Gazans Get Extra Cheese, Little Growth From Eased Blockade
11 August 2010
(Bloomberg) At Shafiq Nushtaha's Gaza City grocery, dairy prices have been cut in half as Israeli imports flood the territory and products such as French Laughing Cow cheese that were smuggled in from Egypt start to spoil.
Israel's loosening of import restrictions since June has led to an almost two-thirds increase in consumer products such as chocolate, jam and shaving cream entering the coastal enclave.
Still, the new rules have barely addressed the challenge of rebuilding the Hamas-ruled territory's economy and allowing in all the building materials needed to fix war damage, according to Maxwell Gaylard, the United Nations humanitarian coordinator for the West Bank and Gaza Strip.
"Certainly Israel has switched directions and this to us is a good thing," Gaylard said in an interview. On the other hand, there is still "a long way to go," he said.
The boost in imports comes as Defense Minister Ehud Barak testified today before a government commission investigating the May 31 commando raid on a flotilla carrying aid to Gaza in which nine Turkish activists were killed. Prime Minister Benjamin Netanyahu addressed the commission in Jerusalem yesterday and said that international pressure following the incident helped prompt Israel to loosen import restrictions.
This month, Israel started allowing as many as 250 trucks a day to unload goods at the Kerem Shalom crossing to Gaza, up from 150 in July and about 80 before that, according to data provided by Raed Fattouh, a liaison officer for the Palestinian Authority. Barak said during his testimony that the number of trucks should soon reach 400 a day.
Goods Return
Israeli goods have returned to Gaza after three years in which most consumer goods other than UN relief supplies entered illegally through some 1,000 smuggling tunnels dug under the Egyptian border, which were licensed by the Islamic Hamas movement that rules the enclave. During that time, Israel permitted about 100 basic food products and consumer items to enter Gaza, while restricting other goods.
Companies including Israel's Tnuva Marketing Cooperative, which sells Emek-brand cheese and other dairy products, are likely to benefit from the new rules.
At his store near the beach in Gaza City, Nushtaha is trying to clear out his inventory of Fromageries Bel SA's La Vache Qui Rit cheese spread, which was smuggled in months ago from Egypt. Signs advertise the cheese packages -- sold in English-speaking countries under the Laughing Cow brand name -- at five for 10 shekels ($2.64), roughly half what it cost in May.
Daoud al-Saqqa, who owns a grocery store six blocks west of Nushtaha's, said he has had to cut prices as shelves pile up with chocolate, potato chips, cookies and soft drinks from Israel.
Good for Shoppers
"It's been good for shoppers but not for those of us who own stores and have to take losses," said Al-Saqqa.
Israel has been blockading Gaza by air, land and sea since Hamas seized control in 2007 after winning Palestinian parliamentary elections the previous year. Israel says it needs to stop weapons from being smuggled to the group, which is considered a terrorist organization by the U.S., the European Union and Israel.
Even while announcing that Israel will loosen its restrictions on goods brought into Gaza, Netanyahu said certain "dual-use" materials that could be used in construction and weapons-making would continue to be banned.
Building materials brought into Gaza must be connected to international projects, according to Israeli regulations. Israel says it restricts imports of construction materials because they can be used to build rockets, bunkers or bombs.
Security Concerns
"We understand the security concerns of Israel," Gaylard said. "But if you want a Gaza that works, that has a working economy where the kids go to school and hopefully get a decent education, then the blockade doesn't make sense."
Amer Hamad, a Gaza furniture-maker, said his business has been paralyzed because he can't get wood from Israel that he needs to make tables. His inability to export has limited his market to Gaza, he said.
Unemployment hovers around 40 percent and per capita gross domestic product is about $1,100 in the coastal enclave, Gaylard said.
The UN gives support to about 80 percent of Gaza's population of 1.5 million, he said.
Israel says the blockade is legal because it is in "a state of armed conflict" with Hamas. Some countries, such as Turkey, dispute the legality. Egypt has kept its border with Gaza closed most of the time since Hamas took over, easing restrictions after the flotilla killings.
Ramadan Dishes
Mark Regev, an Israeli government spokesman, said the question of allowing exports from Gaza "is still pending."
"You're asking us to take the word of Hamas that there's nothing in a particular shipment that's going to explode when we inspect it?" Regev said. "That's a big risk."
Nushtaha is looking forward to this week when the holy month of Ramadan begins and families eat the traditional pre- dawn "suhoor" meal before their daily fast. Cheese dishes are a favorite.
"It cost a lot to get these items that were only obtainable through the tunnels, and now I have to get rid of them cheap," the 45-year-old grocer said. "It's a good time to buy cheese."
