Owaida says Gazans don't need Egyptian tunnels Gaza - Mohammed Habib Hatem Owaida, director of the economy minister's office in Gaza, has told Arabstoday that the import replacement policy aims to support local industry by "regulating the import of goods that have a locally-produced alterative." Owaid explained that the Palestinian Standards Institute (PSI) has been given the responsibility of monitoring and regulating quality of national products. The PSI uses a three-step criteria to assess whether the product has a locally-produced alternative. "They look at quantity and whether it covers the market's needs, the quality of the local product and the general consumer price." The transcript of Arabstoday's exclusive interview with Hatem Owaida is as follows. AT: How do you see the economic situation in the Gaza Strip at the moment, and how do Gaza and the West Bank compare in financially? HO: From a nationalistic standpoint, we shouldn't separate the economy of Gaza, West Bank and Jerusalem. It is all really just one economy. I know there are some economic indicators that can be looked at in Gaza and in the West Bank, but we must look at the Palestinian economy as a whole and not partitioned, because we're under occupation. Palestinian economic indicators confirm that some of the old problems are still there, which came into being as a result of the Palestinian economy's involuntary dependence on the Israeli economy. For example, there are the arbitrary Israeli measures affecting borders and crossings through the Paris Protocol and daily procedures that are in use. The Palestinian economy became passively dependent on the Israeli occupation a long time ago. If the Palestinian economy is to be liberated, we need to take several measures These include freeing ourselves from the Paris Protocol and becoming self-reliant in rebuilding a sustainable and promising Palestinian economy. It is important that we open up to the world, build partnerships with Arab, Islamic and other countries and sign trade and manufacturing agreements to exchange expertise with the external world. AT: There was this report about high unemployment rates in the Gaza Strip. What has caused this phenomenon and what are the proposed solutions? HO: The main cause is the blockade on the Gaza Strip. We can't import materials to run our industrial establishments. We have over 3960 such establishments which employ over 4000 workers. Closing all points of entry has naturally increased and doubled unemployment. Proposed solutions include activating industry by supplying raw materials until workers are trained and employed, or creating new methods for running small enterprises and funding them, so that each Palestinian becomes owner of a small enterprise. This is what the ministry, for example, did to create job opportunities. Three or four people can work in each small business, which would make reducing unemployment easy. In addition, there is the possibility of opening border crossings to allow the easy and uncomplicated entry of materials and export of Palestinian goods and products, so Palestinians and businessmen can deal with the Arab and Islamic world. These measures would reduce unemployment drastically, especially in the Gaza Strip. AT: There has been a problem with the payment of wages in the West Bank. Is Israel's withholding of tax revenue the issue here, or are there other reasons? HO: Tax revenues are part of the problem, especially as the Paris Protocol stipulated that tax must be collected by the Israelis, at ports and border crossings. So, Israel collects the taxes for whatever service and then transfers it to the Palestinian camp, which is left in the mercy of the Israeli's whims. So whenever Israel decides to blackmail the Palestinian camps over withholding these funds, Palestinian society is plunged into a problem. This is especially true as over 30 to 50 percent of the revenues is generated by Palestinian commerce. So the Israeli camp doesn't have the right to use the tax revenues as a deterrent or a trump card. This is part of the problem. The main problem, however, is the way finances are handled by the Palestinian Authority; the presence, or lack thereof, of transparency and the loss and squandering of resources. So there are a lot of factors, but Israel withholding funds from the Palestinian treasury is the main problem. AT: What's your assessment of the Israeli blockade of the Gaza Strip at the moment? HO: The Israeli blockade was very tough, but it's on its way out, thanks to Gazans' patience, perseverance and ingenuity. As they say, we're within a stone's throw of, not lifting the blockade, but breaking it. Palestinian citizens and government policy have proved to everyone that we have managed to survive under this blockade. Many steps were taken in the hope that the blockade will be broken, and everyone will see soon that it's on its way out. AT: If Egypt closed the tunnels with Gaza, would it spark an economic crisis here? HO: Palestinians only resorted to the tunnels when they were prevented from importing goods legally. So when Palestinians were deprived from clothing, medicine and food, we were left with no choice but to buy from Egypt. Trade was not allowed above ground, so we did it underground, but the moment the border crossings are opened, the Palestinian people in Gaza won't need to get their things via the tunnels. The occupation can't keep messing us about with the crossings, opening them and then closing them again. This is the sixth day in a row that the Karam Abu Salem border crossing has been closed, and it's the only one through which all products and goods are allowed to enter. But even with this border crossing, the Israeli occupation only allows us to bring in 35 percent of our total needs. So once the border crossings are open, it would be easy to close the tunnels. But if it's done before the border crossings are functioning fully, we'll get back to the major shortages. So without the border crossings being opened fully, we would suffer from many social, economic and political problems in Gaza if the tunnels are shut. AT: Are the tunnels still Gaza Strip's lifeline? HO: That's precisely what we don't want. We stress the need for the border crossings to be opened fully. The moment this happens, the tunnels will stop working without any external pressure. Then, any product that enters through a border crossing, won't be brought in via the tunnels, because there will be differences in price and taxes and so on. So opening any border crossing fully would definitely close tunnels. Palestinians have the right to live normal and easy lives and for all goods to enter the strip legally. This is what we hope and ask for. What we don't want is for the status quo to persist, the Palestinian camp to be pressured and all commercial border crossings closed. Because then, how would we make these goods and products available? Make no mistake, closing the tunnels without officially opening the border crossings would definitely be catastrophic and a return to the blockade on Palestinians where the shortages will set in again. AT: Is the division between the two governments affecting the economic situation in the Gaza Strip? HO: Of course. The Palestinian government has always stressed the need for unity, so any issue that affect this area will naturally have negative effects on all aspects of life, especially the economic aspects. As for current economic conditions, the West Bank is working in one direction and the Gaza Strip in another. So the future will be negatively affected. We have a lot of evidence of improvised foreign economic relation. So the split does have a negative effect on Palestinian economy, and the closer we become and the stronger the unity between the two government, the more we will see positive effects on the Palestinian economy's sustainability and unity in political and economy decision-making. Any solid, practical steps in the direction of ending the division will therefore improve economic conditions. Also, relations with Arab and Islamic countries would help prop up the Palestinian economy if we can bring the division to an end. AT: How far along is the Gaza Strip electricity crisis and does it affect the Palestinian economy? HO: The electricity problem is quite serious and has been for a long time. It doesn't only affect the industrial and commercial sectors, but also the services sector and everything that's affected by communications indicators. What concerns us now as regards this indicator is the negative effect it has on industry as many plants can't work properly because of the power outages. The same goes for shops that offer goods and services. All these sectors are affected. Many factories have laid out workers because of the power outages. Having a steady power supply would generally affect production as much as having an unstable supply does.