Gaza's courts filling up with bankrupt businessmen

Gaza's courts filling up with bankrupt businessmen
Businesses that can no longer operate due to Gaza's multiple crises are piling up debts, writes Rami Almeghari.
5 min read
24 October, 2018
Khader Abunada looks over the empty land where his medicine factory once stood [Rami Almeghari]
Showing off a lot of papers on a table at his neighbour's beverage factory, Dr Khader Abunada, a 62-year-old Palestinian from the Gaza Strip, spoke to The New Arab, just a few metres from an empty piece of land, to the east of Gaza city.

This empty plot was once Abunada's own chemical and medical factory, before it was devastated during the massive 2014 Israeli attack on the Gaza Strip.

Since then, the veteran pharmacist has been frequently summoned by a local court over debts worth thousands of US dollars.

"I never imagined that I would reach the point of getting some financial support - of $100 per month - from my own daughter.

"These papers are all arrest warrants for debts estimated at about 80,000 US dollars. Since my chemical factory was destroyed completely by Israeli tanks, I have been unable even to stand on my feet," said Dr Abunada.

He was once the former director-general of the Palestinian health ministry's department of pharmacies, he told The New Arab.

Rebuilding strength

Before 2007, when Israel imposed a blockade on Gaza following the Islamist Hamas movement's takeover of the Strip, Abunada's factory was productive, manufacturing cosmetics and suppositories. After the blockade began, production at the one-acre facility slowed because of a lack of raw materials.

"I began relying on raw materials, brought to Gaza through underground tunnels, between Gaza and Egypt," said Abunada. "I attempted to revive my industry, yet due to high prices and less quality of those raw materials, brought via the smuggling tunnels, I had to stop producing by the year 2011."

Reliance on rations

In 2011, Abunada pivoted his business away from pharmaceuticals to lower-cost production line, hoping he would be able to get by and make a living.

"Can you imagine? As of today, I rely on food rations, provided by the United Nations Relief and Works Agency for Palestine Refugees. Actually, I have done the best I can over the past years, even before the collapse of my factory. The machines inside are worth about one million US dollars.

"In 2011, I rented a place in Gaza City, where I managed to contract with the Palestinian Health Ministry to deliver meals for the Gaza hospital of Alshifa," Abunada told The New Arab.

Asbestos roof

Abunada and his seven-member family live in Beer Alna'ja, a neighbourhood in Jabalya refugee camp in the northern Gaza Strip. His house has an asbestos roof and was inherited from his parents.

"This is an unbelievable situation, where people are being plagued by wars and poverty, while the concerned authorities appear apathetic to those people. In 2004, an Israeli army invasion of the northern town of Beit Hanoun rendered my home completely destroyed and forced me and the family to move back to my parents' old home in the Jabalya refugee camp," Abunada said.

I was able to ask executive bodies within the Palestinian Authority for some kind of compensations for my huge financial losses. Yet, I got no concrete response

Dr Abunada is also a member of the Palestinian National Council, a national representative Palestinian body that involves Palestinian leaders from across the occupied Palestinian territories and the global diaspora.

"Recently, I have participated in a meeting of the Palestinian National Council in the West Bank city of Ramallah. I was able to ask executive bodies within the Palestinian Authority for some kind of compensations for my huge financial losses. Yet, I got no concrete response.

"This a very desperate situation, for which Palestinian leaders have no solution. I have already served the nation, when I was on the payroll of the PA's health ministry, many years ago and when I turned to the private sector. Believe me, I am encouraging my sons to find opportunities outside of the country, instead of bearing the brunt of such a situation."

Increasing arrest warrants

The Gaza-based Palestinian Chamber of Commerce suggests that over the past couple of years, as economic hardships in Gaza have reached breaking point, thousands of bank cheques - worth $47 million - have been returned.

"In fact, as we are following up on financial problems, faced by local businessmen here, we have found out that local Palestinian courts have thousands of cases against businessmen, who are being debited because of their inability to cope with economic recession, across the territory," said the PCC's Maher Altaba.

Altaba blames the current recession on the 11-year Israeli siege, the political division between Hamas and Fatah leading to Gaza's further isolation, and recent Palestinian Authority measures against Gaza.

"Actually, it turns out that people's purchasing power has got considerably lower than people imagined. This has made many businesses suffer a notable slowdown. Over the past year and a half, salaries of many thousands of employees on the PA's payroll have been halved on the PA's orders, because of the political split between the Fatah party of Palestinian President Mahmoud Abbas and the Islamist Hamas party in Gaza.

"In addition, the poverty rate in the territory, along with unemployment, has reached a record high; almost 53 percent of Gaza's two million residents live under the poverty line, with more than 80 percent of 1.2 million refugees relying on food rations," Altaba said.

What is needed?

For economic conditions in the Gaza Strip to be improved, the Israeli siege needs to be lifted and the Palestinian parties must reach a unity agreement.

"I do expect things to get much worse soon, unless the siege is lifted, and the political split comes to an end," said Altaba.

Over the past year and a half, President Mahmoud Abbas of the Palestinian Authority in Ramallah has halved salaries of Gaza-based public sector employees. Abbas has frequently called on Gaza's ruling Hamas party to hand the strip over to a "consensus government" to be based in Ramallah.

Hamas and Fatah signed a unity deal in October 2017, in Cairo. The deal followed a series of previous failed unity agreements, the last of which was signed in April 2014, in the Shati refugee camp, west of Gaza city.

Rami Almeghari is a Palestinian freelance journalist living and working in Gaza. 

Follow him on Twitter: @writeralmeghari