Red-Berry Day in Gaza, as Farm Products Leave for Europe
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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EU sets tougher rules for banks
Crisis-hit banks seeking state
aid next year will have to overhaul their operations as part of
a strategy to wean them off state support, the European Union’s
competition chief said on Wednesday. |||
Crisis-hit banks seeking state
aid next year will have to overhaul their operations as part of
a strategy to wean them off state support, the European Union’s
competition chief said on Wednesday.
The tougher conditions came as the European Commission
extended by a year a framework of rules set up in October 2008
allowing EU governments to bail out their lenders under looser
terms.
“After almost two years of a specific crisis state aid
regime, we need to prepare a gradual return to normal market
functioning,” Competition Commissioner Joaquin Almunia said in a
statement.
“The remaining risk of renewed stress is a valid reason to
proceed with care and caution in the exit process.”
Under current rules, only distressed banks which had
received support above 2 percent of their risk-weighed assets
needed to come up with a restructuring plan.
The EU executive also decided to keep measures facilitating
access to finance for small- and medium-sized enterprises, but
under stricter conditions.
It extended by another year to 2011 simpler rules for
short-term export credit insurance and said governments could
invest up to 2.5 million euros ($3.26 million) – a 1 million
euro increase – in start-ups as private equity investors moved
to less risky investments. – Reuters
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Govt to develop Arabica coffee
The government will focus on the development of Arabica coffee next year, a cabinet minister said.
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Euro zone crisis puts SA business in jeopardy
Earlier this year, the EU and the International Monetary Fund (IMF) organised a e110 billion (R1.04 trillion) bailout for Greece. This week, Ireland has accepted around e90bn to help save it from bankruptcy. What does this mean and what implications does it have for Europe? |||
Earlier this year, the EU and the International Monetary Fund (IMF) organised a e110 billion (R1.04 trillion) bailout for Greece. This week, Ireland has accepted around e90bn to help save it from bankruptcy. What does this mean and what implications does it have for Europe?
As a result of the Greek crisis and the fear of a continuing recession across Europe, the EU has set up two funds, contributed to by the 16 euro zone countries, to support EU member economies in danger of going bankrupt. EU countries, such as Ireland, can also source funds from elsewhere, as they are doing with the IMF and through bilateral arrangements with the UK and Sweden.
Countries go bankrupt when their budget deficit (difference between spending and earning) is too high, leaving them with insufficient funds to manage their economies, as in the case of Ireland.
After initially saying that it would not need a bailout, Ireland accepted separate offers from the UK, the IMF, Sweden and the EU funding programmes.
Ireland remains a major importer of UK products; on average, every Irish citizen spends approximately £3 600 (R40 000) on British goods every year. Were the Irish economy to crash, this would have severely negative effects on the British industry and economy.
But the effect is larger than this.
As the EU has agreed to perfect mobility of labour across borders and a common currency, the collapse of one of its members is indirectly carried by the more successful members. If one country’s economy collapses, businesses fail and unemployment rises. In terms of currencies, failing EU countries are less desirable places to invest, which makes the euro less attractive. This depreciates the euro and affects the economy of all EU states, even the successful ones.
But what are the consequences of these bailouts or loans? The borrowers need to repay the loans, so they need to raise the money to do so, which often results in them raising taxes.
In Ireland’s case, this would be especially damaging as its low company taxes make it attractive for international business. The expense of the loan will put massive pressure on its government spending policy and will make its future cost of borrowing even higher.
The lenders, on the other hand, sit with a catch-22 situation. They can’t allow member states to collapse, but bailing them out requires raising and spending huge funds of their own. Even if they will be repaid, this still imposes huge costs upon their own spending and economic policies.
The bigger worry is how long this strategy can continue. Bailout funds are limited and Spain, Portugal and Italy are all sitting with dangerously high budget deficits. If one of them was to require a bailout, similar to that of Greece or Ireland, there may not be enough money available to help the others. Were their economies to collapse, the knock-on effects on the whole EU economy could make the current bailout policies completely ineffective.
Since the EU is one of South Africa’s major export markets (valued at more than e22bn a year), every South African should be concerned about the success of the EU. A collapse of its economies would cause significant collapse of businesses within South Africa.
Pierre Heistein is the convenor of the UCT Applied Economics for Smart Decision Making course, which starts in March. The course is presented by GetSmarter, www.getsmarter.co.za.
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Treasurys, dollar stay up after GDP revised higher
NEW YORK (MarketWatch) — Treasury prices and the dollar held onto gains on Tuesday after the U.S. said the economy grew at a 2.5% pace in the third quarter, revised from a previous estimate of 2%. Yields on 10-year notes , which move inversely to prices, fell 5 basis points to 2.75%. The dollar index , which tracks the performance of the greenback against a basket of other major rivals, rose to 79.143 from 78.611 in North American trade late Monday. The euro fell to $1.3502, versus $1.3629 Friday. Bonds and the dollar were higher before the data as military tensions on the Korean Peninsula and worries about Ireland and Portugal had investors seeking relatively safer assets. Still to come is data on existing home sales, the Federal Reserve’s next buyback, the government’s sale of 5-year notes and the release of the minutes from the most recent Fed meeting.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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Lions Gate Slips To Q2 Loss On Higher Costs – Update
Lions Gate Entertainment Corp., Monday reported a loss for the second quarter of fiscal year 2011, compared to a profit last year, due primarily to higher costs, losses on equity interests and debt extinguishment that more than offset a rise in revenues. The Vancouver, British Columbia-based entertainment company’s net loss for the second quarter was $29.66 million or $0.22 per share, compared to an income of $31.72 million or $0.26 per share in the previous year.
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Thomas Cook Airlines Awards A320 & A330 Full Component Support Contract
A J Walter Aviation And Its Partners Win 5-Year Deal Thomas Cook Airlines has awarded A J Walter Aviation a multi-million dollar contract to provide component power-by-the-hour and leasing support for its A320 and A330 family aircraft based in the UK and Scandinavia.
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Bulgaria Cancels Individual Bonds Bid, Continues Campaign
The auction of 15-year euro-denominated sovereign bonds to be conducted November 22 has been cancelled by the Bulgarian Ministry of Finance. The ministry recommends interested parties to bid for the auction scheduled Monday that will offer 10.5-year bonds at a value of EUR 25 M. …
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HSBC Says Q3 Pre-tax Profit Well Ahead Of Last Year – Update
Financial services firm HSBC Holdings Plc (HBC, HSBA.L) Friday said profit before tax for the third quarter ended September 30 was well ahead of the previous year, reflecting lower loan impairment charges.
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Retail center under construction
Gina Bettini and her daughter, Paula, hope to be serving coffee at The Shops at Duck Creek by early next year.
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