News / Middle East

Gaza Depends Upon Tunnel Economy

A new report finds the ongoing Israeli blockade is increasing the Gaza Strip's dependence on the so-called tunnel economy for basic supplies and income.  But, the report by the International Labor Organization says the informal tunnel economy brings with it many hazards.  The report is under discussion at the ILO's annual assembly.  

The ILO report says there has been some improvement in the economic situation in the Occupied Palestinian Territory.  But, it notes economic growth is unevenly distributed between Gaza and the West Bank.

Last year, it says Gaza's economy grew by only one percent compared to more than eight percent growth in the West Bank.  The report says the situation is somewhat improving in the West Bank because institutions governing law and order are still functioning.

Also, it says some of the barriers to freedom of movement and access have been removed.

On the other hand, the report says the three-year-old Israeli blockade of Gaza is crippling the territory's economy.  And this, says Special Representative of the ILO Director-General, Friedrich Buttler, is creating a booming tunnel economy.

"It goes along with informality and it goes along with very bad practices concerning occupational safety and health.  It goes along with child labor and, we have to say, with worst forms of child labor," Buttler said.  "And, one has to say that the de facto government of Gaza, the Hamas government does not take care of this, although they are profiting from this tunnel economy because they are regulating it and they are levying taxes on it," he added.  

Buttler says there are between 400 and 600 tunnels under the border between Egypt and Gaza.  He says around 20,000 people are related to the tunnel economy.

The ILO report says 75 percent of the population is food dependant and 70 percent of the population lives under the poverty line of $1 a day.

It says 80 percent of the factories have been damaged or destroyed.  It says they cannot be rebuilt because Israel does not allow cement to enter Gaza, fearing it might be used for military purposes.

The ILO's Regional Director for Arab States, Nada al-Nashif, says skills in Gaza have suffered enormously.  She says the ILO is trying to promote job creation.  

She says the ILO is paying particular attention to the needs of women and young people.

"A proportionately large youth population, which remains politically disenfranchised, economically marginalized and socially really quite isolated.  If you compound that with occupation, it really is a stick of dynamite," said al-Nashif.  We are trying to work with young people to create better opportunities, particularly young women where, I think, if you are young and a woman, then you are facing a double whammy in many cases," she said.  

Al-Nashif says the Palestinians of Gaza are not proud of the tunnel economy.  She says they are aware of the shortcomings.  And, she adds the returns are unequally divided among the people.

She says it is the poor who, once again, are losing out because they cannot afford to buy the goods coming into the territory.

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