End of the line for the Gaza Industrial Estate

Once hailed as a fruit of the Oslo Accords and the Israel-Palestine peace process, the Gaza Industrial Estate overcame setback after setback...until now.

The 50-hectare industrial park, located to the east of Gaza City, was first hit by airstrikes in October 2023.

A report on the effects of Israeli military attacks on public health and the environment by the Dutch PAX organization included a satellite image of the Gaza Industrial Estate, dated 8 November 2023, providing evidence of buildings destroyed and others with collapsed roofs.

According to the Palestinian Investment Promotion and Industrial Estates Agency (IPIEA), the bombing caused large fires to break out in many industrial facilities, particularly those containing chemicals and highly flammable materials. It also said that the World Bank Group-funded solar energy project, which supplied all of the power to the industrial park, had lost half of its production capacity.

In late November 2023, a social media post showed short footage of the destruction of buildings at the industrial park. 

Other social media posts, including some posted by Israeli soldiers, showed extensive damage from airstrikes and Israeli ground forces using hydraulic excavators to demolish the entrance and crush a transport truck in the industrial park.

Samir Hulileh, a leading Palestinian economist and businessman and former CEO of the Palestine Development and Investment Corporation (PADICO), told Al Jazeera that, during the temporary ceasefire of 24-30 November 2023, Israeli bulldozers entered the industrial zone and destroyed everything in it. 

The UNOSAT/UNIDO satellite image confirms that, by the beginning of February 2024, the entire industrial park had been razed to the ground.

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The Karni crossing

The site of the industrial park is next to the Karni crossing point - known to Palestinians as al-Muntar - on the border with Israel in the north-central Gaza governorate. The crossing was opened in 1994 in the context of the Oslo Accords to allow Palestinian merchants to export and import goods.

In January 1996, the United States, Israel and the Palestinian Authority agreed to set up the Gaza Industrial Estate on the Gazan side of the Karni crossing. The location was selected precisely to take advantage of the Karni crossing. The idea was to attract investment, create jobs and encourage economic cooperation between Israelis and Palestinians. Importantly, for the Israelis, the production of goods for sale on the Israeli market could take place without Palestinian workers from Gaza having to cross into Israel.

The Palestine Development and Investment Corporation (PADICO), a West Bank-based Palestinian limited public shareholding company, leased land from the Palestinian Authority for fifty years. A range of donors, including the World Bank Group, USAID and the European Investment Bank, provided funding for construction and development funds.

The Gaza Industrial Estate opened in 1997 and was officially inaugurated by US President Clinton’s Commerce Secretary, William Daley, on 15 December 1998. It was the first industrial estate in Palestine, and became the gateway for exporting local products from the Gaza Strip. 

However, over the years, the industrial park’s development has been severely hampered by the ongoing conflict born of the Israeli occupation. Several times after the beginning of the Second Intifada in 2000, attacks on Israeli guards by Palestinians forced the temporary shut-down of the Karni crossing to allow for repairs and increased security measures. In 2006, the Israeli authorities closed the crossing for 100 days due to rocket fire and other security concerns.

Then, in June 2007, when Hamas took power in the Gaza Strip, Israel imposed a land, sea and air blockade, and limited the number and specified categories of people and goods allowed in and out of the enclave through the Israeli-controlled crossings. The transport terminal at the Karni crossing was closed and subsequently only small items were allowed through along a conveyor belt.

The Israelis imposed evermore restrictions and, at the end of March 2011, the crossing was shut down completely. With the closure of the Karni crossing, inputs for and exports from the Gaza Industrial Estate had to be trucked by way of the crossing point at Kerem Shalom at the southern border with Egypt.

In December 2022, the Israeli military demolished the last remaining structures of the Karni crossing, replacing it with a six metre-high “smart fence” with sensors and cameras.

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Israeli attacks on the Gaza Industrial Estate

While the Israeli economic blockade of Gaza and the demise of the Karni crossing hit the Gaza Industrial Estate hard, heavier blows were delivered as a result of periodic Israeli military attacks.

Over three weeks in December 2008 and January 2009, Israeli forces carred out airstrikes, followed by a ground invasion. Around 1,400 Gazans were killed, the vast majority of them non-combatants, and there was extensive damage to buildings and infrastructure. On a visit to Gaza shortly after a ceasefire was declared, John Holmes, the United Nations Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, told the BBC that every building in the industrial estate had been hit by shells and bulldozers. The attack shocked Palestinian entrepreneurs and investors who had supposed that US support and financing for the development of the industrial zone under the auspices of the Oslo Accords meant the area was protected. 

One factory destroyed in the attacks was Sarayo Alwadiya, which manufactured food products, including cookies, wafers, potato chips and ice cream. CEO Yaser al-Wadiya told the BBC, "We will fix whatever we can. We are not going anywhere, this is our land."

In July 2014, the Israeli military launched a seven-week assault on Gaza and inflicted significant damage on the Gaza Industrial Estate – estimated by UNCTAD to total some US$5m. 

Because of the attacks, some tenants closed their businesses and left, but others filled the void. The rebirth of the industrial park after the 2014 attacks received a massive boost in December 2016, when the Coca-Cola Company and the Palestinian National Beverage Company (NBC) jointly opened a US$20m bottling plant (See the bottling plant and other production facilities at the industrial estate in the 2018 video below).

Nehad al-Swafeeri, owner of a furniture manufacturing company, which was bombed by Israeli jets during the May 2021 conflict, told The Media Line, "We used to export our products to the West Bank and Israel, but then the factory was bombed. It was a shock to me and to more than 35 workers who lost their source of income, which supported their families."

However, al-Swafeeri said, "We managed to partially resume the work with only 30% of our capacity; hopefully, one day we will thrive and succeed to export again."

During 2022, PADICO Holding invested in the reconstruction and repair of the Gaza Industrial Estate.

By January 2023, the works were completed. Zakaria Mushtaha, a worker at the al-Swafeeri furniture company, told PADICO, "I want to continue working and earn my livelihood, and I don’t think anyone wants to be unemployed or receive insufficient handouts to support their families. We all strive for a decent life and thank the management of the Industrial Estate and factory owners for their efforts to sustain our jobs."

Manufacturing companies, investors and labour unions expressed optimism about the Gaza Industrial Estate’s contribution to Palestine’s economic development, not least the creation of desperately needed employment opportunities in Gaza. A year later, these hopes have been crushed.