The shelves are packed with imported food, but the ersatz prosperity of the newly opened “Gaza Mall” hides the lingering malaise haunting the impoverished territory.
The two-story supermarket in Gaza City opened its doors shortly after Israel partially lifted a four-year blockade of the Hamas-run enclave in June following an international outcry over the deadly seizure of an aid flotilla.
Three months later, it sells everything from Nestle cereals and Galaxy chocolate to blue jeans and toys, nearly everything imported from Israel. Newly released data show the economy is starting to recover.
But weary factory owners say they are being squeezed out of business by the new imports and more than a third of the Gaza workforce remains unemployed.
“Because of the entry of products from Israel, the West Bank and Jordan after the Freedom Flotilla incident we had to stop one of our production lines,” said Musa Siyam, the owner of the Mecca Cola plant outside Gaza City. “We couldn’t compete on price because there are still raw materials we cannot bring into Gaza ... I had to lay off 20 workers.”
Sunlight slants down from the factory’s high metal walls through a splattering of bullet holes left over from the 2008 to 2009 Gaza war and machines struck by rockets sit unused in the darker corners.
Siyam had already shut down two other production lines because of damage from the war, but kept the factory afloat by bringing in raw materials through smuggling tunnels from Egypt and selling to the besieged local market.
But even with the easing of the blockade, he has not been able to bring in carbon dioxide, forcing him to manufacture his own at much greater expense.
“We can’t compete with them on price ... The prices have fallen so far that we don’t make a profit anymore and sometimes we lose money,” he said.
His experience is shared by other factory owners and in part explains findings by the IMF presented to international donors last week on the sidelines of the UN General Assembly.
It found Gaza’s economy had grown by 16 percent in the first half of the year — from an extremely low base — but that unemployment had held steady at 37 percent, among the highest in the world.
“Producers are still constrained from the input side and the output side,” said Oussama Kanaan, the report’s author, adding that the growth rate would soon wane if further restrictions were not lifted.
Even with the partial easing, Gaza is only importing a fraction of what it was prior to the blockade.
“Raw materials are now 4 percent of 4,000 trucks a month as opposed to 13.5 percent of 10,400 trucks a month,” said Sari Bashi, the head of the Gisha Legal Center, an Israeli group that tracks the closures.
“Other than allowing in Israeli-made consumer products and some raw materials, there has been no change. Export is banned, the movement of people is banned and Israel’s economic warfare is far from over,” she added.
Israeli officials have denied restricting civilian imports and blamed the Western-backed Palestinian Authority for failing to coordinate shipments.
“We have said the crossing is able to handle 250 trucks [per day],” said Major Guy Inbar of the Israeli government’s coordination and liaison office. “They never could get to that number because of problems of coordination.”
The Palestinian Authority — which was driven out of Gaza by Hamas and has been confined to the West Bank since 2007 — has denied such allegations, insisting that Israel makes the final decision on all goods that go in.
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