[From Adam Tooze's Chartbook]
“Staying alive is so expensive”: Economics of the Gaza famine
Prices for basic goods in the Gaza Strip have spiralled after the closure of its border crossing with Egypt worsened wartime scarcity, sending the cost of a single cigarette as high as $20 and forcing families to sell jewellery and other possessions to buy food. Vegetables, frozen meat, medication, petrol and cooking fuel have leapt in price to at least triple their prewar levels. Some items now cost dozens of times what they did before Israel’s war with Hamas began … The outbreak of war in October sharply constrained the flow of goods into Gaza, but the situation worsened last month after Israel’s military launched an offensive into the southern Gazan city of Rafah, seizing a key border crossing with Egypt and targeting a network of smuggling tunnels. A kilo of frozen chicken thighs, only available once or twice a week, has leapt to the equivalent in Israeli shekels of $20, more than 10 times its prewar price. Cooking gas, when available, costs $35 a kilo, up from $1.60; car batteries, used for charging phones and electric lamps, sell for more than $500 each; and a litre of petrol, when available, sells for $22. … the asking price for one Egyptian Karelia brand cigarette peaked at $140 earlier this year and is at present about $20. These are ruinous prices even for the few who can afford them. Per capita income in Gaza before the war, when almost half the population was unemployed because of the Israeli blockade, was about $1,200 a year, according to the World Bank. By February, 90 per cent of Gazans were unemployed, according to estimates by the Palestinian Central Bureau of Statistics, as the enclave’s GDP fell more than 80 per cent. … “Things have become nastier as the situation grows increasingly desperate, the Bedouin clans are more ruthless than ever before [with the looting of convoys]. It’s still Mad Max,” said a person familiar with Gaza humanitarian issues. Soaring profits from the high prices have resulted in local, Egyptian and West Bank-based Palestinian businessmen seeking to get more commercial trucks into Gaza. Two people familiar with the situation said there was a period last month in which commercial goods made up a large portion of incoming convoys. Palestinian businesspeople can pay exponentially more for truck hire than aid groups, they said. Commercial operations, bringing items such as soft drinks and cigarettes, pay as much as $2,500 per truck for armed local security, something international aid groups are barred from doing.
Source: Mehul Srivastava and Neri Zilber in FT