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2012 Edward Said Memorial Lecture

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Wednesday, October 10, 2012





Video and Edited Transcript
Dr. Sara Roy
Transcript No. 374 (10 October 2012)






10 October 2012
The Palestine Center
Washington, DC


[NOTE: This lecture is drawn from a longer research work that will be published (with full citations) as a new introduction to the third edition of her book The Gaza Strip: the Political Economy of De-development forthcoming from the Institute for Palestine Studies]

Dr. Sara Roy:

I would like to begin by thanking the Board of Directors of the Jerusalem Fund and its Chairman, Dr. Subhi Ali, and the Executive Director of The Palestine Center, Yousef Munayyer, for inviting me to deliver the Edward Said Memorial Lecture. I am deeply honored.

Edward and I would always speak about Gaza, in fact every time we met. He felt a profound connection to the place and to the people that seemed to be a permanent part of him. Edward had great compassion and great respect for Gaza’s people. He embraced their suffering and took pride in their courage, in the dignified way they continued to move forward. Yet he feared one thing perhaps most of all: the separation and isolation that now engulfs Gaza and threatens, if it hasn’t already, to sever the Palestinians there from Palestinians elsewhere, forcing them, in the words of Hannah Arendt, to “live outside the common world,” deprived of profession and of citizenship, “without a deed by which to identify or specify [themselves].”

Edward raged against the division of his people and against the kind of loss that such division could bring: disunity, abandonment, irrelevance. In The Origins of Totalitarianism, Arendt argues that the fundamental deprivation of human rights is expressed first and most powerfully in "the deprivation of a place in the world which makes opinions significant and actions effective. Something much more fundamental than freedom and justice... is at stake when belonging to the community into which one is born is no longer a matter of course and not belonging no longer a matter of choice..." "This extremity and nothing else," she writes, "is the situation of people deprived of human rights. They are deprived not of the right to freedom but of the right to action." "Over the last 45 years Gaza’s trajectory has been striking; from a territory economically integrated into, and deeply dependent upon, Israel and deeply tied to the West Bank, to an area largely marginalized from Israel and the West Bank, an isolated (and disposable) enclave - subject to consistent military attacks - with which Israel and the West Bank have fewer formal economic or political ties than they once did. And from a captive economy restricted to fluctuating levels of growth (at best) but still possessed of the capacity to produce and innovate (within limitations), to an economy increasingly deprived of that capacity, characterized by unprecedented levels of unemployment and impoverishment, with three-quarters of its population needing humanitarian assistance. These damaging transformations among others I shall discuss are becoming increasingly institutionalized and permanent, shaping a future that is both partial and disfigured. What is happening to Gaza is, in my view, catastrophic; it is also deliberate, considered and purposeful.

This lecture will address some of the destructive policies and measures imposed on the Gaza Strip and their economic and social impact. I argue that as a result of these policies, Gaza is being rendered unviable and by that I mean dispossessed of the capacity for sustainable economic growth and development on the one hand, and increasingly incapable of effecting social change on the other.

Setting the Stage: Some Key Contextual Transformations

I would like to begin by briefly addressing some key contextual transformations or paradigm shifts in the way Gaza specifically and the Israeli/Palestinian conflict generally is understood. These contextual transformations, which I have written about in great detail elsewhere, provide an important backdrop to this discussion.

The first of these paradigm shifts emerges from the policy of separation, which so powerfully defines Gaza, and the denial of territorial contiguity to which it is linked.

With the Oslo political process, the historical contest over territory was replaced by a policy of separation, isolation and containment that goes well beyond occupation and is arguably most striking in Gaza. A critical turning point came in 2005 with then Israeli Prime Minister Sharon's so-called disengagement from the Gaza Strip. With this policy Israel laid the framework for a new unilateral approach that not only ended the pretense of negotiations, it made the separation of the occupied territories a political, economic and demographic reality.

The denial of territorial contiguity derives from an important paradigm shift that views Israel’s occupation as normal, manageable and routine. The steady and rather seamless normalization of the occupation over the last two decades in particular has remained unchallenged by the international community - a damaging reality to which it largely acceded.

The normalization of the occupation assumes an extremely compelling form in the Gaza Strip. Unlike the West Bank where it is seen in the expansion of settlements, in Gaza it is seen in the fact that its status as an occupied territory has ceased to be a matter of real international concern, the focus of attention having shifted - after Hamas’s 2006 electoral victory and 2007 takeover of the Gaza Strip - to Gaza’s enforced isolation, containment and punishment.

Hence, the Israeli/Palestinian conflict has been reshaped to center on Gaza and on Israel’s hostile relationship with Hamas. Consequently, the occupation has been transformed from a political and legal issue with international legitimacy into a simple border dispute where the rules of armed conflict, not of occupation, apply. This new interpretation has been made explicit in the case of Gaza. This represents another critical paradigm shift in the way the Israeli/Palestinian conflict is understood and addressed.

The international community, again, has largely come to accept Israel’s recasting of its relationship with Gaza from one between occupier and occupied to one between warring parties, facilitating Israeli attacks on Gaza and rendering as illegitimate any notion of human rights or democracy for Palestinians.

This recasting is strikingly reflected in critical changes in Israel’s economic policy toward Gaza (and the West Bank). Whereas previously, policy sought to control and dominate the Palestinian economy, shaping it to Israel’s own interests (as during the first two decades of occupation), current policy attacks the economic structure with the aim of disabling it. Perhaps most striking of all is the transformation of Palestinians, especially in Gaza, from a people with national, political and economic rights into a humanitarian problem, a demographic presence in an impoverished enclave, unable to mobilize politically, and dependent on the "goodwill" of the international community which is now responsible for them.

The Government of Israel (GOI) has, in fact, explicitly referred to its intensified closure (or siege) policy in Gaza as a form of "economic warfare." The government stated, "damaging the enemy’s economy is in and of itself a legitimate means in warfare and a relevant consideration even while deciding to allow the entry of relief consignments." This form of warfare is also seen in the termination of the customs code or customs clearance for Gaza needed for imports into the territory, and the imposition of Israeli-controlled buffer zones on Gaza’s land and sea. All these measures are intentionally designed to undermine and deplete Gaza’s economy and productive capacity, measures seldom justified on security grounds.

In a November 2008 cable from the U.S. embassy in Tel Aviv released by Wikileaks, U.S. officials wrote, "As part of their overall embargo plan against Gaza, Israeli officials have confirmed (to U.S. embassy economic officers) on multiple occasions that they intend to keep the Gazan economy on the brink of collapse without quite pushing it over the edge" with the aim of having Gaza’s economy "functioning at the lowest level possible consistent with avoiding a humanitarian crisis."

The policy of economic warfare is reflected in another dangerous transformation. Since the assumption of Hamas to power, Israel’s goal is no longer simply Gaza’s isolation and disablement, but its abstraction and deletion. Israeli policy has shifted from addressing the economy in some manner (whether positively or negatively) to dispensing with the concept of an economy altogether. That is, rather than weaken Gaza’s economy through punishing closures and other restrictions, as had long been the case, the Israeli government imposed an intensified closure or siege that treats the economy as totally irrelevant, "a dispensable luxury." The impact of Israel’s policy shift is clear in what was until recently, the near total collapse of Gaza’s private sector, the driver of economic growth to which I will return.

For some time, it has not been a question of economic growth or development, change or reform, freedom or sovereignty. Rather, for Gaza, the issue is now largely one of essential humanitarian needs, of reducing the needs and rights of 1.65 million people to an exercise in counting truckloads of food. In this way, Israeli policy diverts attention from, and in fact justifies, the destruction of Gaza’s economic infrastructure and productive capacity,  goals accelerated during Operation Cast Lead (OCL). Thus Gaza’s already fragile economy has been transformed from one driven in large part by private sector productivity to one largely dependent on humanitarian assistance and black market trade.

Some Critical Factors Contributing to Gaza’s Unviability

Here I am going to focus on three areas: Israel’s blockade, Gaza’s tunnel economy and the buffer zone and the despoliation of the agricultural sector.

Israel’s blockade of Gaza and the diminution of the private productive sector

In its 2011 report on poverty in Gaza and the West Bank, the World Bank revealed the degradation of Palestine’s reality:
Following the Second Intifada of 2000, the Palestinian economy began to resemble no other in the world. Limited say over economic policies and trade, the extent of dependence on Israel and international aid and a regime of internal and external closures has created an economy characterized by extreme fluctuations in growth and employment and an increasing divergence between the two territories: the West Bank a fragmented archipelago; and Gaza an increasingly isolated island.
Despite the many controversies surrounding the Gaza Strip in recent years, the most crucial issue confronting the territory is a ruinous, six-year long blockade that ended the normal functioning of the economy, especially trade. The blockade has combined severe economic restriction, isolation, and continued military assault to severely undermine Gaza’s private sector and productive base, introducing several new and damaging dynamics to a region that is one of the most densely populated in the world, more crowded even than Tokyo, [Japan].

Historically, the Gaza Strip and West Bank effectively formed a single economy, and the Gaza Strip was an "indispensable part of the Palestinian economy, accounting for 35 percent of total GDP in 2005..." This unity was reflected in the Oslo Accords and in U.S. policy. Israel and the West Bank combined were Gaza’s primary market and because of this the "ban on the marketing of goods to Israel and the West Bank is the main impediment to sustainable economic development in the Gaza Strip."

Although closure has a long history in Gaza dating back to 1991, restrictions became more acute after 2000 during the second Palestinian uprising and particularly onerous after Hamas’s 2007 takeover of the Gaza Strip when the closure was intensified, preventing the import of raw materials and the export of finished products - thus, ending normal trade.

The impact on the private sector was dramatic. For example, prior to the intensification of the closure (or siege), 54 to 58 percent of Gaza’s employment was generated by the private sector and concentrated in manufacturing, agriculture, construction, and services. Gaza’s manufacturers imported 95 percent of their inputs and exported their finished products primarily to Israel and the West Bank (which received "90 percent of [Gaza’s] garments, 76 percent of furniture products and 20 percent of food products)."

However, by May 2009, only 30 to 40 commercial items were allowed to enter Gaza compared to 4,000 to 7,000 prior to the blockade, increasing to just 400 commodities by May 2012 with virtually none allowed for export. Consequently, between June 2005 and September 2008 at least 95 percent of Gaza’s 3,900 industries were forced to close while the remainder operated far below their capacity. Around 100,000 people out of the private sector’s benchmark capacity of 120,000 lost their jobs. This was prior to Operation Cast Lead.

Perhaps most critically, Israel’s policy of "economic warfare" banned virtually all exports, which remains the case, and is a major constraint on the manufacturing sector, "with Gaza starkly transforming from a potential trade route to a walled hub of humanitarian donations," wrote the World Bank in September 2008. For example, the UN reported that between January to May 2007, Gaza exported around 4,800 truckloads compared with 130 truckloads exported between January to May 2012, around 3 percent of its pre-June 2007 amount. This despite a promise in the 2005 Agreement on Movement and Access (AMA) to allow 400 truckloads of exports each day. Hence, during the first five months of this year, Gaza was allowed to export one-third of what the AMA promised as allowable exports for one day.

The main exception to the export ban involves a limited number of farmers who have, since 2007, been allowed to export flowers and strawberries to Europe only, part of a program funded by the Dutch government to bring Gaza produce to European markets. By June 2012, the rate of exports from Gaza stood at around two to three percent of its pre-June 2007 level.

Furthermore and most important, not one truckload with certain, recent minor exceptions, has been allowed to export to Israel or the West Bank since June 2007, Gaza’s traditional markets, where demand and profitability are higher (and despite the fact that Palestinian exports destined for Europe naturally enter Israel and are subject to an intense security screening). According to GISHA and the IMF, Israel has long been blocking a variety of profitable transactions including furniture orders for Palestinian Authority [PA] schools in the West Bank—one or two of which have recently been filled, citrus fruit to West Bank grocers, and textiles to Israeli companies, clearly showing that the restrictions have little if anything to do with security and instead are directed at maintaining the separation of Gaza and the West Bank, depriving Gaza and precluding the possibility of a unified economy.

The current (2012) Israeli government has apparently renounced the policy of "economic warfare" in favor of "separation," which continues to be a political (rather than a security) decision producing the same effect. Thus, normal trade (upon which Gaza's tiny economy is desperately dependent) continues to be thwarted and prohibited despite a marginal easing of restrictions on certain imports and exports, which was announced by the Israeli government in June 2010. One should not forget that despite a limited relaxation of trade restrictions, there has been virtually no change with regard to the movement of people between Gaza, the West Bank, Israel and the world, confining the overwhelming majority of the population, including the labor force, to the Strip.

While there is no longer a shortage of food, the World Bank states, "Access to Gaza remains highly controlled, and only consumer goods and construction material for donor supervised projects are allowed in. Products from Gaza to the West Bank and Israeli markets... are prohibited. Only small shipments of certain agricultural and manufactured products are exported to other markets through donor-supported projects. East Jerusalem, which is considered a highly lucrative market, is beyond reach." In fact more construction materials have been entering Gaza through the tunnels from Egypt than from Israel.

A diminished and noncompetitive private sector, the inability to trade freely within and outside the Palestinian territories, and severe restrictions on the mobility of labor provide a powerful illustration of economic disablement and the impoverishment it produces. One outcome is high unemployment and persistent unemployment even in the face of some impressive but transient private sector growth after 2010. By June 2012, for example, unemployment stood near 30 percent of Gaza’s labor force and could easily return to the even higher levels of the previous two years (having reached 47 percent in 2010 according to UNCTAD ). The CIA found that the Gaza Strip ranked seventeenth in terms of unemployment rates and the West Bank ranked forty-sixth among 196 countries and territories. More significantly, in early 2012 the unemployment rate in Gaza for those aged 15 to 29 years was 46.9 percent (compared with 29.8 percent in the West Bank).

Chronic unemployment is linked to poverty. Approximately 39 percent of Gaza’s people lived below the poverty line in 2011 - double the West Bank rate - a percentage that would be far greater without donor aid. According to UNESCO, this figure reflects "no reduction in poverty since 2009" which is concerning given the impressive growth in real Gross Domestic Product [GDP] in the period 2009 to 2011, "implying that... high economic expansion did not manage to lift households out of poverty."

Furthermore, in the absence of any human disaster or a shortage of food, approximately 44 percent of people are food insecure meaning they do not have access to enough food to meet their dietary needs. This situation obtains despite UN food distributions to over one million people and the economy’s recent high growth rates.

“From the needle to the rocket:” Gaza’s tunnels - Formalizing the informal economy and other distortions

The devastating restrictions imposed on Gaza’s formal trade lines gave rise to a black market tunnel economy. Tunnels have existed in the Gaza Strip since the 1980s. Between 2007 and 2008 their numbers mushroomed from a few dozen to 500 with current estimates as high as 1100 to 1200 although anywhere from 200 to 600 tunnels are believed operational.

The tunnels, which are almost entirely devoted to smuggling goods into Gaza (with limited exports), have become Gaza’s primary trading route, a critical lifeline for, and driver of, the local economy, allowing it to mitigate the pressures imposed by the blockade. By 2012 the tunnel economy (with and via Egypt) had become Gaza’s principal economic engine accounting for 80 to 90 percent of its trade valued at close to $700 million annually, and for marked increases in private sector employment. Nicholas Pelham, who has written extensively on the tunnel economy, similarly observed, "All told, the tunnels have kick-started Gaza’s reconstruction, propelling it out of the darkest days of the siege. Imports have triggered a building boom... [and] Gaza resembles a vast construction site."

Once Gaza’s smuggling trade began to assume more formal commercial dimensions, the Hamas government moved to regulate it, establishing a regulatory authority known as the Tunnel Affairs Commission (TAC), translating what was "[o]nce a tax-free enterprise to escape closures [into] a source of domestic revenue."

In its drive to formalize the tunnel economy, the Hamas government, writes Pelham, established an "increasingly comprehensive customs regime, providing it with a new revenue base that partially compensated for the Ramallah-based PA’s monopoly on customs revenues collected at Israeli’s ports." I will not list all the fees imposed except to say that the taxes on tunnel goods (consumer items and inputs and raw materials for construction) have proven extremely lucrative. For example, according to Omar Shaban, an economist in Gaza who studies the tunnel trade, the government levies the following taxes: fifty cents on every liter of gas, with 500,000 liters brought in daily; eighty cents on each of the 300,000 packs of cigarettes that enter Gaza each day; $15 on every ton of construction steel with 300 tons entering every day; and $10 per ton of cement with 2,000 tons imported daily. These four commodities alone yield the Hamas government an annual income of $188 million. Hamas also regulates many types of businesses - from street vendors to Gaza’s 20 money-changing companies - by requiring them to pay license fees. Taxes are also collected on a variety of "luxury" items such as cars coming from Israel in order to compensate for lost tunnel income after 2010 when imports from Israel increased.

Import taxes on tunnel goods allowed the government to raise "over half of its $750 million 2011 annual budget locally," while the tunnel trade generated rising levels of employment especially in the construction sector, and improved some of Gaza’s public infrastructure including government buildings, police stations and mosques. The Gaza-Rafah highway was widened, while parks and coastal areas were beautified. In fact, the tunnel economy as a whole was, at its peak in 2010, "Gaza’s largest non-governmental employer and its largest employer of youth" with some 5,000 tunnel operators and 25,000 workers supporting some 150,000 people - around 10 percent of the population.

An extremely crucial aspect of the tunnel trade is its size, which has dwarfed official trade with Israel, outstripping formal trade supplies. For example, by February 2012 a monthly average of 1,600 tons of cement came through Israeli crossings compared to 31,000 tons received through the tunnels. More strikingly, Pelham reports that by mid-2011, 3,000 tons of cement entered Gaza daily; hence, in one day the tunnels could supply nearly double the amount of cement that Israel delivered in one month. This in turn has catalyzed a building boom addressing Gaza’s desperate need for housing with large-scale investment from the Saudi Development Bank, Turkey and Qatar.

The impact of the tunnel economy (coupled with Israel’s easing of import restrictions) has been dramatic. According to the UN, "As in 2010, construction activity was the single most important element in private sector growth in 2011 in the OPT... In 2010 and 2011, Gaza’s annual average real GDP growth surpassed 20 percent and boasted a stunning 23 percent GDP growth rate in 2011 alone - admittedly built on a very low economic base devastated by years of closure. The number of people working in construction more than tripled between 2010 and 2011 and overall employment in Gaza grew nearly 25 percent (relative to 2010)." It is clear that the tunnel trade is now the principal catalyst behind Gaza’s booming construction sector and GDP growth “precipitating... Gaza’s postwar reconstruction while donors remained on the sidelines."

Consequently, according to Robert Serry, the UN’s Middle East peace process coordinator, commerce in Gaza is now controlled by "smugglers and militants" rather than by "international agencies and local contractors who wish to produce goods entering through legitimate crossings," which have been crippled by Israel’s blockade policies. Hence, international organizations, foreign businesses and the local business sector which use established trade routes remain relatively weakened and often unable to compete with Gaza’s underground trade despite an easing of restrictions by Israel, which by one local account has "quadrupled the number of trucks [from Israel] permitted to bring goods to Gaza," and despite an increase in donor-supervised public works projects. This has "crushed" Gaza’s commercial class, which has comparatively fewer economic assets, and increased the population’s dependence on the Hamas government.

Yet, although Gaza’s GDP was driven higher by construction, commerce, foreign aid and consumption, the productive, labor-intensive industrial and agricultural sectors of the economy benefited relatively little from the enormous wealth being generated in the Strip. One critical illustration is seen in the low level of investment in the economy, around 9 percent of Gaza’s GDP in 2011, with little directed to plant, equipment and other productive inputs. Rather, investment is increasingly directed to residential construction and land where speculation and profits are high. Thus, strong GDP growth did not contribute to a strengthened capacity for future production and employment.

The tunnels have allowed Hamas to consolidate its hold on the territory, circumvent U.S.-led international financial restrictions, and in, effect, build its own economic system. This is no doubt one reason why the Ramallah PA has called on the Egyptian government to destroy all the tunnels. Yet, the tunnel trade is under some threat following the 5 August 2012 terrorist attack that resulted in the death of 16 Egyptian soldiers in the Sinai. In response the Egyptian army destroyed 120 tunnels, around 10 percent of the total number, and temporary closed the Rafah crossing, which surprised the Hamas government. In response Hamas proposed a free trade zone on the border as an alternative to the tunnel trade, which President Morsi recently rejected, leaving the tunnels the main source of goods into Gaza.

There is more to say about the Egypt-Gaza relationship in this regard but for now suffice it to say that the status quo - with limited changes - will continue given that Egypt suspended the tunnel destruction soon after it began. The Rafah crossing has been reopened with extended hours and with plans to allow 1,500 people to enter Egypt daily - a significant increase from an average of 450 daily entrants in 2011 to 2012.

Clearly there are many problems with the tunnel trade which make it unsuitable for rehabilitating the productive sectors according to the Israeli human rights organization, GISHA, which monitors conditions in the Gaza Strip: trade is vulnerable to closure or attack by Israel and Egypt and to political and economic conditions in both countries; trade is overwhelmingly one-way; goods are of low quality; supply is unpredictable (as seen in the ongoing fuel crisis caused by Egyptian-imposed restrictions emanating from its own domestic shortages ); transit costs are high and there is always the risk of damage to goods in transit despite improvements made in this regard. Also, international organizations working in Gaza on a range of projects cannot purchase anything through the tunnels given their linkage to the Hamas government. Furthermore, increased construction activity - itself limited by the small size of Gaza’s market - cannot serve as the basis for future economic growth. In fact, some analysts predict that the boom will not last beyond two years as most buildings will be completed and the housing stock restored.

Other distortions have arisen as well. At least two new economic classes have emerged in Gaza, a phenomenon with precedents in the Oslo period. The first and arguably the most prominent is a new mercantile elite (of black market traders and merchants) that has grown extremely wealthy from the tunnel economy, providing them with a form of upward mobility unimaginable just a few years before. In Gaza today there are reportedly over 850 millionaires and "1,600 near-millionaires" who owe their fortunes to the new economic order and likely have little if any incentive to change it. This creates an economic anomaly in which productive sectors are greatly diminished while a small segment of beneficiaries enjoy amazing growth. Furthermore, Pelham states, the tunnel trade has created vested interests "between Sinai’s Bedouin traders, transporters, and tunnel owners and Gaza’s consumers, which will not be easily decoupled."

The second class consists of certain public-sector employees (approximately 60,000) - civil servants and security personnel hired before 2007 - who are paid not to work (for the Hamas government) by the Palestinian Authority in the West Bank. According to UNESCO:
PA support to Gaza in the form of these salaries, [as well as] medical supplies and other expenses is estimated to amount to $1 billion a year. Since the PA is unable to collect taxes in Gaza and the tax revenue it collects on Gaza’s imports is minimal, most of the PA’s expenditures in Gaza are being financed by international aid. Gaza is thus basically being kept alive through external funding, in the form of aid and remittances, and the illegal tunnel economy.
However, these salary subventions (together with payments to the UN for over 10,000 local staff), amounting to $65 million each month, sustained Gaza’s liquidity and purchasing power.

Both these phenomena have led to social and economic disparities between the haves and overwhelming majority of have-nots that are not only vast but visible as seen in the almost perverse consumerism in restaurants and shops that is the singular domain of the nouveau riche and wealthy. Increased spending power has led to further distortions. Since the rich can only invest locally, land prices on the coast have risen dramatically as have real estate prices, which are reported to have increased by 300 percent. In fact the rise in real estate prices is so spectacular that property (per square meter) in Gaza’s largest refugee camp, Jabalya, is reportedly nearly equivalent to prices in Tel Aviv  while Rafah is apparently more expensive than Cairo.

Without doubt, the six-year long blockade coupled with OCL have introduced and institutionalized dynamics that have undermined Gaza’s formal economy in favor of "a pseudo official black market" that is becoming increasingly formal in an environment where donor aid is a principal driver of the economy, reducing economic behavior to its lowest common denominator: consumption.

Although the tunnel trade can and should be understood as a form of empowerment and self-sufficiency providing critically needed goods and jobs in an extremely adverse environment, it still represents a dangerous and increasingly damaging reconfiguration of economic activity despite the growth in output and employment it has generated.

Gaza’s tunnel economy was as Pelham argues, "a remedial answer to the blockade, not an economic solution." Because of this its multiplier effects (including increases in private sector employment) cannot begin to compensate for the decline of the formal economy as seen in the virtual end of export trade and the attendant erosion of the manufacturing and agricultural sectors. This is why despite the recent growth in Gaza’s GDP, it remains below its level in 2005 and 1994. As Oxfam observes, "the scale of economic activity remains heavily dependent on local demand in Gaza, which in turn is constrained by the low purchasing power of the population and the relatively small size of the local market," again underlining the critical need of Gaza’s small, resource-strapped economy for access to external markets.

Furthermore, by bounding Gaza’s economy in this way, which propels Gaza toward a still less-than-welcoming Egypt, Israel is able to further deepen the separation and isolation of the occupied territories and prevent the emergence of a Palestinian state, Israel’s primary goal. Gaza is removed as an integral part of Palestine, eliminating any possibility of a larger Palestinian economy capable of sustained growth and development, which could support a sovereign Palestinian state and compete with Israel. The result, said Meron Benvenisti nearly ten years ago, will be a state that is "limited to the height of its residential buildings and the depth of its graves." Debilitating Gaza’s economy is the key to debilitating Palestine’s.

As a colleague in Gaza so powerfully put it: "The world has long gone airborne and has increasingly gone wireless. The world’s economy has become border-less and virtual. And here we are, digging ourselves into the sand."

It is perhaps in Gaza’s agricultural sector that Israel’s intentions are most visible and Gaza’s unviability most striking. Gaza's agricultural sector, once an important part of the economy, has been severely degraded if not effectively destroyed. The virtual ban on Gaza’s exports that I have already discussed act as a severe constraint on agricultural output and employment.

However, there are other reasons for the sector’s dramatic decline. A key factor is a buffer zone or "access restricted area (ARA)" that has been unilaterally imposed by Israel on the Gaza Strip’s land and sea since the start of the second Palestinian uprising in September 2000 and gradually widened. Buffer zone areas are totally or partially inaccessible to Palestinians. The most striking data are these: the new extended buffer zone, identified by the UN as a hazard and danger zone and based no doubt on firings into the area, now extends one kilometer into Gaza, well beyond the 300 meters designated by Israel. Consequently, the buffer zone now absorbs nearly 14 percent of Gaza’s total land area and encompasses approximately 48 percent of the Gaza Strip’s total arable land (including many groundwater wells and roads). Remember the most arable land in the Gaza Strip is along and within the buffer zone.

Indeed, the UN reports that buffer zone restrictions result in an annual loss of about "75,000 metric tons of potential produce," which is equivalent to just under 83,000 (U.S.) tons. Similarly, the extended buffer zone in the sea covers 85 percent of the maritime area promised to Palestinians in the Oslo Accords; 20 nautical miles (nm) has been reduced to 3 nm. In fact, it was during OCL that both the arable land and maritime area suffered their greatest losses.

In order to enforce the buffer zone, which Palestinian armed groups have used against Israeli targets, the Israeli Defense Forces (IDF) have used a variety of violent means including incursions and land leveling operations. According to Al Haq, “land incursions into the buffer zone [occur] an average of three to four times every week." In 2011 the Israeli army engaged in at least 69 land leveling operations and incursions that took place beyond the 300-meter limit, which has "damaged Gaza’s topsoil in prime agricultural areas." Incursions have resulted in damage to civilian infrastructure e.g., homes, schools, water and sanitation facilities, a water reservoir and a newly built sewage pump station.

Land leveling operations, however, have raised concerns among some analysts that go well beyond immediate damage and loss, suggesting a policy that may be concealing a greater outrage. For the leveling of land is not only about the destruction of agricultural crops and restricting access to food but also about what is being done to the soil itself.

In the final days of OCL, 200 bulldozers working along Gaza’s eastern border inflicted much if not most of the destruction. 7,847 acres of agricultural land - citrus trees, other fruit bearing trees, greenhouses, nurseries, farms etc. - were bulldozed and flattened by tanks and tracked vehicles moving back and forth, compacting the soil.  Approximately 5,000 acres were flattened in the buffer zone and 2,847 acres were damaged or destroyed throughout the 16 sub-districts of the Gaza Strip. Combined these areas account for one-third of Gaza’s total arable land that is now out of production. In fact OCL alone imposed over $250 million in damage, destroying vital agricultural assets.

The bulldozing of land and compaction of the soil raises some potentially serious problems. It creates a situation that forces farmers to deep plow. However, deep plowing without sufficient irrigation, which remains a serious problem in the buffer zone due to the destruction of ground water wells - the main source of irrigation  - will turn the land into a non-arable dustbowl.

Non-arability is further exacerbated by the suspected toxicities of some soils resulting from their saturation by chemicals, sewage and weapon debris. In fact by deep plowing in this way, Palestinian farmers are contributing to the soil’s destruction, unwittingly or not. The resulting desertification process will, in the absence of any remedial measures, insure that the land becomes totally irredeemable. The Israeli authorities reportedly refuse access to the land for soil testing nor will they allow farmers to import pumps, which could be used to repair damaged agricultural wells. According to local sources, the land area between Beit Hanoun in the northern Strip and the Israeli border fence is now 80 percent devastated.

Given the enormous losses in arable land and fishing area - which may grow wider in the future - and the other restrictions imposed, it is not unreasonable to conclude, as the United Nations Environmental Programme has, that Gaza’s agricultural economy "may indeed be finished."

Another critical constraint on agriculture, the economy and the people is water. Water is an extremely serious problem and has been for decades due to over pumping from the coastal aquifer, allowing seawater to enter and pollute fresh water, a problem made worse by the unlicensed and unregulated drilling of more than 4,000 wells by Palestinians. On a visit to Gaza in the summer of 2012, Martha Myers, the Director for Relief and Social Services for UNRWA, commented on the quality of domestic water: "It's not like drinking seawater; it is drinking seawater."

The aquifer has also been contaminated by decades of infiltration by sewage and agricultural fertilizer. Due to the breakdown of Gaza’s sanitation infrastructure, the sewage flow in the Gaza Strip together with other contaminants leaching from waste dumps have led to elevated levels of nitrates and chlorides in the groundwater and soil, which pose a serious risk to humans and livestock. Since 2008, between 60,000 to 90,000 cubic meters (CM) of untreated or partially treated sewage enter the environment and the Mediterranean Sea daily (polluting the aquifer, the fishing waters and the beaches) with clear regional implications.

In 2012, 25 percent of wastewater or 30,000 CM per day is treated and reused in some form for agricultural purposes while 90,000 CM of raw or partially treated sewage is released into the environment daily. This is the equivalent of 23,775,500 U.S. gallons of sewage being dumped into the environment every day.

A 2009 UNICEF and Palestinian Hydrology Group study reported that "concentrations of chloride and nitrate, which is a component in fertilizer and is found in human and animal waste, are as much as ten times the safe levels established by WHO." EWASH, an NGO representing over 30 organizations working in water, sanitation and hygiene in the West Bank and Gaza, similarly argues that most of the Gaza Strip contains groundwater where the nitrate concentration is well above the acceptable WHO level, finding that "90 percent of water wells are contaminated with nitrates between two and eight times higher than WHO standards."

Remedial actions are largely prevented by Israel’s blockade policy, which limits and prevents the entry of materials needed to repair, maintain and upgrade Gaza’s sewage, wastewater treatment and storage infrastructure, which is unable to cope with demand or lacks sufficient fuel to operate. In fact, according to EWASH "[l]ess than 20 percent of the needed materials for essential water/sanitation projects, that would alleviate many of the problems faced in Gaza, have been allowed in through the Israeli-controlled crossing, two years after Israel announced the 'easing' of the blockade in June 2010."

In 2011, furthermore, Save the Children reported that airstrikes
"destroyed $1.3 million worth of water and sanitation infrastructure, including a new sewage pumping station connecting 130,000 residents in Al Nuseirat and Bureij to the main sewage system." They also found (in September 2010) that "1.1 million Gazans in nearly half of Gaza’s municipalities are at high risk of consuming biologically contaminated drinking water from private vendors, the source of water for most Gaza residents. Bacteriological contamination (either from poor hygiene in the home or contaminated water) was found in 63 percent of households sampled." Furthermore, "The compound problem of Gaza’s depleted aquifer, a lack of a proper sewage treatment and disposal system, and the difficulties of providing adequate service-delivery has produced a grave environmental situation with significant health risks." According to the American Near East Relief Agency (ANERA), 26 percent of disease in Gaza, is water-related. It is not unreasonable to assume that water and soil contamination may become chronic and possibly irreversible as long at the blockade denies the importation of essential inputs needed to address the problem.

The internal findings of another international donor agency concluded,
"Nowhere else in the world has such a large number of people been exposed to such high levels of nitrates for such a long period of time. There is no precedent, and no studies to help us understand what happens to people over the course of years of nitrate poisoning."

A comment on social decline

Social decline has many dimensions. Here I would like to touch upon two issues that have particular relevance for Gaza’s unviability: the health of the population and the impact on social attitudes of an economy that has been disabled.

Some issues related to the health of the population

Clearly the health of economy and the environment will determine the health and wellbeing of her people and vice-versa. For example, it is not surprising that Gaza’s worsening economic and environmental conditions combined with high fertility and population growth rates have resulted in rising malnutrition among Palestinian children below the age of five. Between 2000 and 2010, the prevalence of malnutrition rose by 41.3 percent nationally and 60 percent in the Gaza Strip.  Stunting (low height for age), which is an indicator of chronic malnutrition, has become increasingly frequent among Gaza’s children under five, affecting 9.9 percent of them in 2010. According to the Palestinian Central Bureau of Statistics (PCBS), children in Gaza are twice as likely to live in poverty as children in the West Bank.

Nutritional deficiencies, particularly Vitamins A and D, are high among Gazan children under three due in part to dihedral infections that are linked to the lack of access to clean water.
"In addition," states EWASH, "the prevalence of anaemia [due to a dietary iron deficiency] is so high that it indicates a severe public health problem according to the WHO classification system." Between 68 to 74 per cent of infants aged 9 to 12 months suffer from anaemia as do 59 percent of schoolchildren and 37 percent of pregnant women. According to the WHO, the most serious consequences of anaemia include "poor pregnancy outcome, impaired physical and cognitive development, increased risk of morbidity in children and reduced work productivity in adults. Anaemia contributes to 20 percent of all maternal deaths." A 2012 report issued by Save the Children UK, stated, "Diseases of poverty and conflict combined with a degenerating health care system are claiming growing numbers of Gaza’s children."

There is rising concern among Palestinian and European specialists with regard to the reproductive health of Gaza’s population; a reported rise in the number of birth defects and congenital anomalies after OCL; the increase in the number of abortions; and a reported increase in the incidence of cancer after OCL. This is due not only to soil and water contamination but also to the possible use of toxic weaponry during OCL. Although this area of research remains inconclusive and highly contentious, one European military analyst revealed that 55 tons of munitions were dropped on the Gaza Strip in three weeks (of the 2008/09 invasion).
"The deep penetrating munitions used to destroy some tunnels along [Gaza’s southern border] were so destructive that part of the city of Rafah began to sink."

He also revealed that
"witnesses further [stated] that following these attacks IDF engineers entered the area and replaced the top-soil. Such an action may have been intended to prevent possible depleted uranium-impregnated dust from being carried into the territories of southern Israel by the prevailing westerly winds. Another expert privately indicated that although the available data are still incomplete, they suggest the possibility that the number of birth deformities in Gaza will rise, possibly as soon as 2014." Although the requirement for validity is very high, and is perhaps impossible to prove, the concerns raised are real and not without foundation.

Changing social attitudes: Some emerging patterns

Interviews with colleagues and friends in Gaza revealed some common themes regarding the ways in which social attitudes have been affected by Gaza’s altered economic reality, attitudes which will impact Gaza’s future. There is real concern that professionals and academics, unable to travel abroad for training and higher education, will loose their skills and expertise. According to the Portland Trust, a British NGO working in economic development,
"The longer the situation continues the greater the risk of an irreplaceable loss which could take more than a generation to recover."

Severed from the outside world, the position of women has also weakened in Gaza’s increasingly conservative society. One indicator is found in the rising levels of domestic violence. According to the PCBS, 51 percent of all married women reported being abused by their husbands over the last year. Women, more of whom have economic responsibilities outside the home, remain the primary caretaker of their families and must confront on a daily basis the practical consequences of a terribly compromised reality: the lack of access to clean water, nutritious food, medical care and education; poor housing; and insufficient electricity among many other problems.

Another prominent concern centers on what happens to a once productive and motivated population who have been forced into a state of non-productivity, of near-total dependence on humanitarian aid just for basic sustenance. This deprivation is deliberate and imposed on a people desperate and able to work. Although some resist and seek creative ways to move forward, many others do not. In the words of one analyst,
Tens of thousands continue to receive a salary from the PA in Ramallah for doing nothing [while] the... government in Gaza has been paying other tens of thousands, most of whom have been hired to replace those who were ordered by the PA to stay at home. Hundreds of thousands continue to receive "humanitarian" aid from UNRWA and other donors just to keep their heads above water... the rest [have] no one to look out for [them] except private generous citizens and NGOs.
In virtually none of these cases does one see any [attempt to exploit] people’s potential to work, produce and earn their living even though people in Gaza are eager to work and produce. All those who intervene in Gaza - PA, local authorities, UN or others - are, in effect, acquiescing to this reality. No one seems to properly... challenge the political... or economic aspects of internal division and of Israel’s successive policies of keeping Gaza alive but constantly needy and isolated... unable to earn its own living even though it very well could.
In this regard, not only are Israel and donor governments culpable but so too are the Palestinian Authority governments in Gaza and the West Bank whose internal struggle for power - especially over the flow of assistance and the movement of humanitarian aid workers - further diminish any possibility of economic reform.

And last is a theme that has been constant in my work since it began 27 years ago: the assault on human dignity and now, its seeming absence. Dr. Rajaie Batniji, a Stanford University physician, wrote a powerful essay in the British medical journal, The Lancet, about a recent trip to his family in Gaza in which he echoes Hannah Arendt’s observations with which I began this lecture.  He writes, “...Gaza is something of a laboratory for observing an absence of dignity.”  The violations of dignity include “not being seen or being incompletely seen; being subsumed into a group identity; invasion of personal space (including physical violence); and humiliation... The constant surveillance from the sky, collective punishment through blockade and isolation, the intrusion into homes and communications, and restrictions on those trying to travel, or marry, or work make it difficult to live a dignified life in Gaza.” 

In fact during the period between February 2009 and August 2012, 1,059 incidents against Gaza took place, an average of six incidents per week. They were generally of four kinds: attacks by aircraft, helicopter gunships, drones and tanks throughout Gaza even in densely populated areas; attacks against fishermen involving the confiscation of, or damage to, fishing boats and other equipment, and the detention and arrest of fishermen; attacks on industrial, farm and food production facilities and related infrastructure; and ground incursions by the IDF into Gaza’s buffer zone and into Gaza proper. 

And, Batniji continues, it is not just the Israeli occupation and siege that are at fault but the internal power struggles among Palestinians, which has “recreated many of the most threatening aspects of the Israeli occupation [including] barriers to movement of people and goods, fear, isolation and torture.” To these divisions add the exigencies of daily life, which force people to hoard fuel and other necessities and depend disproportionately on foreign assistance to eat, then it is no surprise that “[m]any people on the street now walk with their heads down - whether it is out of fear, isolation, or a loss of dignity... intentionally neglect[ing] the destruction that surrounds them.” 

The words of a 17 year-old boy detained in an Israeli prison captures the essence of life in Gaza, “What it feels like to live here you ask? It’s like being a shadow of your own, caught on the ground, not being able to break out and you see yourself lying there, but you cannot fill the shadow with life.”

A personal and concluding reflection

Palestinians in the Gaza Strip are entrapped in what Professor Nadera Shalhoub-Kevorkian of Hebrew University terms “a zone of non-existence.” In this zone, she argues, one finds “new spaces of obscenity in the politics of day-to-day lives”  where engaging in normal, everyday acts of living and working - going to school, visiting neighbors, traveling abroad, planting a tree, growing vegetables and selling products in a nearby market - are treated as criminal activities, punishable, in some instances, by death.  In these obscene spaces, innocent human beings - most of them, children - are slowly being poisoned by the water they drink, all with the knowledge and acquiescence of the world community.

This disfigurement of everyday life is, for me, as a Jew, painfully symbolized in the Star of David that was gouged into Gaza’s soil during Israel’s 2008 war on the territory. Yet the desecration of the land in this way not only points to the destruction of a way of life and means of survival for Palestinians, it embodies the limitations of Israeli power and the failings of Jewish life as well. No doubt those who wrested the Star of David from Gaza’s land meant to convey the presence and the power of the Jewish state over the destiny of others. Yet this power is one of deprivation and ruin, and it speaks profoundly to our own inability to live a life without the walls we are constantly asked to build. 

As I have hopefully shown, the people of Gaza are being deliberately targeted and a crime against them is being committed.  More than anything, this crime is found in the daily and unrelenting assault on their economy and society for which the United States, the European Union and various Arab states bear enormous responsibility together with Israel. Whether you deliberately shoot a human being through the heart with a bullet or deprive him of a home, livelihood, and the means to care for his children, you are saying to that human being that he has no right to exist. In this way, among others, Gaza speaks to the unnaturalness of our own condition as Jews.  For in Gaza, we seek remedy and consolation in the ruin of another people, “[o]bserving the windows of [their] houses through the sites of rifles,” to borrow from the Israeli poet, Almog Behar. It is ironic then that our own salvation now lies in Gaza’s. And no degree of distance or separation can ever change that.


Dr. Sara Roy is a senior research scholar at the Center for Middle Eastern Studies at Harvard University where she completed her doctoral studies in international development and education. Trained as a political economist, Dr. Roy has worked in the Gaza Strip and West Bank since 1985 conducting research primarily on the economic, social and political development of the Gaza Strip and on U.S. foreign aid to the region. Dr. Roy has written extensively on the Palestinian economy, particularly in Gaza, and has documented its development over the last three decades. Her most recent book, Hamas and Civil Society in Gaza: Engaging the Islamist Social Sector, was published last year by Princeton University Press.

This transcript may be used without permission but with proper attribution to The Palestine Center. The speaker's views do not necessarily reflect the views of The Jerusalem Fund.

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