Creating new perspectives since 2009

Scrap metal trade turns into a problem for Gaza businessmen

September 24, 2015 at 9:30 am

After years of being a prosperous business in the Gaza Strip, the trade in scrap metal has become a heavy burden on the shoulders of Gaza businessmen since the start of the Israeli economic restrictions in 2006, which developed into full siege in mid-2007.

“It was the first commodity which was blacklisted by the Israeli occupation when the Palestinian Islamic Movement Hamas won the general elections in 2006,” said Sami Ayyad, a scrap metal merchant from Gaza. “Blocking it caused fiscal losses for us.”

When Hamas won the free Palestinian parliamentary elections in 2006, the Palestinian Authority (PA) in Ramallah, the rival Fatah movement, Israel, the US and a number of Arab and European countries were angry and planned to undermine Hamas rule.

“Economic sanctions were the first tool to carry out this mission,” said Palestinian financial analyst Saud Amer. “The Israeli authorities froze the PA’s tax money, closed crossings with Gaza and doubled movement restrictions on Palestinians in the occupied West Bank.”

According to Amer, Israel and the others who wanted to oust Hamas expected its government to last 6 months, at most. “That was why Fatah and other parties at first refused to take part in a coalition government with Hamas, but when the economic restrictions failed to undermine the Hamas administration, Fatah and other parties started to call for a unity government.”

About 20,000 lost jobs

As all efforts regarding the formation of a stable and strong unity government failed and the Gaza Strip and the West Bank became engulfed by security chaos, Hamas took the lead and swept Fatah and its loyal security services out of the coastal enclave, formed a de facto government and imposed its own security. It was difficult for Hamas to do the same in the occupied West Bank because most of its MPs and active members were arrested by the Israeli occupation and hundreds of its supporters were arrested by the Ramallah-based PA security services.

“At that time,” explained Amer, “Israel and Egypt imposed a strict and internationally-backed siege and completely closed all the crossings with the Gaza Strip, including the Rafah Crossing into Egypt.”

For Ayyad and others in the business, that was “the worst blow” for the scrap metal trade. The siege “paralysed” scrap metal and related businesses.

The start of the siege, added Hassan Zaytouni, another scrap metal merchant from Gaza, turned business into a big fat zero. “More than 20,000 people, including myself, my brothers and my cousins, immediately lost their jobs linked to scrap metal.”

Zaytouni and Ayyad and other merchants like them stopped purchasing scrap metal as their stores became full without being able to get benefit of “even one per cent of it.”

Uneasy mission

Since the start of the siege, people in Gaza have been able to solve many of the major problems in the tiny coastal enclave, but the problem of all the scrap metal has been insoluble. When asked why traders of scrap metal are unable to recycle, Ayyad answered, “This is very difficult as it needs an iron and steel factory and this is very difficult to afford in Gaza.” He suggested two reasons for this: the first is related to the massive costs to build such a factory, while the second is related to the PA agreements with Israel.

“In the Paris economic protocol, the PA and Israel agreed not to have any iron and steel factory in the Palestinian territories,” Ayyad told MEMO. “Hence, it is difficult to build a factory in Gaza; if it was built, Israel would destroy it.”

He noted that the Israeli occupation had destroyed many factories in Gaza since the start of the siege, including food production plants.

Amer confirmed the restrictions made by Israel and accepted by the PA regarding manufacturing iron and steel in the Palestinian territories.

Trade with Egypt

“Although it was a smuggling trade, it was prosperous,” Ayyad said, referring to the export of scrap metal to Egypt during the revolution and the rule of ousted President Mohamed Morsi.

Zaytouni and Ayyad exported thousands of tons of scrap metal to Egypt through tunnels and they were paid very well for it. Both stressed that exporting scrap metal to Egypt was better than exporting it to Israel. “There is only one iron and steel factory in Israel,” Ayyad pointed out, “but the Egyptian market is so much larger as there are 27 factories in Egypt.”

Both Ayyad and Zaytouni blame the current Egyptian President Abdel Fattah Al-Sisi for the collapse of their trade, which, according to them, could have a positive impact on the Palestinian and Egyptian economies. They also blamed PA President Mahmoud Abbas for exerting no efforts to repair Palestinian-Egyptian relations so that this trade and others can continue with Egypt. Indeed, Abbas and PA officials are also blamed by the scrap metal merchants over the recession in their business because they undermined individual efforts towards cooperation between the traders and their Israeli counterparts.

Lost glimmer of hope

The Palestinian scrap metal traders said that their contacts in Israel always call them, offering good prices, but they said that the PA undermines their efforts. “After too much effort from our Israeli counterparts, we got official Israeli permission to export scrap metal from Gaza through Kerem Shalom Crossing [the only commercial crossing between Israel and Gaza],” Ayyad explained. “We felt happy with this news, but, unfortunately, we were disappointed because the PA put obstacles in our way.” The official in charge of coordinating with Israel on the movement of goods, Hussein Al-Sheikh, apparently said that the PA needs to impose higher export taxes.

As a result of the recession, huge amounts of scrap metal have accumulated in the stores of the Gaza merchants and in the streets, causing a real environmental problem. When it is not exported or recycled, scrap metal is a solid waste without any place for its disposal.

Several officials in the Palestinian ministry of trade and industry refused to speak to MEMO to comment on the latest Israeli offer to export scrap metal and about the high taxes proposed by Al-Sheikh. However, Ra’ed Fattouh, the official in charge of crossings in Gaza, confirmed that the Israeli authorities had offered to allow the Gaza scrap metal merchants to export a small amount to Israel via Kerem Shalom Crossing a couple of months ago. “This did not take place,” he said, but he did not give any reason why.

Images by MEMO photographer Motasem Dalloul


The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.