Gaza’s Economy Has Been Erased–Famine and Black Markets Are All That Remain

PALESTINE - ISRAEL, 29 Jan 2024

Tareq S. Hajjaj | Mondoweiss – TRANSCEND Media Service

Displaced Palestinians huddle around a fire to keep warm in a makeshift camp in Rafah, southern Gaza, near the border with Egypt, 31 Dec 2023. (Photo: Bashar Taleb/APA Images)

Even in areas like Rafah, where the Israeli ground invasion has not reached, Gaza’s society has been decimated. Its economy no longer exists and basic goods can only be found on the black market where they cost ten times their prewar price.

24 Jan 2024 – She wakes up in the early hours of the morning every day, attempting to light the green wood that had been chopped the day before so she could prepare breakfast for her family of six. All of them are crammed into a single tent on the sidewalk in Rafah.

She sets the wood in the middle, between three rocks arranged in a triangle made to serve as a base for a cooking vessel. She attempts to light the wood using discarded pieces of plastic and nylon as kindling. Smoke starts to swell from the pile, rising into her eyes and causing them to water. Behind her, inside the tent, her husband lies on the ground with their children, save for the little one beside her, who is fascinated with the fire and tries to get closer to it. She waves him away, holding him back from the fire and telling him off.

That a woman should be forced to sit on the side of the road and build a fire to prepare breakfast for her family, a rite usually regarded as mundane and reserved for the privacy of the home, but which she is now forced to do out in the cold with thousands of other strangers around her, is anything but normal in Gaza.

Amnah Qaddoum, 48, fled from Gaza City to Rafah after an arduous journey of displacement from one place to another. Before the war, Amnah used to work at a nursery for a modest salary that was barely enough to meet her own needs, but it helped to supplement her husband’s income as a taxi driver in Gaza City. His taxi was bombed early on in the war, taking away the family’s main livelihood.

During the war, Amnah and her husband, Ismail, have lived off the food aid that arrives in Gaza through UNRWA. The breakfast she is preparing includes an UNRWA-issued can of fava beans that she heats up and prepares alongside a can of hummus. The meal will be all the family eats for the whole day, to be followed by some cheese sandwiches handed out by UNRWA in the evening. With no other money to speak of, their situation is similar to that of the thousands of other families who cannot meet any of their basic needs beyond the already scant aid that arrives.

Erasing an economy, destroying a society

The most dramatic effects of the war are undoubtedly the scale of human death, displacement, and bodily and mental harm. Yet outside the constant bombardment and immediate threat of death, the most important feature of this war is that it is underwritten by the destruction of an entire society. Among other consequences, what this means is that Gaza essentially no longer has an economy, and what has arisen in its stead is a series of black markets that exploit the gargantuan humanitarian needs created by the war. These black markets sell basic subsistence goods for astronomical prices.

In Rafah, there is still a street resembling a marketplace, with produce vendors and markets for the trade or sale of humanitarian aid. Commercial items like potato chips, chocolate, milk, and sugar also sometimes enter Gaza, invariably finding their way to this market.

Yet due to the rapid hyperinflation that has resulted from the extreme shortages imposed by Israel’s starvation plan, these goods now cost ten times their prewar price. A kilogram of sugar that used to cost 3 shekels (less than one dollar) is now sold for 25 shekels ($6.75), if available at all. The price of diapers has gone from 15-25 shekels ($5-$7) to 100-125 shekels ($27-$33); coffee from 30-50 shekels ($8-$14) to 250 ($67) for the cheapest kind; children’s biscuits from half a shekel (13 cents) to 7 shekels ($2); a pack of cigarettes from 19-20 shekels ($5) to 100-110 shekels ($27-$30). This month, a 25-kilogram bag of flour cost 400 shekels ($100), but after slightly more flour started to arrive in Rafah as humanitarian aid (which is not the case for northern Gaza), the price of flour went down to only double its prewar price, now costing only 50-60 shekels ($13-$16).

A liter of diesel that used to cost 7 shekels ($2) now costs 70-90 shekels ($19-$24). The 12-kilogram propane cylinders that used to cost 50 shekels ($13.5) to fill are now available on the black market for 250-300 shekels ($68-$81). Even firewood, which used to cost half a shekel per kilogram, has now risen to 4 shekels per kilogram (less than a dollar), given the unprecedented demand for it as the only available alternative fuel source to fend off the winter cold. Legumes such as lentils, a traditional staple for poor families, have jumped from 6 shekels ($1.6) per kilo to 30-35 ($8-$9.5) shekels per kilo.

For families like Amnah’s, this uncontrollable inflation has rendered what little money they do have devoid of any value.

“In these circumstances where we’re sitting out in the cold, with fumes surrounding us from cars running on cooking oil instead of diesel, and with garbage and waste around us, we’re all getting sick,” Amnah tells Mondoweiss. “I can’t buy even a bar of soap to maintain the cleanliness of my family.”

In the earlier days of the war, even though we couldn’t find food to eat, we were still safe in our homes,” she continues. “Now our home is the street.”

As she speaks, the sound of coughing children coming from inside the tent is clear. It barely stops as our conversation continues.

She goes on to say that the cold is coming close to killing her family, and that she is unable to keep her children warm, lying down on the ground with nothing underneath them but a thin blanket.

When they first fled their home in the north, the weather was still warm, and they did not need to take heavier clothes with them. With winter in full force, Amnah has attempted to find and buy some jackets at the market.

“The prices are hard to believe,” Amnah says. “It’s not that they’re a little expensive. It’s that they are unfathomable. A small jacket for my 8-year-old son costs 150 shekels [$40], and I have three other children. If I were to buy jackets for all of them at that price, it would be the entire salary that I used to make before the war. Now I don’t even have that amount of money.”

“My children say they haven’t eaten meat in months and miss it,” she continues. “But meat is now 150 shekels per kilo, and I can’t afford to buy it for them now.”

Families that didn’t have stable sources of income before the war and relied on aid from the World Food Program have had it worse since the war. These families are the vast majority of Gaza’s residents, and most of them are now refugees in Rafah.

Public sector workers under attack

Other families are supported by breadwinners who have comparatively stable salaries, such as employees of the Palestinian Authority (PA) who receive a monthly salary, or employees of the Hamas government in Gaza. Since the war, however, neither of these government employees have been receiving their salaries consistently, if at all. On top of all that, Israeli warplanes continue to bomb all money-changing offices and ATMs that distribute salaries to employees of the Hamas government, even though they are merely civilians who happen to have public sector jobs, like school teachers and healthcare workers. Most recently, Israeli forces targeted the Firwala company in Khan Younis, which had been distributing late salaries to employees from previous months.

Alaa Suboh, 41 years old and a father of four, fled Gaza City to western Rafah by the coast. Had it not been for the war, camping in this area temporarily for the night would have been considered recreational, with a seaside view that was the envy of many a Gaza resident. Today, that same view is marred by the sea of tightly packed tents stretching along the coast, with entire families crowding around meager fires for warmth without proper clothing. This is made all the worse by the icy coastal winds that cut through the encampments and spare no one.

Alaa had been living a comfortable life, receiving a stable salary as a teacher at the Azhari College, part of the PA-affiliated Al-Azhar University.

“Life was good,” Alaa tells Mondoweiss. “Even when prices would rise somewhat, we were able to survive. But this time, the rise in prices has become too expensive even for the rich.”

“Gaza has not imported any new goods during the war,” he continues in anger. “So why are prices so high now? It would have been better if we all took into account the circumstances of the war, and merchants should have refrained from raising prices. Or if they were going to raise prices, they could have at least raised them by a reasonable margin, even if double. We would have accepted a doubling of prices. But we can’t accept a tenfold increase.”

This month, Alaa and his fellow PA employees received their salaries with a 40% pay cut, only exacerbating the effects of the price hikes.

Yet, in spite of the unprecedented rise in prices in Rafah, the effects of inflation are not nearly as important as the effects of scarcity and the difficulty of obtaining food and medicine. Pharmacies open their doors, but their shelves are empty. Grocery stores are similarly sparse. The largest supermarkets in the area sell one or two shipments of a single commodity per day — unloading a newly arrived shipment of salsa on one day, for instance, then unloading a shipment of something else on another. Otherwise, all supermarket shelves remain empty.

“Even water is hard to come by now,” Alaa says. “The amount I now pay to buy drinking water per day is the same as the amount I used to pay per month.”

“I never thought that quenching your thirst would come at such a steep price,” he laments.

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Tareq S. Hajjaj is the Mondoweiss Gaza Correspondent, and a member of the Palestinian Writers Union. He studied English Literature at Al-Azhar University in Gaza. He started his career in journalism in 2015 working as a news writer and translator for the local newspaper, Donia al-Watan. He has reported for Elbadi, Middle East Eye, and Al Monitor. Follow him on Twitter: @Tareqshajjaj

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