It’s the export, stupid!

November 30, 2011

Flowers and Vegetables. Munther Budi Farm , Gaza , Biet Lahia

Flowers and Vegetables. Munther Budi Farm, Gaza, Beit Lahia

Three days ago two truckloads of strawberries exited Gaza and passed through Israel on their way to Europe. They were the first truckloads of export allowed out of the Strip in over six months, part of a program funded by the Dutch government to bring Gaza produce to European markets.

To mark the occasion, we recall an animated clip about the volume of goods entering the Gaza Strip released by the Coordinator of Government Activities in the Territories (COGAT) in June of this year.The numbers seem impressive – every day about 260 trucks enter Gaza from Israel, carrying about 6,000 tons of goods. According to the clip, Israel can transfer double that volume into the Gaza Strip, about 400 trucks per day, carrying 12,000 tons of goods, however “demand is ultimately determined by the Palestinians”.In other words, what closure?

As usual, our main dispute is not with the figures released by COGAT,we just wish to fill in the blanks and give a more complete picture of the situation. For example, alongside the relaxation in restrictions on entrance of goods to Gaza since mid-2010, the ban on sale of goods out of Gaza has remained in place. The two truckloads of strawberries that left in Sunday come on the heels of more than six months during which no product of any kind left the Strip. So can we call it an end to the restrictions on export? Doesn’t look like it. Are the restrictions for security reasons? You make the call.

So is there export? Very little and with great difficulty

Sale of goods from Gaza to the West Bank and Israel
Before 2007: 85% of exports from Gaza were sold in Israel and the West Bank
Since 2007: No goods from Gaza have been permitted to be sold in Israel and the West Bank

Produce from Gaza enters Israel, where it is transferred to the Ashdod seaport or Ben Gurion airport for travel on to Europe. Marketing Palestinian produce all the way in Europe is naturally more costly, so much so that it’s simply not profitable. In other words, the export isn’t a product of a functioning economy, more like the outcome of a humanitarian aid project.

Sale of goods to the West Bank or Israel from Gaza has been strictly prohibited since June of 2007, despite the fact that the produce that is exported to Europe enters Israel and undergoes full security screening en route to the port and airport. Before Israel tightened the closure in 2007, some 85% of the goods leaving Gaza were destined for Israel and the West Bank.

“Over the past year”, COGAT’s website states, “Palestinian exporters brought more than 399 tons of strawberries, 10 million carnations, 6.5 tons of cherry tomatoes, and 6 tons of yellow, red, and green bell pepper to European markets”. Sounds great, right? This is the entire quantity of export from Gaza for a whole year. Gaza’s strawberry export potential is some 2,300 tons per year. In 2005, 904 tons of cherry tomatoes were exported from Gaza, 140 times the amount planned for the upcoming season.

Let the goods go

Export from Gaza
Potential strawberry export from Gaza: 2,300 tons/year
Strawberry export from Gaza in 2010: 904 tons
Cherry tomato export from Gaza in 2010: 6.5 tons

Let’s get back to COGAT’s animated video clip. It says that Israel doesn’t transfer more goods into the Strip because Palestinians aren’t asking for more. This is partially true. Israel doesn’t “transfer” goods to Palestinians. It only allows goods to be bought by Palestinians. Palestinians are not demanding more goods in part because of continued restrictions on the entrance of some raw materials (including construction materials) and in part because purchasing power is weak in the Strip. And purchasing power will remain weak as long as Israel continues to severely restrict export.

In the second quarter of 2011, unemployment in the Gaza Strip stood at 28%. Unemployment is particularly high in the 20 – 24 age bracket, where it reached 42% in the first half of 2011. Without a vibrant and profitable manufacturing sector – industrial and agricultural – it is hard to see how the situation might improve.

What does Israel have to gain by continuing to paralyze the private sector in the Gaza Strip? According to Prime Minister Benjamin Netanyahu, the answer is clear – nothing. This is what Netanyahu said in February:  “… [S]tability is important at all times, but it’s especially important now and the first set of steps that we’re taking are to continue the policy we’ve advanced to enable economic growth in the Palestinian areas…. it’s contributed to a better life for the Palestinians and I think it’s contributing to peace and security in the long term”.Well spoken indeed, but it is time to put words into action.

Stay tuned, in the next post we share three export stories: dangerous potatoes, burning furniture, and the runaway cherry tomatoes…

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