Wednesday, February 10, 2010

An important reality check from Gaza.

“When you compare the US economy with ours and see how dependent we have become on the tunnels, I assure you that our scandal is much worse than Madoff.”

-- Omar Shaban, director of Pal-Think, an economic research institute in Gaza City, comparing the collapse of investments related to Gaza’s tunnel system to New York financier Bernard Madoff’s USD 65-billion Ponzi scheme. Some 4,000 Gazans who gave cash to middlemen and tunnel operators in 2008 as Israel blocked the overland passage of goods lost as much as USD 500 million after Israeli warplanes bombed the tunnels before and during the Dec. 27 to Jan. 18 Gaza offensive and the investments collapsed, Bloomberg reports. Now investors want their money back from Hamas, which runs Gaza. Hamas Economics Minister Ziad Zaza says about 200 people were taken into custody in connection with the tunnel investments; most have been released. Hamas is offering a partial repayment of 16.5 cents on the dollar using money recovered from Ihab al-Kurd, the biggest tunnel operator. The imbroglio over the 800 to 1,000 tunnels has deepened Hamas’s decline in public opinion in Gaza and highlights the Wild West nature of the underground economy that supports this jammed enclave of 1.4 million people. Top Hamas leader Ismail Haniya has not commented publicly on the losses to tunnel investors. “There is no transparency, no public records, no regulators, none of the mechanisms that would let you trace what happened to all the money that people invested in the tunnels,” Samir Abdullah, the Palestinian Authority’s former planning minister, told the news agency. “The smugglers provide essential revenue for Hamas.”

Global Development Briefing -- Tunnel Vision
This is from Devex's regular emails about events in the development field...they always have a thought-provoking quote.

No comments:

Post a Comment