The Rise Of Gaza-illionaires And The ‘Tunnel Economy’!

Posted on January 31, 2014 in GlobeScope

By Apurav Maggu:

Two million inhabitants locked in 25 miles long and the size of one tenth of Rhode Island of a land, which is a virtual prison, could be termed as the worst humanitarian disaster. But, since 2008, a phenomenal thing is happening there – the rise of property and real estate prices in the Gaza strip.

map of gaza

Since 2005, after the withdrawal of Israel from occupied lands of west bank and Gaza strip, Israel has ruled Gaza virtually, like a cauldron i.e. controlling almost every aspect of lives of ordinary people, without any direct military presence on the land. The economy is severely crippled due to terrorist acts of Hamas and Al-aqsa brigades which carry out attacks against southern Israel, resulting in a geographical blockade of the Gaza strip.

However, the underground tunnel economy with neighboring Egypt is keeping millions alive. Underground tunnels with its neighbor, Egypt, is sustaining millions from Gaza with food and daily necessities. This underground economy has generated 1000 millionaires in this area. ½ million dollar worth of goods move through those tunnels and the ownership has created a lot of big names and consumers.

The tunnel economy has also created a real estate price rise, with a commodities boom in construction material which has been restricted by Israel for its alleged dual usage by the Palestinians. While the whole world is still grappling with the repercussions of the 2008 financial crisis and the meltdown of the property market, Gaza’s real estate has been growing at a staggering rate of fifty percent an year.

The 2008 and 2012 wars between Gaza and Israel has created an unsafe environment and more people are buying property which is away from the boundaries with Israel and sea, so as to avert the next military retaliation by Israel. The move to secure peaceful neighborhood by the ordinary citizens in the Gaza strip has stoked the property boom creating new billionaires and commodity traders who can trade properties and make millions of dollars.

For e.g. an unshakable belief exists that Israeli military would not fire missiles at the suburbs near the UN headquarters, so as to not draw international condemnation, this has created a speculative rise in property prices near the United Nations Headquarters itself.

tunnels

However, this could probably suggest a serious erring on assessment of the situation because even though the boom does exist, lives of ordinary citizen is still in misery and penury. The 2008 and 2012 wars have damaged a lot of infrastructure, also the Israeli blockade hampers any movement between Gaza and Israel, thus seriously constraining economic liberties and business opportunities which could, in the long term, provide an impetus for peace (trade theory of peace). Surviving mainly on aid from the house of Saud’s 500 million dollar an year aid since the second Intifada (revolution in Arabic), with economy modestly growing in hiccups, the condition remains precarious as ever.

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