Egyptian minister Moufid Shehab called it “the engineering installation on our eastern borders” — a euphemism that at least suggests a certain discomfort in official circles. Its many opponents more succinctly call it “the wall of shame,” and say it illustrates the Egyptian government’s willingness to go along with Israel and the United States in their longstanding project to squeeze the people of the Gaza Strip until they turn against Hamas, the Islamist movement that has run the territory since 2007.

Muslim clerics have split over the legitimacy of the steel wall under construction along the Gaza-Egypt border, designed to intercept the dozens, possibly hundreds, of illicit tunnels that keep the Gazans supplied with everything beyond the barest necessities.

 Those indebted to the Egyptian government say it is a matter of national security and a justified response to smuggling; independent clerics on satellite television channels, who carry rather more weight with the devout, say it is a crime. All the main opposition forces in Egypt, from the Muslim Brotherhood to leftists and liberals, say the project is a national disgrace.

The government’s international reputation hit new lows over the New Year period when police in the Sinai town of El Arish clubbed foreign activists trying to break the blockade and take supplies to Gaza.

So what does the Egyptian government have to gain from building the massive underground wall between Egyptian territory and the Gaza Strip? Why is it so willing to flout domestic, Arab and large swathes of international public opinion on such a sensitive matter? 

Through all the twists and turns of the past two years, when Egypt stood at the center of attempts to restore Fatah control over Gaza, one overriding anxiety dictated Egyptian policy toward the impoverished and densely populated coastal strip: the possibility that Israel might dump responsibility for Gaza on Egypt, washing its hands of its international obligations to supply the Gazans with food, water, fuel and medical supplies.

In the worst case scenario, from Cairo’s point of view, Israel could then seal its own borders with Gaza completely and hold Egypt accountable for any military activity that originates in the territory. The Egyptian government has not forgotten the precedents of 1956 and 1967, when Palestinian guerrilla activity from Gaza helped drag Egypt into war with Israel, with especially devastating consequences in 1967.

The Egyptian government, which has grown increasingly conservative and unimaginative as President Hosni Mubarak grows older, also shares Israel’s and Washington’s fear of Hamas, which it sees as an illegitimate troublemaker threatening the regional status quo and serving the interests of Shiite Muslim, and potentially nuclear, Iran.

Egypt and its Arab allies — mainly Jordan and Saudi Arabia — long ago renounced the use of force in their dealings with Israel. Hamas, Lebanon’s Hezbollah and others keep the banner of armed struggle aloft, striking a chord with ordinary Arabs and serving as a constant reminder that alternative strategies are possible. In the case of Egypt, Hamas is especially threatening because of its historical and institutional links with the Egyptian-based Muslim Brotherhood, the government’s most formidable opponent. What’s good for Hamas is good for the Brotherhood.

Against this historical background, more immediate considerations seem to have pushed the Egyptian government into a form of cooperation that goes far beyond the commitments it made to Israel in the peace treaty they signed in 1979.

Although the Egyptian domestic political scene looks calm on the surface (even the Muslim Brotherhood is in serious internal disarray), the governing clique faces parliamentary elections later this year and presidential elections in 2011. The last thing they want is a repetition of 2005, when street protests were weekly events and the US openly supported democratic change in the Arab world. That enabled the Muslim Brotherhood to win one fifth of the seats in parliament, more than any opposition force had held since the overthrow of the monarchy in 1952.

So much for sovereignty

This round of elections is even more delicate, mainly because of the succession question that hangs over the country as Mubarak ages and his 46-year-old son, Gamal Mubarak, shows every sign of maneuvering to take his place. Prominent party loyalist Mustafa el-Fiqi, chairman of the Parliament’s Foreign Affairs Committee, dropped a bombshell this month when he said that the choice of the next Egyptian president would need US approval and Israeli clearance.

“Is Egypt becoming another Iraq?” asked the independent Cairo newspaper Al Masry Al Youm. “What sovereignty are we talking about when one must garner the consent of foreign countries to become president?

“We want to ask the regime what benefit it gleans from adopting policies — some of which are declared, others covert, and all invariably disgusting — that dovetail so nicely with Israeli and US interests?” it added.

Best-selling novelist and liberal activist Alaa el-Aswany says he has no doubt about the rationale behind the scenes.

“The Egyptian regime has proved that it will no longer hesitate to commit any crime in order to please Israel, so that Israel puts pressure on the US…to accept President Mubarak’s son Gamal as his successor,” he said.

Jonathan Wright is the managing editor of Arab Media & Society

The siege has destroyed the economy in the Gaza Strip,” said Moeen Rajab, an economist at Al-Azhar University in Gaza City, noting the Strip’s land and sea borders have been effectively sealed for some two and a half years. “But preventing the tunnel trade will deny the livelihoods of tens of thousands of people who depend on it.”

Up to 80 percent of the 1.5 million people in the Gaza Strip rely on some kind of basic subsistence relief aid. In an economy with virtually no official corridors to the outside world, tunnels dug under the Strip’s southern border with Egypt are economic lifelines.

“Despite the fact that goods brought through the tunnels are expensive and difficult to bring into the Strip, there is no alternative,” said Rajab.

Karen Abu Zeid, the commissioner-general of the UN Relief and Work Agency (UNRWA), said that the tunnel trade, which is used to import consumer staples, mechanical parts, medical equipment, weapons, livestock and any number of other commodities into the Gaza Strip, accounts for some 60 percent of the Gazan economy.

“Preventing the tunnel trade will deny the livelihoods of tens of thousands of people who depend on it”

High profits

Much of the available cash is invested in the tunnel sector, with 800 or so tunnels operating in the territory last year. An average tunnel costs about $90,000 to construct and operate, according to Jordan’s Ma’an News Agency. Tunnels can reach depths of 15 meters and extend 800 meters in length, with the usual cost formula being about $100 per meter of tunnel built. Fully operational tunnels sell for approximately $100,000 to $120,000.

The tunnels, which can take less than a month to construct, are sometimes built on rented land. The land owner is often compensated with a share of the tunnel profits, with goods typically transferred underground by mechanized winches and distributed to traders for sale in Gaza markets.

“The people who work the tunnels use [United States] dollars to trade with Egypt, but the average person uses [Israeli] shekels for everything,” said Abu Ahmed, an economist in Gaza City who declined to provide his real name. (The US dollar is currently trading at about 3.7 shekels on the foreign exchange markets.)

The Hamas government charges a one-time tunneling fee to permit tunnel operators to break ground, though reports vary as to the amount — from $3,000 to $10,000. After that, taxes are collected on goods brought through the tunnels, with some estimates pegging Hamas’ tunnel revenue as high as $11 million a month.

According to Israel’s Haaretz newspaper, to transport a single delivery of assorted goods by tunnel in 2008 cost on average $300, while the total monthly value of all goods brought through the tunnels can reach as much as $50 million.

The revenue collected by owners and operators is estimated at $200 million to $300 million annually. 

Since the beginning of the siege, the tunnels have substituted official modes of moving goods into the territory. For instance, only 41 truckloads of construction materials have entered the Gaza Strip since January, 2009. Reliable figures for the volume of the tunnel trade in 2009 are unavailable, but YnetNews put the figure at $650 million worth of goods for 2008.

Sixteen human rights organizations — including Oxfam International, Amnesty International and Mercy Corps — issued a report in December 2009, entitled ‘Failing Gaza,’ summarizing the economic condition of the Strip two and a half years after the start of the blockade and one year after Israel’s Operation Cast Lead — a 22-day military assault in which nearly 1,400 Gazans — mostly civilians —  and 13 Israelis were killed, 10 of whom were soldiers. As much as $890 million in damage was caused, including the destruction of schools and farms.

Before the blockade began “an average of 70 truckloads of exports left Gaza per day, while 583 truckloads of goods and humanitarian supplies came in,” noted the report. The first two years of the blockade saw 112 truckloads enter the Strip per day, on average, with 74 percent of this cargo made up of basic foodstuffs. Exports have been entirely banned, save small shipments of carnations to the Dutch market.

Inflation concern

Before the blockade, Israel deemed 4,000 categories of items as admissible for import into Gaza; currently that number stands at 35. 

Describing the economy in the Gaza Strip, Abu Ahmed said, “People are struggling. Many things are not available in stores right now, despite the existence of the tunnels.”

“During the war the price of a bag of bread went from 5 shekels [$1.35] to 10 shekels [$2.70]. Bread has dropped to about 7 shekels [$1.88] since then, but the prices of other things have stayed very high.” A 2-liter bottle of soda has jumped 100 percent, from $0.80 to $1.69, since mid-2007.

Abu al-Abed, who works at the Islamic University in Gaza City and declined to be identified by his real name, told Executive: “Prices of goods in the stores haven’t increased very much since we learned about the Egyptian wall, but we do expect them to.”

Rajab agreed and predicted that the “the wall will result in an even more severe inflation.”

Conservative estimates place the depth of the Egyptian wall at 18 meters underground, while numerous media reports suggest it is being installed with water pipes to soak the soil and make tunneling beneath it impossible. The completion of the wall will, most likely, entirely discontinue commerce through the tunnels.

An average tunnel costs about $90,000 to construct and operate, with fully operational tunnels selling for approximately $100,000 to $120,000

The first rumors that a building project had commenced on the Egyptian side of the Egypt-Gaza border in the northern Sinai circulated in December 2009.  

Although the Egyptian government initially claimed routine maintenance along the existing border wall, by December 19, Egyptian Foreign Minister Ahmed Aboul Gheit implicitly confirmed the construction of an underground wall intended to prevent the passage of goods and arms into the Gaza Strip.

“Whether a wall or detection hardware, the main thing is that the Egyptian territory is protected,” Aboul Gheit told the state-owned weekly newspaper Al-Ahram Al-Arabi.

Impassable

According to Palestinian security officials, the initial phase of construction at Rafah was completed by late December and builders have moved west. Conservative estimates have put the depth of the wall at a minimum of 18 meters, and extending for 10 kilometers along the border.

Although smugglers first reacted smugly, saying they would dig under it, reports have surfaced that the wall design incorporates water pipes, likely intended to flood tunnels and drench the soil to make tunneling below the wall impossible.

Egyptian security near Rafah has been tightened since construction began, and approaching the border from the Egyptian side requires government permission to pass checkpoints, or the aid of Bedouins willing to provide off-road transport.

Egyptian President Hosni Mubarak addressed the media in mid-January, declaring the tunnels a flagrant abuse of Egyptian sovereignty and a threat to the country’s security, citing the 2004 bomb attacks on tourist resorts in the Sinai Peninsula as evidence of terrorism by Hamas, which took control of the Gaza Strip in June 2007.

Rumors that the United States and Israel pressured the Egyptian government into taking action were echoed by Karen Abu Zeid, outgoing commissioner-general of the United Nations Relief and Works Agency (UNRWA) at a forum at the American University of Cairo in mid-December. According to Abu Zeid, the steel used to build the wall is “bomb resistant” and made in the US.

The Al Jazeera satellite news network reported that US and French engineers designed the panels for the wall, which were built in America and then shipped to Egypt for assembly on-site by the firm contracted to build the wall — The Arab Contractors Co., also know as Osman Ahmed Osman and Company.

The steel used to build the wall is “bomb resistant” and made in the U.S.

The Arab Contractors

The entirely government-owned Arab Contractors Co. is a subsidiary of the Egyptian Ministry of Housing. Established in 1954 by Osman Ahmed Osman, it was nationalized in 1961 and through the 1980s was the largest Arab construction company.

Osman, later the minister of housing and a member of parliament, was a close personal friend of President Anwar Sadat and accompanied him on his 1977 visit to the Israeli Knesset.

Having been contracted to build the Aswan High Dam, as well as boats to ferry Egyptian soldiers across the Suez Canal in the 1973 war with Israel, the Arab Contractors’ role in building the wall at Gaza represents its ongoing involvement in the major developments of modern Egyptian history.

Today the company boasts a workforce of some 60,000, is active in more than 25 countries in the Middle East and Africa and has development projects spanning the spectrum, from bridges and tunnels, to water treatment plants, power stations and hospitals.

Neither the Osman family nor the ministry of housing responded to Executive’s requests to comment for this story. 

The hand of Uncle Sam

America has an extensive history of providing Egypt with military and border security assistance.

In January 2008, the US Congress voted to withhold $100 million in aid intended for Egypt in an effort to pressure Cairo to tighten security at its border with Gaza. Although then-President George W. Bush allowed the money through, Egypt allocated nearly a quarter of the funds to advanced tunnel-detection equipment. A dozen civilian members of the US Army Corps of Engineers then traveled to Egypt in 2008 to train security personnel in the use of that equipment.

In May 2009, the House Appropriations Committee voted to tack an additional $50 million for border security onto a $260 million package for security assistance to Egypt. 

“The US believes that weapons smuggling into Gaza should be stopped,” said Margaret White, spokesperson at the US Embassy in Cairo, to the Daily News Egypt in December 2009. Weapons smuggling is “highly destabilizing” and could provoke “another round of violence in the region,” she continued.

“Incentives for smuggling legitimate goods into Gaza should be reduced by increasing the volume of commercial and humanitarian goods allowed through Israeli-Gaza crossings,” said White, adding that, “The US has no involvement in the project to install a barrier on the border with Gaza.”

Beyond the wall

In addition to the steel barrier itself and the security stations bristling with detection equipment to monitor and halt breaches, Egypt is also constructing a coastal marina, placing boulders in the sea and heightening its ability to prevent maritime passage from Egypt to Gaza.

Israel announced the construction of a similar wall along the entirety of its 250-kilometer border with Egypt, at an estimated cost of up to $1.5 billion, with Prime Minister Benjamin Netanyahu citing “illegal immigration and security concerns.”

Beyond sparking international ridicule of Egypt as a puppet of the US and Israel — with protests erupting in front of Egyptian embassies around the world — on the domestic front the construction of the wall will also curtail a lucrative income source for northern Sinai.

Many smugglers on both sides of the wall have made fortunes from the tunnels, and in impoverished Sinai, long neglected by the Egyptian government, the tunnels have represented one of the few sources of steady income for the Bedouin population.

Others in the area have expressed concern that the wall — which will pump seawater through its pipes — will contaminate the aquifer situated beneath Gaza, northern Sinai and Israel. This aquifer acts as a primary water source for most of the area.

Reports from Palestinian sources indicate that the aquifer is already experiencing rapid degradation from overuse and salt water intrusion.