Gaza Terminals Overview There are six trade terminals at the Gaza strip borderlines, these terminals are utilized for the crossing in and out of imported commodities and exported goods. Four of the terminals are controlled by the Israeli government, while Rafah terminal is partially controlled by the Pales- tinian Authority and under the European supervision. The newly considered Karem Abu Salem /Kerem Shalom crossing is a temporary trade terminal as classified in the AMA, the terminal is ought to be utilized for the crossing in of imports coming from Egypt. AlMontar/ Karni terminal is considered the major commercial terminal of Gaza Strip, where it connects the Gaza Strip with the West Bank, Israel and the rest of the world, the terminal is located at the east of Gaza City and deemed the lifeline for the inhabitants of the Gaza Strip, but is marred by inefficiency and insecurity. Based on the November 2005 AMA, the number of export trucks per day to be processed through Karni should be 150, and should reach 400 by end-2006; however the average daily exports reached only 60 trucks in the period between January to May 2007. Sufa terminal is located in the south of the Gaza Strip (east of Rafah City) used for the imports of construction materials only and in case of the closure of AlMontar/ Karni terminal, Sufa is used for the imports of some goods. Karem Abu Salem/Kerem Shalom crossing is located in the south east of Gaza strip, it's 3.6 Km away from Rafah Terminal. Karem Abu Salem/Kerem Shalom is a temporary trade terminal as classi- fied in the AMA, the terminal is ought to be utilized for the cross- ing of imports coming from or through Egypt. Nahal Oz Entry Point is located east of Gaza Strip and is considered a transit terminal restricted for the imports of Liquid Fuels and Gas, only from Israel. The point consists of storage petrol tanks and Gas tanks linked directly with pipelines, with the Israeli side. Beit Hanoun/ Erez terminal is located in the north of Gaza Strip; it is the border crossing between Gaza Strip and Israel/West Bank. It pri- marily serves civilians, (diplomats, businessmen, international organizations staff, laborers, medical cases) with permits in and out of Gaza Strip. The terminal is also used for the imports of cars. Rafah Border terminal is located in the south of Gaza Strip (south of Rafah City); it is the border crossing between Gaza Strip and Egypt. It serves travelers in and out of Gaza Strip, and was also used as a cargo crossing point for imports from Egypt (until 2005), mainly aggregates and food items. Jurisdiction over the border crossing was transferred to the Palestinian Authority in November 2005, after Israel's disengagement from the Gaza Strip.
The Gaza Strip economy has been in a steadily sharp decline since the crisis that erupted in mid June 2007, since then, the economic situation has been heading towards collapse, as neither raw materials are allowed to enter Gaza Strip nor products are allowed to cross through to the outside markets. Dramatic changes occurred on the terminals' status and operations which can be summarized as follow: AlMontar / Karni Terminal: was officially closed for both imports and exports on June 12, 2007, the terminal re-opened on June 28, 2007 for limited imports such as wheat and animals feed through the conveyer belt which was used usually for crossing of aggregates (area 34). Sufa Terminal: since June 19, 2008, the terminal was used as an alternative terminal for imports only despite the inadequate infrastructure of the terminal. The terminal is the most operative terminal and used for limited imports classified as humanitarian needs, which includes basic food, fruits, vegetables, animals feed, medical supplies, and humanitarian aids. Karem Abu Salem / Kerem Shalom Crossing: was used as an alternative crossing despite the inadequate infrastructure of the crossing. The crossing has been closed since April 19, 2008 after ten months of operation (from June 28, 2007 to April 18, 2008). The crossing has been used for limited imports of goods that are classified as humanitarian needs, which includes basic food, fruits, vegetables, animals' feed, medical supplies, and humanitarian aids. Only 124 truckloads of cash crops were exported through the crossing during the whole study year. Rafah: the terminal did not operate for commercial operations since 2005. Nahal Oz Entry Point: was opened for imports of cooking gas and liquid fuel which includes benzene, diesel, industrial gasoline, and kerosene, which flow into the Gaza Strip through underground pipelines. In parallel with commercial restrictions on the entry of goods, new restrictions on fuel- especially benzene, diesel and cooking gas has been imposed since October 2007, thereby insufficient fuel and cooking gas were flown into the Gaza Strip causing fuel and cooking gas shortage. The table below summarizes the trade activity (exports & imports) before and after the Gaza Strip closure: AlMontar / Karni Karem Abu Salem Kerem Shalom
A study period of the year (from June 2007 to May 2008) was taken to shed some light on the changes of the terminals' trade movement resulting from the closure. The chart below illustrates trade activity that had taken place from June 2007 to May 2008 in comparison with the same period in the previous years through all terminals including AlMontar/Karni, Sufa, (which was used mainly for the entry of aggregates and construction materials), and Karem Abu Salem/Kerem Shalom (which was used before the crisis for the entry of humanitarian aids). The chart shows how steep is the drop in 2007-2008 in terms of the export and import levels, compared with previous years. Figure (1): Trade activity through all terminals (AlMontar/Karni, Sufa, and Karem Abu Salem/ Kerem Shalom) for the period from June 2007 May2008 compared with trade activity in the same period of previous years. B-1-Restrictions on Exports : During the study period, only 124* truckloads of cash crops were crossed out through Karem Abu Salem/ Kerem Shalom, which is considered a trivial number compared with exports reported in the same period of the previous years, when the annual average of exports was calculated at more than 8 thousand truckloads through AlMontar/ Karni terminal, including garment, furniture, cash crops, and other products. * During the closure, only 124 truckloads of cash crops were allowed to cross out from the Gaza Strip, as a result of winning a court case at the Israeli courts, called by the Palestinian agricultural cooperatives to allow the exports of the crops. Unfortunately, the exports were halted after few days due to the inadequacy of Karem Abu Salem/Kerem Shalom infrastructure, which caused impairment of the crops quality.
B-2- Restrictions on Imports*: The imports from June 2007 to May 2008 dropped by about 75% of the past two years averages. The imports have been restricted in terms of quantities and types, 155 truckloads were imported on a daily average, most of them were foodstuff, basic commodities, and humanitarian aids. All imports (commercial and humanitarian aids) have been allowed to cross into the Gaza Strip in order to avert a humanitarian crisis. Most types of raw materials, construction materials, and other essential goods/equipment that used to enter Gaza Strip before the crisis are not allowed to cross. Realizing that more than 50% of imports were raw and construction materials before the current crisis. B-3-Restrictions on Fuel and Gas Supplies: As part of the sanctions imposed on Gaza Strip by the Israeli Government, fuel supplies were reduced starting October 2007. The reduction level per types of fuel is unspecified, and varies from one type to another. The quantity of the imported fuel reached unprecedented low levels during the past six months. Accordingly, the insufficient fuel and gas supply has caused major problems and negative effects on many life aspects in Gaza Strip; where the sewage treatment pumps operate inefficiently, which may lead to serious pollution and health issues. In addition, the lack of fuel has impeded the movement of people and goods which compelled the drivers to substitute gasoline with cooking oil that may cause dangerous health problems. The chart below illustrates the gap between the fuel imports in May 2008 and the estimated needs of the fuel: Liter/Kg
Most of the private sector activities are paralyzed, and the remaining partially functioning businesses are hardly surviving. The severe crisis that resulted from the closure had a harsh impact on the private sector, which can be summarized as follows: Industrial Sector: About 98% of industrial sector establishments were temporarily shut down; and about 34,140 workers were laid off. Garment and furniture sectors are the main industrial sectors that have been impacted as follows: - Most of the garment workshops were temporarily shut down, 5 of them were relocated to West Bank and Jordan, and around 16,000 workers were laid off. The garment sector losses are estimated at US$26 million as direct potential export sales losses, in addition to the other indirect losses. - The furniture sector suffered considerable losses of about US$20 million as direct export sales losses, about 97% of establishments were temporarily closed due to the continued absence of raw materials, 3 of them were relocated to West Bank and around 5,500 workers were laid off. Agricultural Sector: The total agricultural exports losses including the cash crops losses are estimated at US$30 million and about 40,000 farmers were laid off. Of which, the Cash Crops sector was rigorously affected by the closure, according to the agricultural cooperatives, the direct losses are estimated at US$15 million, and about 7,500 farmers were laid off. Trade Sector: More than 1,970 containers (20 sq. ft.) of different commercial goods destined to Gaza are stuck at the Israeli ports and West Bank warehouses due to the suspension of the Gaza customs' code by the Israeli Customs Authority. Yet, none of these goods have been allowed to enter Gaza Strip, resulting in high storage expenses and demurrage charges, forcing some importers to sell out their goods in either West Bank or Israel at lower prices. Construction Sector: All construction projects (estimated at about US$ 223 million) were halted, including the UNDP and UNRWA projects due to the absence of construction materials such as cement, metal, and aggregates. Moreover, the construction-related sectors such as tiles, blocks, readymix concrete, etc. were also affected. The laid off construction employees were estimated at about 42 thousand employees. Other Sectors: Including processed food, plastic, metal industries, ICT sector, and other sub-sectors were exposed to remarkable losses of tens of US million dollars, and tens of thousands of workers were laid off.