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Gaza's economy in tatters
Published in The Saudi Gazette on 01 - 02 - 2009

Not long ago, Yaser Alwadeya's factory was the largest food maker in the Gaza Strip, producing cookies, ice cream and other treats for residents of the blockaded territory. Today, the sprawling complex lies in ruins.
The heavy damage is testament to the scale of destruction caused by Israel's three-week military offensive, and illustrates the challenges Gaza faces as it tries to rebuild.
“Beyond the human losses, the economy is the other great victim of this war,” said Amr Hamad, Gaza's executive manager for the Palestinian Federation of Industries.
Israel launched the offensive in response to years of rocket attacks by Islamic militants in Gaza. The fighting left 1,284 Palestinians dead, according to the Palestinian Center for Human Rights, along with 13 Israelis. Hamad says some 215 factories and workshops were destroyed or seriously damaged, in addition to an estimated 20,000 homes left uninhabitable, according to a West Bank-based economic think tank.
Even before the fighting, Gaza's economy had been limping along, subject to more than a year of punishing Israeli sanctions that severely limited the flow of industrial goods into the area. Now, it is virtually comatose.
“What hadn't been destroyed by the siege (Israeli sanctions) was finished off by bombs and tanks,” Hamad said, adding that 60 percent of Gaza's cement plants are now inoperable and a third of all metal workshops were destroyed. Airstrikes also targeted the territory's largest flour mill, wiping out 10,000 tons of wheat, as well as its Pepsi-Cola bottling plant and the locally made rival, Mecca Cola.
During a visit this week to the industrial zone in the northern Gaza town of Beit Hanoun where the Alwadeya factory is located, UN humanitarian chief John Holmes said the extent of the wreckage was “shocking,” especially the “very systematic” destruction of industry.
Holmes and other UN officials, along with most international aid groups, have called on Israel to reopen Gaza's crossings not only to increase the flow of humanitarian supplies but also to allow in desperately needed construction and other raw materials. The crossings have been largely closed since Hamas seized power in Gaza in June 2007.
Israeli Cabinet Minister Isaac Herzog says the crossings are already sufficiently open.
“Humanitarian aid is entering Gaza at a rate of 150 trucks a day, which is the maximum amount of aid that the Palestinians can absorb at this time,” Herzog, who oversees what is allowed into the territory, told The Associated Press.
However, that's only about a third of the daily traffic into Gaza before the embargo, according to Hamad. Now, he said, Gaza urgently needs building materials of all kinds, including 3.2 million square feet (0.3 million sq. meters) of glass to fix broken windows, along with 2,000 tons of aluminum and ‘thousands of tons' of cement.
Before the offensive, Alwadeya's factory was by far the largest food producer in Gaza.
The family firm, started as an ice-cream shack by Alwadeya's grandfather in 1962, grew to $10 million in annual sales before Gaza's embargo, employing 350 workers to produce cookies, potato chips and dairy products. More than half the sales came from exports to Israel.
Alwadeya struggled to stay in business after the blockade, cutting his staff to 190 and buying supplies smuggled through tunnels under the Egyptian border. He was at home in Gaza City during the Israeli offensive and returned when it ended to find a scene of devastation.
“What strikes me is how deliberate this was,” Alwadeya said Wednesday, pointing at the earth dug up next to one of his assembly plants by an Israeli army bulldozer, apparently to create a ramp so it could then roll onto the factory. Bulldozer or tank tracks were still visible on the collapsed roof.
He estimated the damage at $22 million. He doesn't expect to recover any of that since his insurance company says it doesn't cover acts of war. Among the losses: 300 tons of powdered milk imported from Israel to make ice cream.
“It's soon the beginning of the season, and there'll be no more ice-cream in Gaza,” Alwadeya said as a strong smell of rotting barbecue-flavored chips filled the air.
At Gaza's largest private fish farm, owner Sohail Kehel was in tears Wednesday as he sifted through some of the 20,000 dead fish now rotting in the six destroyed artificial ponds where he once raised red snapper.
There was no trace of explosives or any ammunition casings in the open stretch of farmland where his enterprise was based along the coast in central Gaza. Large expanses of bulldozer tracks and shoveled earth left by Israeli military vehicles were all that remained.
Like Alwadeya, Kehel was holed up at home when the destruction occurred. However, both men insist gunbattles were highly unlikely because their businesses lie on open ground where militants would find no cover for fighting and in areas that were occupied early on by Israeli ground forces.
Both also note the fact that the destruction of their infrastructure was a lengthy process involving bulldozers.
Even before the latest destruction, the United Nations said some 80 percent of Gaza's 1.4 million people lived below the poverty level and some 800,000 were receiving UN food aid. Only 23 of Gaza's 3,500 industrial firms were still functioning and of the 35,000 industrial workers employed before the embargo, 33,000 had already been laid off before the offensive, according to Hamad.
The remainder are now also out of work, because none of the factories still standing have raw material to work with, he said. Faiga Al-Masri is among those struggling to make ends meet.


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