Gaza economic woes hit firms hard

By Alan Johnston
BBC News, Gaza

Restrictions on crossing at Karni have affected Gaza businesses

As the Israelis withdrew their soldiers and settlers from Gaza last autumn, a Palestinian businessman called Naim Siksik made a big bet on a brighter future.

He poured nearly $3m into exactly the kind of project that this poverty-stricken place needs.

His plastic pipe-making factory ought to be creating new jobs - and wealth.

But a year on, Mr Siksik very much wishes he had kept his money in his pocket.

"The political situation has destroyed all our ambitions," he said.

His factory, on the Karni industrial estate, lies almost completely idle.

The high-tech, pipe-moulding machines stand silent. The workers do minor bits of maintenance - or just sit around chatting.

Production has halted because for about six weeks the plant has not been able to get the raw materials it needs.

This is a result of the very tight restrictions that Israel imposes on the movement of goods in and out of Gaza.

On many days this year the main entry point - the Karni cargo terminal - has been shut. At other times traffic can be reduced to a trickle.

Suicide bomb risk

Israel says that it must exert these controls for security reasons. It says Palestinian militants continually plot to attack Israelis working on the border crossing points.

There was a failed attempt to mount an armed assault at Karni earlier this year. And nearly two years ago, several Israelis were killed when suicide bombers got through.

They were Jihadi militants from groups that regard not just the West Bank, East Jerusalem and Gaza as occupied territory. In their eyes, the state of Israel itself sits on Palestinian land - and they dream of its eventual destruction.

For now, they say that their attacks are a response to daily Israeli army raids, arrests and killings in the occupied territories.

But Palestinians argue that whatever threat the militants may pose, the Israeli border security measures are far more severe than necessary.

They believe Israel is deliberately strangling Gaza economically - aiming to keep it weak and endlessly susceptible to pressure.

This view was given credence several months ago when the Israeli media quoted a very senior government figure as saying that the Palestinians would not be starved - but that they would be kept on a diet.

Bankrupt government

The difficulties of getting supplies across the border are not the only problem for Mr Siksik and his pipe factory.

Firms struggle for power since Israel bombed Gaza's electricity plant

The industrial estate has been raided by Israel troops recently. And Mr Siksik's workers are in constant fear of being caught up in the next sudden armoured thrust into the area.

The factory also suffers serious electricity problems - like the rest of Gaza. The Israelis have bombed the territory's only power plant.

And the whole pipe-making business was dealt a blow when the Hamas militant movement won January's general election.

Because Hamas will not renounce violence and accept Israel's right to exist, the government it formed has been subjected to an Israeli and Western economic boycott.

Mr Siksik says that the bankrupt Palestinian Authority - a major customer for his factory - can no longer afford to buy the sewage and drainage pipes that he makes.

"Before the elections things were better," Mr Siksik said. "But now it would be mad for anyone to make any industrial project in Gaza.

"We have spent lots of money, but we can't collect on our investment."

Bottom of the heap

The pressures have been too much for some of Mr Siksik's neighbours on the industrial estate. About 10 factories have shut and moved production to Egypt, Jordan or elsewhere.

An embargo on the Hamas-led government has hit Gazans hard

They took with them many hundreds of jobs that Gaza desperately needed.

And it is not just the small band of wealthy entrepreneurs who are suffering. The entire economy is on its knees.

A recent United Nations report described Gaza and the West Bank as being subjected to an accelerating "process of de-development" that threatens complete collapse.

Many of the great army of government workers, policemen and soldiers are owed large amounts in unpaid wages.

The civil service - the backbone of the Palestinian middle class - has been plunged into poverty.

I get up in the morning and I find some change in my pocket - it's enough, but I'm living in debt Hilmeh, street peddler

And at the bottom of Gaza's heap of economic trouble is a 35-year-old trader called Hilmeh.

He is what is known here as a "bag seller". He wanders the streets trying to peddle cheap cosmetics that he carries in two plastic bags.

Sometimes he makes a few dollars and sometimes he doesn't, but he gets by - just.

"Thanks to God - I survive," Hilmeh said. "I get up in the morning and I find some change in my pocket. It's enough. But I'm living in debt."

He owes thousands of shekels to traders in the market who have given him credit for everything he needs to support his family.

Sometimes his creditors find him, in the two room home he has built on some waste ground in Gaza City.

"It troubles me - it makes me embarrassed," said Hilmeh. "When you knock on my door looking for money, and I don't have that money - it destroys me."

There are many people in Hilmeh's position. But nobody here is allowed to go under completely in what is, in many ways, a close, supportive community that has seen a lot of hardship.

Hilmeh described it like this. He said that people in Gaza are "Arabs and Muslims - they understand the circumstances of their friends".