Industry demands solution to open Karni

Closure has already cost business $135m., manufacturers charge.

karni crossing 88 298  (photo credit: Ariel Jerozolimski)
karni crossing 88 298
(photo credit: Ariel Jerozolimski)
The closing of the Karni crossing in mid-June has cost Israeli businesses some $135 million in direct damages, President of the Manufacturers Association of Israel Shraga Brosh charged Tuesday, as he joined the growing list of politicians, academics and industry leaders who have called on the government to reopen the terminal. Since the Hamas takeover of the Gaza Strip on June 12, the Karni crossing, which had served as the primary passageway of goods into and out of Gaza, 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. "The Israeli government must find a solution to the closing of the border crossing immediately in order to restore trade relations between the private business sectors in Israel and Gaza," said Brosh, who claimed that Israeli manufacturers are losing a combined $2.2m. a day due to the closing of Karni, with businesses in the textile, metal, furniture and food sectors bearing the brunt of the damage. Additionally, he said, the closing has prevented Israeli builders from working with Gazan subcontractors, thereby raising costs and making it difficult to remain competitive. "Right now we need to take into account the long term affects that the closing of Karni will have and need to weigh whether to permanently cut ties with Gazan customers," said Brosh. "The Gazan market has been important for Israeli businesses, but if a new policy is not put in place to ensure that the crossing will remain open, it will be difficult to continue to do business in the Gaza Strip." Brosh also noted that money due to be paid to Israeli business owners from Gazan customers has not come through, inflicting further damage on owners of small companies. 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. Neither Sufa nor Kerem Shalom however, have anything near Karni's capacity and while they are easier to secure because they are slightly set back from the border they have come under almost daily mortar attacks. Additionally, Sufa is not suitable for transporting most produce as the high levels of dust in that area could easily damage delicate fruits and vegetables, the Fruit Growers Association told The Jerusalem Post last month. The closing of Karni has had a profound affect on the other side of the border, as well. "We are talking about nearly 35,000 newly unemployed and a direct hit of $55m. to the Gazan economy," Dr. Ron Pundak, director general of the Peres Center for Peace, told the Post. "If the situation does not reverse itself soon, we are looking at the total collapse of that economy." According to Asaf Adar, product manager for strawberries at the agriculture export company Agrexco, the upcoming growing season is on the verge of being lost. "Even though planting does not begin until November, we still need to get our Gazan growers the materials they need to prepare the season," he said. "Since the border has been closed, we have not been able to send anything in." Adar predicts that if the strawberries are not planted, it will cost the company between $3m and $4m. "We are a company that does over $600m. in sales a year, so this is not such a big loss, but our 400 growers and their families depend on this money to live," he said. "None of our European customers are going to wait for our product - they will get it from elsewhere, leaving thousands of people without income." Last week, Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, said Prime Minister Ehud Olmert and Defense Minister Ehud Barak have an obligation to do their utmost to open the crossing, if necessary by setting up a private security company. "They need to find an alternative to Hamas at the borders immediately. The government must work on establishing a company that can carry out the proper inspections and security checks, so that trade can resume," Lynn said. Total imports and exports between Israel and the PA stood at $2.95b. in 2006, with 25 percent, or $737m., coming from trade with the Gaza Strip, according to the Manufacturers Association.