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.

Hamas' war crimes go unreported

Noah Pollak at Commentary says it best:

Allow me to propose a metric for evaluating whether a journalist is behaving responsibly or not: If he reports that Israel bombed a UN school and killed 30 civilians, he is irresponsible. If he reports that Hamas used a UN school as a weapons cache and base of operations for launching mortars at the IDF, and the IDF’s return fire killed the Hamas cell along, tragically, with a yet-unspecified number of civilians, then he is behaving responsibly. If he wishes to be particularly scrupulous, he might additionally note that Hamas had rigged the school with explosives which detonated after the IDF took out the mortar team, killing a large additional number of civilians. And he might add that you can go to the IDF’s Youtube channel to view footage from 2007 of Hamas using the very same school as a mortar-launching base.

HT: Michael Totten.

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.

Thoughts on Gaza: Iran's role, the civilian death toll, the smuggling tunnels, and proportionality

Here are a few unrelated thoughts on the recent Gaza conflict:

• About two few weeks before Israel's air raid, defense officials were saying that Iran had been pushing Hamas to not renew its cease-fire with Israel. This is in contrast to Hamas' traditional sponsor, Egypt, who evidently did not want war. Further evidence of Iran's new role as the Middle East's biggest direct sponsor of terror. But who knows if the buck stops there.
• The UN says that 62 Palestinian women and children were killed in the Israeli air raids, meaning that total civilian casualties are likely higher. 320 Palestinians in total have been killed, the (vast?) majority of whom appear to have been employed by Hamas.
• Israel has destroyed 40 smuggling tunnels between Egypt and Gaza. The tunnels could supply as much as 90% of Gaza's economic activity, and are an increasingly lucrative source of revenue for Hamas, which taxes and controls at least some of the smuggling trade. Food, fuel, cigarettes, medicine, and weapons seem to be the most popular goods going through the tunnels. The weapons smuggling business, though, had dried up in the beginning of this year, as Hamas routed Fatah in the Gaza Strip and got control of their weapons.
• Many people have remarked at the inanity of criticizing Israel for being "disproportionate" in its attacks – here is an example of the logic. I don't know how relevant I think it is, but Totten does convincingly argue that "proportionality" is an irrelevant red herring.

Russia and the Middle East

I found this article on Stratfor about the geopolitics of the Middle East, and they have intelligence that Russia is beefing up its presence in the Middle East and likely looking to return to its prominent Cold War role in the Middle East. There's so much information in the article that I'll just quote a huge chunk of it:

With Israel sorting itself out internally and the neighboring Arabs lying in wait for the final outcome, this brief respite presents an opportunity for the Russians in the Middle East theater. Russia brought the world back into a Cold War paradigm with its August invasion of Georgia. The idea of a revived Cold War gained further traction in recent weeks when key Russian leaders emerged from the shadows and started popping up in places such as Venezuela, Cuba and Nicaragua to sit down with their old Latin American drinking buddies and discuss a slew of arms deals.

While the Russians appear to be paying a lot of attention to Latin America, the Middle East remains a viable playing ground for Russia to turn the screws on the West. In fact, Stratfor already has been getting indications that Russian intelligence officers are pouring into Beirut — a traditional Cold War battleground.

Of course, much has changed since the days of Soviet-sponsored chaos in the Middle East. Many of the Palestinian leftist leaders with whom the Soviets worked are either dead or retired. Groups have gone extinct. Alliances have shifted.

Nonetheless, the Russians still have a menu of options in getting back into the Middle East game. They will find no shortage of disaffected Palestinians who are sick of the current state of affairs and would be more than happy to have a foreign state sponsor. Former Marxist groups such as the Kurdistan Workers’ Party (PKK) in Turkey, after being beaten heavily in the past year by the Turks in northern Iraq, would likely jump at the opportunity to link up with their old Russian backers. Lebanon, which is now experiencing a higher-than-usual degree of communal volatility, has a range of factions for the Russians to choose from. And the list goes on.

Should the Russians decide that it is worth their while to incur the risk of provoking both Israel and Turkey, the Middle East is the next logical place for Moscow to ramp up covert activity. And the time to do so is now, while the Israelis are still distracted.

Turkey already sees the Russians coming. The Turks were extremely displeased to see Russia at war in the Caucasus, and they now are doing everything they can to keep the Russians as far away from the Middle East as possible. For this reason, Stratfor is hearing that the Turks are growing more and more insistent that the peace talks between Israel and Syria move forward — and quickly.

Syria, meanwhile, is in an interesting position. On the one hand, they can listen to their Turkish mediators and pursue an opening with the United States through a peace deal with Israel. On the other hand, they can choose to jump back into the Cold War game with the Russians and work against Western interests, taking all the risks that come with such a plan. In any case, the Syrians will have a lot of hard thinking to do over the next several weeks.

What the article didn't mention (though Stratfor has mentioned it before, as have Turkish journalists) is the suggestion that Russia might already have contracted out at least one operation with the PKK: the bombing of the BTC pipeline right before the South Ossetia war.

There's also no mention of Iran, though Russia's policy vis-à-vis Iran has been quite successful. It has enabled Iran to remain a minor pariah, just isolated enough to prevent the West from being willing to depend on Iran as a transit point of energy from the east, but not crazy enough to start any wars (though this would drive up energy prices and further bog down the US/Israel, which could be useful to Russia). This is significant because besides through Iran, the only other two ways to get energy from the east into Europe are through Russia and through the Caucasus. Russia obviously controls its own territory, and with the South Ossetia war, has successfully closed the Caucasus to Western energy pipelines (all three of them).

Hamas's lucrative tunnels

Israel put the Gaza Strip under siege a year ago when Hamas took power in a coup, but the siege looks to have some pretty counterproductive unintended consequences: Hamas has been heavily taxing the tunnels which are used to smuggle consumer goods ands over from Egypt, and has been operating tunnels itself to maintain its supply of weapons:

Hamas imposes stiff taxes on the tons of contraband that flow beneath the border each night, collecting revenue from the tunnels to fill its own coffers, according to those involved in the trade and international observers. Hamas also gets to decide who receives scarce supplies, allowing it to consolidate its authority. All the while, the group has used its control to commandeer tunnels of its own, ensuring a steady supply of weapons to use in its attacks against Israel.

Israel's rationale is pretty standard: they're hoping that the people will turn on Hamas. And they are – less than 40% support Hamas's leader Ismail Haniyeh, compared with 56% for Fatah's Mahmoud Abbas. But, considering Gaza isn't a democracy, this turn in public opinion isn't enough to change the government, or its stance.

The Israelis come off as hapless, arguing so vigorously for control on the arms coming into Gaza (it was a condition of the maybe truce), while utterly ignoring the economic power that the blockade brings to Hamas. The organization has found the tunnels to be an effective way of collecting taxes, and it has the deleterious effect of severing the connection between taxation and consent to govern. Though they're "well aware of the massive scale of the smuggling and that Hamas benefits from it," the Israelis don't seem terribly concerned:

"The best thing from our point of view is that there would be no smuggling of ammunition. We don't care about the other things," said Shlomo Dror, spokesman for Israel's Defense Ministry.