Idgit Watch

Gaza tunnel scam leaves investors ruined; Hamas blamed

Posted by danishova on June 8, 2009

This gives new meaning to the phrase “underground economy”:


Khalil Hamra/AP


Guardian U.K. reports from the Muslim World:

For years, a network of underground smugglers’ routes from Egypt to the Gaza Strip has supplied a besieged population with everything from cement to cattle. But now a series of major scams has destroyed the dreams of desperate investors who saw the tunnels as a path out of poverty.

Jawad Tawfiq, a 52-year-old Gazan actor and director, was dubious at first, but his nephew insisted. If they could scrape together enough money, the nephew said, large profits could be made from investing in the tunnels that snake beneath the Egyptian border.

"They were liars," Tawfiq said bitterly last week. "They took my money to put in their own pockets. And we are being offered a fraction of what we gave them."

At first the tunnels emerged as smuggling routes; then they became the vital lifeline for a Gaza under economic siege by Israel. But many people who invested in the tunnels now see them quite differently – as a source of ruination.

The tunnel schemes were advertised as opportunities for doubling and trebling money by unscrupulous figures linked to powerful businessmen in Gaza and, allegedly, to senior officials in Hamas, but have instead led to huge losses for ordinary residents of the Strip.

According to Hamas’s economics minister, Ziad al-Zaza, whose office is investigating the issue, some $100m has been taken fraudulently from would-be entrepreneurs. Others suggest the figure could be closer to $500m….

If Jawad Tawfiq has not been bankrupted, his frightened neighbour, who asks to be identified only as "Umm Mohammed", is in a different situation. She sold all her gold and jewellery, which she had bought after working abroad, to add to a pot of money collected by her family, totalling $17,000. Now she will also have to find money to repay what she borrowed from her son’s fiancée.

"I trusted them," she said last week. "The middleman we dealt with seemed so honest. He was a religious man. He seemed so nice. I lost everything and now I’m poor. If it wasn’t for the salary I receive from the Palestinian Authority, I would be begging now."


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