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Business Owners Suffer from Car Glut in Gaza

It's a small region -- and car dealers in Gaza are complaining that the market is becoming glutted.
By Chana Ya'ar
First Publish: 12/7/2011, 3:03 PM

Kerem Shalom
Kerem Shalom
Flash 90

Car dealers in Gaza say they are facing a tough economy with competition from smugglers who build and staff the hundreds of tunnels maintained by the region's Hamas terrorist rulers.

They are also complaining about a 50 percent import tax imposed by the Palestinian Authority, which also narrows their profit margins even further, according to a report published in the Arabic-language Palestine News Today.

About 40 cars a week are brought in to Gaza through the Kerem Shalom land crossing, according to the report. Dealers have had to lower their prices between $2,000 to $8,000, depending on model and type due to the saturation in the sector.

Ismail Bran, chairman of the Car Dealers Association of Gaza, pointed to the Mercedes as a good example of what is happening. "Estimated at $65,000, a dealer is fortunate to be able to sell a Mercedes at $60,000 under the current circumstances," he said.

Bran also complained about the fact that cars being imported by Gaza dealers through Israel sometimes sit in the port for more than a year. "An estimated 3,000 cars are sitting there" from model year 2008 and above, he said, with a total estimated value of $45 million. "The Ramallah government imposes customs of up to 50 percent" in order for Gaza dealers to import them.

An additional customs duty of 25 percent was imposed by the Hamas government but later nullified. "It was impossible for them to take advantage of these circumstances; the traders reached an agreement with the government after great effort," Bran explained.

Life is clearly getting better for residents of the region; unemployment rates have decreased to their lowest levels in at least ten years, and exports have expanded.

Construction projects are on the rise with more housing, medical clinics and schools being built as well.

Nevertheless, international aid organizations and especially some foreign governments insist on continuing the fantasy that Gaza is in a humanitarian crisis, primarily as a vehicle for their own political purposes.

The proposed Hamas budget for fiscal 2012 stands at $769 million, according to a report published Monday in the Al-Rai newspaper.

The figure represents a $139 million increase over 2010, including a 25 percent increase in salaries, with raises for advancement and back pay. Taxes raised within the region are expected to account for $174 million.