Red-Berry Day in Gaza, as Farm Products Leave for Europe

December 1, 2010 · Posted in forex trading · Comments Off 
The Media Line Staff

Gaza, Palestinian Territory (TML) – Um Hajjar Al-Ghalayini, 46 years old, owns half an acre of sandy Gaza land that produces two tons of strawberries every season. Since her husband died two years ago, the crop is the sole means of support for her nine children, mother-in-law and widowed sister, so every one of the bright red berries counts.

Last year, she had no choice but to sell her produce to the local market. That filled the Gaza markets with fruits and vegetables to the benefit of consumers, but for growers like Um Hajjar it was a disaster. Her earnings dropped by more than half and the family had a tough year economically. This week, as Israel took another step in easing its economic blockade of the Gaza Strip, Um Hajjar delivered her strawberries to the Kerem Shalom checkpoint on the Israel-Gaza border, their first leg of a journey to the more profitable markets in Europe.

“Now I can say that things are getting back to normal, if not on the right track,” she told The Media Line.

Exports of strawberries and flowers from the Gaza Strip to European markets began on Sunday, as part of a wide-ranging project coordinated by the Israeli army and local farmers and funded by the Dutch government. The current undertaking involves some 2.5 tons of strawberries and some 2,000 flowers, but Israel plans expanded facilities at Kerem Shalom and stepped-up security measures that will enable exports to grow more next year.

All told, about 700 tons of strawberries and 30 million carnations will be exported from Gaza by the time the season ends – in February for strawberries and May for flowers — Yousef Shaath, the project manager of the Dutch-funded Agricultural Relief Committee in Gaza, told The Media Line.

Strawberries are just one part of a gradual easing of the blockade Israel imposed on Gaza, a Mediterranean enclave of just 360 square kilometers (138 square miles), in 2007 after the Islamic militant group Hamas seized control. Israel used the siege to pressure Hamas, which unlike the Fatah-controlled Palestinian Authority (PA) that rules in the West Bank, is sworn to Israel’s destruction and rejects peace talks.

While Israel and Hamas are still at loggerheads, Jerusalem has loosened some aspects of the blockade since nine people were killed last May when commandoes raided a ship trying to break the siege. As a result, Gaza’s economy will probably grow 8% this year, according to the International Monetary Fund.

While human rights advocates have focused on the pain caused by Israel’s blocking most imports, Gaza’s tiny economy has suffered by the ban on nearly all exports as well. According to the Palestinian Bureau of Statistics, Gaza’s exports plunged from $41 million in 2005 to $30,000 in 2006 and $20,000 in 2007. In 2008, virtually nothing left the Strip.

The business of export agricultural produce is fraught with politics, business and security issues. Before the first strawberries and carnations could be trucked into Israel, representatives of the Gazan agricultural associations met last week with an Israeli agriculture coordinator, a representative of the Israeli farm-export company Agrexco and the deputy ambassador of the Netherlands in Tel Aviv at the Erez crossing point between Gaza and Israel last week.

That is because the produce has a long and complicated route to get from fields like Um Hajjar and into a French housewife’s strawberry shortcake.

Hamas as the de facto ruler of Gaza had to approve the exports, but because Israel and the European Union don’t recognize the Islamic organization as the official government, representatives of the PA had to act as intermediaries. Indeed, at Kerem Shalom the PA will have an official presence as the produce moves over the border to Israel.

Israel will also need to deploy scanning machines that can x-ray cargo containers and ensure that terrorists or arms aren’t being smuggled out of Gaza. Israel has been wary about letting goods leave Gaza after two Palestinian teenagers infiltrated the Israeli port of Ashdod in 2004 by hiding in a shipping container. They blew themselves up, killing 10 people.

But Israel’s security needs have to be measured against the need for perishable produce and flowers to reach their final destination in Amsterdam and other points in Europe. Last year, Gaza suffered big losses when Israel delayed export permission by two months.

As well, farmers, in particular flower growers, need a host of inputs as well as packaging materials, which require Israeli approval to be imported.

The exports underway these days, however, aren’t enough for Gaza farmers, who form a major component of the Strip’s economy. About 900 acres is devoted to growing strawberries, which will yield a harvest of 1,000 tons, about 40% more than the current export quota. Gazans grow a cornucopia of other fruits and vegetables as well. Their natural market is Israel or the West Bank, but so far Israel has barred sales to those markets. Shaath said this is unfair as Israel now exports some $3400 million of produce to Palestinian areas and under the Oslo peace accord should accept Palestinian imports in return.

Nevertheless, Shaath is sanguine about next year’s export prospects. Gaza crops tend to mature earlier than competing ones, so that if the complicated chain of political and security arrangements can be preserved and developed, the Strip’s farmers will be the first on the market.

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UAE Restricts Money Dealings with Iran

September 8, 2010 · Posted in Forex Exchange · Comments Off 
The Media Line Staff

Dubai, United Arab Emirates (TML) – The waters between Iran and the United Arab Emirates used to be crowded by small cargo vessels carrying goods from the Dubai port to Tehran markets, but as the United Nations sanctions on Iran come into effect the flow of boats has slowed to a trickle and the cash flow is slowing considerably.

The United Arab Emirates, a close ally to the United States, is putting transactions between its banks and Iranian counterparts under increased observation, which in some cases has led to a total stop of transactions, according to AFP.

“United Arab Emirati banks are prohibited from dealing with individuals and entities that are specifically named in the latest sanctions document but the Central Bank is also tightening rules for transactions with Iran in general,” Ayesha Sabavala, who follows the Emirati banking sector for Economist Intelligence Unit, told The Media Line.

“Examples of this tightening include asking for prior approval from the Central Bank when transacting with Iranian companies,” she said. “This has made United Arab Emirati banks reluctant to lend or provide letters of credit to Iranian companies.”

For the month of August, the Central Bank has directed UAE banks to provide it with details of all remittances to and from Iran. Local financial institutions no longer accept property in Iran as collateral in borrowing deals. Therefore, transactions with Iran, both with corporations and individuals have been affected,” Sabavala said.

The trade between the United Arab Emirates and Iran is estimated at $8 billion.

“Although it is hard to gauge the impact on banks in the United Arab Emirates, one has to assume that this tightening has led to some loss of business since trade mostly re-exports between Iran and the UAE, specifically Dubai, is quite substantial and also due to the sizeable Iranian community in Dubai,” she said.

“That said, one must realize that a lot of trade with Iran also goes through unofficial channels and although sanctions will likely impact trade with Iran, trade between the two countries will continue,” Sabavala added.

Dr. Christian Koch, director of international studies at the Gulf Research Center in Dubai said that while sanctions are affecting trade it would not grind to a halt.

“Trade with Iran is still going on and will also continue despite the sanctions being imposed on Iran,” Koch told The Media Line.

“What is being done is that sanctions are being applied more effectively and yes, that leads to some curtailing in trade as conditions are getting more difficult,” he said.

“For the United Arab Emirates however, this is not an either/or issue and they do not see the declining trade with Iran as coming at a cost to the US relationship. United Arab Emirates – United States relations are strategic in nature and given the difficult GCC-Iran relationship as a whole, this is not going to change at any time soon,” Koch said referring to the Gulf Cooperation Council, a regional economic bloc made up of Kuwait, Bahrain, Qatar, Oman, Saudi Arabia, and the United Arab Emirates.

“Furthermore, as a whole, trade volume with Iran is only a small part of the United Arab Emirates’ trade balance so in the end the actual impact will also be less than is usually assumed,” he added.

Tim Williams, a senior analyst with global intelligence firm Stirling Assynt, said that in the end Iran still needs the services of the United Arab Emirates.

“There may be some hostile rhetoric from Tehran and there is some risk that unresolved territorial issues could flare up,” Williams said referring to the contested ownership of three small islands in the Gulf.

“Iran will still be seeking to exploit United Arab Emirates’ relatively loose trade and financial controls to smuggle goods and, possibly, funds through Dubai,” he concluded.

The United Nations Security Council slapped a fourth round of sanctions on Iran in June, barring dealings with firms linked to the Iranian Revolutionary Guard Corps.

The Revolutionary Guard is a separate organization from the Iranian army and operates its own armed forces, navy, air force and militia. Its goal is to preserve the theocracy in Tehran, but over the years it has widened its scope to run a vast business empire, ranging from construction to telecommunications.

The new UN sanctions are the latest stage in an ongoing dispute between the United States and Iran over the end goal of Iran’s nuclear program. Washington and others claim Iran is using its program as a cover to produce atomic bombs, but Tehran argues the program is for the peaceful purpose of power production.

Following the new UN sanctions, which cover all 192-member states of the global body, both the United States and European Union tightened their sanctions further.

In June, shortly after the sanctions were imposed, authorities in the United Arab Emirates closed down 40 companies for selling products to Iran or dealing with Iran’s Revolutionary Guard in violation of UN sanctions on Iran.

The 40 companies that were shut down reportedly had been found to be trading strategic dual-purpose goods, which could be used in both civilian and military production, as well as other dangerous materials.

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