Gaza industries paralysed by relentless Israeli siege

Only 200 tons of canned food are produced every month by the Pioneer industrial facility for canned foods. Before the imposition of the Israeli blockade back in 2007, the factory used to produce 3,000 tons monthly.

"I have 90 employees, including workers and admin staff. Every day, I think of laying many of them off, as my working capacity has lowered to less then 20 percent in the past year and a half," said Hamdan Hamada, owner of the Pioneer food processing plant.

Despite the fact that his production capacity is much less than before, Hamada cannot stop producing once and for all.

"If I want to stop working, I may not be able to collect funds owed by local traders who have picked our canned foods over the past couple of years. At least, I can now collect parts of those funds, which I use in running my facility," Hamada explained.

Exports

Over the past several years, Hamada has been trying to export his products - including beans and tomato sauce - to the occupied West Bank, in an attempt to compensate for losses in the local Gaza market. His is the largest processed food plant in northern Gaza.

"Whenever we wanted to ask for Israeli permission for export, we hear the same pretext - 'security considerations'. Actually, this has affected our production to the extent that we are now producing about 50 tons of canned food, every week. Such a production goes to a market that is already down, due to harsh economic conditions in the region," Hamada told The New Arab, while a handful of workers staffed the production line during one of the few working days at the factory.

Spare parts and electricity

The factory has a number of advanced machines and equipment. Among them is a lift connected to a large boiler, which Hamada names "the pressure cooker".

	Food factory owner Hamdan Hamada lives in fear of his machinery breaking down, which would spell the end of his business [Rami Almeghari]

"This lift has been badly working for the past three years and it is about to break down at any time.

"If it breaks down, my factory will be paralysed. Over the past three years, I have ordered and stockpiled the new lift at an Israeli store inside Israel, yet the Israeli authorities have not allowed it in, under the pretext of 'dual use'."

Construction down

At another facility in southern Gaza City, Naser Abu Karsh, a 30-year producer of building cement and bricks, has  2,000 bricks stockpiled for more than a year beneath the nearby Gaza bridge.

His bricks have not yet been sold, because of the recession in the trade of raw building materials across the Gaza Strip. Not only have the bricks not sold, neither has the cement produced by Abu Karsh's facility.

"Nowadays, we happen to work for no concrete income, unfortunately," he told The New Arab. "Prior to the Israeli blockade, we used to import construction raw materials on our own and stockpile them to sell out, whenever there is a demand. But these times, all the raw building materials are being brought via the GRM. This mechanism was applied following the last Israeli war on Gaza in 2014.

"From 2010 to 2014, our activity was good and we happened to work well, due to the underground tunnels between Egypt and Gaza, which Palestinians used for bringing in various goods and commodities."

Access to funds

Abu Karsh has been unable to deliver products to the local market for the past few years, as a majority of potential buyers, including building contractors, no longer buy with cash but through bank cheques - and many of those cheques have later proven to be invalid.

"For the time being, I have an amount of 600,000 shekels [$180,000], owed to me by many traders, but I can not have access to them. The only thing that I did was to file lawsuits to bring the funds back. Even so, I was unable to get them back, due to the fact that the traders themselves do not have funds any more.

"These times are the most crucial for me and maybe for many others," Abu Karsh told The New Arab.

His two cement-pumping machines, a truck and a bulldozer, were parked, gathering dust during a working day.

	Factory owner Naser Abu Karsh with his stockpile of 2,000 bricks, however the lack of demand has made his business redundant [Rami Almeghari]

Peak times

In Maghazi, a refugee camp in the central Gaza Strip, 55-year-old Lutfi Daher owns the Aldaher carpentry company.

He sits, sipping coffee, while his machines sit idle. His saws have stopped buzzing for the rest of the day, or at least until the electricity returns, as he can not afford to run his CNC and other carpentry machines using power generators. Alternative power supplies just cost too much.

"Fifteen years ago, I used to manufacture furniture and export to Israeli and West Bank markets, working around the clock. But these times, and as you see, we keep the machines off for prolonged hours during a working day," he said.

"Since the imposition of the Israeli blockade back in 2007, exports of furniture have stopped and only in the past few years, we have been informed that Israel has begun allowing exports of some furniture. However, the specifications the Israeli side demands are beyond our own capacities and the procedures are prohibitively complicated."

Less demand

Local demand for furniture has notably decreased, says Daher. People here can no longer buy new furniture like bedrooms, fitted kitchens and wardrobes.

	Lutfi Daher's machines stand motionless as there is no power to run them [Rami Almeghari]

"Since the Palestinian Authority has partially cut off salaries of employees, things have got worse and people's purchasing power has dropped drastically," he said.

"We are only hoping that the Israeli siege is lifted and that Palestinian political parties reunite."

Very low capacity

The once thriving industrial facilities of the Gaza Strip, population nearly two million, have ground to a halt. All factories have been either completely or partially affected by the current situation in Gaza.

"There are many problems facing the industrial sector," said Khader Shnaiwra, executive director for the Palestinian Union for Industries in Gaza.

"More than 1,000 facilities have been badly affected, due to many reasons - including the Israeli siege, the prolonged power outages, as well as the internal Palestinian division."

Shnaiwra said that the dual-use list of goods, imposed by Israel during the siege, included 400 items - among them raw building materials, other goods and spare machine parts.

In 2018, the industrial sector functions at less than 20 percent of its capacity. "The whole of industry here is being threatened and about to collapse, unless there is an intervention by concerned parties. Last week, trucks shipping various commodities into Gaza, waged a strike and suspended their work for one day, in protest of fewer imports and exports," Shnaiwra added.

The garment sector alone used to employ 35,000 workers, whereas now it only employs 1,600

Food processing plants used to employ 2,700 workers, while now they only employ 900. Construction facilities now employ only 3,860, compared with about 10,000 in previous years. The garment sector alone used to employ 35,000 workers, whereas now it only employs 1,600.

Limited exports

Before the 2007 Israeli siege took hold, there was a border crossing, the Karni crossing, specifically for industrial goods. It has stopped functioning since the Israeli siege was imposed.

"Recently, the Israeli side has allowed some exports of garments and furniture to the West Bank markets. The furniture allowed to be exported are being governed by some strict measures and procedures. For example, they imposed some measurements for a bedroom and this has put pressure on local producers. In the meantime, the Israeli side bans import of certain types of wood that are employed in the manufacture of furniture," Shnaiwra told The New Arab.

The union adds that all raw building materials are being imported through the GRM and not directly through local traders.

Other industries including the chemical production sector, pproducing cleaning materials and paints, have been hard-hit, with 180 factories shut down, and only 40 functioning.

The Israeli side has recently allowed exports of some ice-cream, wafer and some canned foods to Israel and the West Bank... So far, no single shipment of such foods has been exported, awaiting coordination and procedures

"The Israeli side has recently allowed exports of some ice-cream, wafer and some canned foods to Israel and the West Bank, within certain procedures. Only 45 factories out of 65 are now working. So far, no single shipment of such foods has been exported, awaiting coordination and procedures," Shnaiwra revealed.

There are 2,500 registered factories in the Gaza Strip. Production across the coastal enclave stands at just 17 percent.

Obstacles

In October, the Islamist Hamas party ruling Gaza signed a unity deal with the Fatah party of Palestinian Authority President Mahmoud Abbas in Cairo, in order to end the political division and bring relief to the Gaza Strip.

Several months before the deal was signed, President Abbas had imposed a number of measures against Hamas, including cutting off funds allocated for fuel to run Gaza's power plant and partially cutting off monthly salaries, received by tens of thousands of Gaza-based public-sector employees, officially on the PA's payroll.

These measures have further weakened Gaza's economy, already decimated by Israel's decade-long blockade.

This is such an unprecedented situation that requires intervention by all parties concerned. Otherwise, myself and others will have to completely shut down their facilities, something that is quite alarming

"What is needed is that Palestinian rival parties should go for a genuine unity that would alleviate the suffering of Gaza's two million residents. I believe that the PA should make sure all the measures taken against Gaza be removed and that the consensus government of Ramallah should hold responsibility for the coastal region," said Nehad Nashwan, a Gaza-based economic analyst.

This month, a delegation from Hamas visited the Egyptian capital, upon request by Egyptian mediators, amid  attempts by Egypt to forge Palestinian unity and thus improve economic conditions in the Gaza Strip.

"This is such an unprecedented situation that requires intervention by all parties concerned," Naser Abu Karsh, the cement factory owner told The New Arab. "Otherwise, myself and others will have to completely shut down their facilities, something that is quite alarming."  

Rami Almeghari is a Palestinian freelance journalist living and working in Gaza. 

Follow him on Twitter: @writeralmeghari