In Gaza, money is falling apart

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0:28Hello? Hello? The other day, I joined a call between these two old friends, Al-Aldin Sheikh Khalid and Muhammad Awad. Hello, hey, Muhammad. Hey, how are you? They haven't seen each other in 11 years, but they're always on the phone together. Every day. You talk daily? Yes. He's my best friend. He's my brother. He's everything that friendship means. And Al-Aldeen, who is Muhammad to you? Muhammad is really like the best human I can know. Like when bad things happening, Muhammad got in even more like higher place inside my soul. So, yeah. Al-Aldeen calls Muhammad Modi. Yeah, we call him Modi. Muhammad calls Al-Aldeen, just Allah.

1:23Pretty simple nicknames. They were much more creative in high school. Allah, we called him the prince. You called him the prince? Yeah, he's right. And then Muhammad al-Maestro. So the maestro and the prince. Oh, yes. Yeah, two best friends. Al-Aldin, Allah, the prince, and Muhammad, Modi, the maestro, grew up together in Gaza. In high school, Muhammad used to have to walk by Al-Aldin's house on the way to school. And every morning, Allah would wait for Modi. And we like going together, walking. There's the guy who opening his store for morning student and he selling falafel, hummus, ful, like very tasty small sandwiches.

2:09Do you remember that? He asked Mohammed. Yes, of course I remember. It's our daily breakfast. This memory they have of walking to school in Gaza, buying falafel and hummus sandwiches. this could never happen today. Because first of all, Al-Aldin is in Belgium now and Mohammed is stuck in Gaza. But also, kids in Gaza have not gone to formal school in almost two years. 90 % of homes have been damaged or destroyed. And food? Well, though Israel disputes this, a United Nations back panel has declared famine in parts of Gaza, which means there is documentation of widespread starvation. We eat right now to stay alive, Not for joy.

2:50And besides food, there's something else that's missing. When Al-Aldin and Mohammed used to stop by the falafel store, they'd just dig into their pockets. How would you pay for it? With cash? Yeah, cash. It was like cheap as coins, shekels. Like one shekel, for example, something like that. Shekels are the Israeli currency, but Gaza uses the Israeli shekel too. Yeah, for sure. The economy is sharing with Israel the currency. And Aladin says sharing currencies with Israel was, in a way, for a while, good for Gaza. From the shekel is good economy, yeah? We can say good economy. The Israeli shekel is a strong currency.

3:30But Israel stopped letting physical shekels into Gaza almost two years ago when the war started. No new cash or coins have been allowed to enter. And there are no bank branches or ATMs operating in Gaza anymore. In addition to all of the other shortages in Gaza, there's also not enough money. So Al-Aldin, the prince in Belgium, he's now trying to get money into Gaza, Israeli shekels into Mohammed's bank account, which is not that simple. No, absolutely not. Yeah. And Mohammed, the maestro in Gaza, he's trying to somehow turn that money in the bank into cash to buy things people need. That's why they're on the phone every day.

4:18Cash is a very big problem here. How do you turn money in the bank into cash when there are no banks? And almost no electricity? And spotty internet? And what is there to buy? How does money even work in Gaza right now?

4:39Hello and welcome to Planet Money. I'm Sarah Gonzalez. Whatever paper cash was in Gaza before the war started, that's basically all that's been circulating for two years. It's been overused so much the bills are now faded and fraying. Money in Gaza is falling apart. Today on the show, how Mohammed and Al-Aldin are little by little getting money from outside of Gaza into Gaza in order to buy food, milk, tents. This involves multiple bank accounts all around the world, plus a cash broker in Gaza, sometimes a cash repair person in Gaza, just to get usable money in Mohammed's hands one time.

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6:22No need to panic. With your iPhone, you can tap to pay using Apple Card with Apple Pay. and earn unlimited daily cash back when you do. Apple Card is ready when you need it. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Terms and more at applecard.com. This message comes from Insperity. Excellence takes drive, work, perseverance. Tiger Woods brings it to the course. Insperity brings it to your business. Want to be the best? Work with the best. Insperity. How you HR matters. Learn more at insperity.com slash tiger. In a way, Al-Aldin and Mohammed's whole project started because these two best friends ended up in two very different places.

7:05Mohammed was stuck in Gaza and Al-Aldin was not. Al-Aldin was able to pay to evacuate some of his family back when you could do that. But Mohammed couldn't get out in time. And Al-Aldin couldn't get his mind off of Mohammed or out of Gaza. So he started thinking, OK, what can I get into Gaza? He can't send food or packages. Israel controls the flow of anything into Gaza. The Israeli military says it's not letting cash in because it wants to prevent Hamas from being able to buy weapons or pay fighters. But this cash blockade is affecting all two million people in Gaza. UN experts have called it a severe economic emergency and pushed for an end.

7:48But the Palestinian Authority in the West Bank also stopped cash shipments to Gaza because there were robberies. So last year, Al-Aldin decided maybe he could get money in for the family he has left behind. Friends, friends of friends, not to hand out his cash. Actually, people there is not looking for money exactly, you know. They need it for urgent needs. Yeah, no one's handing out cash. Al-Aldin and Mohamed's whole project, which they call Impossible Light, by the way, is to get money in in order for Mohamed to buy formula, tents, diapers, water, to give away for free. Mohamed, give the family the tent, give the family the food, like that.

8:32This is Haya. I'm from Gaza Strip. Haya lives in a camp in Gaza, along with a bunch of families that Al-Aldin and Mohamed have been trying to help out. They put us in touch. She's the oldest child in her family. And talking to Haya really helped me understand what it's like to live in a place where there's a cash shortage. What families like hers have right now, what they don't have. How old are you, Haya? I'm 23 years old. 23. And where are you living currently? Like, where are you sleeping? Recently, in Almawasi, in a tent. The Almawasi tent camp is where many of the hundreds of thousands currently fleeing the Israeli assault on Gaza City are likely headed.

9:19It's one of the few places left where people can stay in Gaza. Haya says it's crowded beyond imagination already. Do you have pictures of your home now, where you're living now? Home now? What? Every time I ask Haya about her home now, she says, What? No, I don't have a home. I have a tent. Our tent is very simple. Inside the tent, there are just these eight mattress pads on the floor. Whatever belongings they have are covered under this red cloth. To make the place pretty, you know. Haya doesn't really want to talk about her tent. What Haya wants to show me is pictures of her real home and her old life.

9:58This is the cat, Mimi. Mimi is Haya's fluffy white cat that she hopes is still in her home somewhere, if her home is still there. She's not allowed to go back to check. That's your house, that big house? Right, my house is a big house. Haya misses her room in that big house. Her poetry books, having a door, quiet. I'm a person who likes to be alone to read or to write. She misses baking. A cake, a cheesecake, a knafa. You know knafa? I love knafa. If I meet you, I will bring a knafa. Okay, sounds good. Have you ever left Gaza? Just once. Just once. Right. For decades, Israel and Egypt have both restricted travel in and out of Gaza.

10:55But inside Gaza, until this war, people could still go to school every day, go to restaurants, go to the bank, go shopping, go work, make money. Can anyone work right now? Your mom, your dad, you? Is anyone working and making money right now? Right now, no. There is no job in Gaza. There are no jobs in Gaza anymore, says Haya. Her dad used to be a farmer, but 98.5 % of cropland in Gaza is either damaged, inaccessible, or both. Her mom was a teacher, but there's no more school. So there's no reliable way to make money except around aid work. So Haya says often people just barter to get what they need.

11:40Yes, right. My cousin traded oil with her neighbor in exchange for flour. Oil in exchange for flour? Yes, for flour. Sometimes Hai and her family will sell things, like when they have extra lentils at their tent, extra chickpeas. And people will pay them through, like, mobile banking. Just transfer money from your Palestinian bank account to my Palestinian bank account. People in Gaza have been asking for money on crowdfunding sites. They will even call random phone numbers in the West Bank asking strangers to please deposit money to them. But electronic money in a bank account has become less and less valuable in the war.

12:19Israel has cut off electricity to Gaza, except for one line that powers two water desalination plants, according to the Israeli military. There's some solar panels and backup generators, but there's limited internet access. A bank transfer doesn't always go through when you need it to. Also, not everyone had a bank account before the war. So unless you can physically hold your money in your hand, you can't always use it. That's why people want paper money. Cash. Do you and your family have cash right now? Right now I have 200 cash. 200 shekels? Yes, right. And so that's$59 in the U.S.? Right. Whenever their family gets cash shekels in their hands like this, it is a valuable possession that they keep close by.

13:11I put the money in my bag and if all family go outside the farm tent, we make one person inside the tent to protect the money. This cash she has, the 59 U.S. dollars in shekels, she paid$118 for it. Yeah, it's strange. But in Gaza, actually, we buy money with money. There's not enough cash in Gaza, right? So if you have money in the bank, you have to find other people in Gaza who happen to have a lot of cash on them that they sell. People are calling them cash brokers or money changers. And the fee is high. The exchange rate is 50%. So you show up to the money exchanger with 100 shekels in your bank and you transfer it into his bank account like that?

14:06Yes, right. And the money changer give me 50 shekels. But you have shekels, and you just need to turn them into bills in your hand shekels, right? Not like numbers on your bank, and even that is a 50 % fee. Right. Before the war, if I go to the bank, want to take 100 shekels cash, I take 100 shekels. Yes. Yes. It's your money, right? Right. Yes, that's right. But now cash in Gaza is so scarce that you will pay a huge markup for it. So we buy money with money. Yeah, you do buy money with money. Spending that money, though, that's another challenge. Haya has$59 worth of shekels right now, right?

15:00and yet she and her family do not eat often, like once a day. There is one meal. It's spaghetti. Most of what we eat is just carbohydrates, so it's without vegetable or fruit. Fruits have completely disappeared. Vegetables are almost gone. And when they appear, the price was expensive. Okay. In some parts of Gaza, people can grow vegetables sometimes and sell them in makeshift markets. But a lot of what is being sold in Gaza is food and medicine and supplies that are coming in as aid, as donations from other countries and charities. And some of that food and aid gets stolen and then sold when it was always meant to be given out for free.

15:52You are not supposed to sell humanitarian aid, which may be another reason people want to get paid in cash. Al-Aldin says these people are contributing to the starvation of their own people. But also, getting the aid has become extremely dangerous. Though Israel has said that it has only fired warning shots near aid distribution sites, the UN Human Rights Office says that about 1 ,400 Palestinians have been killed while trying to get food since May. nearly all by Israeli fire. So people collecting the aid are taking on a risk. And Al-Eldin says people are charging to take on that risk. Some people like even don't have someone to go to bring the aid, you know, because now who want to bring the food, he needs to be like in really good shape and like ready to die.

16:41So they make that as a job. So Hayes says shopping for food is about what has made it into Gaza, how much you're willing to risk to get it, and how much you can pay. The war and resulting cash shortages have inflated prices. A kilo of tomatoes now costs about$32. $32 for like six tomatoes. One kilo. If she wants to buy sugar? If we want to buy sugar, buy a gram. Sometimes they'll buy just a few grams for like$6. Over the spring, the price of cooking oil increased 1 ,200%. The price of flour, 5 ,000%. Larger items like a tent? 30 ,000 shekels for a tent? Wait. No, just a minute. That's not right, she says.

17:483 ,000. I'm sorry, I'm sorry, I'm sorry, I'm sorry. I'm really sorry. That's okay. Yes, it's 3 ,000 shekels. 3 ,000 shekels. 900 U.S. dollars for a tent. How much is, like, I mean, can you buy, I don't know, milk right now? Buy what? Milk. No, I don't know what. Milk, like you drink it. Milk, yeah. Yeah, yeah. I got it. Yes, I'm sorry. Milk. Actually, my little sister, Layan, said to me, Haya, if you find milk, please buy for me. So when the interview finishes, I will research for milk. Haya has a little sister, Layan, who she talks about all the time. She calls her My Layan. And Sarah, she's just 10 years old.

18:42So Haya is going to try to find milk for her layan. Maybe powder milk, she says. And doing this or doing anything in Gaza is dangerous. Haya says the Israeli military has killed so many people in her family. Cousins, aunts, also her best friend, a poetry professor she really cared about. And this is always in the back of Haya's mind. Sure. I was always scared to...

19:13I always cared for my family. And every morning, I hug my mother, my father, and my sister. I hug my little sister, my Leanne, Mohammed, Raghad, and say to them, I love you. So, after Haya and I say goodbye, she goes off to try to find milk for her little sister. Which is exactly the kind of thing that Al-Aldin and Mohammed try to find for other people in Haya's neighborhood. Great. Okay. So we need to buy the milk. Modi will buy the milk. I wrote the process, as you see. After the break, we follow the process. How a single donation to their project makes it from the U.S. or Europe or wherever to Modi in Gaza.

20:06From the prince to the maestro.

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21:03Because when it comes to your finances, your business, your future, LPL Financial believes the only question should be, what if you could? LPL Financial, member FINRA SIPC. No strategy assures success or protects against loss. Investing involves risk, including possible loss of principle. This message comes from NPR sponsor, Capella University. Interested in a quality online education? Capella is accredited by the Higher Learning Commission. A different future is closer than you think with Capella University. Learn more at capella.edu. Al-Aldin has drawn this flowchart to try to show me how they even start the process of buying milk.

21:43Like first just getting Israeli shekels into Gaza. I don't know if it will be chaos, but like we will start from the bottom. Like there is a milk formula. Yeah, you can see it. Uh-huh. Milk. OK, so you did a little drawing. It says there's a little milk and it says buy milk. There are all these arrows pointing up and branching out to show all of the different stops that a single donation makes before the money is in Mohammed's hands, ready to buy milk or buy diapers. Can I slow it down a little bit and start a little bit further back first before we do this? Okay, you can put the paper down if you want.

22:21Here's how Al-Adeen and Mohammed's operation works. Impossible Light has a website and a crowdfunding site. And they'll have all these different campaigns where they raise money for milk for children in Gaza or diapers or to put up bathrooms, bring in water pipes. Mohammed, the maestro, is the one in Gaza who buys all of the supplies and hands them out. Al-Aldeen, the prince, is the one in Belgium who gets Mohammed the money to pay for these things. Al-Aldeen and his wife, actually, Tammy, a self-described white American from Alaska, go looking for anyone they know anywhere in the world who wants to donate money to their cause.

22:59The tricky part is getting the donations to Mohammed. And this is where all those bank accounts come in, because you cannot easily or regularly walk into a bank in Belgium or the U.S. or Egypt and say, here, I'd like to deposit all of these donations into the account of this person I know in Gaza. No, no, you cannot. You cannot. You cannot. For almost two decades, Gaza has been run by Hamas, which the U.S., Israel and most Western countries consider a terrorist group. And there are a lot of rules against using banking systems to fund terrorism. So even before the Israel-Hamas war, many banks shied away from just allowing people outside of Gaza to send remittances.

23:41Even recipients of aid from big humanitarian groups are vetted before money is sent. You can do it. I spoke to a Gazan-American in the U.S. who says she has wired money to Gaza many times through Bank of America, but to relatives. She says you can do it pretty easily if you have the same last name or if you have paperwork to prove you're related. But there have been a few times, she says, when she's tried to send money to a cousin, an aunt with a different last name. And she says that money has been frozen and then sent back. And it's not the U.S. bank that blocks the money transfers, she says.

24:16It's not Israel that blocks it. It's the Bank of Palestine, she says, where her relatives bank. When I asked for confirmation, a source at the Bank of Palestine said they try to facilitate as many transactions as they can while still applying, quote, robust, strict measures on anti-money laundering and counterterrorism financing in compliance with our regulators and international standards and international partners. And the Palestinian banking sector is known for this. They don't want to be accused of financing terrorism, so they're very strict about who gets to send money to who. If you send for anyone inside Gaza, welcome to you here and the biggest headache in your life.

24:56Al-Aldin says his bank in Belgium told him he could do a wire transfer to Gaza one time. And if you do manage to wire money to Gaza, there's a fee, right? the regular international wire transfer fee. But because there are already so many fees in Gaza, and because, you know, six tomatoes cost 32 US dollars, Al-Eldin wants every penny left that he raises to go to helping people in Gaza. So he does not pay to wire money. Instead, Al-Eldin swaps money. He does these deals with people all around the world who already have shekels in a Palestinian account, but don't need them because they are no longer living in Gaza.

25:37Like we're always looking and anyone has any money on any Palestinian bank account. You need to find people who have a Palestinian bank account already with shekels already in there. Yes. Like that's the trick. The trick is to trade them for those shekels, like your shekels for my euros or pounds or yen. or dollars, whatever currency they now use. Al-Eldin will say, don't exchange your shekels for euros or whatever. Give them to me. I will give you the equivalent in euros from all those donations we've been getting. Just transfer your shekels to my Palestinian bank account. Because Al-Eldin has a relative who evacuated Gaza, but still has their Palestinian account.

26:28And that's the account they show me a real deal that just went through. Like now I can show you 150 shekel came to my relative bank account from someone, Mustafa. Mustafa sent to us 150 shekels. Mustafa is in Egypt, but he had 150 Israeli shekels in a Palestinian account. But Mustafa can't use it in Egypt as shekels. He need Egyptian bound. I tell him, okay, I give you Egyptian bound and give me the 150 shekels. And there's no exchange rate? Is that the deal? Like you don't charge him an exchange rate? If he don't charge me, I don't charge him like this. No fees. 150 shekel, by the way, is like 45 US dollars.

27:15So even a small little amount, 100 shekel, 150, we gather it, you know? There are lots of people like Mustafa, people who used to live or work in Gaza or the West bank who got paid in shekels and still have their Palestinian accounts. So Al-Aldeen basically collects those shekels sitting in Palestinian accounts and just kind of moves them around until I take this shekel from our bank account and send it to Muhammad, my best friend inside Gaza, Palestinian bank account. You see the point? Al-Aldeen's Palestinian bank account is the key to his operation. Because when you transfer money from the Palestinian bank account of Mustafa in Egypt to the Palestinian bank account of Allah's relative, who is in Turkey, to the Palestinian bank account of Mohammed, who is in Gaza, it's instant.

28:06And there are no transfer fees. It's all Palestinian bank accounts. Now, Al-Adeen assumes all of this is being watched and tracked, and he's fine with it. He says he is only sending money to Mohammed, a known, trusted source, and Mohammed only uses it to buy things. You give people money. Like I think many people will wonder, OK, but how we know that you don't give this money for terrorist people? You can't expect this question, right? I'm giving food. I'm giving debbers. Like we have debbers. I don't know how you can use the debbers. So once Al-El-Din in Belgium has transferred money to the bank account of his best friend, Mohamed, who is in Gaza, Mohamed now has to get the money out of the account as cash when there are no functioning ATMs and go looking for flour and bread and tents.

28:58Mohamed is currently staying in a relative's house that is standing, but a lot of the exterior walls are gone. You can see into the neighbors, so it's always loud where he is. The past years I was living in a tent, but 20 days Years ago, the army came to our camp and destroyed everything, destroyed our tents. There is a heaviness in Mohammed's voice that you will hear. It's kind of always there, except when you hear him with his kids, Ahmed and Mariam. Mariam! Mariam! Come on! He calls Mariam, my heart. Come on, tell me. Hi! Hi, Mariam! Hi, Mariam! She's four. And when I ask her if she speaks any English, she says, no, number two.