New Developments in the Gaza Economy: The Impact of the Blockade
p. xxxvii
[...] Gaza’s Tunnels: Formalizing the Informal Economy and Other Distortions
A critical economic development in the Strip since the second edition of this book was published in 2001 is unquestionably the phenomenal (but short-lived) growth of the “tunnel economy.” Tunnels burrowing under the Gaza-Egypt border have existed since the 1980s, but in the space of a few years they mushroomed from a few dozen to about 500 by the eve of OCL; by 2012, estimates reached as high as 1,100—1,200 tunnels (of which anywhere from 200 to 600 were believed operational)."’ Such growth is a direct consequence of the blockade and has taken place largely at the expense of the formal private sector discussed above. Already by 2008, the World Bank was reporting a redistribution of wealth from the formal private sector toward informal black market operators.” By the end of that year, the massive destruction wrought by Israel’s OCL provided a further push to the tunnel economy, as the massive reconstruction required materials barred entry by the blockade.