Gaza's economic woes pile up

22 Feb, 2014

Voices of construction workers and the noise from their tools used to ring out in Gaza's streets. Now hulks of unfinished buildings stand in eerie silence, and the idle builders are left to worry how to make ends meet. An Egyptian-Israeli blockade on the Gaza Strip, run by the Hamas Islamist movement, has left industry and construction gasping for resources, pushing unemployment to dizzying heights and deepening suffering for impoverished residents.
The problem intensified after a campaign begun in July by Egypt's military-backed government to close cross-border smuggling tunnels that used to provide Gaza with basic goods including food, fuel and building materials. Joblessness jumped to 38.5 percent at the end of last year from 32 percent in the third quarter of 2013, according to the Palestinian Central Bureau of Statistics.
The downturn has put Hamas, deemed a terrorist organisation by many Western states, in a financial and political bind. Buoyed by the Arab uprisings which brought its Muslim Brotherhood allies to power in Cairo, Hamas shunned its old patrons in Iran and Syria. But when the Egyptian army ousted the Islamist government last July, Hamas was left isolated.
Determined to cling to the weapons that have made it a pariah in the Western world, it is being forced to explore economic reforms, including possible privatisation's, hoping to alleviate the woes that are everywhere to be seen. Sitting beside a huge apartment building he has been unable to finish because of the lack of cement, businessman Mohammed Abu Izz sips his tea and smokes a cigarette.
"Forty families have been waiting for five months to move in. Most them paid the price of their apartments in full and I could not deliver," he said glumly. Gaza is wedged between Israel and Egypt on a 40-km (25-mile) stretch of the Mediterranean coast. Israel tightened a blockade when Hamas, sworn to its destruction, seized control of the strip in a brief 2007 civil war, ousting the forces of the Western-backed Palestinian president, Mahmoud Abbas.
Goods from Israel used to account for between a third and half of imports to the enclave, with the rest coming through the tunnels on the border with Egypt. Over the past six months, an angry Egypt has caved in many of the underground passages, once a lifeline to Gaza's 1.8 million people, taking the economy down with them. Egypt accuses Hamas of backing al Qaeda-linked militant groups which have stepped up attacks against Egyptian security forces in the neighbouring Sinai peninsula over the past few months. The violence has spread to Cairo and other cities.

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