Israel-Gaza tensions: Pilot program to expand Gaza exports falters

The Bright Star textile company in Gaza used to sew 4 million pieces of clothing a month, most of it for export to Israel and beyond – part of a humming manufacturing sector that accounted for nearly a third of Gaza's economy. But after Israel imposed a blockade in 2006, Gaza's factories fell silent, unable to import the raw materials they needed or send their finished products abroad for sale.

This year, Israel began allowing cloth into the tiny coastal territory and said it would allow exports of garments and furniture – a move that promised to help Gaza’s floundering economy get back on its feet after the five-year siege and a brief war with Israel, which devastated the territory's infrastructure.

The Bright Star factory owner fired up the machines, rehired workers, and began churning out products like children’s clothes, soccer jerseys, and men’s suits. But it has taken officials and businessmen 10 months to hash out the details of getting the products through Israeli-controlled border crossings. So the factory fell silent once again, as Ahmed Alghouti tried unsuccessfully to sell all the clothes in Gaza.

“When they allowed raw materials to come into the strip, we started opening the factory ... with hope that they will open the borders for exporting,” says Mr. Alghouti. “But now we have lost hope.”

Israel has already allowed limited agricultural exports over the past year, including strawberries, flowers, cherry tomatoes, and other vegetables. A test run for expanding exports was set to begin yesterday, when a furniture shipment – the first nonagricultural product to be exported since Israel’s blockade began – was due to cross Gaza’s border.

But the factory where the furniture shipment was stored appeared to be intentionally set on fire on Monday, owner Waddah Bsaiso told the Monitor. The blaze, which destroyed the furniture, will delay the pilot program for at least a few weeks.

Gaza's economy grows 28 percent 

Many factories like Bright Star fired up this year in anticipation of more open borders. That movement, along with international development projects and a building boom fed by illegal smuggling tunnels, led to enough activity that a September World Bank report said Gaza’s economy grew by 28 percent in the first half of 2011.

Many on the ground consider that number inflated – and unsustainable, driven in large part by a building boom, as well as international aid projects.

“We need to talk about agriculture, factories, fishing, other industries that create sustainable growth,” says Gaza economist Omar Shaban. “We need to build a transparent economy, an accountable economy – on the ground, not underneath it. The danger of this report is that when people in Europe read it, they say things in Gaza are OK, we don't need to lift the siege. It creates an illusion.”

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