Ramallah – Mohannad Nirokh, the owner and manager of an aluminum accessories factory in the West Bank, never anticipated that the situation of his facility and its annual profits would deteriorate to such an extent. This change occurred following Israel’s war on the Gaza Strip and Palestinian territories after an operation referred to as “The Al-Aqsa Storm,” which was initiated by the resistance in the last quarter of the year when this industrial sector typically earns its annual profits.
According to Nirokh, who spoke to Al Jazeera, he employs 30 people in the aluminum accessories company founded by his father in 1993. All of them are suffering from the political situation and Israel’s war on Palestinian territories, which has forced him to take measures to cut expenses amid declining income. He indicated that his establishment is operating at about 40% capacity after having reduced its production by 60%.
The aluminum factory reduced production by 60% (Al Jazeera)
Losses of Two Months
As per the Palestinian Central Bureau of Statistics, the Palestinian industrial sector suffered losses estimated at billions of dollars in the first few months of the war, with all forms of industry halted in Gaza, and factories and industrial companies in the occupied West Bank facing significant setbacks.
The bureau estimated the economic losses in Palestine since the beginning of Israel’s aggression on Gaza at about 1.5 billion dollars, resulting from the near-complete halt in production in Gaza and the repercussions on the West Bank, equivalent to about 25 million dollars daily, excluding direct losses to properties and assets.
The central statistics report on the industrial sector indicates that the value of production during the first two months of the war reached 452,573 dollars in the West Bank and 11,852 dollars in Gaza, meaning Palestinian production was below 500 thousand dollars.
During regular months of the past year, production in the West Bank was 969,954 dollars, and in Gaza, it was 110,715 dollars with a total just over one million dollars in Palestine.
However, the losses during the first two months of aggression amounted to 407,381 dollars in the West Bank and 98,862 dollars in Gaza, totaling 506,243 dollars in Palestine, according to the bureau’s data.
Nirokh, a father of two, says he had to cut various expenses, halt renovation and development work on his house, and might need to reduce additional household expenses if the war continues.
Barriers and Closures
Nirokh further states that numerous issues and obstacles have arisen due to the ongoing war, the most prominent being Israeli checkpoints and the increased costs of transportation and shipping, both internally between Palestinian cities and externally for importing raw materials. This has increased production costs at a time when demand is decreasing under the weight of the war.
Regarding the distribution of products, Nirokh, whose factory distributes across the West Bank, says that the checkpoints are the biggest hindrance. Closures have caused numerous issues, including workers struggling to arrive on time for their shifts and delays if they manage to reach the workplace, as well as difficulty transporting goods to traders and agents in the provinces.
Truck drivers are forced to take difficult and sometimes dangerous routes, which adds financial burdens on Nirokh’s factory. Often, trucks return without delivering their goods due to Israeli closure of checkpoints, or they take longer alternative routes to reach dealers and complete deliveries.
The final product price at the aluminum accessories factory has increased due to the import of raw materials from countries including China, Italy, Spain, and Turkey, with the mention that port closures at the start of the war raised the cost of materials and thus their prices.
According to Nirokh, the new conditions have delayed the arrival of shipped materials from 20 days to 60 days, negatively impacting exports to Jordan and the Israeli market, particularly with the closure of crossings between West Bank cities and Israel as well as the borders with Jordan.
Nirokh oversees his factory’s production (Al Jazeera)
Obstacles
In this field, Samir Hazboun, the Secretary General of the Palestinian Federation of Chambers of Industry and Commerce, tells Al Jazeera that the industrial sector, whether extractive or manufacturing, faces multiple problems. The most significant are the barriers between provinces and the imposed closures, making the import of raw materials difficult.
Hazboun highlights additional barriers, including increased transportation costs due to war and checkpoints or due to the closure of crossings. The difficulty of labor mobility across provinces is another major issue.
Hazboun noted that Palestinian industries are operating at no more than 60% of their production capacity, with most factories working between 40 and 50%.
He also pointed to other influential factors like the rising exchange rate of currencies used for importing raw materials and increased dependence on cash liquidity due to banking difficulties with checks and money transfers.
Production Cutbacks
Returning to Nirokh, he explains that production quantities have dropped with the decrease in sales. His factory is part of the construction sector, which has almost completely halted as building operations, including in private houses, have stopped. Employees in the public sector and a significant portion of private sector employees are not receiving their salaries, and Palestinian workers in Israel are barred from returning to their jobs, leading to a cessation of building and construction.
Nirokh also mentioned a drop in debt collection and an increase in bounced checks from agents and residents.
Hazboun warns that if the current situation persists and as the fourth month of the war approaches, Palestinian factories have collapsed; for example, in the stone and marble industry sector in Bethlehem, only 30 to 35 factories now operate out of 130.
Nirokh states that his company has continued to absorb all employee expenses since the outbreak of war out of social responsibility, but it will not be able to continue this if the war persists. There will come a point when he must consider laying off workers because the conditions have become catastrophic.
Workers at the factory, who are working shorter hours, shared their fears with Al Jazeera about the ongoing situation affecting their livelihood. They feel fortunate to have not lost their jobs so far but are aware of the gravity of the situation.
In this context, Rakan Ibrahim Abu al-Hoor, from a village near Bethlehem, feels lucky to still have a job and has not yet been laid off. He hopes for a quick improvement in conditions.
Discussing the reality of workers and job opportunities, Hazboun concludes by saying that the difficult situation in the Palestinian industry is weakening job prospects and creating a state of unemployment.
