Impoverished Gaza economy struggles under Israeli blockade

Gaza City – For the past 15 years, Wael al-Ghussein has been struggling to keep his oxygen canister factory in Gaza open.

Like many other entrepreneurs in the territory, blockaded by Israel since 2007, al-Ghussein has to face restrictions on imports, Israeli attacks and the generally poor economic conditions that have existed in Gaza for years.

“Previously, the factory operated for 24 hours a day, but now we only operate three days a month,” al-Ghussein told Al Jazeera. “We used to have 30 employees working for us, today we have only three workers.”

Restrictions have made it difficult to import basic raw materials and equipment necessary for the factory, and constant power cuts have also limited al-Ghussein’s ability to operate his business effectively.

“Entry permits for raw materials and equipment need months to be approved by the Israeli side,” al-Ghussein said. “Some of the materials were damaged due to the waiting period, and sometimes there was no approval.”

Abandoned equipment in a Gaza factory
Much of the factory equipment has gathered cobwebs as it has not been used for years [Abdelkarim Abu Riash/Al Jazeera]

Al-Ghussein explained that he spends thousands of dollars per month on the fuel needed for the generators that run the factory during the eight to 12 hours a day that power is off.

To make matters worse, al-Ghussein has already had to rebuild his factory just to return it to the level it was at when the blockade began.

In 2002, al-Ghusseini says that Israeli bulldozers destroyed his factory, located in the industrial zone in southeast Gaza. He estimates his losses from the destruction of the factory at $4m.

He was able to rebuild two years later on a smaller scale in Gaza City, but had lost many of his customers.

Shocking numbers

The blockade of Gaza, which Israel imposed after Hamas took control of the territory, has heavily affected the territory’s economy.

According to a 2021 World Bank report, Gaza only contributes 18 percent to the overall Palestinian economy, half of what it previously did 30 years ago.

It has also deindustrialised, and, with a 45 percent unemployment rate and an almost 50 percent poverty rate, Palestinians in Gaza are heavily dependent on external transfers of money.

“Gaza’s citizens suffer from poor electricity and water-sewerage availability, conflict-related psychological trauma, and limited movement,” the report added.

Jamal Al-Khudari, a Palestinian parliamentarian who heads the Popular Committee Against the Blockade, told Al Jazeera that Gaza’s economic statistics told the story of the territory’s economic crisis.

“These shocking and dangerous numbers require an urgent international intervention to work on two tracks,” al-Khudari said. “The first is to work to completely lift the blockade on the Gaza Strip, and the second is to work on directing urgent support to alleviate the tragic humanitarian situation.”

According to his organisation’s latest reports, direct and indirect losses due to the blockade on Gaza amounted to approximately $2bn in 2021.

Al-Khudari also added that the blockade threatens the food security of about 70 percent of families in Gaza, with about 300,000 workers unemployed, and 80 percent of factories closed.

“The world, with its governments, institutions, and all relevant authorities, is required to carry out a moral, humanitarian and legal action to save the situation in Gaza,” al-Khudari said. “Lifting the blockade on Gaza is the main gateway to overcoming the current serious crises, and this requires an international effort.”

“I’ve lost everything now”

Nael al-Ghazali finds it difficult to even walk past the location where his restaurant used to be.

The 48-year-old was forced to close it last year after nine years – he blames the Israeli blockade.

Al-Ghazali explained that, after the restaurant was badly damaged in an Israeli bombing in May 2021, he was unable to bear the financial losses.

“Opening a business in the Gaza Strip is a dangerous adventure,” al-Ghazali told Al Jazeera. “You don’t know where the problems will come from. There are blockade and equipment restrictions, there are power cuts that double the cost of production, and there are also Israeli wars that destroy everything in the blink of an eye.”

Al-Ghazali described the restaurant as “one of his biggest dreams”, making shutting it down even harder.

“It is like losing a son of yours. You raised it and worked hard, but the conditions in Gaza are impossible,” the father of four said.

But, despite selling his apartment, his car and another property he owned, he was unable to save his business.

“I’ve lost everything now,” al-Ghazali said. “I live in my brother’s apartment now; I lost my income and all my money.”

Al-Ghazali said there is no compensation or any attention to the huge economic losses in the Gaza Strip, and there are no projects to develop the moribund economic situation due to the Israeli blockade.