Hamas under threat as Gaza economy squeezed by Israel, Egypt blockades

Palestinian enclave blockaded by Israel and now isolated by Egypt after Muslim Brotherhood fall

PUBLISHED : Friday, 14 March, 2014, 9:11pm
UPDATED : Saturday, 15 March, 2014, 4:33am


Gaza's Hamas rulers have been hit by the worst economic crisis since seizing the territory seven years ago and face growing discontent, even among core supporters, because there's no sign of relief from a blockade enforced not only by Israel but also by a suddenly hostile Egypt.

Hamas government employees have complained publicly about getting only partial salaries for the past four months. Bus drivers have staged a strike over soaring fuel prices. Labourers have lost jobs as construction has dried up. Hamas' own surveys show its popularity plummeting.

"I never experienced a situation worse than this one," said Ahmed Zeitouniya, 32, who has been walking to his job in the Culture Ministry because he can no longer afford US$1 in bus fares and is in debt to the neighbourhood grocery and his oldest son's kindergarten.

Gaza's isolation is unlikely to ease soon. Instead, Israel and Egypt have tightened their border closures.

Israel sealed its only cargo crossing with Gaza on Wednesday after the Islamic Jihad group fired dozens of rockets from the territory at Israel.

The game changer for Hamas was the Egyptian military's ousting last July of then-President Mohammed Morsi. The military-backed government in Cairo has since banned Morsi's Muslim Brotherhood - the region-wide movement that also spawned Hamas - and has shut down most of the smuggling tunnels along the Gaza border, which were an economic lifeline for the strip.

The Hamas government lost nearly two-thirds of its revenue as a result, said Omar Shaban, a Gaza economist. With the tunnels, Hamas earned about US$500 million a year - of an annual budget of just under US$900 million - in taxes on the Egyptian imports, said Shaban.

Cheap fuel, cement and other supplies from Egypt used to power Gaza's economy. With smuggled Egyptian fuel no longer coming in, motorists now pay triple for legally imported Israeli diesel and petrol.

Israel, which considers Hamas a terrorist group, controls Gaza's airspace, blockades it by sea, and heavily restricts movement of people and goods.

Now the government is no longer able to pay full wages to 51,000 civil servants and members of the security forces. In recent months, government employees have received only partial payments.

There is even speculation that Hamas might be overthrown.

An internal poll carried out by Hamas in December showed that support for the group had dropped to 29 per cent, down from 55 per cent from late 2012.

Ahmed Yousef, an intellectual from Hamas' pragmatic wing, told journalists: "It is no longer possible for the government institutions ... to stop the continued decline in all walks of life."