Sitting pretty: Gaza renews furniture exports

Though the shipment is small, it could point the way to a new source of jobs and economic growth.

Palestinian at pot factory in Gaza Strip 390 (photo credit: Mohammed Salem / Reuters)
Palestinian at pot factory in Gaza Strip 390
(photo credit: Mohammed Salem / Reuters)
Israel’s blockade of goods coming into the Gaza Strip has been the target of flotillas and a cause for concern among human rights activists and economists alike. But the difficulty of getting products out of this tiny Mediterranean enclave is just as important to the well-being of its 1.7 million residents.
So a shipment of Gaza-made furniture through the Kerem Shalom crossing last week was far more important than the size of the consignment itself. Two trucks filled with cupboards, dressers, beds, tables and chairs made their way through the check point on their way to a furniture exhibition in Jordan, 130 kilometers away.
It marked the first time since 2007, when Israeli authorities first imposed a blockade on Gaza following the election of the Hamas movement- listed by the US as a terrorist entity- that any non-agricultural exports have succeeded in getting out of Gaza. Nathmy Muhana, head of Borders and Crossings Committee in the West Bank, said six factories in Gaza were allowed to participate in the exported consignment.
The opportunity of selling his wares in more lucrative export markets was so exciting for Abu Muhanad Al-Helo, who owns one of the factories that participated in the furniture consignment, that he put all his local jobs on hold.
“I asked all my workers to commit for a week. I closed my factory and cancelled my local orders so we could fully commit to being a part of the export consignment to Jordan. After all, it’s the first time in years,” Al-Helo told The Media Line. “I used to export daily shipments from Gaza but that stopped back in 2007. If we’re allowed to make more shipments, I’ll need to employ new workers to finish the local and export workloads.”
Gaza could certainly use the jobs. The blockade, as well as the 2008-09 clash between Hamas and Israel, took a heavy toll on the economy, boosting unemployment and poverty rates deep into the double digits. Israel, which imposed the blockade because Hamas opposes the Jewish State’s existence and employs violence against it, has allowed humanitarian aid into Gaza.  Tunnels dug by smugglers under Gaza’s border with Egypt provided a lifeline for the economy.
Over the last 18 months, Israel has begun to ease the blockade and Gaza’s economy has come back to life in many ways. According to the Gaza Chamber of Commerce, the number of trucks loaded with goods coming into Gaza through the Kerem Shalom crossing increased to 250 a day last year from 100 in 2010.
Exports have begun trickling out of Gaza, as well, but until now they have been entirely farm products. Indeed, while the two truckloads of furniture were making their way through Kerem Shalom last week, some 400 tons of strawberries, 40 tons of peppers, six tons of cherry tomatoes and 812,000 carnations were heading to Europe.
The Palestinian Central Bureau of Statistics estimates that gross domestic product jumped a preliminary 22% in the third quarter, compared with a year ago, while the Chamber estimates the jobless rate plunged 11 percentage points last year from 2010.
But such statistics are misleading. The economy had contracted so much that it is probably smaller than it was a decade or more ago. Even if more Gazans are working, the unemployment rate was still 28% last year, according to the Chamber.
Catherine Essoyan, Oxfam’s regional manager, cites economic projections that suggest Gaza needs 10,400 truckloads of goods coming in every month to get the economy back to where it was in 2005. But, given the growing needs of an expanding population living under an ongoing blockade, actual needs may be much higher than this.
Before 2007, Gaza exported 40-50 truckloads of goods on daily basis – two thirds of them agricultural products – to Arab and European countries. The Palestinian Bureau of Statistics says the enclave's exports in 2005 were worth $41 million.
The furniture industry was once the pride of Gaza, whose economy is mostly reliant on agriculture. With Israel’s encouragement, hundreds of factories were built in an industrial zone near Karni, another of the four crossings between Gaza and Israel, to take advantage of low labor costs and the nearby Israeli market. Before the second intifada – the period of unbridled violence aimed at Israeli targets – which broke out in 2000, companies like Nestle, Pepsi-Cola and Japan Tobacco were considering building plants there.
Today, most of the factories are empty or serve as United Nations warehouses. Gisha, an Israel non-government organization that advocates freedom of movement for Palestinians, estimates that more than 80% of Gaza’s factories have been either shut down or are operating at 50% capacity or less.
Gaza’s furniture makers and its other small industrialists still have a long way to go to revive manufacturing. While quiet has more or less returned to Gaza, interrupted by an occasional exchange of Palestinians rockets and Israeli air raids, and Egypt has re-opened its border, Gaza remains a rough-and-tumble place that makes investing in new businesses a risky proposition.
The furniture exports are a case in point. Israeli authorities approved a batch of exports to Europe last year, a shipment of seven truckloads, but the shipment caught fire in a warehouse before it left Gaza. Owners said the cause was arson, but an investigation into the fire did not lead to any arrests.
Israel presents another obstacle to reviving Gaza’s exports: Authorities will not allow products from the enclave to be sold in Israel, a potentially huge market, or the West Bank, where most Palestinians live. Israel and the West Bank were once the destination for 85% of the goods sold by Gaza outside the enclave.
“To implement the promise to allow economic development for residents of Gaza, it's not enough to allow Gaza's products to transverse the roads of Israel and the West Bank,” Gisha Director Sari Bashi said the day the furniture passed through Kerem Shalom. “They must be able to actually reach markets there.”