November 19, 2012
Economic costs of Gaza fighting
Israelis and Palestinians are paying a steep price
Last Friday, Moshe Ahituv (not his real name) received another call-up from the Israeli army. A captain in the home front command, he had already completed 43 days of army reserve service this year.
Moshe, 40, is an English teacher and the father of two toddlers. His wife is a physical therapist and they are about to purchase their first apartment in Jerusalem. He says the emotional cost of the fighting in the Gaza Strip has already taken a toll.
“The kids aren’t sleeping well, and my three-year-old daughter is behaving badly at nursery school,” he told The Media Line. “It’s also frustrating for me. I spend a lot of time on buses getting from home to my base. I could be home with the kids then or working to bring home money to my family.”
There is also an economic toll. While the government will pay for his missed days at work, he will not receive compensation for the private tutoring hours he has been forced to cancel, which amounts to $400 per week.
Israelis and Palestinians are paying a heavy economic price for the cross-border fighting in Gaza. From orange trees in Gaza damaged during an Israeli airstrike to small restaurants in southern Israel who have no customers, to tourists cancelling trips to Israel and Bethlehem, to destroyed buildings in Gaza, the economic costs on both sides is astronomical.
The business information company IDI estimates the fighting in Gaza will cost the Israeli economy $75 million dollars per day in lost productivity. Many small businesses in southern Israel, in particular, are suffering.
“Usually on the weekends we are full, but this past weekend we had just two tables – both of journalists,” Elad Zaritsky, 35, the owner of Linda, a bistro restaurant in the Mediterranean coastal city of Ashqelon, told The Media Line. “We’ve already lost thousands of dollars and we simply can’t continue like this. If the fighting continues much longer, we may have to close.”
Zaritsky says small businesses like his operate with only a narrow profit margin. He says the restaurant has been open for five years. Four years ago, during Cast Lead, Israel’s last major ground operation in Gaza, his business also suffered. The government did give him compensation, but he says it did not nearly cover his losses.
Tourism in Israel is also beginning to suffer, although this is the low season for tourism, between the Jewish holidays of the fall; and Chanuka and Christmas in a few weeks.
“Incoming groups for the near future are down 10 percent and individual bookings are down 15 percent,” Ami Etgar, the general director of the Israel Incoming Tour Operator Association told The Media Line. “But groups that are already here have not left.”
Across the border, inside Gaza, life has virtually come to a standstill. While most residents keep a stock of food supplies including flour, oil, sugar and tea in their homes, most shops and businesses remain closed.
“Banks are closed and ATM machines are running out of cash,” Azzam Shawwa, the general manager of the Quds Bank told The Media Line. “But who wants to risk going out when there are airstrikes?”
Shawwa said there is also concern about the electricity supply to Gaza. While Israel has continued to provide power to the 1.7 million Palestinians in Gaza, the electricity must go through transformers to change the voltage. Some of those transformers have been destroyed in Israeli airstrikes, and the spare ones are already being used, he said.
“Even before this, some places only had electricity for 12 hours a day,” Omar Shaaban, an economist at Palthink, a Gaza-based think tank told The Media Line. “Now some places only have electricity for six hours a day. Some of us have generators, but there is a shortage of fuel for the generators. I just turned my generator on to answer some emails, but I’m going to have to turn it off soon.”
Shaaban says it’s too early to assess the economic damage caused by the Israeli airstrikes, which have killed at least 95 Palestinians and wounded hundreds. Dozens of buildings in Gaza have been completely destroyed.
“Our economy is losing at least $2 million dollars per day,” Shaaban said. “And that’s in addition to the agricultural sector which has already lost $25 million dollars. The economy has been completely suspended. Agricultural products were supposed to be exported this week from Gaza, but now that didn’t happen.”
Back across the border in Israel, more people seem to be staying home, even in areas that have been relatively free of missile strikes.
“There are many fewer passengers going from Tel Aviv to Jerusalem,” Raof Basila, an Arab citizen of Israel who drives a shared-taxi between the two cities. His colleague, Fadi Abu Katish, agrees. He told The Media Line that while fifty drivers normally transport more than 1,500 passengers each day, the drivers are now alone in their vehicles.
Basila added a pensive note. “People are afraid to go out,” he said. “It is not good for either side. Both sides need peace.”