Like many things in Gaza, the truth about its economy is covered up amongst the spin of interests groups and their supporters. Even the IMF and World Bank surveys, are often prepared by locals, who are suspected of having a ‘less-than-objective’ agenda.

As I observed a few days ago, the inherent contradictions were brought to light by the visit to the region of EU foreign policy chief, Ashton. In order to combat what she saw as a humanitarian crisis, she announced another aid package. Yet, on the same day, the people of Gaza were treated to a brand new shopping mall.

What’s really going on?

Back in May, before the flotilla fiasco, the Financial Times was already reporting that: –

Some argue that Gaza’s tunnel economy is becoming a victim of its own success. … the remaining tunnels, about 200 to 300 according to most estimates, have become so efficient that shops all over Gaza are bursting with goods.

Branded products such as Coca-Cola, Nescafé, Snickers and Heinz ketchup – long absent as a result of the Israeli blockade – are both cheap and widely available. However, the tunnel operators have also flooded Gaza with Korean refrigerators, German food mixers and Chinese airconditioning units. Tunnel operators and traders alike complain of a saturated market – and falling prices. “Everything I demand, I can get,” says Abu Amar al-Kahlout, who sells household goods out of a warehouse big enough to accommodate a passenger jet.

A month later, The Economist confirmed that life in Gaza was far different than what Ashton et al is led to believe.

American investors of Palestinian origin are set to open Gaza’s first mall. Land prices in Gaza city have shot up. Saudi investors have asked management consultants to look for opportunities.

The Palestinian news agency, Maan, is an excellent source of news. If you click on its Gaza page, you will see a typical spread of anti-Israel features. Understandable. And in-between, you can also learn how new cars are about to be sold in Gaza. Evidently, there is a lot of spending power in Gaza.

Maybe the real question is who has access to this financial wealth? In early July 2010, the Palpress news agency released a report in Arabic about Hamas corruption in Gaza. As a (google-supplied) translation reveals:

 Hamas movement in the Gaza Strip a chronic crisis because of corruption, its ugliest forms, in all joints of political and military, from its Prime Minister Ismail Haniyeh, who continues with his family to buy apartments and land through the military wing ” Qassam Brigades, “all the way to junior government officials who receive bribes from citizens burdened because of the Israeli blockade.

So we have NGOs and the EU claiming water and health situation in Gaza is not up to standard. We have consuming spending going through the roof. And the top politicos are on a roll.

In order to sustain this economy, three things need to happen. First, Hamas must maintain its autocracy. Second, Western taxpayers must be prepared to contribute generously, and at the expense of other important causes. Finally, the international media must continue to ignore such contradictions, just as it has failed to report on the new mall.