Gaza's underground economy

There's no secret about what the tunnel smugglers do, and they make no attempt to hide it. It's there for everyone to see.

And when the missiles come down from the sky, many of them are killed.

But when the morning comes, they reappear and carry on with their work, digging deep into the ground.

It's one of the most dangerous jobs in the Gaza Strip, and it's also one of the most lucrative.

The controversial Rafah tunnels, on the border with Egypt, have been one of the main talking points of the recent Israeli offensive in Gaza.

But they have been a lifeline for Palestinians for 20 years, and their owners are some of the richest men in Palestine.

Just a few metres from the border with Egypt, the tunnels have been the smuggling routes where hundreds of thousands of tonnes of goods enter illicitly into the Gaza Strip every year.

They've been in operation since the early 1990s, but more and more have been built in recent years.

When Hamas came to power in 2007, and Egypt and Israel sealed off their borders with Gaza, tunnel smuggling rose exponentially — about 300-400 were in operation at the time of the recent Israeli offensive, compared with about 50 in 2006.

The Rafah tunnels link Palestinian Rafah with the Egyptian town of the same name. Historically, they were once one town, but after three wars and a number of treaties signed between Egypt and Israel, the border now cuts straight through it.

In the early days, they were simple, crude holes in the ground, hidden from view, where just a few items were smuggled.

Now, it's a complicated industry, worth hundreds of thousands of dollars, bringing in petrol, food, medicines, motorbikes, generators, and livestock (there are even rumours that some of the animals at Gaza's Zoo came in through them).

There are so many tunnels that workers operate in the open air and are spread over about half a square mile.

That's an easy target for an Israeli F16 jet, and during the Israeli offensive they were bombed a number of times.

Israel believes the weapons in Gaza come through the tunnels, which can be up to one kilometre long and 30 metres deep, and Tel Aviv's conditions for a ceasefire include dismantling them.

“Don't talk to me about weapons,'' says Ayman, irritated by our questioning. The tunnel owner from Rafah town won't let us photograph him.

“Why can't they [the Israelis] just let us work, this is how we make our money.'' When Weekend Review visited Rafah, a couple of days after the ceasefire, he was rebuilding the entrance to his tunnel, which had been damaged in an air strike.

He, like most other tunnel owners, was jittery; worried that any media attention meant the jets could come back again.

Ayman tells us his tunnel cost him $40,000 [Dh146,800] to build and operate; he employs five people, two of whom are boys. “This is a business,'' he says, “it's not something we hide. Officials are controlling the operations here, they are regulating it all.''

Ayman claims government officials either own some of the tunnels or take a cut from the operations. He goes on to tell us about the sophisticated economy involved.

A business partner, at a secret location in Egypt, will cut a deal with him to supply goods.

Ayman pays up to $200 to his workers to bring in a shipment — without the threat of looming air strikes, a number of trips can be made every day.

But when they get to Gaza, prices are heavily inflated — goods such as food and electrical appliances can be as much as double what they would cost over the border in Egypt.

Bulky items, such as refrigerators, can be very expensive — they are harder to transport, and can cause damage to the tunnel itself.

Other products, such as generators or spare parts, are relatively cheap since the market has become flooded with them.

Meanwhile, cheap petrol coming through from Egypt has meant smuggled fuel prices are now lower than the small amounts imported from Israel.

Making a profit

Still, with such volatile prices and no real regulation, people are at the mercy of the tunnel owners. “What do you want from me?'' he says.

“I have to make a profit somehow, this is our livelihood. It's a risky game — when the risk goes up, the prices go up.'' It's a harsh fact of life that is more or less accepted here.

Even in Gaza, which is being suffocated by a harsh Israeli embargo, people are paying incredibly high prices for simple, but essential goods.

The tunnels are a lifeline to Gaza, and that means tunnel owners can demand high prices, while government officials take a correspondingly large chunk as commission. Meanwhile, children bear the brunt of the tunnel industry.

They are hired at a young age to build the tunnels — they are small, and can carry out the work an adult can't.

They are paid in dollars, but don't take a percentage of the sales like some of the adult partners do; and when the tunnels near completion they are neglected.

It's dangerous work for them; many die in tunnel collapses during the early stages of construction, and with the water table at around 12 metres below ground level in some places, many drown.

It's a trade-off many of the local children are willing to take; we heard of a case where one boy made $2,000 for ferrying over a video camera during the recent offensive, even as the tunnels themselves were being bombed.

“It's very well organised,'' says Dr Mohammad Abdul Salam, Head of Regional Security Studies at the Al Ahram Centre for Political and Strategic Studies, in Cairo.

“Palestinians need this lifeline more than their Egyptian counterparts do on the other side. So while a few Egyptian families are involved in the smuggling operation, many wealthy influential Palestinians are capitalising on the trade.''

And security is an issue for those on the other side of the border, too.

“The tunnels are very harmful for Egypt,'' he says. “The smuggling is actually happening in both directions. Many of the terror attacks that have taken place in recent years in Sinai are believed to have been backed by money, training and weapons coming back into Egypt.''

It's a sore point for Egypt — they are now under pressure from the US and others for not policing their border effectively enough.

Claims that all borders are porous and difficult to control are becoming harder to defend; particularly since there are Egyptian border posts no more than 20 metres from the tunnel entrances in Palestinian Rafah.

“The whole tunnel system is creating a lot of tension between Egypt and Israel,'' Abdul Salam says.

“They couldn't stamp it out when they occupied Gaza, and now they are criticising Egypt for not doing the same. And it's also destroying the economy there, too. Prices for household goods are too high, and the removal of money into Egypt is causing huge liquidity problems.''

Now smugglers will be watched by newly-installed monitoring equipment on the Egyptian border.

But whether that will bring about an end to smuggling, at least in the short-term, is doubtful.

The tunnels are like veins for the people of Gaza, nourishing them with essential goods denied by the Israeli blockade.

And as long as their borders stay closed, they will always find a way to borough under them to the outside world.

Haytham
Tunnel builder

“This is what all the boys in Rafah want to do,'' Haytham tells us.

He's wary about being photographed, but eager to tell us about the dangers involved. “Everyday I'm risking my life in the tunnels, but without that risk I won't get paid.''

He's no more than 10 years old, with a gruff voice, and his small frame is already starting to bear the characteristics of a grown man.

He lives in Rafah and got into the business when his family home was destroyed by the Israel Defence Forces.

They razed hundreds of homes during the occupation to create a buffer zone and better police the smuggling activities.

The tunnel owners rely on hundreds of young boys from the area to build them and then ferry goods from Egypt into Gaza. But they are being systematically exploited and are exposed to highly dangerous working conditions.

“It's normal for me. I've worked on many tunnels here. They take about three or four months to build, and I make good money, much better than any other job around here.

"I've had friends who have died in tunnel collapses. It's dangerous work, but I don't really have any other choice. Now is a good time to build tunnels — there are many operators who need workers and new tunnels are being built all the time.''

History of tunnel smuggling