David R. Henderson  

Human Ingenuity in Gaza

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You can get a brand new BMW in the impoverished Gaza Strip, but it'll come in pieces which you'll have to weld together.
This is from an article on the effect of restrictions on car imports into Gaza. What I found interesting was how resilient and creative many of the residents of Gaza are in adversity. Here's more:
"I'm not joking," says Mahmoud Sallah, a 32-year-old Palestinian from the southern Gaza Strip town of Rafah, when he describes the grotesque process of how his 2010 model was delivered in four parts through the network of tunnels dug by smugglers under the border with Egypt.

He took the pieces to a mechanic "and now I drive a new car."

Since Israel declared Gaza a "hostile entity" shortly after the June 2007 take-over by the radical Islamist Hamas movement and imposed its stringent economic embargo, car prices have leaped by at least 50 per cent, and even more than doubled in some cases.


Over the past three years, only 50 new cars entered Gaza through its official border crossings with Israel and Egypt, as exceptional foreign donations allowed through the Rafah passage in the south.

All the rest was smuggled in through the hundreds of tunnels under the border with Egypt, through which goods ranging from fuel to cows, sheep, refrigerators, candy and cigarettes make their way daily.

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CATEGORIES: International Trade

COMMENTS (10 to date)
Les writes:

It seems that the logic of this is elusive.

1) Smuggling banned goods is a universal response to restrictions on trade, and has been noted over centuries in numerous areas of the world. What makes Gaza a special case?

2) If the residents of Gaza are so resilient and creative, why have car prices "leaped by at least 50 per cent, and even more than doubled in some cases?" Apparently restrictions are winning over smuggling.

3) If the residents of Gaza are so resilient and creative, why have they continued to fire rockets into Israel, rather than adopting peaceful measures which would promote law, order and the removal of restrictions?

David R. Henderson writes:

It doesn't sound to me as if you think the logic is illusive. You didn't challenge the logic. Now to your specifics.
1. Gaza is not a special case. That's my point. Even in that hellhole, life goes on. I find that an enormous tribute to the human spirit.
2. Because it's enormously costly to ship cars through tunnels and weld them--or however it's done--back together.
3. "The residents?" Watch your collectivist premise. Some residents fire rockets into Israel. I would bet that most residents don't.

Les writes:

David: thanks for your helpful response. Logic remains elusive:

1) If Gaza residents are so resilient and creative, why is Gaza (in your words) a "hellhole?" Surely a people so resilient and creative could turn Gaza into something much better than a "hellhole." Maybe a Hong Kong or a Taiwan or an Israel?

2) If Gaza residents are so resilient and creative, why are they shipping cars through tunnels and welding them--or however it's done--back together, instead of performing more productive activities?

David R. Henderson writes:

You're kidding, right? Hong Kong had totally free trade. Gaza doesn't because the Israeli and Egyptian governments prevent it. Given that, shipping cars through tunnels is incredibly productive. What tells you that is the price data.

Les writes:


Thanks for your response - it is very informative on your views. Of course you attribute the desolation in Gaza to the Israeli and Egyptian governments, and not to the enlightened, creative HAMAS that is firing rockets at Israeli citizens.

Tom Dougherty writes:


1. I hate the residents of Gaza.

2. Anything I hate can't be resilient and creative.

3. Therefore, the residence of Gaza can't be resilient and creative.

Joey Donuts writes:

Watch your collectivist premise. Its true that only some residents of Gaza fire rockets. However, many if not most condone it. Is condoning an act of violence participating in it?

David R. Henderson writes:

If you can show me that it's the government in Gaza that is restricting trade and not the governments of Israel and Egypt, then I will stand corrected. But the news story that I referred to in the post pretty clearly says that the Israeli government is restricting trade with Gaza and I know from other published sources that the Egyptian government is also restricting trade.

George X writes:

I think truly "resilient and creative" people would have built a tunnel big enough to, you know, drive the car through. And the government, as always, gets its cut. From the article:

"I pay 10,000 dollars to the government in order to make the illegal smuggled car legal with an official license," [the car dealer] says.

Incidentally, over the border in Israel, a car also costs about twice as much as elsewhere: the government imposes an unbelievable 100% use tax on cars.

And, yeah, if a place with auto dealerships, taxis, and 32-year-olds buying BMWs is a "hellhole" then New York is a hellhole (and you know how I feel about hellholes). Of course, Hamas isn't done with Gaza yet.

Tom Grey writes:

I hope that Israel, in its next incursion into Gaza to attempt to reduce the violence against it, strips Gaza of all autos and sends them back "temporarily" to Israel.

Rather than flatten Gaza with bombs, stripping it of all modern machines might be a better "modern-war" approach.

Note that the Israel-bashers will complain in any case, but taking material away from the Hamas-supporting Gazans seems to remain a pretty low level of war response.

Perhaps 1/6 Gazans, approx the ratio of militants to peace activists on the 6 boats, are active supporters of Hamas violence.

How to stop the violence? One side has to win. Or else both sides have to decide to stop fighting.

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