http://www.haaretz.com/hasen/spages/630784.html
This article was published a couple days ago in the hebrew version of Ha'aretz and now they translated it.
The article is interesting on several levels:
*The in depth, behind the scenes look at the process of tunnel making.
*What it reveals about the complete failure (and the impossibility of success) of Israel's purely military deterrence techniques, without dealing with any of the underlying causes.
* The lucrative business motives of tunnel making.
While no doubt the business motive behind the tunnels is paramount and the market aspect of supply/demand does influence the situation, I find the author's emphasis on these aspects a bit ideological...
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[...]
"The Israel Defense Forces was ensconced on the so-called Philadelphi road between Gaza and Rafah and waged a losing battle against the most profitable business in the Gaza Strip. The army built an ugly, rusty steel wall along the road, believing that by "burying" the wall's foundations six meters underground they would create a tough barrier that the excavators would find difficult to breach. Above ground were five huge concrete bases and around them were tanks, armored vehicles and sophisticated observation and night-vision instruments. But below the diggers deepened the tunnel to 12 meters and rendered useless both the wall and the state-of-the-art defensive equipment above them. The result was that the top of the steel wall remained suspended in the air, its legs buried six meters down, but not deep enough to stop the human moles, whose simple means made a mockery of the technology that was mustered to try to stop them. The Philadelphi wall remains one more ugly addition to the ugly landscape of Rafah, a wall that is of no use and that offers no deterrence."
[...]
"The smuggling market To own a tunnel in Rafah is a profitable business. The cost of building an average one, 800 meters long, from the nearby Brazil neighborhood or another one in the vicinity, is approximately $30,000. Another $30,000 has to be added to the cost for paying the owner of the house under which the tunnel is dug a great deal of money in Gaza terms but a drop in the ocean compared to the profits a good tunnel can yield with Gaza's craving for imported merchandise.
As in the stock market, as in any active capital market, here, too, there are ups and downs in the prices of the "goods." When the market was dry and the smuggling route operated lethargically, the price of a Kalashnikov assault rifle soared to $600. In a routine, active market the price ranges between $250 and $300, a price that every sensible person with an instinct for survival can afford in order to safeguard himself and his family.
When the border was breached and the smuggling proceeded freely, the price of a Kalashnikov plummeted to below $200 almost below cost price, according to the tunnel index. Smart "entrepreneurs" have stopped all subterranean activity until the market regains its balance and gets back to normal operations.
Supply and demand also affect the salary of the "moles." In "good" periods a master excavator could make almost 50 Jordanian dinars (NIS 325) in a day. The first and second assistants to the team head earn between 30 and 40 dinars, a huge salary in Rafah and Gaza terms.
An active tunnel can yield for the entrepreneur and his partners close to $500,000 in one smuggling operation. Just about everything is smuggled: weapons, ammunition,"
[...]