Ramadan shutdown spells disaster for small businesses in Israel’s Arab community
Nazareth’s merchants had hoped that the second week of Ramadan would be different. But the streets are still empty, the market is still closed, and even the sweets shops, the stars of the month-long holiday, are reporting little business.
“This is our main holiday, but there’s no feeling of celebration; the mood is horrible,” says Ali Awnallah, who owns the El Janina restaurant, a mainstay in the city.
The restaurant was founded 60 years ago and hadn’t closed for a day – until the coronavirus hit. Awnallah had hoped that Ramadan would compensate for the previous month the restaurant was closed, but this was dashed – the city is on lockdown starting 10 minutes after the fast ends every night.
“We feed 300 people every evening during Ramadan,” Awnallah says. “Our revenues for that month account for 15% to 20% of our annual revenues.”
He says he recently invested 1 million shekels ($285,000) to renovate an events hall that’s now standing empty. He has tough words about the government.
“We’ve had nearly no work for a month and no one is helping us,” he says. “It’s like the government is saying, ‘Manage on your own.’”
Nazareth hasn’t stopped charging its businesses municipal property tax, restaurants aren’t eligible for the government’s crisis loan program, and the banks make it hard for Arab Israelis to take out loans as it is, Awnallah says.
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Unofficial, so-called gray market loans are having a field day in Nazareth.
“I know of dozens of businesses that have collapsed. They’re small businesses for which a loss of 100,000 or 200,000 is a death knell,” Awnallah says.
“After nearly two months, people are coming to us and asking for 500 shekels to buy food for their family. It’s tough here, and it’s going to get tougher – and we’re alone.”
Awnallah employs 20 workers and says he’s giving them extras at the moment, “because you don’t throw out someone who’s worked for you for 30 years. We’re doing the government’s work.”
Mahdi Arslan owns Nazareth’s Almahdi Sweets. On a typical Ramadan day, his shop would have nine or 10 employees toiling a single shift; at the moment he has only one.
“Not only are people not going out, there’s no work,” he says. “We’re not selling bread, milk or meat. We’re selling sweets – and when people don’t have money, it’s the first thing they skip, even if these are traditional holiday sweets.”
Ramadan sales normally account for 30% of his annual turnover. “The holiday sweets are eaten warm,” he notes.
“People typically go out after iftar [the break-the-fast meal], buy sweets and eat them immediately. This year the fast ends at 7:20 P.M. and the curfew starts at 7:30. If it started at 9 P.M. things would be easier.”
Most businesses in Israel’s food industry have survived the economic lockdown by providing deliveries, but ordering food is hardly a tradition in the Arab community. In addition, Arab Israelis are suffering their share of coronavirus panic.
“People were frightened by the warnings and ran to the grocery stores to stockpile food because they thought they wouldn’t be able to go outside for weeks,” Awnallah says.
While the coronavirus pandemic took the whole world by surprise, Israel’s Arab citizens are in a particularly poor position. A survey by the Israel Democracy Institute found that 43% of Arab citizens reported they could not go a single month without taking out extra loans, breaking into savings or increasing their overdraft, versus 29% of Jewish citizens.
Arab-community businesses are also more fragile. Some 96% of the community’s private sector is comprised of small businesses, and around 54% of them have annual turnover of less than 500,000 shekels, says Nasreen Hadad Haj-Yahya of the Israel Democracy Institute.
“A crisis like this one is an impossible blow for businesses like these, particularly when they have no safety net,” she says.