Exclusive Report:: The Scene of Blood in Gaza

Resonant Global affects Oil, Tourism, Trade, and Gold are with Gaza

"Gaza raises oil prices"

"The War on Gaza freezes the construction of new centers in the Amman Stock Exchange"

"The crisis of the U.S. Economy is exacerbated as a result of the aggression on Gaza"


"Sweden, Denmark, Norway, and Jordan decide to cancel their purchase of fruit produced by Israeli farmers"


"The consumer confidence shrinks shopping in the Arab World"In Israel:" The level of the budget deficit has risen, the purchasing power of the NIS has weakened, and there have been heavy losses in factories and projects in areas affected by the attack on Gaza Strip"


“Much of the aid has not reached the people who deserve it most”


“The Jerusalem Post: other impacts of the military operations are long- term and may include weakening the purchase power of the NIS and rising oil prices”



Operation Cast Lead, war, holocaust, massacre, disaster. There have been so many terms used in the speeches of politicians, intellectuals, and journalists to bring the image of Gaza to the human mind. Do they believe in all of these terms as a representation of what has happened in Gaza? This is a reality that the journalists, despite their presence in the target area of the Zionists, endeavor to describe with their cameras and their pens dried by grief, pain, and death. What has happened has not yet ended. We at Al- Safeer Al- Iqtsadi try hard to highlight through description and analysis the specifics of the catastrophe in our field: the economic side of events. Who is the winner in the game of blood in Gaza and who is the loser? What is the deepest economic impact for the winner or the loser, if it can even be said that there is a winner? This is what we will explore in our observation of events in Gaza.




The oil price has a large extent from the tragedy


Oil price rises exceeding $40 a barrel due to the Israeli attack on Gaza. The war on Gaza has prompted the oil price to rise in first 13 days. Oil experts believe that the attack on Gaza, combined with other factors, has contributed to raising the price of oil to current levels of $50 a barrel. According to some economists, the Gaza strip is in the region that provides the world with a third of global production. "Outside parties like Iran has used oil as a pretext and diplomatic tool and has threatened to use it. Venezuela, the sixth largest oil producer in the world, expelled the Israeli ambassador, in a further sign that the major producers are angry. This provokes genuine concern about supplies." Arab Markets have reported that traders have been affected by the images of death and deconstruction that the media has broadcasted from Gaza at the time when analysts, experts, and specialist journalists leave the New Year holiday. This has led to the absence of accurate information needed to make decisions. However, there are those who think that the current level of pricing a barrel of oil is will not last. There are other factors such as the Russian- Ukrainian conflict over gas supplies to Europe. According to some experts, the price will not hold but this depends on the commitment of OPEC with its decision, that taken at the last WTO meeting in Algeria, to reduce production.


Crude prices rose to $50 a barrel from its lowest level on 19 December to $32.40. Traders have expected the crisis in the American Economy to be exacerbated as the aggression on Gaza continues. Oil prices keep rising and Washington continues to rely on Arab oil. According to the French-press agency this means that the continuing increase of the price of a barrel of crude oil will lead to more deterioration of the U.S. dollar versus most other currencies, particularly the Euro.



Nahariya receives Katusha and the U.S. dollar rises versus the NIS


The world was not immune from the bullets fired in Gaza. We state here the clear impact on the prices of oil, currency rates and gold. According to PNN agency, the U.S. Dollar rose against the NIS to 3.92 NIS a dollar at the moment in which the Israeli media announced the fall of Katusha rockets from southern Lebanon on Nahariya in northern Israel.




Gold as a safe haven for investors


According to Reuters, in the first week of war the price of crude oil one percentage in the early Asian trade after Israel has started its ground attack on Gaza. At the same time, the gains of oil have pushed investors into commodities. The price of gold rose to $881.75 to the immediate sale of U.S. dollar a troy ounce, up 0.9 percent from the nominal level of closure in New York, which amounted to $873.20 dollar. The prices of future gold contracts rose during the meeting in 2009 due to the rising of the value of the dollar against the yen.


The impact of war on the countries throughout the world


South Korea denied that the war on Gaza has had a powerful influence on its economy. The Korean Trade Promotion Authority (KOTRA) declared that the Korean trade in the Middle East is not strongly affected by the Israeli aggression on the Palestinian Gaza strip that began on Saturday 27 December 2008. KOTRA noted a slight impact on trade with Korea. A study by the KOTRA office in Dubai showed that there is no impact on the activity of its companies in Dubai and the Middle East as a result of the Israeli aggression on Gaza strip. However, it did have concerns for the future.


The freezing of construction of new centers in the Amman Exchange Stock has been reported by the Arab Markets. Jordanian investors have been in continual suspense with "one eye on the stock exchange screen and the other on Gaza screens" according to Jordanian newspapers. The tragedy has cast its shadow on these investors, making many of them unwilling to build new financial centers and this has negatively affected the movement of the index.

Arab Tourism is also hit by events in Gaza


Arab countries surrounding the scene of the Israeli aggression are affected differently. Lebanese and Syrian tourist industries have been affected by the military offensive in Gaza. In Egypt, there were huge declines in patronage to Egyptian restaurants during the New Year celebration. According to the Libyan tourist site, the Board members of the Chamber of issuance of tourist facilities called for immediate support for the tourism enterprises. The Council called for the preservation of human resources and employment through the government support. Official resources in the tourism sector in Ssuthern Sinai declared that the hotels in Taba and Nuweiba cities were threatened with closure because of the Israeli bombardment on Gaza Strip and the global financial crisis. It must be noted that there are very few tourists in these hotels.



Jordanian experts in the tourism sector predicted a decline in the tourist season in the Kingdom because of the repercussions of Israeli aggression on Gaza. These events are likely to change the direction and destination foreign tourists in particular. They noted that this will impact on the sector's contribution to the gross domestic product, which last year reached 14%.


According to the same source, Basim Twesi has confirmed that tourism has been directly affected by the developments in politics over the last few years. He also maintained that the tourist season in the kingdom is negatively affected by the Israeli aggression on Gaza. Twesi believes that the level of its impact on the tourist season is "unknown" because of the absence of clear vision for the war and the possibility of long-term military action.


Twesi notes that some bookings for January are already cancelled. This underlines the negative affect caused by the political events in Palestine. Jordan and Egypt are most-affected with what is happening in Gaza because of their geographical proximity to Israel, Gaza and the West Bank.


The owners of tourist offices have also confirmed that what is happening in Palestine combined with the global crisis economic recession is threatening the tourist season for the upcoming months. It was noted that the bookings of tourist offices were cancelled for January and February of this year. The head of the assembly of the Kingdom’s hotels, Fwaz Al- Hsanat, declared that the Israeli aggression on Gaza will reduce the number of coming tourists to the kingdom, and compared this to the war in 2006 which negatively affected on the tourist season in July of that year. Al- Hsanat pointed out that the numbers of tourist will reduce as the war continues and that this will lead to the weakening of the tourist season in the Kingdom this year.


As for popular Arab markets, it was reported about Arab traders in several articles have been affected with Gaza events. There seems to be an unfamiliar market slowdown at this time of public occasions and festivals. Patriotic songs and tragic scenes of martyrs and wounded, frightened, and homeless people have had a strong impact on the mood of Arab consumers and reduced levels of purchasing.


NIS 100 million daily loss for the Israeli enemy in its war on Gaza


Every day of the aggression has cost the Israeli budget millions of NIS. A Hebrew newspaper declared that the cost of summoning one soldier of the reservists force amounted to about NIS 450 a day. This does not include food and clothing, but represents only the amount of compensation of his wages. It does not also include the real cost of lost productivity in the civilian economy from the call-up reserve soldiers.


The Jerusalem Post newspaper reported that "every day of military operations in Gaza Strip cost the Israeli factories and enterprises in the zone of conflict around 4 million shekels”. The report pointed out that at the beginning of the military operation, the Home Front Command ordered the closure of projects around the perimeter of Gaza: "The Union of Manufactures" in the Zionist entity has declared that 8o factories have been affected by the closure of industrial areas near Sderot, Netivot, and Gaza Strip.

According to estimates by the Israel Bureau of Statistics, the total national production in Israel was negatively effected by the July 2006 war in Lebanon. The war had an economic affects on the producers and owners of industries on one hand, and social effects such as increasing inequality. It is predicted that this may be repeated in the offensive in Gaza.


The Haaretz newspaper quoted a senior, unnamed government official who stated that “one week of military operations used up the budget allocations from the remaining budget in 2008”. The impact of this military cost will be clearly noticed in 2009 budget. According to Haaretz, the Minister of War refused to comment on these expectations.


The Jerusalem Post stated that the other impacts of the military operations are long- term and may include weakening the purchase power of the NIS and rising oil prices.


Economists have said that the cost of the Israeli occupation during the aggression on Gaza was estimated at 100 million shekels a day. In addition, there is a talk of a decline in the level of Israeli exports and imports. According to the Central Bureau of Statistics features of crisis have started to show up in Tel Aviv and research is being done on the mechanisms for paying for the cost of war. It is not whether there will be reductions in payments to reservists called up to serve.


The Israeli newspaper Maariv has reported that financial officials in Israel have been striving to keep to the official vision. They have tried to create an image of the official data which does not deal with this issue. They said “talk concerning the economic issues will be held between the Ministry of Defense and the Ministry of Finance only when the fighting ends. Till then, we refuse to give any economic information about the war". In parallel, officers in the Ministry of Israeli Defense insisted that “the Ministry did not discuss the economic issues and the cost of the attack during the war".


The Israeli domestic economy has also been affected. The news network Wi-Net News and the newspaper Yediot Ahronot reported on 17 January 2009 that "some Scandinavian countries especially Sweden, Denmark, and Norway, as well Jordan, have decided to cancel orders of fruit produced by Israeli farmers. This will lead to serious financial losses in the agriculture sector.


The Israeli Fruit farmers Union said that there is fruit packed in warehouses which is still waiting to be exported and risks spoiling. Many of the purchase orders from Jordan have been cancelled despite of the fact that purchasing took place normally before the war.


The organization expressed its concern over a decline of fruit exports to some countries due to the increasing boycotts of its products in Europe and the Middle East.


In Palestine, the scale of destruction in Gaza is more than one can imagine

Palestine has a lot to say. If nations far from the scene of blood in Gaza have been affected economically, then what will be the situation for the victim of this aggression, Palestine? Losses are very heavy and may bring disastrous consequences. More time is needed to analyze the situation and these reports are only preliminary. It was stated in the of Palestinian Economic Council for Development and Reconstruction, PECDAR, that some areas in the Gaza Strip seems as if they have struck by an earthquake. The magnitude of devastation has reached $2 billion in costs, mostly concentrated in the destruction of civilian homes. It included the deconstruction of all the security institutions, ministries, mosques, some schools; all networks of roads, water, and sewage; the facilities of the private sector such as metal workshops, carpentry workshops, poultry farms; and severe damage in the power and telecommunications sectors. Besides all this there is the terrible cost in human lives.


The report has concluded that the loss of the security centers is about $135 million, other infrastructure about $195 million, Gaza Airport about $40 million, the headquarters of the Legislative Council about $7 million, the governorate residence about $5 million, the complex of ministries about $4o million, the Islamic University and other schools about $64 million, mosques about $2o million, the telecommunications company about $5 million, and the electricity sector about $75 million, and more. Yet, the most important thing is the destruction, partial or total of houses and their contents.


The report has confirmed that these estimates are only preliminary until the detailed and final report is done. The report has shown that the economy in the Gaza Strip is fragile and still in dire straits. The poverty rate in Gaza has reached about 80% and in some parts of the Strip more than 50% of people are unemployed. People in Gaza rely on the monthly distribution from of the Palestinian Authority of millions of shekels for income support and reconstruction funds. They also completely depend on the funds of the United Nations Relief and Works Agency, UNRWA, and what is being smuggled through the tunnels. There were over 700 tunnels before the Israeli offensive which were used to smuggle goods, livestock, and other materials.


While the PCBS has estimated the Palestinian losses in Gaza Strip will amount to around $1.9 billion. The figures depend on the average building cost per square meter and numbers of floors and level of facilities. All of these factors vary considerably due to the irregular patterns of construction in the Strip and overall calculation is difficult.



In addition, this massacre has provoked demonstrations of thousands and millions of people over the world, expressing their solidarity with Gazan men, women and children. Gaza is now paying the cost of Arab Global defeatism and silence on crimes that have been committed against humanity. The whole world expects that the Arabs will stand firmly to stop the events in Gaza. The whole world has expected that the Arab leaders will use the leverage of oil to put pressure on the Israeli state. This has not happned. While foreigners have responded, the Arab leaders have not. The Venezuelan leader Chavez and the Turkish leader Erdogan have hastened to support Gaza while the Arabs have kept repeating their familiar weeping symphony, and half-hearted promises to talk of an agreement to fund rebuilding. Oil prices have increased at the same time that the West fears the use of oil as a diplomatic weapon.


Arab oil-expert Prof Anas Bin Faysal Al-Haji, who is a resident of USA, has pointed out the significance of the timing of the events “While most of the analysts and journalists have been on long vacations, Oil trade electronic markets have kept working. Therefore, the basic information has been absent from the market that has affected with the images of destruction and killing. These images have come from the Middle East that produces one third of the global product of oil. The prices have affected and increased to $50 consequently". He has added that" the Iranian talk about using oil as a tool of pressure in its opposed stance to the war on Gaza has influenced global consumers and the traders". He has also said that "there are other factors including the influential Ukrainian- Russian dispute, and the halting of gas supplies to the Europe markets. Thus, the oil demand has increased to use it as a substitute winter fuel". “As prices decrease again and the journalists and analysts return to their work, the traders will have the necessary information that enables them to take selling and purchasing decisions. However they have refused to give price predictions because the market is open and many options are affected with by other factors". Al-Haji has also stated that "the Iranian threats have not been translated into action. The Arabs too will never adopt any decision on supplies as a response to the aggression on Gaza".


Al-Safeer Al-Iqtsadi has questioned Palestinian economists on this issue. Each economist interviewed has analyzed it from his own point of view:


Prof Majeed Mansor

Prof Mansor believes that international political commotion often leads to decreases in oil pumping and that this concern leads to rising oil prices.


Prof Maarof Dwekat

Prof Dwekat has said that "the indirect reason, in my point of view, is that the world has expected the Arab countries to adopt a firm decision because of the events in Gaza – reducing production and exporting. There is an expectation that prices will then rise. Yet, this is what the Arabs never do".


Prof Sulaiyman Abbadi

Prof Abbadi has denied that the Gaza war could be the primary factor. He has said that there are other problems which have led to rising oil prices in the world. Seasonal problems increase demand on petrol in winter and thus prices will rise. Decreasing the OPEC products several times has led to demand diminution and prices rising. In addition to this is the Israeli attack on Gaza. Global events affect markets, petrol in particular. The strategic location of the events is important. 60% of oil going to the US and Europe passes through the Suez Canal which is close to Gaza and the Israeli border. He added that "the Arab countries have witnessed disturbances and demonstrations concerning Gaza events. This has also affected oil prices”.


Prof Basim Mkahol

The relationship between Gaza and oil price is indirect. The Gaza crisis could have an influence on oil-producing countries. There is a possibility that the Gulf countries would threaten economic boycott and stop exporting oil. This will increase the risks of the oil supply decrease in the world. Even the possibility creates a concussion in the market.


Pros Nafeth Abu Baker

Prof Abu Baker believes that Gaza is not the primary reason for oil prices rising. Price rises have happened due to simple speculations. Gaza has been just one of these speculations.


Using Gaza to raise oil prices

According to the oil expert Hjaj Bu Khader, geopolitical reasons play a very important role in increasing oil prices. He has argued that "all of the producers are benefiting from this price increase. Israel also benefits from what has happened because it wants to hide its financial shortage and economic situation that affected by the global financial crisis. It will demand urgent aid from Europe and the US.





Aid to Gaza?



Morality not statistics


Despite the inevitability of aid to the devastated Gaza strip, we ask where will this aid go? What is the mechanism of its distribution? Does aid reach the correct recipients? We have received complaints from Gaza concerning this issue. There is a perception of an ugly commercial exploitation of people in Gaza. Some parties sell humanitarian aid to families despite of its supposed gratuity. It is even sold at inflated levels according to some citizens. One citizen (A.M) has told Al-Safeer Al-Iqtsadi investigator in a telephone interview that "I went out to buy some necessaries for home. I saw some materials in packages marked as donations from the Saudi government. I returned it reading that”. One citizen (A.H) has told this paper that "aid is being distributed by some parties according to particular standards. Much of the aid has not reached the people who deserve it most. None of this aid has reached the region where I live".


It is clear that some people are always able to exploit the political cost of war for their own economic benefit. War can always be used for personal gain and for those working in the international economy.


This is no consolation for Palestine and its people who groan under the scourges of poverty, unemployment, killings, and siege. We are the ones who call loudest for the boycott of Israeli products. Who is the enemy? Has the war on Gaza revealed that there is more than one enemy facing our people? Who we are supposed to boycott and who do we ignore? Are those who give the green light for aggression not an enemy? Are those who supply Israel with the fuel and hardware not an enemy? Are those who speak and not act not an enemy?

This has been A Al Safeer Newspaper Investigation Report