The tunnel trade between Gaza and Sinai: capital without direction, direction without capital

By: Omar Shaban

Summary: “One of the challenges of the reconciliation between Hamas and the Authority is the reabsorption of 55000 employees of the Palestinian Authority in Gaza, who were asked to abstain from working with the Hamas government. There is a challenge of no less importance, which is how to integrate hundreds of the new rich, who accumulated immense fortunes from the illegitimate trade, into the legitimate and registered economic activity, and how to bring back hundreds of others who exited economic activity because of the blockade.

The tunnels are not new:-

According to the Israeli Ministry of Defence, the tunnels under the Gazan-Sinai border have existed since the mid-eighties. Their number at that time did not exceed the fingers of one hand and they were very primitive and were used in smuggling what was forbidden at that time, such as weapons, drugs, and individuals forbidden from passing through the legitimate crossings. The tunnels became a central and influential phenomenon since the imposition of the Israeli blockade on the Strip in June of the year 2007, in the wake of Hamas's takeover of rule in the Gaza Strip. Their number swelled until it reached 1200 tunnels extending under the border strip, whose length ranges around 12 kilometres and its width 700 metres. Likewise their function changed, as they became an important source for bringing in thousands of goods necessary for human life and an important source of the revenues the Hamas government in Gaza collects. Yet their importance and their number diminished in June 2010 as a result of the lightening of the blockade that the Israeli government was forced into because of the international pressure produced when the Israeli navy attacked a number of ships, most of them Turkish, carrying international solidarity activists, most of them Turks, on 31 May 2010. It is worth mentioning that the Israeli attack led to the killing of a number of Turkish activists and the tensing of the relation between Israel and Turkey.

Results in multiple directions:

Despite their illegitimacy, the tunnels trade contributed to lightening the repercussions of the Israeli blockade on the population of the Gaza Strip, as the tunnels provided hundreds of basic goods such as infant milk, school supplies, and likewise the inputs of the construction sector — but they also created negative phenomena and behaviours that Palestinian society will need long years and immense efforts to treat.

- New rich and new patterns of investment: one of the direct results of the tunnels trade is the formation of a class of the new rich, who were able to accumulate fantastical fortunes in a short span of time. Many reports spoke of the formation of a new class of new millionaires whose number exceeds 1000 millionaires. The appearance of this class caused an essential change in the patterns of economic activity in the Gaza Strip and a change in the system of values that governs society. And given this class's lack of the experience necessary in managing businesses, their investments headed in most of them to the traditional forms of investment, such as buying lands and real estate and owning luxurious cars, which raised their prices fantastically. Likewise this class was able gradually to possess political and cultural influence in the society of the Gaza Strip. As usually happens in such circumstances, this class strove to network with the authority in order to obtain protection and influence.

- The shift of the economic weight from the centre to the periphery:

Gaza City, inhabited by a third of the Strip's population, was the centre of economic activity, whether traditional or modern. The shift of this weight, because of the tunnels existing under the border strip between the Palestinian city of Rafah and its Egyptian counterpart, led to a shift of the economic activity and the accumulation of capital from Gaza the city to Rafah in the far south of the Gaza Strip. In return, and in an attempt by them to achieve profits, immense capitals moved from the traditional families residing in Gaza City and its surroundings to the Rafah area, where partnerships took place between the business class, which possesses experience and knowledge of economic activity, and a new class possessing experience in digging tunnels and in trade, in addition to its family bonds with the tribes of Sinai — which are very important conditions for working in the tunnels trade. In return, a noticeable movement of the class of the new rich took place from the periphery to the centre in their search for opportunities to employ their immense fortunes or in their search for the seats of influence and control. And the city of Rafah, located in the far south of the Gaza Strip, became among the wealthiest areas of Palestine, after the human-development reports had classified it as the poorest area of Palestine.

- Human losses and a change in values and concepts:-

The tunnels have brought about an essential change in the social and class fabric and in the system of values that governs society. The tunnels trade contributed to spreading the values of quick wealth among the youth and the businessmen, which pushed thousands of small savers and businessmen to engage in this field, in addition to tens of thousands of workers who had no other job opportunities before them but working in this very dangerous field. Quick wealth from the tunnels trade gave an additional example of the imbalance of the relation between effort and return.. where you find a young man in the third decade of his life driving a very luxurious car.. the university doctor would have to work twenty years to be able to acquire it.

Money without a head.. and a head without money:-

The Israeli government stipulates, for lifting the blockade from the Gaza Strip — which means the end of the tunnels trade and the return of trade between the Gaza Strip and Israel as it was previously — that the Hamas government recognise the Quartet's conditions, or that the Palestinian Authority, recognised by Israel and internationally, return to rule in the Gaza Strip. The tunnels may end with the realisation of either of these two conditions, but their effects will remain for long years and Palestinian society will need great programmes and efforts to treat them. One of the most important of these results is how to deal with these rich who have grown accustomed to working underground and do not believe in registering at the chamber of commerce and the official institutions, or in how to deal with the banks or enter business partnerships at the international level. Likewise the Palestinian economy will need these immense funds, which their owners keep outside the frame of the banking system, on one hand; and how to work on bringing back the business class, which possesses experience in the field of business but lacks capital, on the other hand. One of the expected challenges is how the money can be brought together with its head so that it contributes to rebuilding the Gaza Strip, activating the economic activity, and treating the distortion that has afflicted the social fabric.

http://www.al-monitor.com/pulse/ar/contents/articles/opinion/2013/01/gaza-tunnel-millionaires.html