Oct. 7 (Bloomberg) -- Investment opportunities are rare in the Gaza Strip. So when Nabila Ghabin saw one last year, she pawned her car and jewelry and put $12,000 into a network of tunnels that brought in supplies smuggled from Egypt. She was one of about 4,000 Gazans who gave cash to middlemen and tunnel operators in 2008 as Israel blocked the overland passage of goods. Then Israeli warplanes... [more]
Oct. 7 (Bloomberg) -- Investment opportunities are rare in
the Gaza Strip. So when Nabila Ghabin saw one last year, she
pawned her car and jewelry and put $12,000 into a network of
tunnels that brought in supplies smuggled from Egypt.
She was one of about 4,000 Gazans who gave cash to
middlemen and tunnel operators in 2008 as Israel blocked the
overland passage of goods. Then Israeli warplanes bombed the
tunnels before and during the Dec. 27 to Jan. 18 Gaza offensive
and the investments collapsed.
Now investors, who lost as much as $500 million, want their
money back from Hamas, which runs Gaza. Hamas Economics Minister
Ziad Zaza says about 200 people were taken into custody in
connection with the tunnel investments; most have been released.
Hamas is offering a partial repayment of 16.5 cents on the
dollar using money recovered from Ihab al-Kurd, the biggest
tunnel operator.
The imbroglio over the 800 to 1,000 tunnels has deepened
Hamas’s decline in public opinion in Gaza and highlights the
Wild West nature of the underground economy that supports this
jammed enclave of 1.4 million people.
“When you compare the U.S. economy with ours and see how
dependent we have become on the tunnels, I assure you that our
scandal is much worse than Madoff,” said Omar Shaban, director
of Pal-Think, an economic research institute in Gaza City,
speaking of New York financier Bernard Madoff’s $65-billion
Ponzi scheme.
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