Who profits from keeping Gaza on the brink of humanitarian catastrophe?

Keeping Gaza on the verge of collapse keeps international humanitarian aid money flowing to exactly where it benefits Israeli interests.

By Shir Hever

Palestinians in the southern Gaza city of Rafah receive monthly food rations from an UNRWA distribution center, January 23, 2017. (Abed Rahim Khatib/ Flash90)
Palestinians in the southern Gaza city of Rafah receive monthly food rations from an UNRWA distribution center, January 23, 2017. (Abed Rahim Khatib/ Flash90)

“The Gaza Strip is on the brink of a humanitarian crisis.” Sound familiar? We’ve been hearing about the imminent collapse of Gaza’s drinking water, sewage, health, and electricity systems since the outbreak of the Second Intifada 18 years ago.

In their book “The One State Condition,” Ariella Azoulay and Adi Ophir attempt to answer the question, what interest does Israel have in keeping Gaza on the verge of collapse? Their answer remains valid even after fifteen years: keeping the Palestinians perpetually on the brink is proof of Israel’s conclusive victory. The Palestinians cannot take their lives as given, for Israel can take their lives at any time. This is the basis of Israel’s relation of clear relation of dominance over the Palestinians.

But while this answer is true, it is not sufficient. There is also an economic answer.  As long as Gaza remains on the brink of collapse, international donors keep the flow of humanitarian aid money going. If the crisis were ended and the siege lifted, it is safe to assume that that the international donors would change the type of aid they provide and return to focus on the development of the Gazan economy (as they did from 1994—2000, until the outbreak of the Second Intifada). This type of aid would likely compete with certain branches of Israeli companies and therefore threaten the Israeli economy. Keeping Gaza on the verge of collapse keeps international humanitarian aid money flowing exactly to where it benefits Israeli interests.

In light of the growing strength of the populist right, which portrays Palestinians as total enemies of the state of Israel, we must ask why the Israeli government has refused its second opportunity to exit the situation of “the brink” — to prompt an even worse humanitarian crisis, and cause mass death in Gaza and in the occupied territory more generally. Despite the ever-deepening national hatred for the Palestinians, the Israeli government has clearly acted to prevent this kind of scenario, allowing emergency deliveries of medicine and desalination machines (internationally funded) to prevent mass death in Gaza. But why?

Despite numerous protests from the Palestinian side, the Paris Agreements signed in 1994 continue to constitute the framework for the main economic agreements between Israel and the Palestinian Authority, including the Gaza Strip. Israel controls the customs regime, thus there is no import duty on goods imported from Israel to the occupied territories, while there is on goods imported from abroad.

International aid organizations are required to provide humanitarian aid in the most efficient way possible. They must purchase the cheapest food available to aid the greatest number of people within their budget. Though food is cheaper in Jordan and Egypt, food imports from Jordan and Egypt to the occupied Palestinian territory are taxed. The taxes, in principle, go to the PA coffers, but this cannot be a consideration for the aid organizations. Instead, they are required to purchase most of the goods they distribute from Israeli companies, unless importation from another country, including import taxes, will still be cheaper than the price in Israel.

Additionally, Israeli security regulations require aid organizations to use Israeli transportation companies and vehicles, since Palestinian companies are not allowed to enter Israel to pick up goods from airports or sea-ports. Even more significant is the fact that the Palestinians do not have their own currency or central bank: financial assistance must be given in New Israeli Shekels. The foreign currency remains in the Bank of Israel, and Israeli commercial banks collect numerous service charges along the way.

What this means, in fact, is that Israel exports the occupation: as long as the international community is willing to contribute financially to prevent a humanitarian crisis in Gaza, Israeli companies continue to supply them with goods and services and receive payment in foreign currency.

Palestinian refugees collect aid parcels at a United Nations food distribution centre in Rafah in the southern Gaza Strip on January 21, 2018. (Abed Rahim Khatib/ Flash90)
Palestinian refugees collect aid parcels at a United Nations food distribution centre in Rafah in the southern Gaza Strip on January 21, 2018. (Abed Rahim Khatib/ Flash90)

In a study I conducted for the Palestinian organization Aid Watch in 2015, I observed the correlation between international aid, on the one hand, and the trade deficit in goods and services between the Palestinian and Israeli economies, on the other. The data for the study was from 2000-2013. I found that some 78 percent of aid to the Palestinians found its way to the Israeli economy. This is a rough estimate, to be sure. And we need to remember that this isn’t simply clean profit for Israel companies but revenue. The Israeli companies need to provide goods and services for the money and bear the costs of production.

In light of these figures, it’s easy to understand the gap between the government’s populist declarations against the Palestinians and the steps it quietly but consistently takes to increase international humanitarian aid to the Palestinians. During an emergency meeting of contributing countries in January, Regional Cooperation Minister Tzahi Hanegbi presented a billion-dollar plan to rebuild the Gaza Strip — foreign funded, of course. Transportation Minister Yisrael Katz’s plan to build an artificial island off the Gaza coast also suggested that foreign funders bear some of the cost of the occupation, bringing foreign cash into Israeli coffers, and, at the same time, preventing the situation in Gaza from deteriorating to the point of no-return.

The picture I’ve presented here is not new. It is clear to the contributing countries, the international aid organizations, the Israeli army, and the Israeli government. It is, of course, clear to the Palestinians, who need the aid but who also understand that it makes the work of occupation easier for the Israeli authorities.

However, there is also a serious problem with this picture. It presupposes the existence of a state called “the brink” of humanitarian crisis and generates endless discussion of whether the current state of affairs constitutes a crisis or not. But when exactly do the economic conditions in Gaza constitute a humanitarian crisis? How many people need to die before the siege is lifted to avoid reaching the point, beyond which mass starvation, disease and the disintegration of the social fabric cannot be stopped?

The most important recent aid initiative to move beyond this situation is the flotilla initiative. The flotillas provide aid to Palestinians in coordination with Gaza residents’ specific demands for goods that are not permitted to cross through Kerem Shalom. Without using Israeli currency and without paying customs duties to the Israeli treasury, the boats attempt to provide the aid directly, without a middle-man. Unsurprisingly, the Israeli response has been violent – the army killed nine activists on the Mavi Marmara ship in May 2010.

But what would the Israeli government do if the major international aid organizations adopted a similar mode of action to supply the Palestinians with aid directly, without using Israeli companies and without paying taxes to the Israeli authorities? This strategy would expose the economic interest Israel has in keeping Gaza on “the brink” and would force the Israeli government to choose: take direct control over the lives of the Palestinians and pay the costs involved, or allow the international humanitarian organizations to supply aid under the conditions of their choosing, therefore helping the Palestinians out of the crisis.

This would not abrogate Israel’s responsibility for the Palestinians — which is delineated by international law — but it would eliminate Israel’s financial incentive to maintain the occupation and the siege of Gaza.

Shir Hever is an economic researcher and journalist living in Heidelberg, Germany. His latest book, The Privatisation of Israeli Security, was published by Pluto Press in 2017. A version of this article first appeared in Hebrew at Local Call. Read it here.

17 responses to “Who profits from keeping Gaza on the brink of humanitarian catastrophe?”

  1. Bruce Gould says:

    Who Profits?


    Who Profits is dedicated to exposing the commercial involvement of companies in the continuing Israeli control over Palestinian and Syrian land. The project publishes information about these companies, produces in-depth reports and serves as an information center

  2. Ben says:

    Pepper Wingate, you simply confirm Shir Hever’s point. Requirements of international law have never moved Israel to do anything whatsoever. Your “sewerage plant” is merely what Israel calculates it needs to do at the moment to maintain “the brink” and its profitability. Go back and reread Shir Hever. You add absolutely nothing but a case in point backing his argument.

    Jeffrey Wilens, your “until Gaza surrenders” rhetoric and your “peace” rhetoric is bizarrely divorced from reality, is, to anyone who know what is actually going, on a cynical reversal of reality, but is nothing new, the same tired stuff. But you shouldn’t have made yourself so obvious, openly defining ending the occupation as “destroying Israel.” Wow.

  3. Michael Davison says:

    The main beneficiary is Hamas.

  4. Lewis from Afula says:

    Answer to the Title Question:
    The same people who keep ALL Arab countries (except the Petrodollar Gulf ones) impoverished, enmiserated, chaotic and run by military dictators or extreme religious loons.
    ie THe Arabs themselves.

    • Ben says:

      Go back and reread the title question. Your pronouncement is illogical to the point of incoherence. A crude non sequitur. Once you realize that you’ll realize that your comment is reduced to pure reflexive racism. But what’s new?

  5. Beruce Gould says:

    “How Israel Went From Helping Create Hamas To Bombing It”


    That it’s sworn to destroy Israel? That it’s a terrorist group, proscribed both by the United States and the European Union? That it rules Gaza with an iron fist? That it’s killed hundreds of innocent Israelis with rocket, mortar, and suicide attacks?…But did you also know that Hamas — which is an Arabic acronym for “Islamic Resistance Movement” — would probably not exist today were it not for the Jewish state? That the Israelis helped turn a bunch of fringe Palestinian Islamists in the late 1970s into one of the world’s most notorious militant groups? That Hamas is blowback?

    • David says:


      On 16 June 2009, after meeting with former U.S. President Jimmy Carter, Ismail Haniya, prime minister of Hamas’s Gaza Strip government, announced that “If there is a real plan to resolve the Palestinian question on the basis of the creation of a Palestinian state within the borders of June 4, 1967 [i.e. 22% of historic Palestine as per 1949 armistice agreements] and with full sovereignty, we are in favour of it.”

      “‘We accept a Palestinian state on the borders of 1967, with Jerusalem as its capital, the release of Palestinian prisoners, and the resolution of the issue of refugees,’ Haniyeh said, referring to the year of Middle East war in which Israel captured East Jerusalem and the Palestinian territories. ” (Haaretz, December 1, 2010)

      In its revised Charter, April, 2017, Hamas again agreed to a Palestinian state based on the 4 June 1967 borders. Unfortunately, but not surprisingly, Israel promptly rejected the Hamas overture instead of using it to open a dialogue.

      The International Committee of the Red Cross: “The whole of Gaza’s civilian population is being punished for acts for which they bear no responsibility. The closure therefore constitutes a collective punishment imposed in clear violation of Israel’s obligations under international humanitarian law. The Fourth Geneva Convention of 1949, ratified by Israel, bans collective punishment of a civilian population.”

  6. Ben says:

    @Ido Geller: I think you find Shir Hever’s analysis a mystery to yourself because you completely miss it’s main point, and you miss it because it’s economic, “follow the money” analysis upends every smug, comfortable “everybody knows” piece of disinformation you’ve been fed over many years and in which the Israeli right wing wraps itself like a cocoon.

    You can find other many other insightful things Shir Hever has written and spoken out there, just search his name on You Tube, but here’s just one for starters:

    The Origins of the Israel-Palestine Conflict | With Dr. Shir Hever

  7. Ben says:

    Wingate, Geller & Wilens, your root assumptions need examining. “The Jewish people” do not own some proprietary right to not be lectured to on issues of morality. Or to immunity from prosecution. Where did you pick up that lazy, self-inoculating, and at bottom racist-supremacist assumption? A corollary to that: Israel does not in the first place equate with “the Jewish people,” and Israel in any case also does not have some proprietary right to go unchallenged morally. Sub-corollary: Wilens is not the Jewish people’s representative on Earth. Wilens appears to have the world divided into “you Dutch, you Arab, you Muslim, me Jew….” He should ply his venomous poison elsewhere. +972 Magazine intelligently and with great integrity defends human rights for all and provides much better solutions to these problems.

    • Ido Geller says:

      I never said anything about morality, I pointed out the lies and inaccuracies in the article and how the writer (and you) completely ignore the Palestinian side and their actions, the actual cause for Israel’s response.
      Why do you ignore the fact that Hamas are obviously the ones who benefit from the situation in Gaza ? both financially and politically ? are you even aware of the fact that they steal the funds and equipment meant to rebuild Gaza ?
      Why do you ignore the fact that the Palestinians (especially Hamas) don’t see Israel’s existence as acceptable ? they are not hiding this, it’s literally in their organization’s declared goals.

      • Bruce Gould says:

        @Ido Geller: Yes, Hamas is corrupt, the PLO is phenomenally corrupt – it wouldn’t shock me to find out that there’s still some Swiss bank account with Yasser Arafat’s name on it. But the Israeli corruption is on a much larger scale – they’ve succeeded in getting the international community to pay for its occupation – and the consequences of the Israeli corruption is worse because they have all the power.

      • Ben says:

        Ah, but you did, Mr. Geller, you did say something about morality. Wilens said something explicitly about morality and you said it implicitly. Each of your sentences is a distortion or a lie wrapped in misinformation wrapped in self-righteousness, false history built on a false moral high ground. Shir Hever speaks no lies and no inaccuracies. You haven’t countered a single thing Hever writes.

        I don’t ignore how Hamas benefits but I also don’t ignore how right wing Israel benefits. The truth is that Netanyahu loves the Hamas, knows that the Israelis created Hamas in order to divide and conquer the Palestinians, and only wants to keep the flame that is Hamas versus PA at a manageable slow burn. Not too much, not too little. Israel cynically manipulates the situation in Gaza and the West Bank like a burner on a stove. It reserves its greatest hatred and vituperation for the very Palestinians who at this stage in the conflict and for many years now do see Israel’s existence as acceptable and have declared it. Netanyahu and Lieberman are far more vicious and deceitful about Abbas and the PA than about the Hamas. The last thing Netahyahu and Lieberman want to face is moderate Palestinians. Moderate Palestinians are their worst nightmare. Netanyahu cynically manipulates you too.

        By the way I agree with everything Bruce Gould says. But also consider that in this age of Olmert, Bibi, Sara, Milchan, Ganor, Filber, Elovitch, Hefetz et al.. who among you would be shocked to find Cayman Island accounts in Bibi’s or related crony’s name? This is therefore part of the moral posing that goes on: “Look at those corrupt Palestinian leaders (and keep looking at them so as to distract your gaze from the Palestinian persons on the ground in places like Nabi Saleh) while we Israelis are so different, so righteous….”

        So yes, you did say quite a lot about morality, Mr. Geller. You said it implicitly while striking a pose. It is truthful analysts like Shir Hever who puncture the pose by examining the economics underlying the whole deceitful enterprise. So, yes, let’s look at the economics of corruption, let’s look at all of it.

  8. Ben says:

    Geller: “resolution passed by Arab countries who basically criticize Israel’s efforts to defend itself.”

    The fact is that the world operates a blatant double standard in Israel’s favor:

    Israel does not shoot Gazan fishermen in cold blood to defend itself. It did not shoot Ahed Tamimi’s cousin in the head and then lie about it being a bicycle accident to defend itself. It is not occupying Ariel to defend itself. It is not ruthlessly committing slow ethnic cleansing, whatever it can get away with at any moment, to defend itself. It is not brutalizing the Palestinians day in day out, night in night out, to defend itself. It is doing these things to defend its illegal occupation and dispossession of others. It is doing these things to squelch even the slightest non-violent protest movement, because it prefers things on its own violent terms. The ugly truth is that Israel wants violence, it abhors peaceful protest and it only listens to violence.

    It does all these things in fact to defend Jeffrey Wilens’ explicit/implicit proposition that Israel can do whatever it wants, with impunity, because no one under any circumstances ever has any “right to lecture the Jewish people on morality.”

  9. Carl Zaisser says:

    So, to get your proposal off the ground, aid companies working for countries supplying aid would have to get on board, so to speak, with the attitude of defying Israel. To defy Israel, countries themselves would have to be ready to take a stand. The US would never defy Israel like this, and many European countries would have to do some serious soul searching to make a break with their appeasement of Israel. If that happened, the next step would be to come to terms with what would happen when the ships came into Gazan waters and were stopped by Israel. Enough ships would create a problem for Israel, but one or two at a time might allow it to continue apprehending international ships just as it has been doing, claiming it has a right to self-defense, always supported by the US. It is an interesting idea to expose an economic regime clearly explicated in this article. Perhaps the current flotilla groups themselves could join a lobby organization with the goal to convince European governments to make this transition.

  10. Kitty Hoffman says:

    Gaza shares a border with Egypt.