Bloomberg Businessweek August 19, 2019
53midmorning, the streets are eerily empty. Few people have
any reason to get out of bed.
The GRM was conceived as a temporary measure; five
years later it’s still in place, and there’s growing pressure
to reconsider the system and Israel’s controls on dual-use
goods. The World Bank says that difficulties getting approv-
als for supply shipments have slowed construction of a water
treatment plant by at least four years and that relaxing the
dual-use limits could boost the Gaza economy 11% by 2025.
If anything comes of the Trump administration’s so-called
Deal of the Century to promote investment and eventually
peace in the region, there will be even greater need for a
more streamlined approach.
In January, the UN, the Palestinian Authority, and the
Israelis agreed to modifications aimed at making the GRM
more transparent. Gazans who are sanctioned under the sys-
tem or whose plans are rejected can now lodge an appeal.
Projects must be approved or blocked within 45 days ( before
there was no time limit, and a response sometimes took
months). And there’s a clear catalog of dual-use goods, mak-
ing it easier for Palestinians to know what they can and can’t
request. The UN says that since the changes, the average time
for a decision on dual-use shipments has been cut in half,
to 18 days. “It’s much more user-friendly, transparent for
donors and beneficiaries, and accountable,” says Nickolay
Mladenov, the UN special coordinator for the Middle East
peace process.
For many Palestinians, the pain of the restrictions is com-
pounded by the source of the materials. Although the GRM
doesn’t require purchases from Israel—as many in Gaza
believe—most goods pass through the country, giving its com-
panies a strong advantage. Mohamad Abu Qammar, who sells
goldfinches and canaries from his ground-floor apartment a
few hundred yards from the Israeli border fence, felt he had
little choice but to buy his supplies from the same people who
destroyed his home.
Early in the 2014 war, most of his neighbors decamped for
safer ground, but Abu Qammar had no place else to go, and
he figured the Israelis would only attack militants, not civil-
ians. Two weeks into the conflict, his building was hit by a
shell. Abu Qammar, his wife, and five children were taken to
a hospital, where they were treated and released the follow-
ing day. The family moved to a UN shelter, where they would
stay for six weeks. When Abu Qammar finally got back to his
home, it was still standing, but barely. He cleared away the
rubble and moved back in to the damaged flat. A year and a
half ago, the UN showed up with plans to rebuild. He’s happy
with the reconstruction—there’s room for his songbird shop—
but it stings that it was done with Israeli materials. “Israel
is destroying,” Abu Qammar says, sitting in the shade of the
building on a hot summer afternoon with a circle of friends,
repairing a broken fan, “and Arabs are paying.”
Abu Qammar’s cement came from Nesher, which for
decades had a monopoly on cement production in Israel, help-
ing build everything from kibbutzim to Tel Aviv’s Bauhaus
masterpieces to the walls that divide the West Bank. In the past
20 years, though, Israel has abandoned its socialist roots, and
today it needs ever more concrete for its superhighways, high-
speed trains, and luxury apartment towers. With the economy
booming, the government in 2015 sought to boost competition
by forcing Nesher to sell off a production facility. As imports
from Greece and Turkey have grown, Nesher’s market share in
Israel has fallen to 55% from 85% three years ago. But in Gaza
it remains dominant. “Israel has monopolized the reconstruc-
tion,” says Mkhaimar Abusada, a political science professor at
Al-Azhar University in Gaza. “There’s no doubt that Nesher is
making money from the rebuilding.”
Nesher had been cut off from Gaza for the better part of a
decade by Israeli restrictions on cement sales there, but the
GRM opened it again. With its monopoly in Israel unwind-
ing, the company hired a former military governor of Gaza to
help boost its business in the territory, which now accounts
for 10% of the Israeli cement market. But Miro Amiel, Nesher’ssales chief, calls the GRM “bullshit” and says it’s created a
secondary market among people with GRM IDs who charge
an extra $15 per ton to buy cement and deliver it to anyone, no
questions asked. That makes his cement more expensive, tilt-
ing customers toward Egypt. “Why do you think Israel is build-
ing a wall around Gaza?” Amiel says. “Nobody really knows
where the cement is going.”
Fifty miles south, through the Israeli checkpoints and across
the concrete wall, fence, and barbed wire surrounding Gaza,
al-Assar agrees with Amiel—and says that’s why it’s time to scrap
the GRM. In addition to his office at the mixing plant, he has a
space up two flights of rough concrete stairs in an unfinished
Gaza City building surrounded by rubble. A glass door leads to
the marble-clad suite, the only occupied floor in the otherwise
empty shell. Al-Assar says the incomplete building highlights the
lack of materials and the economic struggles of Gazans under
the GRM. “From the beginning we opposed Serry’s plan,” he
says, raising his voice to be heard over the street noise pour-
ing in through a window propped open to catch a breeze. “We
knew it would destroy our economy, but in the end we had to
work with it.” <BW> �With Saud Abu RamadanAbu Qammar