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- [00:05]
Aviv
Hi, everybody. Welcome to a new episode of Ask Aviv Anything. Professor Yanai Spitzer helped me understand. He didn't know he was doing this. It was a tweet of his. He helped me understand a couple weeks ago that everything in Gaza had changed. I had already said on podcasts or live streams back in May, things like this could mean hunger. Israel, don't screw this up. I actually have a tweet like that with harsher words than that. There was a whole theory, a calculation that we could stop aid, create pressure, increase the protests against Hamas. It's kind of a shocking misunderstanding of Hamas by people who should understand Hamas. Apparently, the people who suggested this plan, who came up with this plan are army intelligence, the same brilliant minds that gave the actually successful, astonishingly successful campaign against Hezbollah. Israel in Gaza is floundering, looking for a strategy. There was a good strategy, and then it didn't work. And then another good strategy, and it didn't work. And then another good strategy, and it didn't work. It always made sense. It never got the job done. And there isn't a serious debate. There is. It's so politicized. Netanyahu made a decision about now surging aid into Gaza two weeks ago Saturday in a way that prevented Smotic and Ben gvir, his great wing coalition who opposed aid from being at the table to vote on it. So much politics is influencing this fundamental question. And this past week, Smotrich has finally said, you know, maybe leaving aid out is actually hurting the war effort. Maybe we should put aid in. Good morning. It's been a deeply frustrating thing to watch. There's a tremendous amount of lying out there. I also believe that the Israelis have engaged in what is both morally an enormous problem and strategically a massive setback, because this war isn't being run properly. There is hunger in Gaza. Israelis have a hard time believing it because there've been claims of hunger that never panned out. Not warnings, claims by serious agencies that hunger had gripped Gaza and everybody was in the throes of it when it simply wasn't true. And that has happened repeatedly in 22 months. And now it is true. And Israelis still suspect that maybe they're being lied to by everybody. So all of that, all of that complexity, all of that frustration, all of all of that suffering that this folly of a policy has imposed on Gaza is something I'm going to unpack. I asked Professor Yanish Spitzel to come on the podcast. He is here with me today. And before we get into it and really unpack, both the hunger question, the policy question, the economics of how we know there is hunger, how much hunger, what it's going to take to solve it. All of that I'm going to throw at him and also the political economy of Gaza generally, which is a really good indicator, a data based indicator rather than just a propagandistic or political one for what Hamas's actual state is and what a war to actually defeat it going forward. If we're going into Gaza City, if there's going to be occupation, what it would actually take, what does that actually look like? So all of those things stay with me. I just want to tell you really quickly beforehand that this episode was sponsored by an anonymous sponsor and dedicated to the memory of Herbert Pagani, artist, composer, author, and in to the essay that he shared on French TV in the mid-1970s. It's titled Plea for My Land. It's a powerful and timeless defense of Jews and Israel that should be heard by all. Herbert was an Italian Jewish artist. His talents were varied from sculptures made of recycled materials to classical painting to composing original songs for his musical album albums. He was born in Libya in 1944. He died in the United States of leukemia at the young age of 44, leaving behind so much unrealized talent and potential. He was a self described leftist and humanist, but also a passionate defender of Zionism. And we will put in the show notes a rough translation of the essay that he presented in French on French tv. I encourage everyone to watch the original. It'll be a YouTube link. Thank you so much for that dedication and for this just fascinating opening of a window so we can all learn more. Yanai, thank you for joining me. How are you?
- [04:25]
Yanai Spitzer
I'm doing well. I'm really honored to be here on a show. I've been following it and many of my friends and relatives have been and you're doing a great job disseminating good information. So I'm really honored to be here.
- [04:39]
Aviv
Thank you. Thank you so much. I wanted to take a dive basically starting with what everybody knows or what everybody thinks they know, but I don't actually know. First of all, let's talk about hunger. Israelis, a lot of Israelis don't believe there's hunger. There's a poll now. Almost 80% of Israelis say that the Israeli army is doing whatever it can to prevent civilian suffering. It's just a general belief of the Israeli public about their military. Fine, understandable, reasonable. I happen to think the Israeli military is moral generally and there are failures, obviously. And it's a war and it's urban environments and all of that, but there really actually is hunger now. So first of all, why do you come to the conclusion that, no, this is the one time it's real? We have literal reports from literal UN agencies in January of last year and March of last year. Just, I think I found half a dozen just in a cursory sort of Google search of not claims that it might happen, claims that it was already. Gaza was deep in the. In the, in the grip of famine, and it simply was never true. It never panned out. Everybody just kind of dropped it when the data didn't show it and moved on. But the claims still hovered and the whole world was convinced it was happening. This time it's real. And it took people like you, and you framed it that way the first time you said it. And I framed it that way and quoted you by name. I should say Israelis don't believe it. Please, Israelis believe it. This time this is happening. So tell us about that. Why did Israelis not believe it? Why did they think there might not be? Why would Israeli officials think there might not be hunger if in March and April and right up until May, no aid was going in? And why were you convinced that now there really is hunger?
- [06:17]
Yanai Spitzer
Okay, so perhaps the way to start is actually by talking about what you actually mean by hunger, because there are part of the problem, and I guess we will get into the informational arena, but part of the problem is that people have a lot of misconception of what hunger really means. So I think it's a good idea to start this conversation by kind of defining, well, what at least I mean by hunger. In Israel, people have the concept of hunger as basically, we need to see pictures like in Buchenwald or Auschwitz upon liberation. But that's not the kind of hunger that we're talking about. Definitely not. We're talking about a situation in which a significant portion of the population simply does not get the basic calories it needs in order to sustain for a prolonged period of time without losing health and have detrimental health effects. So it could be that people still look, you know, they still have their hats on, they still can move, they still can operate, but they go on. Too few calories, they're dizzy, they're weak, they're susceptible to diseases. And that can go on for a few days or maybe even a few weeks. But over time, the detrimental effects are catching on. So first, the most vulnerable portions of the population, elderly people, people with prior medical conditions, babies, little children, they are going to be weaker, more susceptible to diseases, and gradually they're going to start dying. I don't think that there is a situation where people are actually dying in the streets. And honestly, famine, even during the worst famines, most of the causes of death are not starvation. People usually succumb to diseases way before they become emaciated bodies. So people have this idea of famine as being a very extreme situation where it's either Buchenwald or people sitting on the beach, eating in restaurants and stuffing their bellies. There is a lot of gradation in between. And I just want to be clear about what is the threshold I choose to talk about. And this is this threshold, a large proportion of the population that is unable to receive the basic amount of calories that it needs in order to sustain its health and its weight. Now, to be sure, let me just add.
- [08:42]
Aviv
Let me just add to that. We spoke to Ruti Rousseau, who is a famous Israeli chef, but also head of the Israeli branch of World Central Kitchen, and very aware, doesn't have a connection to the Gazan work of World Central Kitchen. That's a whole different group, but very aware of their work. And she says one of the problems also is, I wouldn't say psychological, emotional, because that makes it sound maybe flippant and less significant. But we're talking about people who don't know if there'll be food for their family in two days. The not knowing a means you're stockpiling in a way you wouldn't, and that we're going to talk about that. You argue that stockpiling also had a tremendous effect on Israeli miscalculations about how much food was actually available. But also we're talking about just a level of anxiety and tension and fear that hunger represents, independent of the nutrition question.
- [09:35]
Yanai Spitzer
So that's exactly right. I mean, you're talking about, basically about food insecurity. And food insecurity, even. Even given the quantities of food that are available, does affect the diet because people will eat less even if they had the same amount of food, if they're not certain that they're going to have to have food on the markets or in the aid centers tomorrow or next week or two weeks from now. So that's definitely something that we need to take into account in our. In our calculations. Now, it's too few calories to begin with. It's not the Buchenwald standard, but it's also pretty low in the sense that we're not talking about a diverse diet. So I think that there is no dispute that very few vegetables, fresh vegetables, Fruits and live proteins are coming into Gaza. So I'm not even sure that the diet we're talking about has enough proteins. It has some fat, but it comes from things like, you know, trina or tahini, right? Not from eggs, not from chicken, not from meat, not from fresh milk. So this is the standard that we're talking about. And already here people have certain expectations when they think about hunger and the reality doesn't meet them. But it still is a dire situation and, and it just cannot persist. Now the other reason where people are very, well, the two other reasons why people are very reluctant to believe it first is obviously that they've lost sympathy. And sympathy is really kind of like a key trigger for alarming us to the distress of the other side. And people in Israel, even people who are close to me like minded, have simply lost it. The third reason is really the wolf, wolf story, the crying wolf story. As you said, the alarms about famine have been going on almost since the day the war started. And time and again they've been proven to be overblown, incorrect, labelious. There's not been a situation of famine in Gaza with the exception of northern Gaza. I believe it was last summer when Israel basically decided to besiege it to induce the population to move southwards and to go on and fight the militants that were left in the area. People that were left there were. I'm not sure how much provision they've had to go by, but that was a dire situation, but that was local and it should be said, I'm not a legal scholar or definitely, I know very little about international law, but it should be clear that there is a war going on and under conditions of war, an army is not obliged to supply food all the time, everywhere. So I would think of that as a separate episode. And now we're talking about the entire, the entire population of Gaza. And about two weeks ago, when, when I started writing about the topic, that was because I saw things that seem to me like critical signs that if the situation persists, there will be a hunger in the sense that I defined earlier on, that it cannot last more than a few days without this process taking effect.
- [13:07]
Aviv
Channel 13 ran this with quotes from the cabinet meeting where army intelligence came and said, you know, we're stuck, right? The ministers are all arguing with each other, we're stuck. Well, we can always push with the military more. The army then says, we already control 75% of Gaza. If we take the other 25%, the hostages all die, the civilians have nowhere to go. We actually take military control of the civilians physically. And then we owe the civilians all the demands of occupation under 4th Geneva, which is, you know, sanitation and food and water and all these things. It's a massive decision. And then on the side of this conversation, army intelligence says, well, you know, there are these. I'm paraphrasing badly, I apologize, but this is basically what the conversation was in the Cabinet. There are these protests against Hamas and there's a lot of anger in Gaza. Most Gazans, according to polls, don't want Hamas to still rule Gaza after the war. So Army Intelligence, faced with this frustration by the Cabinet, basically comes and says, if we cut aid, you know, we will instigate these rebellions and maybe that's the way forward. That is something that kind of other sources have said. So how do you understand how all of that unfolded?
- [14:15]
Yanai Spitzer
So, okay, I think we should go back to the ceasefire period, which is about January, February 2025, and Israel. So over two months, Hamas was gradually releasing hostages. Israel was kind of like forced into this deal by the new Trump administration. And as a part of this deal, Israel basically flooded the Gaza Strip with basic provision. And that is a very important key to understanding how things unfolded. There are criteria by UN organizations for how much food is actually needed in order to prevent famine in the sense that I described. Basically, how much food does the population need in order to have enough calories, some fat, some proteins, in order to prevent starvation. So that's a very low bar on which a population can survive over a lengthy period of time. And the numbers that the UN quotes are something like 62,000 tons of food provision a month. And during the two months of the ceasefire, depending on the source, between 340 and 380,000 tons of food supplies entered Gaza. So, again, so that's a quantity that should have sufficed for five months, albeit on a very undiversified and unsatisfying diet. Okay, so if everybody is getting exactly its chair, nobody hoards, nothing goes to waste. There's still a buffer actually included in these calculations. So these calculations amount to more than 3,000 calories per person a day, which is way more than the threshold demands. But there's always waste and there's packaging, et cetera. So this is definitely. You don't want to play around with these quantities. You definitely cannot go below if you're claiming that you're not trying to starve the population. So I think that's a key point for understanding how things unfolded, which was, I mean, the best evidence to the fact that there was plenty of food going on to be had in Gaza was that the prices, for example, of flour came back to almost exactly the prices before October 7th. So really the prices here are a very good indication. If they're paying exactly the same, then in all likelihood it is equally available as it was in September 2023. Now, I think you can speak much better than me about the political moves that brought the change about, but Israel violated the ceasefire and when it did that, it basically stopped any food supplies going into Gaza. So for more than two months on March, April and until the middle of May, basically zero supply went in, zero food supply. It was a virtual siege. And I think we can talk about whether this is a justified, this is an acceptable tactic or not. But it's very important to understand that Israeli decision makers did that knowing very well that the stocks are full now. It did it, I think, for bad reasons. Maybe it was linked to pressures by extremists like Smotrich and Benvir, hoping it could use that as a negotiation tactics. But in my view at least, and here I'm not saying it as an economist, but just as a general observer, you don't want to play with this. I mean, you can pressure the population, but you cannot use the risk of famine as negotiation tactics. Now, already in March, Kogat, the Coordinator of government activities in Gaza, headed by General Rahsan Alian, warned that Gaza has about 80 days of food to survive on, which is even more conservative than the numbers published by then UN's own numbers are suggest.
- [18:49]
Aviv
And there are some reports in the press that he was, he was laughed at, actually. Yeah, there's a lot less food than you think there is. And the rest of the bureaucracy and the intelligence people said you're just, you don't understand these things. And it turned out that they did not understand these things. And he was accurate, right?
- [19:08]
Yanai Spitzer
And I think Nadava did last week a very good job describing this process. And there's lots that is left for the, of the future to, to study. But I think that it's important to understand that there was a reasonable debate to be had. I'm putting aside the question of whether preventing food at all is a legitimate tactic. There were reasons to believe that Gaza is not supposed to starve, that the starvation is not supposed to start immediately, even though no food was coming in. And again, we're talking about a very low bar of sustenance. In mid May, Kogatz issued another warning during the debates on what to do next. The debates that led to Operation chart of Gideon and he said that Gaza has a few more weeks left. And the pressure was mounting. Food prices were skyrocketing. So by May, I don't remember the exact number, but I think that the price of a sack of flour previously sold for 50 shekels before the war and again 50 shekels during the ceasefire has reached 1850 shekels. This suggests an acute shortage. Now other things have happened during that time. Israel started its military operation. It initiated the activities of the Gaza ghf, Gaza Humanitarian, Humanitarian Foundation. So that was another way of bringing food into Gaza. Also Israel resumed the food supplies to international organizations, but it set new conditions on how those food are going to be, how those trucks are going to be delivered and distributed. And that caused a lot of friction between Israel and the aid organizations. And there is a lot of, there's an entire shomon of mutual accusations of who's to blame. But the bottom line is that if you add up the numbers of just the tonnage of food that came through the GHF and through Kogat, that provides directly to the, that facilitates provision directly to the head organizations. If you add it up, it amounted to barely half of the minimum quantity of 62,000 tons a month. And that started after two and a half months of complete cessation.
- [21:39]
Aviv
So which again these officials believed meant that the three months they still had left of that buffer was now going to be five months left of that buffer, plus they would take international pressure off of them. And then what happened?
- [21:54]
Yanai Spitzer
So the prices did go down for a while. So June prices were about half the level of, of May prices. So it did have an effect, but it didn't last long. And in mid July we started seeing acute signs that there is just not enough food to be had in the markets. And at this point, I remember that week I heard several kind of reports that I would normally not consider as representative or, or reliable as a kind of like a representative picture of the entire situation in Gaza. But it started accumulating and also what really shook me was an interview of a former source of the journalist Shlomi Eldar. Again in an interview with, together with Ruth Russo, whom you mentioned before, who described the situation in Gaza City, which to be clear is relatively remote from the distribution centers. So this is probably one of the less provided areas in the, in the Gaza Strip. He described prices of flour going in between 100 and 200 shekels a kilo. So this is about 60, between 30 and $60 per kilo of kilogram of flour. And simply described his life as a father to a family who is unable to provide for them basic calories. He said it felt like, you know, physically, it sounded like Yom Kippur. You know, you're a bit dizzy. You are weak. Everyone around you is like that. And you're just busy all day trying to get food from whatever you can. And the amounts that you're paying for it are just fantastic or astronomical. So maybe you should talk about, you know, the order of magnitude, like, what do prices like that actually mean? People in Gaza never had the income that people in Israel or the west have had. It's actually closer to a third world country in terms of its income per capita working. A day's worth of labor in Gaza is on, even before the war was less than 100, maybe even around 50 shekels or even less. It's really. It's really meager. And right now, people really have no income other than transfer that they're receiving from the Palestinian Authority and donations. And, you know, the order of magnitude is anywhere between maybe 1,000 to 2,000 shekels for a Palestinian Authority pensioner or official. That's what they have to go by with. In addition to the food provision that is handed out freely. Okay. And that's an important piece of information. So with a monetary income of 1000 or 1500 shekels a month, you clearly cannot buy enough food even for full week. So the freely provided aid is hugely important. That is, in effect, income in kind. And that's how people were able to survive even under prices of 300 or 500 shekels for a sack of flour. They didn't have to buy all the flour. They got a lot of it for free. And the fact that another sack costs between 200 to 500 shekels, you know, before, before the ceasefire, that meant that they were pretty desperate for the last kilo of flour that, that they wanted to consume. But they.
- [25:35]
Aviv
I'm sorry, I'm saying. Let me, Let me just. This has been something that a lot of people have criticized. When this went out on the fp and when. And when I. And Amit basically brought this table that you had produced, a lot of people came at us and said, well, but, you know, the prices don't reflect availability because a lot of money comes in on these cash apps because. And that creates inflation because of all these other kinds of reasons. You made a very clear distinction that I found extremely eye opening, and that made me feel the same urgency that you felt, which is, we've been Looking at the UN numbers for quantity that went in. UN numbers for quantity that went in told us they should be eating perfectly fine. Not happily not. It's a terrible war. Cities are demolished. It's an urban warfare on a scale that the Israeli Palestinian conflict has never seen even anything remotely like it. But they have plenty and plenty of food. That's the UN quantitative numbers of what's going in. And you said, no, that's absolutely the wrong way to go. Prices are the way to go. And since then, a lot of people tried to challenge the prices. So why are the market prices, if so much is free, why is it nevertheless a signal of scarcity? Why are prices the right way?
- [26:44]
Yanai Spitzer
So we should not ignore the quantities. I mean, both of them are very useful pieces of information. But prices are highly indicative of the scarcity and the need on the ground. Now, what does it mean when a kilo of flour costs 100 or 200 shekels, which is likely 10% of the money income of a Gazan household for just one kilo for which you can bake maybe two loaves of bread? This basically means that even after the households receive their free allowance of food, they're absolutely desperate for the last kilo. So you can think of it either as they're willing to pay 100 or 200 shekels for an extra kilo of flour, or they are unwilling to forego this income simply by selling in the market their last kilo of flour. This cannot mean anything else, but those people are desperate for calories.
- [27:42]
Aviv
Okay, let me just double down on that and just clarify that. So in other words, if we know they're getting free supplies and these prices are still skyrocketing, and that tells us that the free supplies, even those free supplies with those free supplies, they're still desperate. And that tells us how little the actual free supplies are actually getting to them. The prices as an indicator of scarcity doesn't go away just because there's also free supplies. It also doesn't go away if we know that there's a tremendous quantity. Even worse, they can't get at it.
- [28:13]
Yanai Spitzer
It's like, despite the fact that there is a lot of provision that is handed out freely, people are still so desperate for the last kilo. This is how we should read it. And I was also challenged by many comments and critiques that how do you know that those prices are representative? Or maybe it's just one location and in other locations food are plentiful. And that was, for me, kind of like an interesting new Experience. So I'm an economic historian, so I'm kind of used to working on that data. I actually worked on historical data on food quantities in the case of the late Imperial Russia and to some extent also in Italy. I've also, you know, I'm somewhat familiar with the literature on the economic history of famine, but this is a problem that I've not encountered before, how to analyze this situation. And I realized that basically there is. The quantities and the prices tell us somewhat different stories. And so we have basically three sources. There are anecdotal reports from the ground in Gaza. It's always hard to interpret them. I mean, they're surely selective. There are a lot of people who have the interest of, whose interest is to project a picture that is much more dire than it actually is. But once you dive into this rabbit hole, you realize that there is a lot of high quality information that is, you know, it's not a statistical survey by states such as the Israeli Bureau of Statistics that samples precise prices every, every month in a large number of supermarkets. But prices are generally shared within the market. There could be many markets in Gaza, but in principle, if you have just a small number of reports that you consider reliable, the situation cannot be very different from that. And when you, when you take a deep dive into that, and I did some of it, you see that people are, you know, the expression, the legal expression in Hebrew is mesichim le fitumam. You see people that are talking among themselves, clearly not towards an outside spectator. They just want to provide information to each other. And the most interesting information in Gaza is what is the price of flour today in a given market. I've seen many discussions like that. And the prices vary, but the order of magnitude was always the same. I think that this is a very reliable source. It's consistent with. So the World Food Program, wfp, which is the main organization that currently provides food in Gaza, basically collects data. It's not very high quality service, but it collects and preserves and publishes data, but they always do it with a lag of several weeks. So the latest report we have from them is June. And it was clear that the situation between June and July suddenly became critical. So we couldn't rely for prices, we couldn't rely on WFP data. We actually had to rely on informal reports from the ground. And after diving into this rabbit hole, I'm absolutely convinced that that was really the situation throughout many places in Gaza. In many markets, prices have exceeded at certain times 100 shekels a kilo.
- [31:36]
Aviv
So let's Talk about stealing. If a tremendous amount of aid is going in and not enough aid is reaching those families and the prices are actually reliable with all of the nuance and complexity and caveats that you said. Nevertheless, this is fairly good information and it's spiking everywhere. And the actual scarcity is real. Somebody is taking the aid along the way. Now, since we talked in those. Since we talked, since I read you and took it out to the world without even talking to you, because frankly, you said it. And then I had a live stream scheduled and there wasn't even time since that happened. Massive amounts of aid have been surged into Gaza. And we have UN statements that in some cases 80%, somewhere approaching 90% of trucks have been taken, have been hijacked and all the aid taken off them and disappeared into Gaza, we still appear to have serious pockets of real hunger and massive lack of supplies. And I don't know if those pockets are, you know, 20% of Gaza or if those pockets are 75% of Gaza. I literally don't know and I don't know anyone who can seriously tell us. But both of those. If we're talking about Gaza, the population, in other words, not the territory, both of those numbers are disasters. The aid is disappearing. Now, the accusation that is very easy for. We'll call it our side, okay? Both of us have had a lot of criticisms of the war. Both of us also think Hamas has to be removed from Gaza. Both of us are frustrated. I've just been reading your Twitter feed since then, so I happen to know that you are. You have certain opinions about other, you know, questions of how the government's handled this war, etcetera, but our side being the Israeli side. Some people in Israel have been arguing that, well, the aid's going in. We've made sure the aid's gone in. No fault of ours, because the UN has never said that there isn't enough food going in. The period where there wasn't any going in came right after a period where six months worth went in in a single month. So there was plenty of food that went in. And then there was this political trick and, yeah, you know what? Catastrophic. Yeah, you know what? Absolutely disastrous pr. Yeah, you know what? It's a major military setback because it meant ceasefire for Hamas to get the aid distributed as fast as possible. It's the first time in 22 months Hamas got a cease fire without releasing a hostage. It was a catastrophic Israeli blunder, but it wasn't purposeful mass starvation, which is the accusation in the Guardian and in the New York Times and everywhere else. And so Israelis are saying, but who's actually at fault if enough goes in? But it doesn't get to Gazans, it's the theft of 90% of the UN's trucks. A thousand trucks go in, 800, something gets stolen. That's the problem. It's still Hamas. So.
- [34:17]
Yanai Spitzer
Hamas. So let's talk about like why do we think that Hamas gets his hand on at least some of the, of the provision? Hamas had a state in Gaza and it was, you know, it was also a terror organization, it was also a social movement, it was a lot of things. But it also had a state with all of the state functions including and probably the most important is the capacity to tax the population. And this is the backbone of every state. You cannot have a state without the ability to lay your hands on resources. And people have, you know, in the public debates there have been accusations about the money from Qatar that Bibi and and other leaders have allowed to come in. That was about, if I'm not mistaken, on the order of $30 million a month. I don't think that was that important. Hamas fiscal capacity was based on his ability to tax the population to tax the Gazan economy. And Hamas's survival depends on his future ability to tax the population without that is just a crime organization, which I think this is what he's on his way to being reduced to right now. Now how do you acquire resources from the population? First you need a certain tax base which is basically the Gaza gdp. This is what you can tax. And Gaza's GDP is basically non existent anymore. I mean there are only basic services that are provided. It's unmeasurable. So, so just because of the complete collapse of the Gazan economy that basically became a nation of beggars, the tax base has been eliminated and that's already a huge hit for Hamas fiscal capacity. Now it could also there are donations coming from abroad, there are the allowances from the PA and other sources that are supposedly supposed to reach the household directly. And that's a source of income that potentially Hamas could tax. Now there have been claims that when Gazans exchange the money that they get in the banks, which they call, you know, application money because it's not money, they can see it sits in a, in a Ramallah bank account and there is no way to import the cash into Gaza. There is a complete cash siege on this territory. In order to purchase goods in Gaza, usually you actually need banknotes. And there is a huge problem of cash shortage in Gaza, that makes their life even harder than they would have been otherwise. And it's really just a fascinating economic problem, leaving aside the, you know, the human tragedy there. But basically it means that one cash shekel in Gaza can buy almost two shekels in the bank account in Ramallah. So if you're a pensioner of the Palestinian Authority and you have 1800 shekels of pension that you got, you have it in your own bank account in Ramallah, you can see it in the application. But if you really want to buy flour of it, you have to redeem it, you have to cash it. So you can't go to the ATM because there are no ATMs still existing in Gaza. You have to transfer to another person in Gaza, usually a broker or exchange person. You need to transfer him 1800 shekels in order to receive 1000 shekels in cash. These are basically two different currencies. Now the way Gazans don't understand it, and very few people understood it a few months ago, I wrote a long way explanations about it, but these are really two separate currencies. The way Gazan sees it and the way people in Israel see it is that the gap, the 800 shekels that are lost in these transactions, are basically a commission that Hamas can tax. But that's not the case. We need to think of the two currencies as just the same way that when you sell $100 and receive 350. Sorry, when you buy $100 and, and pay for them with 350 shekels, you're not asking yourself, where did the 250 shekels have gone? They've not gone. It's just a dollar is more valuable than a shekel. In the same way a cash shekel in Gaza is much more valuable than a shekel of deposit in a Ramallah bank account. And so people think, and people have said that this is actually a source of income for Hamas because it can tax those exorbitant commissions. But these aren't commissions and Hamas can barely tax them. Maybe he can demand protection money from big brokers. He may be making some income out of that, but that cannot be a large source of income. What is left are the food provisions, and these are the economic resources that renew themselves in Gaza. And whether Hamas can keep up its governing capabilities crucially depends on whether he can lay his hands on those resources. He doesn't need to get all of them, but he needs to be able to get a share.
- [39:46]
Aviv
And there's very little Logic. There's no question that Hamas's very survival depends on control of as much aid as possible. You can assume that most of the gunmen taking that aid, most of them, even people who don't appear to be gunmen taking that aid anywhere Hamas could control that process, they must control that process. So Israeli assumptions are basically correct.
- [40:07]
Yanai Spitzer
I think they are questionable. I think that the reality on the ground is just so much more chaotic and it doesn't look like there is a state that just don't have the state capacity to be able to tax this provision efficiently. What I see is chaos, system collapse, societal collapse, a state that doesn't exist and a civil society that cannot stand up to the task of replacing it. It's anarchy, it's chaos. And I just don't see Hamas capabilities on the ground. In order to tax efficiently, you need to know where the things are. You need to have loyal people who provide you with your share. You need to have control. And right now it looks much more chaos and it's really hard to quantify it. I'm absolutely sure that Hamas gets some of the shares, but it just looks so chaotic. And if Hamas is really doing it like this is worth ruling. It's a really bizarre way of running a state. The more reasonable explanation is that Hamas basically lost most of its governing capabilities and its on its way to being reduced to just being the largest crime organization in Gaza. I don't buy the standard version that is going on in Israel is that everything goes to Hamas. I'm sure they're getting some of it. How much of it is just very hard to tell. And the figure you mentioned before of almost 90% of the aid being intercepted, these are official UN data and you see the videos of how it's being intercepted. Sometimes they're gunmen, sometimes they're hungry looters, and it's a bit atrocious. But the UN doesn't distinguish, obviously it cannot Ask the gunman, who are you loyal to? Are you Hamas? Are you a clan? If you're a clan, are you a clan that is loyal to Hamas? If so, how much? What's the share that you're giving them? All I'm saying is that a capable governing body, like people still presume Hamas is, if it wants to confiscate aid, it. It doesn't do it like that. It's too chaotic. This is not how a functioning state works. And I think that now that Israel has woken up to the prospects of imminent hunger and is willing to provide the quantities we are now stuck with the problem of the last five miles of how to deliver food from safely and in an efficient way from the border crossings into the kitchens and to the households. This is the problem now. And I think that quantities are not exactly no longer the problem. The problem is the anarchy and the system collapse that Gaza is experiencing now. You know, Israel can, can, can reach aerial superiority over Tehran in two days of war. It is not equipped to dealing with this kind of problem. It's a completely different thing. So some of the critique I received was that prices are high because Hamas is taxing the supply and because it's holding it. And I tried to argue that neither explanation are reasonable is Hamas is just taxing the food supply, but is distributing even, you know, according to its own interest, but it's still distributing as much food as it is it is receiving. So it's not nets accumulating or hoarding food supplies. That should not have caused a significant change in definitely not an 84 fold.
- [43:44]
Aviv
80 fold. Right.
- [43:46]
Yanai Spitzer
It could affect the prices somewhat. I'm still an economist, I'm the last one should argue that market organization or the market power are not likely to affect prices. But we're talking about 10, 20%, not 8,000%. Now the second question is whether Hamas was able throughout the spring and early summer whether Hamas had the capability to hoard. And I was very doubtful about it. In order to hoard so much food and you need, to the extent that will actually cause this shortage and the high prices, you need significant logistic capabilities and operational capacity. And I just don't understand how Hamas would have that meaning.
- [44:31]
Aviv
Ballpark. 150,000 tons of food would have to be hoarded by Hamas, not little pieces of it by individual families or other crime, but literally Hamas, 150,000 tons of food within that, you know, general ballpark. Yeah. And that's something that warehouses, Right?
- [44:49]
Yanai Spitzer
Yeah. And if, if it had that capacity, it would be quickly jeopardized and intercepted and demolished by, by Israel in order to, you know, Pharaoh was able to hoard enough food for that period, but he had a state capacity, he had granaries. And Hamas, even if he could do that logistically, this is a large scale logistical operation. It's easily monitored by the idf and it would have been demolished the moment that they tried to put it up.
- [45:18]
Aviv
So Hamas stealing is not the problem?
- [45:20]
Yanai Spitzer
I don't think so.
- [45:22]
Aviv
It is a problem, but it is not.
- [45:24]
Yanai Spitzer
It is a big problem. It is a big problem because that's the key for its governing capacities. I find it a very poor explanation for the food shortage and for the high prices.
- [45:34]
Aviv
It's not why Gazans are hungry. Will flooding Gaza with massive amounts of aid reach Gazans at this point and also crash the prices and therefore bankrupt Hamas if it is selling aid?
- [45:47]
Yanai Spitzer
So it already has. Over the past week or ten days, we've been seeing a sharp decline, decline in the prices going down to. I think the last prices that I saw go between 30 and 50 shekels a kilo, which is still a lot.
- [46:03]
Aviv
And not a sack, not a sack of 25 kilos.
- [46:07]
Yanai Spitzer
Yeah, so that's down from over.
- [46:08]
Aviv
We're talking from 80 fold to 20 fold.
- [46:11]
Yanai Spitzer
Exactly. Yeah. Which is definitely, you know, allows them to breathe a little bit, but it's not sustainable in the long run. So I think, you know, Israel got its act together at least partly, and it's willing to provide the necessary quantities now. And now we're left with the problem that I mentioned before. So definitely there has been a positive effect in the sense that people can. It's much easier for them to access food Right now. The situation is probably not acute as it was two weeks ago. And I don't know if it's sustainable and if it is sustainable, then for how long. Definitely there has been an improvement due to the increase in the amount of foods that has been released. I don't know the details, but I understand that at least part of it is due to better organizations, better interaction between Colgate and the UN organization. I should mention that the GHF provides, at least during June, provided something like between around 45% of the quantity of food into Gaza. Now, the way it provides the food is horrendous, but the food does get to, at least to some people, and it's a significant portion of what Gazans are being fed. So, yeah, so Israel can and already has ameliorated the situation. And really the challenge is how to continue to do so without letting Hamas laying his hand on the provision. You know, parachuting food is a great way to bypass Hamas. It's not a solution in the sense that the quantities are not very large. It's still very messy. It's still, you know, whoever can carry, whoever is lucky to have something landed on right next to him. It's not sustainable, but we need to find a mechanism to get to the kitchen, to the communal kitchens, to get to the tents, to the households without Hamas laying their hands on this. And my suspect is that working with UN aid organization is not a bad method. The accusation Israelis that they're Hamas infested It must be true to some degree, but I don't think that to a large degree they actually had, I think, a very, not very, but a somewhat efficient system of making sure that people who actually need the provision are getting it, including personal coupons. Part of it is that Israel will have to concede that some of the quantities will leak to Hamas and as I said, that will help him keep some of his capabilities. Now going forward. I don't want to create impression that that is it, that Hamas is done, because the moment that there is going to be a ceasefire and Israel will be restricted from acting, Hamas will get its act together again and will do everything to exert dominance over the Gaza Strip. And as I said, it's currently a crime organization, but it's the largest crime organization, probably still the most capable. It's not what it used to be. I think it will never be what it used to be. It's lost, from what I saw, it's lost a lot of legitimacy. And it's very hard to rule a population that doesn't see you as a legitimate ruler. It's possible, but it requires using a lot more, a lot more means of suppression that just makes governing less efficient. So I think that the moment the question is, you know, once, you know, one way draw the conclusion from what I said is that that's it. I mean, all of the official goals of the war have been achieved but the release of the hostages. So once we've done that, we have released the hostages, we have dismantled Hamas's governing and military capabilities and we are done. And that's not the impression I want people to come out of, because the moment that we are out, if we don't have the means to crack down on Hamas again, it will do everything to rebuild its power, to regain its capacity, to tax the population. And we're not going to get back to the same situation as before, because the Gazan economy is going to be much weaker. There are going to be a lot more restrictions. It's not going to be September 2023, but my best guess is that Hamas is going to win this Hobbesian competition of who is going to be the new Leviathan and we will still have that Hamas problem. It's just temporarily now. My best guess is that his capacities are close to fully degraded. If you tried something and it doesn't work, try another thing or try multiple things and see what works. And another thing is that to be prepared for the worst case eventuality, and that's something that I really hope wouldn't happen, which is that the anarchy is going to be so bad that Israel will actually have to occupy populated areas in Gaza. If it becomes a Somali situation, we will never be able to stand on the side and say, like, that's not ours, that's them. Because nobody in the world will take that seriously. We will be accused of causing the situation where no matter what is, what was the true culpability of Hamas, no matter what our intentions were, I would just make sure that we are prepared for that. In order to never do that, we need to think about, understand that Hamas is really building itself off its fiscal capacity. So it's not so much the Qatari money, although that was bad enough in retrospect. But we need to make sure that there's a functioning state or state like institution that governs Gaza, whether it's an Arab mandate or a UN mandate or the Palestinian Authority or some combination thereof. So long as Hamas remains a ruling power in Gaza and can tax the population, there's never going to be neither peace nor prosperity, nor dignity for the people of Gaza. And I think that whatever the design of the solution will look like, those principles need to be kept up and really monitor carefully the fiscal capacity.
- [52:24]
Aviv
Professor Yaneshvitzel, thank you so much for joining me.
- [52:27]
Yanai Spitzer
Okay, thank you.
- [52:29]
Aviv
With any luck, this will help people make some better decisions.
- [52:33]
Yanai Spitzer
Okay, very good.