8 June 2012
Mohammed Sahwal is 46-year-old father of ten living in Bureij camp in the Gaza strip. In 2005, Mohammed decided to start his own carpentry business, and with assistance from the YMCA, he was able to purchase all the necessary machinery to begin the project.
A promising start
With hard work and perseverance, Mohammed’s business went well from the start, and he was able to export his wooden products to Israel. Carpentry work was promising and Mohammed expanded his work, hiring labourers and eventually renting two locations for a paint shop and a retail store in which to sell his products.
After Israel tightened its blockade of Gaza in 2007, Mohammed‘s life changed dramatically. No longer able to export his goods to Israel, and with raw materials prevented from entering Gaza, he suffered great financial losses. Mohammed could not find the materials he needed to continue his business and soon was unable to pay his labourers‘ wages.
Mohammed‘s business and life suffered; he lost the money he had invested and had to sell all the machinery he had bought to build up his business to cover both the monthly payments to the YMCA and further accumulated debts. In the end, he was forced to sell his own house to deal with the spiralling debt. Mohammed now rents. Having lost all hope of overcoming the hardships of his new life, he tried many times to commit suicide.
"It was difficult to cope with my new situation; I owned a carpentry business with many labourers, and now I have to beg for help from other people", said Mohammed.
Since Gaza has been under the Israeli blockade, work opportunities have decreased dramatically. Even for a skilled man like Mohammed, it was difficult to find work to support his family.
Currently, Mohammed and his family receive the support of UNRWA’s social safety-net, which covers basic food requirements to help diminish their food insecurity. He has also been receiving counselling services from UNRWA to help him better cope with the loss of his livelihood and stand on his feet again.
With the support of staff at the UNRWA office in his area, Mohammed was able to start a small business again. He is now selling tea and coffee in the market as a source of income to keep his family from begging in the streets.
- Ends -
Key facts about the blockade:
- Ongoing restrictions against the movement of goods to and from Gaza are preventing sustainable economic recovery. As of today, exports from Gaza remain at less than five per cent of pre-2007 levels and imports at 41 per cent of pre-2007 levels, despite limited measures in 2010 to ease restrictions on the import of some goods to Gaza. A total ban on the transfer of Gazan goods to its historic market in the West Bank, second in importance only after Israel, remains in effect as well. Of the few exports that have managed to leave Gaza this year, all have been seasonal agricultural exports, exports sponsored by international agencies, or both.
- New data from the Palestinian Central Bureau of Statistics confirms that the recent economic recovery in Gaza has reached a saturation point, with some gains beginning to reverse. Most economic gains took place from mid-2010 to mid-2011, with real GDP per capita growing by approximately 19 per cent in 2011. However, real GDP per capita showed stagnation in the last quarter of 2011 and as at end 2011, it remained at approximately ten per cent below 2005 levels. The closure of Gaza dealt a crushing blow to the economy, with a severe contraction of 39 per cent in real GDP per capita experienced from 2005-2009. As of June 2012, Gaza has yet to begin any sustainable recovery.
- Without access to exports, the Gaza economy has turned inward, transforming from a productive, export-driven economy to a consumption, demand-driven one. Analysis shows that the economic growth from mid-2010 to mid-2011 was primarily driven by demand, fuelled by external assistance and the network of tunnels under the Egyptian border, and does not reflect an actual reactivation of the productive economy. The Gaza economy has progressively restructured itself around non-tradeable sectors which are incapable of sustaining the viability of a small, export-oriented economy. The manufacturing and agricultural sectors shrunk while construction and public and private services grew significantly. For example, in 2011 the manufacturing GDP was down by 68 per cent compared to its 2006 level. The increased prominence of construction and service sectors, which are comprised of unskilled and low-wage jobs, has driven wages down. In 2011, the average daily nominal wage was 11 per cent below its 2006 level.
For interviews with Mohammed or with UNRWA officials, please contact Milina Shahin at [email protected].