Gaza Faces Supply Glut as Smuggled Goods Flood In Through Tunnels (registration required).
But despite that, Hamas is facing a major financial crisis:
Hamas faces financial crisis after three-year Israeli blockadeMore interestingly, it seems that it is finally beginning to dawn on Gazans just how they got into this situation--and they are not necessarily blaming Israel:
Laboring under an Israel blockade supported by Egypt, Hamas hasn't paid government employees full salaries for two months. It's also had to raise taxes, an unpopular move in the impoverished Gaza Strip.
Hamas has failed to pay in full the monthly salaries of its roughly 30,000 civilian and security employees in the past two months, signaling that the Islamist organization may be in the throes of its first financial crisis since it seized control of Gaza in 2007.
"The government is facing a crisis," said Hamas lawmaker Jamal Nassar last month. "The siege on the [Hamas-run] Palestinian government has been tightened recently and because of this it has been unable to bring in funds from abroad."
In response, Gaza's Hamas-run government has imposed new taxes in recent weeks. Cigarette packs cost a dollar more than they did last month, and the price of fuel is up 3 percent. Building materials are in short supply under an Israeli-Egyptian blockade, and scavengers now pay hefty fines even on the rubble they salvage.
The duties have sown popular discontent across an already impoverished Gaza.
"I run my generator because the electricity is cut, and I cannot do business," says Ahmed, a shop owner who was taxed for putting his generator on the street outside his store.
"Why is the electricity cut?" he asks. "Because Hamas is in power, and the borders are closed. So now, Hamas, you will charge me for my steadfastness under your siege?"
Such sentiments are widely shared in Gaza, where unemployment stands at roughly 40 percent, and 4 in 5 residents are dependent on food aid.
Apparently, no matter how successful the tunnels are in bringing in goods, there is still a problem when you have to actually pay for them.
Tunnel Economics does have a downside--especially when there is a crackdown. Besides Egypt cracking down on financial transactions, on May 10 Arab Bank announced it was going to close its three branches in Gaza , which would cut off one of Hamas's last financial lifelines from the outside world.
The fact of the matter is that the economic viability of Gaza since the bloody Hamas coup has always been a mirage:
Hamas needs approximately $16 million monthly for salaries, says Deputy Finance Minister Ismail Mahfouz.Gaza may finally be revealed as nothing more than a terrorist enclave surrounding by human shields.
The Fatah-controlled Palestinian Authority in the West Bank foots the bill for most of the government services in Gaza. But Hamas is believed to also be financed by Syria, Iran, and Islamic charities abroad, with just 10 percent of revenue generated locally.
Crossposted on Soccer Dad
Technorati Tag: Gaza and Hamas.