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Sunday, November 25, 2007
Gaza smuggler complains increase in number of tunnels driving down profit margins

The smugglers are working in clear view of Egyptian border posts and Israeli
surveillance

Gaza Strip
Tunnel visions
Nov 15th 2007 | RAFAH
From The Economist print edition
www.economist.com/world/africa/displaystory.cfm?story_id=10147681

Ingenious ways to survive a blockade

The economy goes underground

SEVEN Gazans died this week when Hamas gunmen fired on Fatah supporters at a
rally commemorating Yasser Arafat, the founder of Fatah and the
Palestinians' long-time leader. For Gazans, who have enjoyed months of
relative calm since Hamas took control of the strip from Fatah-loyalist
Palestinian Authority forces in June, it was a jarring reminder of the
factional violence that had claimed dozens of lives in the months before.

But while Hamas faces increasing dissent from Fatah and other factions,
it-and Gaza-are so far fending off the effects of a trade blockade that
Israel has imposed, thanks to an explosion in smuggling.

The strip's southern border with Egypt, a no-man's land roamed by tanks
until Israel pulled its settlements out in 2005, is now dominated by
colourful encampments which cover the entrances to smuggling tunnels, used
to ferry goods and people from Egypt into Gaza. Once a secretive and
dangerous industry, smuggling has become open, even respectable. As recently
as last year, Israeli jets would destroy any sites suspected of housing
tunnels, but now the smugglers are working in clear view of Egyptian border
posts and Israeli surveillance.

Egypt says that restrictions on the strength of its forces in Sinai prevent
it from clamping down on smuggling. The reason for Israel's forbearance is
less clear. It has often said that the tunnels are used to import
sophisticated weapons into Gaza that threaten its security. If so, they are
not lying around in plain view in the border area; but much in evidence are
rocks of chalky TNT used in the production of Gaza's home-made rockets.

However, the tunnels are used for much more than munitions. Nasser, a
pharmacist in Rafah, says that he receives regular visits from smugglers
offering to
supply him with medicine bought in Egypt. While he does buy dried milk and
drugs, his most popular import is generic Viagra, made in India, which he
sells for 75 cents a tablet.

Israel declared Gaza a "hostile entity" last month and promised more
restrictions. But as it tightens them and poverty rises, smuggling becomes a
more attractive risk. Abu Adnan, a 21-year-old, said he had been working in
Rafah's tunnels since he was 14 and can make around $7,000 per shipment. He
has smuggled weapons, people and cash, but now the most popular import is
cigarettes which Israel has stopped.

The smugglers are almost always private entrepreneurs. They first select a
piece of land close to the border wall and then dig a large hole with a
mechanical digger. They then enclose an area of dozens of square metres and
start digging, filling the first hole with the earth from the tunnel. They
can map the length and direction of the tunnel accurately using satellite
pictures from Google Earth.

Tunnels are equipped with lighting and telephones. Pumps provide air, and
winches drag trains of jerry cans over the smooth surface of the tunnel
floor. The cans can be filled with earth, merchandise or people.

Mr Adnan complains that the increase in the number of tunnels is driving
down profit margins. So is the heavy taxation imposed by the Hamas police.
But there are always new opportunities. Israel has threatened to reduce fuel
supplies to Gaza; so Mr Adnan and his friends are already planning a pipe to
import subsidised fuel from Egypt.

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