chapter  7
16 Pages

The Rise and Fall of Gaza’s Tunnel Economy (2007–2014)

ByNicolas Pelham

This chapter analyzes the rise of Gaza’s tunnel economy in response to siege and its even more searing collapse with Egypt’s military takeover in July 2013. It traces the three-stage transformation of Gaza’s economy, from a formal to an informal economy when regional and global powers boycotted the rule of the Palestinian Islamist movement, Hamas, and then to drip-fed dependency, when Egypt’s armed forces destroyed the tunnel complex in the summer of 2013. It argues that contrary to the intentions of its architects, the siege led to the reconfiguration of Gaza’s socioeconomic hierarchy and fostered alternative trade conduits. However, ultimately the tunnel complex failed to deliver the economic independence Gaza’s leaders had sought.