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Page last updated at 20:42 GMT, Sunday, 20 January 2008

Gaza economy crushed by embargo

By Martin Patience
BBC News, Gaza City

Petrol station closed because of shortages
The closure has brought fuel deliveries to a halt
Gaza's gravediggers are busy. More than 35 Palestinians - mainly militants - were killed by Israeli air strikes last week.

But at the dusty Adwan cemetery in Gaza City, the gravediggers are facing an extra challenge.

The cement that they once used to build the graves has run out and they are now using bathroom tile grout.

"We can't guarantee the quality of work," says Anwar Dramleh, 33, one of the gravediggers holding a shovel in hands.

"It might lead to water leakage as the graves are not properly finished."

Across the Gaza Strip, everyday goods are no longer everyday.

Hospitals are reporting a lack of drugs and parts for medical equipment. The price of chocolate, cigarettes and Coke has doubled, even trebled, because of the shortages.

Since the Hamas takeover of the territory in June, Gaza has been subjected to an intensified economic embargo.

Power plant

The main goods crossing into Gaza has been closed and only humanitarian aid has been allowed into the strip since then.

It's a disaster for Gaza's economy - we have to be productive here, we can't just rely on international aid
Manal Hassan
Head of biscuit factory
But last week, Israel announced that it was closing all the border crossings into Gaza.

Israeli officials say this was in response to the almost continuous rocket fire from the territory onto neighbouring Israeli towns and villages.

UN agencies are warning that the humanitarian situation in the territory will worsen. On Sunday the only power plant in Gaza said that it was shutting down because of a lack of fuel supplies.

Palestinian business leaders and politicians also warn that the damage to the economy because of the embargo is now irreparable.

With no raw materials getting in and no finished products getting out, Gaza's industrial sector has collapsed. Over 100,000 Palestinians have lost their jobs in the last six months, according to local unions.

Amr Hamad, the head of the Palestinian Federation of Industries in Gaza, says that even if the goods crossing opened tomorrow, most of the business would not return.

"The Israeli importers have lost their trust in Gaza," he says. "I don't think they will come back to do business."

Relocation

The food and beverage sector is the one industry in Gaza that has fared well because food has not been subject to the economic embargo.

Queue for bread in Gaza City
People are trying to stock up on basic foodstuffs
Manal Hassan, the managing director of the Awda biscuit factory, says that her plant is one of the last still operating in the territory.

But she says that they will be forced to close in two weeks as they have run out of supplies to make the biscuit wrappers.

Like many other companies in Gaza, Awda's managers are looking to relocate abroad in neighbouring Egypt or in Jordan.

"It's a disaster for Gaza's economy," she says. "We have to be productive here, we can't just rely on international aid.

With soaring unemployment, many Gazans look for work wherever there is an opportunity.

'Death' jobs

Close to one of the crossings from Gaza into Israel, a few men working with donkeys sift though rubble for scrap metal.

The job is dangerous as Israeli troops sometimes fire at them, suspecting they are militants.

One of the workers said the job was like "walking towards death".

But he considers himself lucky to have a job - a rare privilege in Gaza these days.





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