Israel eases its Gaza blockade, smuggling tunnels go unused

I've written quite a bit in the past about the flourishing smuggling tunnels between Gaza and Egypt which supplied the blockaded territory with goods not available through legitimate trade (one source put the number at 90%, though I can't vouch for this figure). The tunnels were dangerous and Hamas was known to tax them, but they served their purpose.

It looks like now, however, they are falling into disuse as Israel has eased its blockade:

"Israel now allows more food, different kinds of it, juice, electrical equipment and even fridges, therefore merchants shifted their business to the old regular way and abandoned tunnels," he added.

Israel relaxed its restrictions in June in the wake of its raid to halt a blockade-running flotilla from reaching Gaza in a military operation that killed nine activists and drew widespread international condemnation.

While counterfactuals are difficult, this easing appears to be a direct result of the Gaza flotilla raid and the attention that it brought to the situation. At the time, I thought the activists were drawing more attention to themselves than anything else – there were way more people on the "aid" boats than there needed to be, and the used clothing and toys that made up the bulk of the cargo were relatively useless. But I suppose now that the blockade has been eased, I stand corrected.

Gaza's proliferating tunnels

Foreign Policy has an excellent article about the ubiquitous smuggling tunnels sustaining the Gazan economy. Apparently the smuggling market has become incredibly saturated:

One smuggler, who used to ply his business in the days of the Israeli occupation when a single shipment of weapons could earn him $5,000, bemoaned the fact that there were so many tunnels these days that he barely earned $50 per load. Indeed, some commodities are now actually cheaper than when they were imported from Israel, with the lower cost of goods originating from Egypt offsetting the cost of smuggling them in. On the days when the [Palestinian Authority] pays salaries and Gazans go shopping, some tunnel operators find it more profitable to drive a taxi.

Apparently the banalization of the tunnels has been pretty complete:

This set the stage for a number of fraudulent schemes that came to light last summer, with Gazans of modest means investing in tunnels that turned out not to exist. Tens and possibly hundreds of millions of dollars were stolen in this way, and some suggested senior members of Hamas might somehow be implicated. The Hamas government arranged partial compensation of the victims.

For all previous posts on the Gazan smuggling tunnels, check the archive.

The economics and political economy of Gazan smuggling tunnels

I've written a lot in the past about the smuggling tunnels between Egypt and the Gaza Strip, but the London Review of Books has what has got to be the best article I've ever seen. As the article says, data's hard to find, but the anecdotes are pretty good. Here's an excerpt:

According to World Bank officials, 80 per cent of Gaza’s imports currently come through the tunnels. Once black-market smuggling had turned into Gaza’s formal trade, Hamas inspectors began to impose controls and licensing fees. Some tunnel merchants now operate a telephone order service and send out catalogues: office equipment ordered by phone arrives in 48 hours. ‘Goods move faster now than when Rafah terminal was open,’ a businessman told me. With the rise in trade, prices have fallen. Egyptian goods cost less than Israel’s, sometimes even after Hamas and the smugglers have taken their cut. Petrol is half its pre-siege price.

There are precious few macroeconomic data on the effect all this is having. ‘For us Gaza’s a bit of a black hole,’ a World Bank economist reliant on Ramallah’s figures admits. Even so, he says, unemployment rates in May dropped 3 per cent from a high of 32 per cent. ‘My tiler’s gone underground,’ a UN civil servant complained to me: he couldn’t compete with the tunnel smugglers, who pay four times the £12 daily wage he was offering.

More tangible signs of recovery can be seen among Gaza’s numerous money-changers, who help smugglers launder their earnings. The weight of a million dollars in hundred dollar bills to the nearest decimal point trips off their tongues. In June, the Gaza-based Bank of Palestine doubled the size of its trading rooms, which are linked electronically to Nablus, Cairo and Dubai stock markets, and installed rows of plasma screens. With investors keen to park their profits, share-trading volumes doubled in a year, and this summer the Bank of Palestine share price reached an all-time high. Traders who used to go home at lunchtime now stay till four.

And the tunnels are rebuilt

Just a few days after the cease-fire and already the tunnels are being rebuilt between Egypt and Gaza. The tunnels began sprouting like Saudi princes after Israel imposed a blockade on the Gaza Strip and Egypt followed suit (remember: it takes two to tango). Though it appears that most of the goods moving from Egypt to Gaza through the tunnels are commercial, there does seem to have been weapons smuggling.

Though Israel supposedly went to war partially to destroy the tunnels (and destroy them they did), they must realize that they don't actually want the smuggling to come to an end. If the tunnels supply even close to 90% of the imports into Gaza as some claim, their total abandonment would result in starvation on a scale that Israel could never tolerate. Egypt has little incentive to close the tunnels because of the brisk trade that it brings to the Egyptian side of the Rafah crossing, and likely doesn't want the vilification that it would receive from its own population if it were complicit in starving Gaza into Hamas' surrender (an unlikely scenario to begin with). I predict that the "heavy international pressure" on Egypt to prevent smuggling will turn out to be not heavy enough, and that the tunnels will be there as long as the blockade will be there.

It takes two to tango/besiege Gaza

Anshel Pfeffer has a take on the Gaza "siege" which, embarrassingly enough, I never considered: Israel cannot unilaterally impose a siege on the Gaza Strip, as it shares a land border with Egypt as well as with Israel.

In all the talk of the siege, blockade and humanitarian disaster of Gaza, one small inconvenient detail almost always goes unmentioned. Gaza has a second border in addition to the one with Israel: a small but potentially useful border with its Arab sister, Egypt. [...]

A well-regulated and secure crossing at Rafah could have solved most of the current problems. It could have let through normal food and medical supplies for the Palestinians, allowed them travel and made a mockery of the claims that Israel and its allies have turned the Strip into a gigantic prison.

But despite signing the Philadelphi Agreement that allowed it to station many more troops in the demilitarised Sinai peninsula, and receiving European assistance to control the border-crossing, Egypt has failed to police it. Instead it sealed the border and forced back Palestinians who tried to break through. This was also a misguided policy on the part of Israel, which urged and supported the Egyptian blockade.

Happy birthday Stephen and Ayman

Today, it's my birthday! It's also Ayman al-Zawahiri's birthday – my favorite Islamic jihadist. He merged his terrorist organization Egyptian Islamic Jihad with bin Laden's al-Qaeda throughout the nineties. Osama bin Laden's favored biographer, Hamid Mir, believes that al-Zawahiri is the "real brains of the outfit" once said that "[h]e is the person who can do the things that happened on Sept. 11" Assassinated former Russian spy Alexander Litvinenko claimed that right before the 1998 US embassy bombings in Nairobi and Dar es Salaam, al-Zawahiri was trained for six months in an FSB camp in Dagestan. The FSB's ties to al-Zawahiri are just another example of Russian sponsorship of most major terrorist groups and rogue nations. In my opinion, it's a way to drive up oil prices (which Putin's cronies' pockets, give them popular support, and threaten Western economies) and thwart the West's liberalization by making totalitarianism more fashionable.

Anyway, for my birthday present, I want anyone who's a regular reader (or, hell, anyone who's reading this) to leave a comment (anonymously will do) saying hello and telling me what they like and dislike about the blog. And, for those who don't know me (don't ruin it!), guess how old I turned today. If not an exact age, then at least a decade.