Gaza's tunnel economy means fortunes built on Creme Eggs

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Bursting with exotic foodstuffs, Hassan Hasuna's brightly lit grocery store appears like a beacon on a run-down street in central Gaza City. Cadbury Creme Eggs, a rare commodity in the Middle East, take pride of place next to the till.

Only a few locals can afford to buy any of it. All of the goods on display have come through a network of smuggling tunnels from Egypt that circumvent a three-year, Israeli-led blockade that has brought Gaza's once buoyant economy to its knees. The tunnels are a critical lifeline for ordinary Gazans, enabling the passage of fresh meat, soft drinks, condiments and other non-essential goods that Israel and Egypt won't let past the borders into Gaza. Unluckily for many Palestinians, they can cost twice the price.

The blockade, designed to weaken the Islamist group Hamas, has created an almost entirely black economy that has enriched and sustained Hamas while hurting the many Palestinians who have lost their jobs and live below the poverty line, subsisting on United Nations handouts. "The Israelis are interested to keep the tunnel economy in order to create an image of us as "tunnel diggers" not a nation struggling for political rights," Palestinian economist Omar Shaban said.

He estimates that more than 20,000 Gazans are employed in the tunnel trade. "I don't need to work 20 months to buy a car. I just need to work two months in the tunnels."

At first reluctant to endorse the tunnels openly, Hamas nevertheless recognised the potential financial benefits and levied taxes on products coming through. It now charges smugglers a one-off fee of £1,900 for every site, while tunnel taxes have become ever more critical to propping up its one-party rule. "The people who own the economy own the political influence," Mr Shaban said.

The tunnels have also given rise to a new entrepreneurial class that has won legitimacy and emerged as "the engine of the economy," Mr Shaban said. They are the lucky few who can afford to dine at the flashy Roots restaurant in Gaza City or the Al Deira beach-front hotel.

Legitimate businesspeople have struggled to keep up. Fearful that Israel would boycott them in a post-siege era for engaging in the tunnel trade, they initially stood by as their influence and resources faded.

It is only recently that they have started to cross over to the other side. Faced with a choice of going under or surviving, many choose the latter. The customers may be fewer but it's much better than before, Mr Hasuna, the shopkeeper, said. "Before [the tunnels], this shop was empty. We had nothing to sell."