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Inception of capitalism on the streets of Rafah - Daily News Egypt

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Inception of capitalism on the streets of Rafah

RAFAH: In what can only be described as the shopping spree of poverty, hundreds of thousands of Palestinians flooded the Egyptian border town of Rafah this past week to purchase much needed supplies after having been completely shut off within the Gaza strip. The center of Rafah was gridlocked for days as traders from all …


RAFAH: In what can only be described as the shopping spree of poverty, hundreds of thousands of Palestinians flooded the Egyptian border town of Rafah this past week to purchase much needed supplies after having been completely shut off within the Gaza strip.

The center of Rafah was gridlocked for days as traders from all over Egypt attempted to capitalize on the unheralded and urgent demand for goods.

Almost six km of road was full to the brim of people buying foodstuffs, fuel, cement and even motorcycles.

What was apparent in Rafah was the inception of unadulterated capitalism as a rudimentary economy took hold in unique circumstances, succumbing to the forces of supply and demand as well as the concept of competition as prices fluctuated wildly.

Because of the blockade imposed on Gaza, there was nothing available, which created a huge and immediate demand. When they crossed through, suppliers rushed to profit from this in an unchecked economic environment.

Sellers ran riot in this unregulated and temporary economy, hiking prices as more people flooded in. They were then forced to lower prices as more traders descended upon the city, selling at cheaper prices, to the chagrin of some.

Demand for fuel was so huge that there was no petrol to be found in Rafah, Al-Arish and surrounding areas within 24 hours.

One of the most essential purchases was any type of fuel, and Solaar gasoline was on sale for LE 5.5 a can. Thousands stocked up on the fuel cans knowing that fuel shortages in Gaza had become the norm.

As Palestinians entered Rafah, some Egyptians were on hand to convert their shekels. However, the exchange rate was not favorable to the visitors. The best one could find was an exchange of LE 1.10 to one shekel.

Eventually, traders accepted shekels when the local currency ran out. The going rate was usually one for one.

Officially, the Israeli shekel is equivalent to a little under LE 1.50.

Hatem Hussain traveled 45 km from his home in Beit Lehya to shop for goods in Rafah. He told Daily News Egypt, “There is exploitation in the prices. I used to come into Egypt before so I know the prices. Some things are 100 percent more expensive and they are considering the shekel to be the equivalent of one pound.

“I brought L&M red box of cigarettes for LE 9. Yesterday it was LE 4, and within two hours it was LE 8. Prices were normal at first but when they saw the amount of people, they doubled the prices and people say there is no problem because there is nothing in Gaza, Hussain added.

Nader El Sayed was one of the Egyptian traders who had come from the Sharqeya governorate to sell to the Palestinians in Rafah. He claimed that he was selling at comparable prices but that other traders selling imported goods were raising the prices.

“When we heard that the siege had been lifted, we wanted to help our Palestinian brothers with what they need, El Sayed told Daily News Egypt.

He was selling the locally produced Cleopatra cigarettes for LE 2.5 a pack. “We are not raising the prices, but those selling the Marlboros and Rothmans are the ones raising their prices. I sell a bottle of water for LE 2. Some traders are selling Marlboros for LE 15. We sell it for LE 8, only half a pound extra, he explained.

El Sayed promised that he would stay as long as there were Palestinian customers. He was sleeping in the streets.

Umm Mohammed had come from the Palestinian side of Rafah with her daughters to take a look at the wares. She too found herself being over-charged.

“The goods are expensive. but they are not available in Gaza, she said, “if the crossing wasn’t open, they would be much cheaper . those who traveled here before used to tell us the prices.

Her daughters bought a large bag of Egyptian crisps, Chipsy, last Wednesday for LE 8. The next day, with the further influx of sellers, they got it for half that price, which is closer to the original price.

And while the laissez faire attitude of this artificial economy caused a natural correction in the price index as more traders entered the city, some of the sellers were none too pleased that their profit margins were being reduced.

Nasser Abdel-Razek, an Egyptian trader who owns a shop in the Cairene town of Maadi, told Daily News Egypt that prices were pushed down as more traders came. The disappointment on his face was palpable.

He did not appear to be concerned with the plight of the Palestinians buying his wares; this was a business opportunity to be utilized.

“When more traders came the prices went down. Some Egyptians lowered the price so we had to lower ours as well, he said.

Despite that, Abdel-Razek said, “Business is good. We have bought some stock from Cairo and I keep going [back and forth]. I’ll keep coming as long as the Palestinians are here.

Eventually, external forces contributed to another change in the situation, as Egypt – desperate to reseal the border – began preventing the supply trucks from entering Rafah and Al-Arish. It was decided that the best way to safely herd the Palestinians back into Gaza was to eliminate the reason they were coming into Egypt.

Soon, the streets emptied as supply became a trickle rather than a flood. However, market forces did come into play once more as the prices shot up on what little was available in the area.

Topics: FJP

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https://www.dailynewsegypt.com/2008/01/29/inception-of-capitalism-on-the-streets-of-rafah/
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