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With Gaza in Financial Crisis, Fears That ‘an Explosion’s Coming’

Hopes Raised, Then Dashed

Last year, the Palestinian Authority’s president, Mahmoud Abbas, ratcheted up the pressure on Hamas, stopping its payments for fuel for Gaza’s power station and to Israel for electrical transmission into the Gaza Strip. It slashed the salaries of thousands of its workers who remained on its payroll in Gaza, even though they no longer had jobs to do after Hamas took power. Those measures forced Hamas into reconciliation talks that kindled new hopes, reaching their peak in a much-heralded October agreement in Cairo.

Hamas, eager to rid itself of the burdens of governing — though unwilling to disarm its military wing — showed flexibility at the talks, quickly ceding control over border crossings like the one with Israel at Kerem Shalom, and the tax collections there that had provided it with some $ 20 million a month.

But a series of missed deadlines for handing over governance to the Palestinian Authority, and the removal last month of the Egyptian intelligence chief who had brokered the reconciliation talks, have dashed hopes and left the two factions squabbling, the rapprochement slowly bleeding out.

Hamas now refuses to relinquish its collection of taxes inside Gaza until the Palestinian Authority starts paying the salaries of public employees. But the authority is refusing to do that until Hamas hands over the internal revenue stream.

“The most hard-line people in the P.A. believe they need full capitulation from Hamas, including the dismantling of its military,” said Nathan Thrall, an analyst for International Crisis Group who closely monitors Gaza. “The vast majority of Palestinians see that as wholly unrealistic. But the P.A. thinks that strategy is working. So they think the pressure should continue, and they’ll get even more.”

The longer the stalemate lasts, the more Hamas hemorrhages funds and Gaza’s economy suffocates. While thousands of Palestinian Authority workers in Gaza like Mr. Abu Shaaban were forced into early retirement, and those who remained saw their pay cut 40 percent, some 40,000 Hamas workers — many of them police officers — have not been paid in months, officials say.

As Gaza’s buying power plummets, imports through Kerem Shalom are falling — from a monthly average of 9,720 truckloads last year to just 7,855 in January — which will only cut Hamas’s revenue more.

“Abu Mazen has punished all of us, not only Hamas,” Fawzi Barhoum, the chief Hamas spokesman in Gaza, said in an interview, using Mr. Abbas’s nickname.

Source: NYT > World

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