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(photo credit: Ariel Jerozolimski)
Word that the government may shut down all trade with the Gaza Strip after labeling the area a "hostile territory" was met with mixed reactions from industry leaders on Wednesday, with most unsure whether the government would follow through with its announcement.
"If the government decides to go ahead and halt all trade with the Gaza Strip, it will definitely impact the export sector," said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce. "It will mean that any commerce that does enter the Gaza Strip will need special approval. Trade will no longer be free-flowing and everything will need to be done with special permission."
In addition to threatening a trade stoppage, the government also announced that it will shut off electricity and gas supplies to the Gaza Strip. A representative of Dor Alon Energy Israel, which in June cut back its supplies of gas to stations in Gaza, told The Jerusalem Post, however, that despite the government decision it was not expecting to stop its supply of gas to Gaza and will continue to operate as normal until told otherwise. The director-general of Dor Alon, Yisrael Yaniv, had no comment.
According to estimates provided by the FICC, Israel exports approximately $500 million worth of goods and services into the Gaza Strip each year, a significant number said Lynn, but only a fraction of the country's overall $17 billion export sector.
"We can't measure this decision by economic loss, however, but by the human price - this is more concerning to me, and Gazan citizens are going to be terribly hurt by this decision," said Lynn.
A complete shutdown of trade with the Gaza Strip may tip the Gazan economy, already severely weakened from the Israeli decision to close the Karni crossing - the primary passageway of goods into and out of Gaza - following the Hamas takeover of the Gaza Strip in mid-June.
The closing of Karni has been estimated to be costing the Israeli economy some NIS 10m. a day and the crossing has been open only for the transfer of humanitarian necessities as Israel and the PA continue to search for a viable alternative to Hamas personnel manning the border crossings.
Prior to Hamas's violent takeover, the Fatah-led Palestinian Authority was responsible for operating the crossings.
In addition to the closing of Karni, located in the center of the Strip near Gaza City, the Erez crossing in the North has remained open only for medical supplies and limited pedestrian traffic.
Unable to fully reopen the two crossings in the absence of Fatah or an alternative Palestinian counterparty, Israel has relied on two secondary passages at Sufa and Kerem Shalom, both in the South, to allow humanitarian aid such as food staples and animal feed into Gaza.
"As we can see, trade has already been essentially stopped between Israel and Gaza," said Dr. Bassim Koury, chairman of the Palestinian Federation of Industries, "So I am not worried about the threat of a complete shutdown of trade between Israel and Gaza. Since Hamas has taken over, there has been an almost hermetic sealing of trade between Israel and Gaza - exports out of Gaza have been totally stopped and imports are already limited to staples," he said.
Meanwhile, David Artzi, chairman of the Israel Export Institute, was not concerned about a complete halting of trade between Israel and the Gaza Strip.
"Right now, the Israeli government is continuing to supply the Gaza Strip with electricity, and as long as they do that there will be no affect on the commercial relationship," Artzi told The Jerusalem Post. "A declaration in terms of the commercial relationship is really meaningless - they won't completely stop trade because the US won't let them."
Artzi added, however, that until an official government decision is made regarding trade, he won't be able to tell what kind of impact there will be for the Israeli export community.