Destroyed tunnel in Gaza
Photo: Reuters

Gazans lost big with tunnel investments

Destruction of smuggling tunnels by IDF in Operation Cast Lead left many Strip residents at a loss after investing sums of money in industry. Hamas officials claim unaware, say investment 'against Islamic law'

Since the end of Operation Cast Lead, and the destruction of many of smuggling tunnels in Rafah, many of the small investors in the Strip have realized that they have fallen victim to a bad investment at best, and a "major scam" at worst, according to one of the investors.


The tunnel industry has thrived since Hamas took over the Gaza Strip in the summer of 2007, as a means to raise funds from the public in exchange for handsome profits. These investors were promised that their money was safe and the profits would be large.


According to testimonies heard in the Strip in recent days, an unknown number of brokers convinced small investors to invest in the tunnel industry for the profit of several hundreds of dollars per month.


Small investors were swayed into putting their money into the tunnels and the trend passed from mouth to ear and from one person to another.


At the start of the fighting the middlemen disappeared, along with the investors' money. A 49-year-old Gazan vegetable vendor Omar Abdullah said he was persuaded into investing in the tunnels and sold some of his property in exchange for some $56,000 to be put to this purpose.


In the months prior to the war, Abdullah received $3,000 per month for his investment, but, since the fighting broke out, the investor has not seen any revenues and fears his investment went down the drain.


"I went to my broker, who is a friend of mine, and he told me that he had the same problem. What can we do now?" the desperate vendor wondered.

'What can we do now?' Tunnel in Gaza (Photo: Reuters)


Abdullah is one of thousands of small investors in Gaza who were tempted to put their money into the tunnel business. The Hamas government turned a blind eye to the trend since it was making good use of the income toward tunnels.


But now, at least on the surface of things, Hamas is showing much determination in tackling the trend. In recent days, rumors spread throughout the Strip that local police arrested a broker who collected an almost fictional-sounding amount of money - $480 million dollars – in investments.


Official sources in the Strip provided no details on the arrest, but unofficial reports said the amount collected by the broker in question was much lower.


Hamas Finance Minister Ziyad Thatha commented on the affair saying, "A number of investors collected millions of dollars in a way that is against sharia (Islamic law) and we will operate against them."


The Hamas Interior Ministry has decided to appoint a committee to look into where the funds have gone.


Despite such statements from the Hamas leadership, many residents of the Strip believe Prime Minister Ismail Haniyeh's aides were well aware of the fact that laymen's money was being collected and put towards the tunnel industry, and are now denying all knowledge of it.


Walid, a resident of the Strip, said he raised some $50,000 from his friends and family to invest in the tunnels.


Walid refrained from criticizing the Hamas government, but said, "After the war it became clear that we had fallen victims to a major scam. The investor disappeared, taking all the money with him, and now all my friends are chasing after me wanting to know where their money is."


Doron Peskin is head of research at Info-Prod Research (Middle East) Ltd


פרסום ראשון: 02.20.09, 08:48
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