Eisa Khalid Gareeb and his two sons, Walid and Mansour, did not seem very busy as they grouped in their small workshop in Beit Shahour.

The Gareebs who have been carving wood for nearly a century are considered relatively newcomers in comparison to Palestinian families which adopted the profession several centuries ago.

Work has not been the same in the last few years. Eisa, who inherited the workshop from his father 10 years ago, recalls how business was good till the second intifada erupted in September 2000. Since then, profit has decreased by 1000 per cent as a result of the economic crisis.

While his workshop used to employee eight full-time workers, he has consolidated business with his son, Walid, who had to shut down his own factory. They have scaled operating expenses to the bare-bones minimum, employing only the father with the two sons. "Sometimes a whole week goes by without any of us working," says Walid.

Olive-wood carving involves hours of hand carving and working the wood with simple tools. Their humble workshop is not more than two rooms, approximately 150 square feet, made of concrete blocks with orange PVC pipes running around them.

They have little equipment: a wood saw to cut the olive wood into small sections, a 'copy machine' drill to make a rough duplicate of the original wood figure, a dentist's drill workstation to carve intricate details on the wood pieces, and an air compressor for applying the final coat of varnish on each piece. Making a simple wooden cross takes between 10 and 15 separate steps.

The handicraft has been native to the town of Bethlehem, and the predominantly Christian villages of Beit Shahour and Beit Jala in Palestine, ever since the fourth century when Catholic monks associated with the Church of the Nativity, introduced it to the local population.

Once a thriving industry, it is now on the border of bankruptcy as a result of restrictions imposed by Israel on movement and trade. The presence of the Separation Wall makes it illegal for anyone without a Jerusalem blue identity card to travel to or from the West Bank.

"Jewish merchants can move freely so they go to China and Italy to buy materials, which they then sell back to us," says Darweesh, an owner of another workshop, who gave only his first name. "Their only advantage is they can move freely and we can't."

Darweesh, who opened his workshop in 2001, has managed to survive by developing creative ways to export his goods to the United States and Europe.

He was a pioneer in running a website which illustrates historical, cultural, and environmental values of olive wood. He has developed a network of wholesalers and retailers in the US, including Home Shopping Network, in addition to direct sales to end customers.

"The olive wood is the only reason this industry has survived. There is no olive wood in China or Korea. Even if there is in Spain and Italy, their prices are outrageous," he says.

Wood types

Bethlehem's Holy Land olive wood is heavy, dense and durable with a distinctive red pigment in its grain. It rarely cracks like other wood varieties. When dried, it can last for more than a hundred years.

There are three classes of olive wood; the first class, called Roman, is dark and has many distinctive lines and markings and thought to be up to 2,000 years old; the second class is 700 to 1,000 years old, and the third class is a few hundred years old and paler in colour.

It is a common practice not to destroy the whole tree, but to prune it or cut only branches to make wood-carvings.

The Gareebs' workshop creates a cross, divided into 14 recessed sections depicting Crucifixion scenes. It takes three people at least one week to finish a cross. The factory price is $400, and it can sell up to $2,000 retail.

However, because the family cannot sell their goods outside Palestine, they are forced to sell far below even the factory price to Arab and Israeli merchants who then sell their goods abroad.

Therefore, the wood carvers are losing on both sides: they are forced to sell at a substantially lower wholesale price, and they are not realising profit gains at the retail end.

This is one instance where the middle man wins out over the factory owner.

Walid recounts an instance when an Israeli merchant placed an order of 100,000 pieces. "He started haggling with us over the price. We asked for three cents each but he wanted us to sell for one cent. We knew he would re-sell each piece for $2 or $3," he says.

When the deal broke, the merchant said he would take a piece to China and replicate it in gypsum and plastic, and the tourists who bought them could not tell the difference anyway, according to Walid.

A plastic silicone angel piece, identical to a handcrafted olive wood figure that Walid and his father sell for $12, is sold for $1 at in souvenir shops if made in China.

Some other factories have caught on to the same idea. They are sending their designs to China to have them cast into cheaper gypsum and silicone models which they can sell for far less. They are forced to do this as the price of olive wood is increasing while their industry is badly hit.

Only 63 out of the 142 registered olive wood factories were still operational in 2004, making ornamental wooden figures for nativity sets, icons, crucifixes, and similar wooden souvenirs.

According to a special report published on the Bethlehem Handicrafts Industry by the Bethlehem Chamber of Commerce, the second Intifada has caused a worse recession than the first one which shrank production by 40 per cent.

The overall income of the family-run businesses has dropped by 90 per cent. Many wood carvers have had to sell their tools, and relocated to other countries to make a livelihood.

On the other side, the olive wood carving trade is directly tied to Bethlehem's tourism, so when tourism decreases, it affects the entire economic life of the town.

According to Juda Markos, Minister of Tourism in Bethlehem, more than 90 per cent of the tourism to Palestine including Bethlehem has decreased since the intifada.

"While Bethlehem used to welcome more than one million visitors per year since its peak year in 1995, there were approximately 15,000 tourists by the end of 2002. There was a slight increase in 2005 to 300,000 tourists, and at the end of 2006 we are projecting a number of 400,000 visitors to Bethlehem," he says.

Unlike other Palestinian towns which have an industrial or agricultural base, and are open to movement from surrounding villages, Bethlehem is caught in an economic stranglehold.

Unemployment hovers above 65 per cent in comparison to 45 per cent in Ramallah. Construction is down to less than 7,000 square metres at the end of 2006 from the usual 55,000 to 60,000 square metres before 2000.

Even if some relief has come by way of export to external markets, the red tape and extra mileage costs brought on by the occupation makes it difficult to sustain a living.

Obstacles

Permits have to be issued to transport goods from one town to another; goods have to be shipped to one central location, undergo inspection and then must be picked up by another carrier to be shipped to ports in Ashdod or Haifa.

This process entails extra time to commute, additional transportation costs, and more red tape to clear.

Sometimes the authorities do not allow goods to be shipped in a timely manner, which translates into time waste and warehouse charges for factory owners.

E-commerce is not an option as a result of economic sanctions imposed on the Palestinian Authority, they are not allowed to receive payments into Arab bank accounts.

The olive wood carving factories' woes have spread to the retail shops where many of their nativity sets, ornaments, crosses, and statues are sold directly to the public.

Many shops are completely empty. "I keep my shop open as a social club for my friends to have coffee and talk," says Adnan Al Kourna, one of the hundreds of souvenir shopkeepers centred around Manger Square in front of the Nativity Church.

"I don't sell anything anymore. I just keep it open for people to come and complain about their problems." Moses Odjra, a clerk at his shop who makes coffee for any stray visitor to the shop says, "We don't need money anymore, we need peace because peace brings money."

The writer is a freelance journalist based in Jerusalem.