohammad Al-Susi, owner of one of the largest furniture factories in Gaza, has already rented a site in Egypt and is in the process of moving operations across the southern border. He says Israel s frequent closure of the Karni crossing, the main commercial trading point with Gaza, is to blame. We depend on exporting our products to Israel and the West Bank but for four months now we haven t been able to make one shipment out, Susi told Reuters. That has meant huge losses. We haven t been able to fulfill deals we made and we don t see any indication that things are going to get better any time soon. Karni, through which virtually all commercial supplies enter and leave Gaza, has been closed on a regular basis since the Islamist movement Hamas won Palestinian elections in January. As of May 2, the crossing was shut for 57 days of this year, or 47 percent of the time, according to the United Nations. By comparison, Karni was closed 18 percent of 2005. Israel says it closes the border for security reasons and fears militants may enter Israel to carry out attacks. Susi is not the only businessman to relocate. Abu Al-Abed is head of production at a Gaza sewing factory that has already moved part of its operation to Egypt. We used to bring fabric from Israel and finish it here, but for months the Israeli company had to reduce the quantities it was sending us, said Abed. The limits meant more than 100 of the company s 163 workers had to be laid off. Now the company is back in business. The owner has already opened a place in Egypt and will continue to deal with the same Israeli company, Abed said. Some businessmen have not been so fortunate. Kamal al-Jayar ran a successful fiberglass factory in Gaza for six years, but for the past three months was unable to import essential materials because of Karni s closure. I had to close the factory and dismiss all the workers, the father of eight said. Now me and my brother, who is also my partner, have had to find other jobs, said Jayar, who now works as a taxi driver. To reduce expenses he has converted his car to run on cooking gas rather than petrol, although even that has its problems – Israel recently stopped cooking gas entering Gaza. Economist Khaled Abdel-Shafi calls Gaza s economic crisis the worst in 40 years and says unemployment now exceeds 50 percent. He also estimates that up to 80 percent of the population (1.4 million) is living below the poverty line. It s all a long way from the optimism that hung over Gaza in September last year, when Israel completed a pull out after 38 years of occupation. Then, many hoped an independent Gaza would see foreign investment and business boom and poverty decline. Abdel-Shafi says Gaza businessmen are not only thinking about relocating to Egypt but to Sudan too. That might suggest entrepreneurship, but it s also a death knell for investment. If local investors are running away from Gaza, international investors will not even think about it, he said.
