Surviving Gaza: Tunnels, a Fiat and 375,000 Sheets of Paper

By Mohammed Al-Shawaf, KF9 Palestine

I had heard that more than half of Gaza’s population lived under the poverty line (http://bit.ly/4mI5EU). I knew that since Hamas’ rise to power in Gaza–and its expulsion of its secular rival and the presiding party in the West Bank, Fatah–Israel had enacted a military blockade, allowing only “basic humanitarian supplies”(http://bit.ly/4lihuc) into the 25 mile coastal strip. I had even read a few articles about underground tunnels dug between Gaza and its Egyptian border which are being used to transport all “non-emergency” goods—from TVs to live sheep—into Gaza for a steep price (http://bit.ly/6rV8cx).

But before last month, all of this was just words on a page, information I knew to be true but had no point of reference for. Having lived in Palestine for over two months, I felt no closer to Gaza or understanding what life was like there than when I had read these news articles back home.

That is, until a fortuitous video conference call introduced me to Wael and Mohammad, two FATEN/Kiva clients who are the finest examples I’ve ever met of entrepreneurism: individuals who make something out of nothing.

If I had to describe Wael, I’d call him a “runner.” He drives his small Fiat around the northern areas of the Gaza Strip, selling a variety of non-edible goods like cleaning products, batteries and cosmetics to small grocery stores. He is not the only distributor in his market, but he is the only one with the versatility to sell to individuals who lack regular access to grocery stores as well as to the stores themselves.

Wael has clearly found a niche in Gaza’s economy. He began his business on a motor rickshaw two years prior, “graduating” to the Fiat a year and a half ago and dreams that in the future, he will not only have a bigger car and become a more successful “runner,” but own a shop of his own as well.

In many ways, Wael is aspiring to be a lot like Mohammad, the second client I met over videoconference. Mohammad quit his first shop as a used clothes dealer after the blockade made it impossible for him to get his merchandise from across the border. But shortly after, he began a bookstore and gift shop in Jabalia. Initially, he filled the same role in the distribution chain as Wael, selling his products to businesses as well as to individuals, but only after buying his goods from a Gaza-based wholesaler.

When he requested a loan from FATEN, he planned on purchasing a photocopier that businesses, schools and students would pay him to use. But an unlikely opportunity arrived next—in paper form.

Since the blockade, paper (white, 8 ½ X 11) has been in short supply. Just to illustrate the point, FATEN’s Operations Manager at the time, Fawz Abuhijleh, showed me a stack of office paper in the Ramallah office and explained that if possible, FATEN HQ would be sending these reams of paper to its three branches in Gaza because of their urgent need.

Mohammad was not new to buying and selling paper, Previously, he purchased 2500 sheets of paper from a Gaza wholesaler for $30-35, depending on market forces (i.e. the ease of delivery between Egypt and Gaza during that timeframe). But when he was able to make a connection with a direct supplier from Egypt, he had the opportunity to buy 2500 sheets at a below-market rate of $20. He jumped at the chance.

Mohammad purchased $3000 worth of paper and sold all of it within one month, netting an astounding 50% profit margin that Staples or Office Depot could only dream about. The paper detour was so successful in fact, that he was able to immediately turn the profit around and put a down payment on the photocopier, his latest revenue stream.

Wartime economies (and Gaza’s is characteristic of one, regardless of the cessation of fighting a year ago) are extremely vulnerable to external, political events. Even before Egypt began constructing an underground barrier last month to close Gaza’s tunnels (http://bit.ly/6nA0rg), the specter of the closure was felt by both entrepreneurs, resulting in higher prices for all goods they needed for their businesses. Mohammad, sensing a rapidly closing window, openly lobbied FATEN during our videoconference for equity investment, saying that if he could access cash immediately he could turn another 50% profit margin on white paper before the tunnels were completely shut, threatening his and many others’ livelihoods.

I cannot predict if Egypt will go through with the tunnel closure, or when Israel will end its blockade of the Gaza Strip. Although these issues are of renewed interest to me, they are still tempered with insulation–common having lived most of my life in an area where political events, even the most dramatic, have had little effect on my day-to-day life. It is yet another reason why I remain in unabashed awe of people like Wael and Mohammad.

Microfinance will not fundamentally change the lives of Palestinians living in Gaza if it is not also coupled with real and sustained political solutions. Whether Wael and Mohammad agree with me, whether you agree with me is beside the point.

Wael and Mohammad may be consistently affected by events outside of their control, but they are not held captive by them. They respond to these events with foresight, building businesses around real needs and slowly improving their economic livelihoods. They recognize that if their whole world changes tomorrow, they’ll find a way to fill the new needs of their customers because that’s what they know how to do. They are entrepreneurs trying to better themselves and their families. Wherever you stand on this issue, stand with them.

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Mohammed Al-Shawaf has completed his Kiva Fellowship with Ryada and FATEN, two new field partners based in Ramallah (Palestine).

Follow Mohammed (post-Kiva Fellowship) on Twitter @moshawaf