Gaza: the Economics of Tunnels

February 10th, 2009 | Posted in Palestine
    By Mohammed Omer, Washington Report on Middle East Affairs.

    Photo: Iyad Albaba. Tunneling essential goods into the Gaza Strip.

Options are few in Rafah. As in other societies throughout history trapped behind walls or segregated in ghettos, the smuggling in of basic necessities, as well as weapons for defense, means the difference between life and death. In Gaza, tunneling dates back to the 1980s, when Israel returned the Sinai Peninsula to Egypt. During the first intifada, which began in late 1987, tunnels were used as an underground railroad, transporting people out of Gaza, as well as serving as safe houses for resistance fighters, and storage spaces for weapons and supplies.

Since Israel imposed its siege on Gaza after Hamas won democratic legislative elections in January 2006, the number of Palestinians tied to some segment of the tunnel industry has grown in direct proportion to the increasing lack of availability of raw materials and basic necessities, including food, fuel and medicine. Palestinian sources estimate that some 6,000 people are employed as diggers in the hundreds of tunnels crisscrossing the Gaza-Egyptian border.

But tunnels are not the romantic passageways portrayed in Hollywood films about World War II or Vietnam. You can die simply upon entering one—as a result of the tunnel collapsing, of suffocation from the tear gas lobbed in by Egyptian authorities, or from electrocution caused by the willy-nilly wiring jerry-rigged to provide lighting and ventilation. You can die simply by getting lost in the maze, or from breathing in the unstable sand. If you’re lucky, your body will be found and given a proper burial.

Like the toll houses of a bygone era, Gaza’s tunnels are owned by individuals who collect fees for their use. One such owner is Abu Khaled, a father of seven. Although he doesn’t dare traverse the 30- to 45-foot tunnel himself for fear it might collapse, Abu Khaled is among a growing number of tunnel entrepreneurs in the Philadelphia corridor, Rafah’s no-man’s-land between Gaza and Egypt. Others involved in the industry include diggers, runners, smugglers and merchants.

Tunnel owners earn $300 for each 100 pounds of goods smuggled in. (Smuggling animals for Gaza’s zoo can net up to $3,000 each!) With this revenue Abu Khaled supports 20 workers: diggers who do the dirty work, and runners who transport the goods.

As he separates bags of smuggled goods for distribution throughout the Strip, Abu Khaled points to his jeans. “These jeans I am wearing cost Egyptian pounds ($11), including the [Egyptian] merchant’s profit,” he explains, “but now I can sell them for 120 Israeli shekels ($34).”

Not only jeans, but shoes and underwear are brought through the tunnels and resold at high mark-ups. In addition, Abu Khaled notes, “We get medicine, gasoline, food, dried milk and monocycles” through the tunnels—which also serve as the conduit for sending money to merchants in Egypt to pay for the goods smuggled back into Gaza.

Islam frowns upon alcohol and drug use, although pharmaceuticals—even Viagra—continue to be smuggled in. According to Abu Khaled, Hamas police “control what we get in. Weapons and drugs are prohibited.” Rafah municipal officials confirm that they regulate tunnel operations, which they classify as an “investment project.”

In a society where the average family lives on $2 a day or less, tunnel work is a way out of poverty and a means to feed one’s family. Nader, a 20-year-old tunnel digger, admits he can make between $80 and $110 a day. “It depends on how many feet I dig in the ground,” the young man explains, adding that he usually spends 12 hours a day digging underground, in poorly ventilated conditions.

To date he’s taken part in the search and recovery of three colleagues who died in tunnel collapses. The deaths prompted him to stop working in the tunnel—until his cash ran out, forcing him back. “It’s a dangerous job—some of my friends died in tunnel collapses; others were arrested by Egypt,” he says. More than 50 tunnel workers have been killed in the past year in accidents or Egyptian anti-smuggling operations.

Last October, Hamas police summoned tunnel owners and ordered them “to take action to protect their employees,” confirmed Ihab Al Ghoussien, spokesman for the Ministry of Interior in Gaza.

Participants in the meeting said owners were asked to sign a promise to pay the Islamic diyeh, or blood money, to the family of each worker killed. As a result, many tunnel owners have begun to pay more attention to the safety of their workers, rather than face future costs of at least $55,000 to $70,000.

Nader admits that tunnel owners often abuse diggers by paying them less than the agreed-upon rate, or by withholding payment until the tunnel is completed, which typically takes about six months. But without the tunnel income, he notes, “I could not afford my sister’s university fees or bring food for my mom and dad.”

Odai Abdelraheem, a 42-year-old father of eight, lost his construction job due to a lack of raw materials. Working in the tunnels makes it possible for him to feed his family and parents—though physically it’s taking its toll. His knees are swollen from crawling in the damp soil. “It’s cold and dark below,” he says, “and you have to worry that at any minute the tunnel might collapse over our heads.”

“Catastrophic Consequences”

Economists warn that these tunnels should not be regarded as a permanent lifeline for Palestinians. The longer the tunnels serve that function, notes Gaza business analyst Sami Abdel Shafi, the poorer Gaza’s chances for future economic recovery. Relying upon the tunnels “will have catastrophic consequences,” he warns. “1.5 million people can’t depend for long on tunnels [to fulfill their] basic needs. [You can’t smuggle in] civil services in education, health and infrastructure,” he points out, describing the goods that do make it into Gaza as “a drop in the bucket.”

Before the siege, most supplies in Gaza were imported from Israel. Today, they come from Egypt—which the Israeli government accuses of ignoring the smuggling. Although Israeli Foreign Ministry spokesman Aviv Shiron praised recent Egyptian efforts to seal and shut down the tunnels, he insisted that “much more has to be done.”

According to the Interior Ministry’s Ghoussien, his team is acting on the tunnels issue. However, he notes, the smuggling would stop if Israel allowed the border to be reopened. And, indeed, history supports this analysis. When Gaza’s borders were open prior to 2006, Palestinian authorities consistently shut down the tunnels in favor of the free flow of goods and services into the Strip. The risk of smuggling with open borders wasn’t worth the cost in money or in lives.

Under pressure from Washington, Egypt recently escalated its efforts to shut down the tunnels, destroying scores in the past months and fast-tracking the acquisition and implementation of a new $28 million U.S.-made tunnel detection system. Israeli sources confirm that U.S. experts are working with the Egyptians to find and expose the tunnels along the Philadelphia corridor.

Providing the means for Gaza’s businesses to remain operating is a most lucrative form of smuggling. One tunnel owner who just a few months ago could afford nothing and used donkey carts for transportation now has enough money to afford luxury jeeps and merchandise for his wife.

The tunnels are not only used to supply Gazans with food, clothing, medicine, fuel and spare parts, however. They also make it possible to reunite families who have become separated when their non-Palestinian spouses find themselves prevented from reaching their husbands, wives or children as a result of the Israeli-imposed border closures. In desperation, they pay handsomely to be smuggled in or out of Gaza. One smuggler admits to having received $1,000 to reunite a European wife with her Palestinian husband and children living in Gaza.

Asked what he thinks of being viewed by some people as an exploiter of the bleak situation in Gaza, Abu Khaled responds, “I am no hero. I bring life out of death to our people.”

Award-winning journalist Mohammed Omer reports from the Gaza Strip, where he maintains the website

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