VZCZCXRO4627
PP RUEHROV
DE RUEHJM #1155/01 1881202
ZNR UUUUU ZZH
P 071202Z JUL 09
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC PRIORITY 5360
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 0182
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 JERUSALEM 001155 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE AND NEA/IPA; PRM FOR FRONT OFFICE AND 
PRM/ANE; NSC FOR SHAPIRO/KUMAR;JOINT STAFF FOR LTG SELVA; 
DEPT PLEASE PASS TO USAID FOR ANE/MEA:MCCLOUD/BORODIN 
 
E.O. 12958: N/A 
TAGS: PREF PREL EAID PGOV PTER ECON KWBG KPAL IS
SUBJECT: GAZA CONDITIONS CONTINUE TO DETERIORATE 
 
REF: JERUSALEM 749 
 
¶1. (SBU) Summary: UN and NGO contacts report that 
socio-economic conditions in Gaza continue to deteriorate as 
legitimate imports remain limited and the private sector 
dormant.  ConGen Gaza contacts and recent visitors to Gaza 
report adequate supplies of basic commodities, including a 
glut of some staples, but rising poverty and unemployment 
rates, and sporadic electricity and water supply.  There is 
little sign of rebuilding in areas damaged in the fighting 
six months ago.  End Summary. 
 
Socio-Economic Conditions Remain Bleak 
--------------------------------------- 
 
¶2. (SBU) ConGen contacts in Gaza report that the social and 
economic situation has continued to deteriorate in the six 
months following Operation Cast Lead.  According to UN 
contacts, nearly 80 percent of Gazans are living below the 
poverty line (defined as less than USD 2 per day), and the 
unemployment rate, currently about 45 percent, continues to 
climb.  Much of the middle class, they said, is dropping down 
the socio-economic ladder into poverty.  An recent 
European-funded wage survey revealed that unskilled workers, 
when they are able to find jobs, receive NIS 20-30 (roughly 
USD 5-8) per day, down 50 percent from before the Gaza 
conflict.  (Note: Fresh meat costs around USD 15/kg, and 
cooking gas costs USD 11/canister.  End Note.)   According to 
a survey of CARE beneficiaries, food, cash and drinking water 
top the list of Gazans' greatest needs. 
 
Glut of Basic Commodities; 
Not Much Else (Affordable) 
-------------------------- 
 
¶3. (SBU) UN contacts report a slight decrease in the quantity 
of goods shipped to Gaza in June, although the scope of 
materials widened to include recreational, educational, and 
household supplies. In June, an average of 78 truckloads per 
day entered, down slightly from 86 in May and compared to 475 
truckloads per day in April 2007 (pre-Hamas takeover).  More 
than 92 percent contained food, medicines, and hygiene 
supplies. 
 
¶4. (SBU) Recent visitors to Gaza said that shops appear to be 
well stocked with food and basic consumer goods.  Gaza-based 
contacts report a glut in the market of basic commodities 
typically found in UN food aid baskets, such as flour, 
lentils, and cooking oil.  There are anecdotal reports that 
some of these commodities are being smuggled out of Gaza 
through the tunnels. 
 
¶5. (SBU) NGOs and UN agencies report that requests for 
shipments are more readily approved by the GOI's Coordinator 
for Government Activities in the Territories (COGAT), though 
they note that certain commodities that have repeatedly been 
rejected, like sweets, are no longer requested.  UNRWA 
officials reported on July 6 that they were informed that 
tea, coffee, soup and canned foods remain prohibited. 
 
¶6. (SBU) No construction materials, including glass, cement, 
and rebar, or industrial inputs, such as fabric and thread to 
make clothing, have entered Gaza for commercial use.  Some 
building materials are smuggled through the tunnels, but the 
cost makes them unattainable for most Gazans.  According to a 
PA Ministry of Finance contact, cement is reportedly selling 
for forty times the West Bank price and 160 times the 
Egyptian price. 
 
Fuel and Electricity 
-------------------- 
 
¶7. (SBU) Contacts in Gaza report that electricity cut-offs 
remain frequent, and UNRWA reports rolling blackouts between 
6-8 hours/day throughout most of Gaza.   Electricity 
shortages also affect the availability of pumped, potable 
water, and most houses have water from the mains only two or 
three times per week.  The Gaza power plant is receiving 
enough industrial diesel to produce between 50-55 MW of a 
total capacity of 80MW. 
 
¶8. (SBU) Cooking gas is entering via the official crossings, 
but in quantities that meet only one-third of the demand. 
(Note: Cooking gas is reportedly too difficult to move 
through the tunnels.  End Note.)  No diesel or gasoline has 
 
JERUSALEM 00001155  002 OF 002 
 
 
been permitted since November 2008, although sufficient 
quantities (of poor quality) are smuggled through the 
tunnels.  Gasoline is reportedly plentiful, and one-third the 
cost in Israel. 
 
Areas of Northern Gaza Still in Rubble 
--------------------------------------- 
 
¶9. (SBU) Recent visitors to Gaza reported that little to no 
progress has been made in clearing rubble from areas 
destroyed during Operation Cast Lead.  One recent visitor 
told EconOff that many Gazans whose houses were destroyed sit 
idle in makeshift tents near their former homes during the 
day, and sleep at their relatives' homes at night.  A Quartet 
Representative's Office official who accompanied Tony Blair 
into Gaza on June 15 said the vast destruction in Beit Hanoun 
and the former Erez industrial estate remained visible.  Gaza 
City, he said, was "squalid" but "bustling." Hamas security 
was fully deployed during Blair's visit and clearly 
controlled the streets, he said. 
 
WALLES