August 8, 2014 / 12:09 PM / 5 years ago

Gaza war takes its toll on business and jobs

GAZA (Reuters) - Palestinian businessman Hatem Shammaly paid $2 million a year ago for a tile factory near Gaza City. Now the once profitable business is buried under rubble after Israel bombed it.

Shammaly became the major contractor to many housing projects in the enclave, specially those carried by the United Nations Relief and Works Agency, which executes projects funded by international donors.

The 42-year-old father of 14, a resident of the Shejaia district where Israeli attacks killed 72 people in late July, said his family’s business interests included a brick factory, a farm and a transport company.

“The tile factory was flattened, wiped out, the brick factory was destroyed, most of the animals were killed and the vehicles were crushed,” the businessmen told Reuters.

“You can say they bombed me personally. We lost $4 million,” he said.

In addition, the Israeli military bombed four houses belonging to Shammaly and his brothers, forcing them to rent apartments in Gaza City.

Israel says it is fighting Islamist militants in the Gaza Strip and Palestinian authorities must bear responsibility for allowing them to launch rockets in densely populated areas and near other facilities.

At least 150 employees who worked for Shammaly have now become jobless, adding to unemployment rates that stood at 40 percent before the war started in July.

“That meant 150 families lost their breadwinner,” said Shammaly, who estimated it could take him 20 years to re-establish his businesses unless he is paid compensation.

Gaza economy expert Maher Al-Tabbaa, whose is also an official at the Gaza Chamber of Commerce, told Reuters that an estimated 500 businesses have been struck by Israeli bombs and shells since fighting began on July 8.

This amounted to a “massacre of the Palestinian economy that will hinder recovery for years,” said Tabbaa, adding that at least 30,000 people were expected to have lost their jobs.

Gaza officials said infrastructure has suffered badly. Most of the 1.8 million population have no electricity for most of the day after Israel bombed Gaza’s only power station and electricity lines providing the enclave with Israeli power were damaged during fighting.


In 2007, Israel tightened its blockade of Gaza after Hamas took control of the territory from the long-dominant Fatah faction of President Mahmoud Abbas following a brief civil war.

Israel eased its blockade in 2010, but Palestinians in Gaza complained that imports from Israel only met between 30 and 50 percent of their needs.

The blockade however had led to the closure of 3,900 factories and workshops in the territory. Many of those later reopened when thousands of smuggling tunnels were dug under the border with Egypt, allowing the import of nearly everything from raw materials to rockets.

But since the 2013 overthrow of Islamist President Mohammed Mursi, Egyptian security forces have closed almost all the tunnels.

The closure of the tunnels also deprived the Hamas government of taxes on imported goods that had made up a major part of its revenues.

Last April, rival Palestinian factions struck a unity deal, which led to the formation of a government of technocrats, but the Palestinian Authority has yet to assume full control in Gaza.

Mohammed Mustafa, the Palestinian deputy prime minister, said the postwar reconstruction of Gaza would cost at least $6 billion.

Palestinians hope that donors will make good on their aid pledges. In 2009, only a fraction of the nearly $5 billion in funds promised at an international conference after a three-week war between Israel and Gaza’s ruling Hamas faction actually arrived in the battered enclave.

The present Israeli bombardment has not spared factories that were demolished in 2009 and rebuilt.

Tabbaa said businesses affected by the fighting were in the food, farming, building materials and plastics sectors.

“If the war ends, crossings are opened and compensation is paid, these businesses may still need between three and five years to resume operation,” the economist said.

“If that does not happen it will be catastrophic for the Gaza economy for a very long time.”

Writing by Nidal al-Mughrabi; Editing by Giles Elgood

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