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Cablegate: Living Conditions in Gaza Continue to Decline

VZCZCXYZ0027
OO RUEHWEB

DE RUEHJM #3439/01 2191354
ZNR UUUUU ZZH
O 071354Z AUG 06
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4030
INFO RUEHXK/ARAB ISRAELI COLLECTIVE IMMEDIATE
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS JERUSALEM 003439

SIPDIS

SENSITIVE
SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR WILLIAMS/WATERS/WAECHTER;
PRM FOR PDAS GREENE AND PRM/ANE; NSC FOR
ABRAMS/DORAN/LOGERFO; TREASURY FOR NUGENT/ADKINS

E.O. 12958: N/A
TAGS: PHUM ECON EAID PREL KWBG IS
SUBJECT: LIVING CONDITIONS IN GAZA CONTINUE TO DECLINE

REF: A. JERUSALEM 2611

B. JERUSALEM 2201
C. JERUSALEM 2068

1. (SBU) Summary: Anecdotal reports collected by ConGen FSN
and USAID staff resident in Gaza indicate that living
conditions in Gaza continue to decline. Electricity and
water are in short supply, in addition to food, fuel, credit
and overall economic opportunity. Electricity imports from
Israel only meet 50 percent of demand, and Gaza water pumps
are delivering reduced levels of water to residents. Fuel
shortages have forced most professionals in Gaza to downgrade
from private cars to public buses and/or walking. The
unemployment rate hovers at 45 percent, as private industry
continues to cut work hours and lay off employees. End
Summary.

-------------------------------
ELECTRICITY AND WATER SHORTAGES
-------------------------------

2. (SBU) The Israeli bombing of the transformers of the Gaza
power plant on June 28 resulted in major electrical shortages
throughout the entire Gaza Strip, since the power plant had
produced half of Gaza,s electricity supply. According to
USAID Gaza-based staff, the Gaza Electricity Distribution
Company is forced to rotate available electricity, imported
from the Israeli Electric Company (IEC), in six to eight hour
intervals. Each zone gets six to eight hours of electricity
followed by roughly six to eight hours of black-out.

3. (SBU) The lack of electricity to power water pumps has
caused problems in the distribution of water. Due to the
difficulty synchronizing water and electricity schedules, the
average water availability is two or three hours of water per
day.

---------------------------
LIMITED PRODUCT AVAILABILITY,
LACK OF REFRIGERATION
AND A RISE IN PRICES
---------------------------

4. (SBU) Frequent closure of the Karni/al-Mintar commercial
crossing into Gaza has greatly reduced the amount of food
products on store shelves and in markets, according to USAID
Gaza-based staff (see ref B). The lack of electricity makes
dependable refrigeration impossible. Flour, rice and sugar
are available on the market. Current private sector stocks
of flour amount to less than one week's consumption; rice,
sugar, and cooking oil stocks in the private sector are
sufficient for three weeks' consumption. According to an
August 3, 2006 statement by UN agencies, the World Food
Program reported that flour and sugar prices have risen 15
and 33 percent, respectively, since January 2006.

5. (SBU) Due to crossing closures and insufficient
electricity and water supply, there is a severe supply
shortage of both imported and local fresh foods in the
marketplace. Locally-produced watermelons and apples are the
only fruits readily available, according to USAID Gaza-based
staff. Supplies of fresh fish are sparse due to IDF
restrictions on fishing (see ref C). In general, the
population has stopped consuming milk, cheese, and meat -
products that require refrigeration. Gazans are buying
mostly canned and dry goods and small amounts of fresh
vegetables.

6. (SBU) USAID Gaza-based staff report that product prices
have risen over the last month. Fresh vegetable prices have
risen 150 percent and fruit prices have doubled since June 28
as a result of a lack of water for agricultural use, the
destruction and subsequent looting of greenhouse facilities,
and the increased demand in the market for staple foods.
Prices of canned goods have also risen slightly in the last
month.

------------------------------
DEVASTATING EFFECT ON INDUSTRY
------------------------------

7. (SBU) USAID staff report that the private sector lacks
sufficient supplies due to frequent closures of
Karni/al-Mintar commercial crossing. Israeli officials have
also denied entry for certain products including asphalt and
cement. Many construction and renovation projects have been
discontinued. Many stores have reduced by half their
employees' working hours in order to keep them on the
payroll. Since April, job announcements in newspapers for
the construction field have dropped to zero. Since June,
several local construction companies have reported that they
are making plans to leave the area to go to the Gulf, Egypt
and Jordan (see ref A).

8. (SBU) The Palestinian Central Bureau of Statistics
reported the unemployment rate at the end of March at 40
percent. USAID staff estimate the unemployment rate now to
be closer to 45 percent. These unemployment estimates do not
reflect the economic impact of the non-payment of salaries to
government employees or the reduction in the number of hours
(and salaries) to those in the private sector.

------------------------
MORE WALKERS AND BEGGARS
------------------------

9. (SBU) Fuel prices are fixed by the PA and no price
increases have been reported, despite severe fuel shortages.
Taxi fares have increased by 25 percent since May due to
limited gasoline supply. USAID Gaza-based staff report that
fewer cars are on the street now than two months ago. In
general, Gazans who used to drive their own vehicles are now
taking public transportation, and those who took public
transportation are now walking.

10. (SBU) USAID staff in Gaza estimate an increase in the
number of beggars since May, with many of the women veiling
themselves to make it difficult for people to recognize them.
Almost two-thirds of Gaza's residents depend upon food
assistance, either from UNRWA or the WFP.
WALLES

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