What happens to industry when you open a market to consumer products but restrict raw materials and ban export? What doesn’t happen is economic recovery.
The Israeli cabinet decision to ease the closure on the Gaza Strip did not change the sweeping ban on Gaza exports. While industrial raw materials were allowed into Gaza beginning in July, the limited capacity of the crossings meant only small quantities entered (raw materials were 4% of the total amount of goods that entered in July), while at the same time Israeli-made consumer products, no longer banned, flooded the market. The combination does not bode well for manufacturers in particular and the economy in general, as evidenced by the story of Jihad Abu Dan, aged 22, married and the father of two, whose family owns a textile factory in the northern Gaza Strip town of Beit Lahiya. His father was a textile worker who built a two-story factory that spans an area of 1,500 m², meant to support the extended family. Says Jihad:
The sewing and textile industry in Gaza – general information“Not only did the ‘easements’ Israel declared not help us, they have even harmed us. Exports are still banned, and that is a problem because the Gaza market is very small, and a large amount of ready made clothes have been brought in from Israel and China. The Gaza market was flooded with products, there is a lot of supply and less demand, and because of the stiff competition, we are forced to lower prices. As long as there is no export, it is hard for workers in the clothing and textile sector to profit and produce. After three years of closure, we lost the contacts we had developed with clients from Israel, and they went elsewhere”.“Before the closure, we worked at our full manufacturing capacity, producing 2000-3000 pieces a day. We did not manufacture for the local market; all of our products were for export to Israel and abroad. Back then, we imported between one and one and a half trucks of raw materials a day through the Karni Crossing, three days a week, and we exported between one and one and a half trucks of goods a day, two or three days a week”.
Mohammad Abu Dan and Co. Textile and Clothes Company. ‘These days the factory operates at only about 10% of its production capacity.’“Right before the closure began, we received an order from an Israeli client, who asked for 100,000 items, which we had to make in three months. We managed to send him 30% of the order before Israel closed the crossings, and the rest of the goods remained in Gaza; he did not benefit from them, nor did we. Because clothing on the local market is sold more cheaply, we had to lower prices in order to sell the goods, and we lost money”.“Today we employ 25 workers. There is not much work. The Gaza market is very small, and profits are minute. We mostly just cover manufacturing costs, but we continue to operate out of a desire to maintain the factory my father built. Out of 180 sewing machines, these days we are working with just 20. More than half of the machines broke down, partly due to remaining idle for a long period of time. These days we manufacture about 300 pieces a day, 10% of our capacity and our actual production before the closure. For many hours a day we have no electricity, and during that time we don’t work. We adjust our daily schedule to the power supply – Sometimes we work from 6 in the morning until 1 pm, we then stop working, because there is no electricity, and go back to work when the power returns, sometimes from 10 at night to 5 in the morning.”
In 2005, prior to the closure, the production value of the sewing and textile industry in the Gaza Strip was estimated at $39 million, and approximately 70% of the manufactured goods were designed for sale to Israel and West Bank. In 2000, 37,000 people worked in this industry, whereas today the number of workers is estimated at 1,500. In the past there were 600 textile and sewing companies in the Gaza Strip, however it is estimated that only 10% are active today.