How Millions of Dollars Were Lost in the Gaza Tunnels

Wednesday 16 November 201610:04 am

He always dreamt of making enough money to be able to afford anything, even if making that money was dangerous, even deadly.

A bunch of men sit next to the entrance to Saleh Bilal’s house (Abou Ramez). He is known as one of the “reform men” south of the Gaza strip. The men get louder and louder until everyone around notices. One of them shouts: “What you are saying Haj Saleh is that we have been duped and we lost our money? Oh god… I sold the house that protects me and my children, and placed all the money I had in the tunnels, and now you tell me "May God make it up to you"?”

There has been hundreds of those gatherings in the last ten years in Gaza. Especially after the “tunnel trade” took over many aspects of life in the strip.

In 2002, two years after the Second Intifada, digging accelerated. In the beginning the tunnels were used to hide Palestinian resistance fighters, and carry out operations against Israel. With time, and with the situation changing, the digging developed, spreading all across the strip, and especially on the border with Egypt.


Things changed again when Hamas took over control of the strip after the June 2007 coup. Hamas focused its efforts on the southern border zone with Egypt, and began turning it into a zone of trade and smuggling. Egyptian authorities were turning a blind eye, as a way to support and help the besieged and strangled Strip. What was being smuggled at the beginning was not much more than basic goods, in addition to some more upscale items such as computers and new phones. There was also a lot of drugs coming into the strip, and spreading like wildfire among the population looking for a way to escape the difficult conditions in Gaza.

The Liar and the Greedy

With things getting worse in the Gaza strip, almost half the population was investing in the tunnel trade, which had become a multi-million dollar operation.

Said Z. says that with the beginning of 2008, the tunnel trade was already flourishing: “I used to own a car and work as a driver. With the insistence of some friends who had gotten into the tunnel business and earned thousands of dollars, I decided to sell the car, and use the money to invest in the trade, which would get me a good income without much effort.”

Said sold his car and gave the money to a merchant: “the sum was 9,000 US Dollars and we agreed that I would get $500  a month of profit on the original sum, which I could get back at any time. The first three months I got the agreed distribution, but then in the fourth month, the delays started happening, until we were convinced that we had fallen victims to a big scam.”


Things started becoming clearer and Said discovered the hidden aspects of the shady deal. Soon after, the Israeli war started at the end of 2008, and by the time it ended, “we discovered that half the population of the strip had fallen victims to this scam. The result was spectacular amounts of money lost, and those who were held responsible were a bunch of small crooks that were covering for big names that were never held accountable till this day.”

By the end of the war, large tunnels able to fit cars and other large machines appeared. Even the poor were not safe from this trade. Some sold their houses, hoping to make profits, and buy a better house, and with every beginning of the month, when profits should arrive, the number of traders in the “tunnel Stockmarket” would get higher.

Underground Treasures

Treasure hunters and gold diggers usually dig in places that they know contain what they are looking for. But to dig in the ground and make millions of dollars, was a new thing in Gaza.

Ahmed: “Do you see that man driving the dark Mercedes?”

Ali: “Yes, what’s with him?”

Ahmed: “10 years ago he sold beans on the street”

Ali: “What’s his story, how did he get so rich that he is driving one of the fanciest cars in Gaza?”

Ahmed: “The tunnels!”

This was a dialogue that took place between two friends, Ahmed Al Sawi, and Ali Majdalawi, while sitting in one of the popular cafes in the south of the Gaza strip. Ahmed saw his old neighbors in a fancy car, while he is living in poverty with his family. When the tunnel trading started, his neighbours had a crumbling house on the border between Egypt and the Gaza strip. They agreed with a trader to dig a tunnel inside their house in return for a large part of the profits, and that turned them from a poor family to one of the richest in the strip.

The Tunnel Government

After the 2008 war, and during the tense media exchanges between Hamas and Fateh, the latter would accuse Hamas of being a "tunnel government" that destroyed the Palestinian economy with the illegal trade and money laundering it is doing through the tunnel trade. Legitimate business suffered and this further setback the local economy.

Furthermore, the tunnels were blamed for the drugs that were circulating in the strip, used by many in Gaza for their availability and price as a way to escape their difficult situation. The tunnels were also used to smuggle people in and out of the strip, especially that the Rafah border crossing was constantly closed. Egypt had closed the strip except on some distant intervals when it would allow students and humanitarian cases to pass. During a celebration organized by Hamas to commemorate its "victory" against Israel during the war, the prominent leader in Hamas, Ismail Hania said his famous sentence: "a tunnels government is better than a corruption government".


A Sad Ending

With the beginning of the Israeli war on the Gaza strip in 2012, the tunnel trade became very public. In an attempt to put an end to rumours, Hamas tried to blame the scam which cost more than a billion dollars, on some people, and promised to return the money that was stolen.

After many investigation committees and much pushing and pulling, Hamas ended the controversy by deciding to return 10% of individuals losses if they signed a quit claim agreement.

After that, the border area was turned into a closed military zone, controlled by the military wing of Hamas, as well as some other armed groups, who have interests in the area. The tunnels were now used for smuggling specific goods like ‘solar’, gas, cement, drugs, and weapons. This was done in secret though, especially that the Egyptian side was launching a fierce campaign on this zone as part of the "war on terror" that the Egyptian army was fighting in Sinai.

Show the comments
Website by WhiteBeard