Gaza industries getting back on their feet, again

a solar panelled roof

Initiatives, like this solar-paneled roof in Gaza’s industrial zone, are giving hope to industry that production will no longer be hampered by an irregular electricity supply. 

Mohammed Salem The Electronic Intifada

Gaza’s economy has taken a battering over the past 16 years of Israel’s blockade on the impoverished coastal enclave.

But adversity breeds defiance, and some sectors of Gaza’s economy are pulling themselves to their feet in spite of the circumstances.

The al-Bawab manufacturing facility, also known as Unipal 2000, currently exports 150,000 to 160,000 items of women’s clothing to the Israeli market.

This marks a remarkable turnaround for a company that had left Gaza to survive in 2007. The company relocated to Egypt in the aftermath of clashes between Hamas and Fatah, the two main Palestinian political factions, following the former’s parliamentary election victory the year before, and the full blockade Israel imposed.

“In 2017, we shut down the business in Egypt and returned to Gaza, with the hope of resuming production for the local and Israeli markets, the way we did before 2007,” said owner Nabil al-Bawab.

The factory is now located in the PADICO industrial zone to the east of Gaza City and just west of Shujaiya, the neighborhood that was the site of a massacre during Israel’s 2014 assault.

PADICO is a Palestinian investment group that, among a number of other interests, runs two industrial zones, one in Gaza and one in Jericho.

The Gaza industrial zone is nearly 500,000 square meters, allowing plenty of space for the dozens of companies and factories operating there. Unipal 2000 runs a large facility that employs more than 1,000 people, according to al-Bawab, who said the return to Gaza – even with the subsequent COVID-19 pandemic – had been a success.

“We only stopped production for a short period of time once, back in May 2021,” al-Bawab told The Electronic Intifada. This was during Israel’s May assault on Gaza that year, he said.

The size and scale of Unipal is an aberration in Gaza, where poverty runs at over 50 percent and unemployment has reached 45 percent, while investment opportunities have been few and far between.

In 2020, the UN estimated that Israel’s blockade had cost Gaza’s economy nearly $17 billion in the years 2007-2018.

Aiding al-Bawab’s production are the power generators made available by PADICO to mitigate for power shortages that have been a major problem in Gaza ever since Israel bombed the coastal strip’s only power plant in 2006.

Since then, Gaza’s 2.3 million residents have had to cope with eight hours of power, followed by eight hours of outage.

Hope for industry

Nevertheless, at the Gaza offices of the Palestinian Federation of Garment and Textile Industries, Fuad Odeh, head of the union, spoke with optimism about Gaza’s garment industry, which, he said, currently employs 8,000 people and contributes $20 million to Gaza’s economy annually.

He hopes the industry will expand to employ 12,000 people in the next few years.

“Local producers have excelled at their job for about four decades now,” Odeh told The Electronic Intifada.

In addition, international investment in solar power – some of which has benefited the industrial zone – has somewhat eased concerns over the reliability of electricity supply, allowing industries to save significant money otherwise spent on spare generators, said Odeh.

Over the past year, Odeh added, Gazan companies have met 90 percent of local demand for jilbab, traditional women’s dresses, that importers used to bring from Jordan. They are also producing half of Gaza’s jeans, according to Odeh, with the other half being imported from Turkey.

Nevertheless, Gaza’s garment manufacturers continue to face significant obstacles as a result of the closure on Gaza, including stringent rules for pallet sizes for export, that raise the costs of shipping.

Another major industry in Gaza is food processing.

The Saraya al-Wadiya food-processing facility, also located in the PADICO industrial zone, processes potato chips and cookies for the Gaza and West Bank markets.

During Israel’s 2014 war on Gaza, the company lost more than $5 million due to damage to its factory near the eastern boundary of Gaza.

As a result, the owners sold their real estate assets in Gaza and managed to survive without financial compensation by opening a factory in the PADICO zone.

The company also expanded to Egypt, opening a factory with four times the capacity of the existing facility in Gaza, according to Ayman al-Jadba, a company marketing official.

The Egyptian location allows the company to export to several Arab countries, including Sudan, Libya and Bahrain, in an effort to make up for the difficulty in exporting directly to these countries from Gaza.

Indeed, the company sued the Israeli government in 2019 for improved access for exports.

The Saraya al-Wadiya factory in the PADICO zone employs more than 200 workers.

At the Gaza City office of the Palestinian Food Industries Union, Tayseer al-Safadi, union deputy-head, also told The Electronic Intifada that he was optimistic for more exports from Gaza to the outside world.

“We hope there will be more industrial zones in the Gaza Strip. For now, we have tens of food production facilities,” al-Safadi said.

This hope is shared by Khader Shinawara of the General Union of Industries, an umbrella group for 13 different industrial sectors in Gaza.

The group has been in contact with relevant international bodies over ways to develop industry in Gaza, Shinawara told The Electronic Intifada, and is looking at progressive plans for a green economy.

“We are trying to be optimistic,” said Shinawara.

Rami Almeghari is a journalist based in Gaza.