Egypt struggles to tackle smuggling tunnels
Egypt wants to solve illegal trade in Rafah tunnels but residents warn of tunnel destruction. Hamas also slams idea of destroying tunnels, creating trade free zone due to large profit it generates from illegal trade
It is hard to give an accurate estimation of the overall value of the tunnel trade, but estimations made over the past few years indicate that the value is approximately $800 million a year. This sum includes the value of products transferred to both sides, as there is a high demand in the Egyptian Rafah for Israeli products that were smuggled from Gaza.
It is not clear if the estimated figure also includes the "trade" of weapons and terrorists.
In Gaza, the tunnel owners earn a living mainly due to their taxation policies. According to estimations, the tax charged from tunnel smugglers provides some 20% of Hamas' government budget.
In negotiations between Egypt and Rafah residents, the latter made it clear that they would not allow for the destruction of the tunnels without finding an alternative source of their livelihood.
If you take into consideration that there are over 1,000 smuggling tunnels in the area, the recent reports of the destruction of 20 tunnels, in what appears to be Egypt's attempts to cleanse Sinai of terrorists, are just a publicity stunt,
Furthermore, Egypt's military would not dare touch the more significant tunnels – the one's controlled by Hamas.
Since the ouster of Egypt's former Presidet Hosni Mubarak, the option of destroying the tunnels and creating a free trade zone between Gaza and Sinai has been raised every now and then. Arab media has reported that Hamas government representatives and Egyptian officials have already begun discussing the matter.
However, there are those who question the idea of creating a trade free zone in the area. Nasser Abu Akar, Chairman of the North Sinai Chamber of Commerce said that establishing a trade free zone in Rafah should be part of an overall plan to develop northern Sinai and not just a single initiative.
Osama Salah, Egypt's Investment Minister called the idea a "populist slogan," saying that "prior to creating such an area, one must make sure that it would not harm the national economy."
Hamas officials do not seem very excited over the closure of the tunnels either, as the Gaza-ruling government profits a great deal from the taxation policies of the tunnels.
