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How Israel's easing of Gaza blockade has hurt Gaza business

Israel's lifting of the Gaza blockade allows Israeli goods into Gaza, but has not allowed Gazan manufacturers to import raw materials or export goods.

By Correspondent / November 9, 2010

A Palestinian smuggler lowers himself into a tunnel beneath the Egyptian- Gaza border in Rafah in the southern Gaza Strip on Sept. 27. Business has become so bad for Gaza's smuggler barons since Israel relaxed its blockade that tunnel traders have given up spiriting goods into the enclave, and some have even turned underground exporters.

Ibraheem Abu Mustafa/Reuters

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Gaza City, Gaza

Israel's move to ease the three-year blockade on the Gaza Strip has put consumer products that were long absent back on Gazan shelves and is cited as one of the reasons the territory’s economy grew rapidly this year.

But the June move, which has allowed Israeli goods to start flowing into Gaza, is actually hurting Gaza businesses. By allowing Israeli goods to flood the coastal enclave, while continuing to restrict Gazan manufacturers by keeping them from importing raw materials and exporting goods, the policy tilts the playing field.

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“The Israelis have turned Gaza into a place of consumption only,” says Ali El Haik, president of the Palestinian Businessmen Association. “They ban us from exporting and push their items on the market, killing our industry.”

Before Israel imposed a blockade on Hamas-run Gaza three years ago, Gaza exported more than $300 million worth of products each year, from garments to furniture to agricultural products to ice cream. Now, the only exports are limited seasonal shipments of strawberries and flowers, through a deal negotiated by The Netherlands.

Mr. Haik was one of the businessmen who met in October with the Israeli general who oversees the territories, Maj. Gen. Eitan Dangot. They asked Dangot, who heads Israel’s Coordinator of Government Activities in the Territories (COGAT), to begin allowing exports from Gaza.

Dangot said in October that Israel would seek to allow exports from Gaza by the middle of 2011. But before that can happen, Palestinian Authority (PA) officials would have to be present at the crossing points, said Guy Inbar, a COGAT spokesman, in a phone interview.

That is unlikely to happen until Fatah, the secular Palestinian faction that controls the PA, reconciles with Hamas, the Islamist group that rules Gaza. And few in Gaza have hope that will happen anytime soon.

RELATED: In Gaza, rise of Hamas military wing complicates reconciliation with Fatah

Israel – which together with the US and European Union consider Hamas a terrorist organization – has enforced a strict blockade of the Palestinian territory since Hamas wrested control of Gaza from Fatah in 2007. Israel relaxed the blockade in June, after a fatal Israeli raid on a Gaza-bound aid flotilla caused an international uproar. But the ban on exports remained in place, and most raw materials needed by manufacturers are also banned from entry.

A Gazan ice-cream maker's factory falls silent

Emand Al Wadiya, owner of Al Ameer Ice Cream company in Gaza City, is one of the manufacturers hurt by the ban on exports. Before 2007, 70 percent of his products were sold in the West Bank. Today, in his dormant factory, he flips through pictures showing the damage after his factory was bombed during Israel's 2009 war against Hamas.

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