For years, the tunnel economy in the Gaza Strip has flourished. An estimated 1,000 tunnels were burrowed underground, connecting the southern Gaza town of Rafah and the Egyptian–controlled Sinai Peninsula. Everything from new cars (cut up into pieces for shipping) to cigarettes to weapons to drugs came through the tunnels.
Hamas, which took control of Gaza in 2007 sparking an Israeli blockade of the Strip, even taxed the goods coming out of the tunnels. Tunnel owners became Gaza’s nouveau riche, and tunnel workers earned a decent wage, mostly because of the danger that a tunnel could collapse made it a risky job.
But since an August 5 attack that killed 16 Egyptian soldiers in the Sinai, the Egyptian government has closed dozens of tunnels, fearing that some of the attackers may have used them to enter Egypt from Gaza. A delegation of Hamas officials visited Egypt this week to discuss the closure of the tunnels.
In a statement, Hamas official Mahmoud A-Zahar said the delegation discussed “the possibility of shutting down Rafah’s smuggling tunnels completely after opening another commercial border. There would be a signed agreement between Gaza and Egypt like any other country that has borders with Egypt.”
Other Hamas officials say they would like to institute a free-trade zone that would help the Gaza economy recover from the Israeli boycott. Israel has allowed food and medicine to enter Gaza, and recently began allowing some construction materials for US-AID funded projects.
Earlier this week, some 200 Palestinians held a protest asking Egypt to stop closing the tunnels, saying they are the only way to supply Gaza with basic goods and necessities.
So far at least, supermarket owners told The Media Line, there are no shortages because of built-up stocks that are continuing to be sold. But, they said, there is concern that if more of the tunnels are destroyed, shortages could follow.
It is not clear how many tunnels have been demolished so far. Of the approximately 1,000 tunnels, about 225 are considered “primary” conduits. Estimates are that Egypt has demolished between one-third and half of these tunnels.
Fuel is not being affected, because it is brought in from Egypt through underground hoses. But prices are increasing for certain goods, especially building materials. Before August, a ton of gravel cost wholesalers $15, whereas the current price is $38.
Osama Kuhail, chairman of the Federation of Arab Contractors, told The Media Line that the prices of construction materials have been skyrocketing.
The 1.7 million citizens of Gaza cannot leave the densely populated enclave without special permission from Egypt or Israel. Israel allows thousands of Palestinians in for medical treatment; and Israeli officials insist there is no humanitarian crisis in Gaza. Egypt, which is afraid of being overrun by Palestinian refugees from Gaza, keeps a tight hold on its side of the border.
Hamas officials say that if Egypt opens a commercial border, Hamas will make sure there is no violence and no mass-entry into Egypt.
“We ask Egypt to open the Rafah border commercially with different committees for medical and customs supervision and to stop any means of smuggling,” Hamas official Al-Zahar said in a statement.
Salah Al-Bardaweel, another senior Hamas official, told a news conference in Gaza this week that the smuggling tunnels are the only way to supply Gaza with basic goods. “The civilized alternative would be to turn Rafah into a commercial border as well,” he said.
Some analysts say that Egypt does not want a crisis in neighboring Gaza and will not close all of the tunnels. Omar Sha’aban, a Gaza-based economist, said that Egypt’s show of force against those behind the recent attack on its border police and soldiers was meant for its domestic audience. New Egyptian President Mohamed Morsi had to do something to show he was cracking down on those who launched the violent attack on his forces. But he said that Egypt does not want to see widespread hunger or instability in Gaza.
It is not clear exactly what percentage of goods that enter Gaza come through the tunnels. Economist Maher Al-Taba told The Media Line it is about 30 percent, while some tunnel owners say it is up to 80 percent of all consumer goods.