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Peace is Good for Business - Business is Good for Peace

When cargo flows the economy grows. Crossing points are presently the only ground conduits for Palestinian cargo and passenger flows. Presently these are essentially restricted to humanitarian provisions trucked into Gaza through the Kerem Shalom crossing point between Israel and Southern Gaza and passengers transited into/from Israel for medical treatment through the Eres Crossing point in Northern Gaza.


Throughout recent history and currently, both crossing points were/are periodically closed due to security issues. Significant employment in Gaza was previously generated from Gazan production exported to and through Israel. For example, until Disengagement from Gaza in 2005, upwards to NIS1 billion in export production was shipped through Eres from factories operating in the Eres Industrial Estate. This does not include Gazan production that was exported through the Karni crossing point from factories operating in the Gaza Industrial Estate, nor does it include production from Israeli settlements in Gaza shipped to Israel via the Settlers Road.


Most if not all of those jobs vanished shortly following Disengagement because Gazan producers were not able to ship their products in a timely manner or at all due to closures. Karni and the Settlers Road have been closed as well as the Eres Industrial Estate. Since Disengagement was implemented, no Israeli is allowed to enter Gaza. One-third of the factories operating at the Eres Industrial Estate were Israeli-owned, one-third were Palestinian-owned and the rest were Israeli-Palestinian joint-ventures.


Two-thirds of businesses operating at Eres shut down very soon following Disengagement. Thousands of Gazan Eres jobs were lost along with thousands more from settlement industries, the Gaza Industrial Estate, Gazan workers who worked in Israel, etc. All of this is impacting today’s high Gazan unemployment rate of 50 percent, more than twice that of the West Bank according to a recent World Bank report. This comes at a time when Israel is importing tens of thousands of workers from around the world. Israel’s construction industry alone is now authorized by the Israeli Government to import more than 20,000 workers. There is something very wrong with this picture. But how can one blame any Israeli industry for importing labor globally when a capable and authorized Palestinian workforce is eagerly and readily available but cannot securely pass through crossing points in order to get to work in a timely manner?


Loss of income in Gaza and the West Bank not only negatively impacts unemployed Palestinians. Their families are also negatively impacted and so are Israeli businesses that lose revenue from Palestinian markets. Imported labor also tends to be more costly to Israeli industries; Israelis, therefore, end up having to pay higher prices – especially in those sectors already experiencing inflated costs, such as housing and food.


This scenario is untenable. Underlying most of Gaza’s debilitating challenges is the urgent need for economic redevelopment, including infrastructure support. How can one expect people to be positive, constructive and productive when they lack the ability to build equity?


What Gaza and its neighbors need is a safe, secure and profitable supply-chain management system that will enable Gazan production to be shipped to and through Egypt, Israel and Jordan. Concurrently, investment in Gazan infrastructure is sorely needed, not only for essential services (e.g., water, power) but in order to redevelop productive industrial estate facilities so that businesses can operate. Allowing these facilities to function as duty-free export processing zones will not only generate direct foreign investment but will generate employment and opportunities for Gazans to build equity.