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Who is responsible for solving Gaza’s massive electricity crisis?

- February 5, 2018

Last week, Beit Hanoun Hospital in the northern Gaza Strip halted its operations, the al-Durra Children’s Hospital drastically reduced its services and seven other health centers across Gaza closed because of a lack of fuel to power their generators. Lapses in the power supply have devastating consequences for every sector of the economy, including health care, education, water and sanitation, and agriculture. The power crisis is a grave symptom of the larger problem plaguing Gaza: the inability or refusal of key actors to govern the territory.

My research explores how the ongoing occupation and conflict distorts the Palestinian capacity to perform the typical functions of a state in the West Bank, and these complications are even more pronounced in the Gaza Strip.

In normal circumstances, electricity is distributed by a public or private utility and paid for by consumers who benefit from it. This ideal exchange can be interrupted in a number of ways — people might tap into electricity networks illegally, or government revenue may be pocketed rather than directed toward improving public infrastructure. However, Gaza stands out as an especially serious breakdown in the contractual model of service provision, because the ability and willingness to pay has been decimated on both sides — the governments and the governed.

A three-part breakdown in provision

Gazans have traditionally received their electricity supply from three sources: Just under two-thirds is imported from Israel, about 23 percent is generated domestically by the Gaza Power Plant, and the remainder is imported from Egypt. All three are facing major problems.

First, electricity imported directly from Israel and Egypt is paid for by the Fatah-ruled Palestinian Authority (PA), based in the West Bank city of Ramallah, not by the Hamas government in Gaza. The cost of the Israeli supply is deducted from the revenue that Israel collects on imported goods destined for the Palestinian territories and, under normal circumstances, transfers to the PA. Since the 2007 Fatah-Hamas split, the government in Ramallah has become increasingly frustrated with incurring the costs of electricity supply for the Gaza Strip. In a highly politicized move in June, PA President Mahmoud Abbas requested that Israel reduce the supply of power to Gaza. During much of 2017, power supply was limited to three to four hours per day.

Second, fuel is artificially expensive for both Gaza’s only power plant and private consumers because of costs associated with the Israeli-imposed blockade and taxes levied by both Israel and the PA. Recently, the “blue tax,” imposed by the PA to ensure fuel prices in the Palestinian territories stay within a certain range of Israeli prices, as mandated by the Oslo accords, amounted to 100 percent of the refined fuel price. For Hamas, as for many Gazans, this has felt punitive. Previously, fuel, along with other goods, was smuggled through tunnels from Egypt to get around border closings, but the Egyptian government has destroyed many of these tunnels in recent years.

Third, Egypt’s relationship with Gaza is tenuous. Egypt stopped directly exporting fuel to Gaza in the wake of Hamas’s takeover of the territory in 2007 but resumed temporary deliveries this summer under a deal brokered by exiled Fatah leader Mohammed Dahlan. Though its initial financing remains murky, this fuel was briefly paid for by the Hamas government. But shortages in recent weeks have reignited the crisis. Additionally, ongoing instability in the Sinai suggests that fuel imports from Egypt may remain volatile — not a particularly promising avenue for boosting Gaza’s long-term power supply.

Who is responsible for powering Gaza?

All actors involved have expressed nominal interest in solving the power problem in Gaza, but a fundamental question remains unanswered: Given the ongoing conflict, who should cover the costs of electrifying the Strip?

Some might think Gazans should pay for their own electricity consumption, like everyone else. Of course this would, eventually, make the most sense. But since Hamas took control of the coastal strip in 2007 and Israel initiated a blockade, an ethical dilemma has emerged. As the elected ruling party, Hamas would appear to be responsible for facilitating access to basic goods. But Gaza’s inability to trade with its neighbors and, relatedly, its anemic economy, with one of the highest unemployment rates in the world, have resulted in a virtually nonexistent tax base.

Gazans are also aware that most of their power supply comes from Israel, and therefore most of their payments end up in Israeli coffers or in PA-controlled banks, not in the hands of any government that can serve them. Polls show that Gazans are highly dissatisfied with both Abbas and the so-called reconciliation government, announced by Fatah and Hamas late last year. Further, a recent announcement by the Ramallah government to re-impose other forms of taxation on Gazans has not been well received.

A series of disappointments have made it hard for Gazans to be optimistic that they will ever have reliable electricity to boosts their economy and standard of living. Donor conferences have failed to mobilize international reconstruction assistance on the scale promised. Meanwhile, a U.S. announcement of dramatic cuts to the U.N. Relief and Works Agency budget, pending further reform, has thrown the education, health-care, and emergency and social assistance programs for the enclave’s 1.3 million registered refugees into uncertainty. Further, Abbas’s hard-line stance on the supply of not only energy but also the importation of key medical equipment into Gaza has exacerbated the gap in trust between Gaza and the West Bank government. Even as Israel proposed a plan to international donors for $1 billion toward Gaza reconstruction last week, including new power lines from Israel, who will pay remains unclear.

The reality of life in Gaza illustrates that a government elected by the people is alone not sufficient to ensure basic goods and services. There are no citizens of Gaza. There is, effectively, no state. While emergency assistance from the international community is probably necessary to stave off complete collapse in the short term, the hard truth is that a government that is acceptable to external actors — namely, the PA, Israel, Egypt and the broader international community — is needed before the long-term energy problem can be solved.

Diana B. Greenwald is a postdoctoral research fellow at the Harvard Kennedy School’s Middle East Initiative. In the fall of 2018, she will be joining the City College of New York as an assistant professor of political science. You can follow her @hispeedtourist.

Note: Updated Oct. 9, 2023.