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Wednesday, June 9, 2010

The Gaza Blockade : Why Trade Embargoes Don't Work

Chris Berg :
Restrictions on trade with Iraq failed to topple Saddam Hussein. They were some of the toughest sanctions in history. Yet before 2003, the only major destabilisation of the Iraq government came from the bombing in 1998.

Trade embargoes have failed in Burma, Iran, Zimbabwe, and Syria.

A 2007 study of 204 separate economic sanctions over the last century found they were successful in achieving regime change in only 31 per cent of cases. Their success at disrupting military adventures was successful in just 19 per cent.

And they can have some terrible unintended consequences.

Certainly, humanitarian goods are getting into Gaza. But simply sustaining the population isn't the main game.

The trade embargo stops Gazans from integrating themselves into the world economy. Their domestic economy is busted. It will remain busted as long as they are unable to trade. Imports to Gaza may be strictly limited, but exports from Gaza are effectively banned.

The Palestinian Trade Centre claims that, as a consequence, the number of private sector firms has shrunk at least 70%. In 2005, around 25,000 people were employed in Gaza's clothing industry. That number is now around 230. Unemployment in Gaza is nearing 50 per cent. 80 per cent of the population relies on aid. Recent Iraqi history has taught us sudden mass unemployment is not a harbinger of peace.

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