page_title: Gaza Strip
section_title: After Oslo (1994–2007)
hierarchical_section_title: Gaza Strip / Economy / After Oslo (1994–2007)
caption_attribution_description: English: Summary: A Gaza man working a Singer sewing machine in a backyard business. Author: Erich Habich URL: http://startrek.ehabich.info/intgaza.htm
context_page_description: The Gaza Strip, or simply Gaza, is a self-governing Palestinian territory on the eastern coast of the Mediterranean Sea, that borders Egypt on the southwest for 11 kilometers and Israel on the east and north along a 51 km border. Gaza and the West Bank are claimed by the de jure sovereign State of Palestine.
  The territories of Gaza and the West Bank are separated from each other by Israeli territory. Both fell under the jurisdiction of the Palestinian Authority, but Gaza has since June 2007 been governed by Hamas, a Palestinian fundamentalist militant Islamic organization which came to power in free elections in 2006. It has been placed under an Israeli and U.S.-led international economic and political boycott from that time onwards.
  The territory is 41 kilometers long, and from 6 to 12 kilometers wide, with a total area of 365 square kilometers. With around 1.85 million Palestinians on some 362 square kilometers, Gaza ranks as the 3rd most densely populated polity in the world. An extensive Israeli buffer zone within the Strip renders much land off-limits to Gaza's Palestinians.
context_section_description: Economic output in the Gaza Strip declined by about one-third between 1992 and 1996. This downturn was attributed to Israeli closure policies and, to a lesser extent, corruption and mismanagement by Yasser Arafat. Economic development has been hindered by Israel refusing to allow the operation of a sea harbour. A seaport was planned to be built in Gaza with help from France and The Netherlands, but the project was bombed by Israel in 2001. Israel said that the reason for bombing was that Israeli settlements were being shot at from the construction site at the harbour. As a result, international transports (both trade and aid) had to go through Israel, which was hindered by the imposition of generalized border closures. These also disrupted previously established labor and commodity market relationships between Israel and the Strip. A serious negative social effect of this downturn was the emergence of high unemployment.
  For its energy, Gaza is largely dependent on Israel either for import of electricity or fuel for its sole power plant. The Oslo Accords set limits for the Palestinian production and importation of energy. Pursuant to the Accords, the Israel Electric Corporation exclusively supplies the electricity (63% of the total consumption in 2013). The amount of electricity has consistently been limited to 120 megawatts, which is the amount Israel undertook to sell to Gaza pursuant to the Oslo Accords.
  Israel's use of comprehensive closures decreased over the next few years. In 1998, Israel implemented new policies to ease security procedures and allow somewhat freer movement of Gazan goods and labor into Israel. These changes led to three years of economic recovery in the Gaza Strip, disrupted by the outbreak of the al-Aqsa Intifada in the last quarter of 2000. Before the second Palestinian uprising in September 2000, around 25,000 workers from the Gaza Strip (about 2% of the population) worked in Israel on a daily basis.
  The Second Intifada led to a steep decline in the economy of Gaza, which was heavily reliant upon external markets. Israel—which had begun its occupation by helping Gazans to plant approximately 618,000 trees in 1968, and to improve seed selection—over the first 3-year period of the second intifada, destroyed 10 percent of Gazan agricultural land, and uprooted 226,000 trees. The population became largely dependent on humanitarian assistance, primarily from UN agencies.
  The al-Aqsa Intifada triggered tight IDF closures of the border with Israel, as well as frequent curbs on traffic in Palestinian self-rule areas, severely disrupting trade and labor movements. In 2001, and even more so in early 2002, internal turmoil and Israeli military measures led to widespread business closures and a sharp drop in GDP. Civilian infrastructure, such as the Palestine airport, was destroyed by Israel. Another major factor was a drop in income due to reduction in the number of Gazans permitted entry to work in Israel. After the Israeli withdrawal from Gaza, the flow of a limited number of workers into Israel resumed, although Israel said it would reduce or end such permits due to the victory of Hamas in the 2006 parliamentary elections.
  The Israeli settlers of Gush Katif built greenhouses and experimented with new forms of agriculture. These greenhouses provided employment for hundreds of Gazans. When Israel withdrew from the Gaza Strip in the summer of 2005, more than 3,000 (about half) of the greenhouses were purchased with $14 million raised by former World Bank president James Wolfensohn, and given to Palestinians to jump-start their economy. The rest were demolished by the departing settlers before there were offered a compensation as an inducement to leave them behind. The farming effort faltered due to limited water supply, Palestinian looting, restrictions on exports, and corruption in the Palestinian Authority. Many Palestinian companies repaired the greenhouses damaged and looted by the Palestinians after the Israeli withdrawal.
  In 2005, after the Israeli withdrawal from the Gaza Strip, Gaza businessmen env
caption: Backyard industry
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