Sarah A. Topol covers Gaza's tunnel industry:
“As long as we have any blockade, we have tunnels,” says Sameer Abumdallala, dean of the economics department at the Al Azhar University in Gaza, who has studied the tunnel sector. “In each war, they destroy some tunnels, and it affects specific workers, but it doesn’t change the industry.”
Abumdallala says there are now roughly 2,000 tunnels, up from 50 passageways that dealt mainly in weapons and drugs prior to the Israeli-led blockade in 2007. The industry employs between 12,000 to 15,000 Gazans, and most tunnels operate in two shifts, 24 hours a day, providing a much-needed lifeline in all kinds of goods—from food stuffs to building materials, like wood, metal, and cement.
This paper uses detailed household expenditure and firm production data to study the welfare consequences of the blockade on the Gaza Strip between 2007 and 2010. Using the West Bank as a counterfactual, I find that being removed from world markets reduced welfare by 17%-28% on average.
(Photo: A Palestinian man emerges from a smuggling tunnel along the Gaza-Egypt border in Rafah, in the southern Gaza Strip on November 25, 2012. Egypt's closure of scores of cross-border smuggling tunnels has affected the flow of goods into Gaza but has not dealt the knockout blow widely expected by traders and officials. By Said Khatib/AFP/Getty Images)