Palestinian reconciliation makes life cheaper in Gaza
PA cancels surcharges as high as 25% that Hamas used to collect from merchants
Gaza’s merchants and consumers are reaping early rewards from reconciliation moves by the enclave’s dominant Hamas Islamists and the Western-backed Palestinian Authority (PA).
Israeli border restrictions, including a nearly blanket ban on exports from Gaza, and three wars since 2008 have imposed severe hardship in the territory.
Since Hamas ceded Gaza’s border crossings with Israel — the main gateway for commercial imports — to the Authority on November 1 under an Egyptbrokered unity deal, prices of many items in the territory have dropped.
The main reason for the decrease: the Authority has cancelled surcharges, sometimes as high as 25 per cent, that Hamas collected in cash from merchants in Gaza. Businesses, in turn, have passed on some of those savings to customers: a 2017 Kia Picanto compact car, for example, now sells for $20,000 (Dh73,450) instead of $22,500, and a kilo of beef costs 40 shekels ($11), down from 50 ($15).
And this week, the PA, which takes its own tax in an arrangement agreed with Israel, allowed the import of cigarettes costing eight shekels a pack compared with the usual 21 shekels for other brands, through Israel’s Kerem Shalom commercial crossing for the first time.
Cigarettes used to come in only via smuggling tunnels under the Egyptian border but the PA is seeking an understanding with Hamas as well as Cairo to choke off that channel.
“[Hamas’s fees] led to a weakening of sales power because the people in Gaza live under bad economic conditions and because of the Israeli blockade and the loss of jobs,” said Tarek Al Saqqa, who owns an electrical goods company in Gaza, where unemployment tops 40 per cent.
Hamas, regarded by the West as a terrorist group, seized the enclave in fighting in 2007 against forces loyal to Palestinian President Mahmoud Abbas.
Mohammad Abu Jayyad, a Gaza economist and other local economic experts cautioned against any hopes of a rapid revival of Gaza’s economy unless Israel’s restrictions were fully removed.