For reasons that are still unclear, Hamas’ financial supporter Qatar has stopped payments to the terror group. This has led Hamas, in turn, to stop paying the salaries of 50,000 government employees in Gaza. More on the financial crisis in Gaza can be found here: “Hamas unable to pay salaries in Gaza after Qatari aid delay, officials say,” Reuters, July 16, 2023:
The Gaza Strip’s Hamas rulers have been unable to pay salaries for 50,000 public sector workers, with officials in part blaming a delay in a monthly payroll grant from Qatar, a crucial aid donor to the impoverished Palestinian enclave.
The government of Qatar has been the main financial supporter of Hamas in Gaza. Why has it suddenly stopped its aid? This may reflect a desire to win favor in Washington by ending aid for a group that the U.S. has designated as a “terrorist organization.” Or perhaps Qatar, which has had a rapprochement with the members of the Gulf Cooperation Council thtat had formerly boycotted it, has now been pressured by fellow members of the GCC to cease supporting Hamas, the Gazan branch of the Muslim Brotherhood, that is regarded by Saudi Arabia and the UAE as a persistent threat to their family monarchies.
The salary crisis has sparked an unusual amount of criticism on social media in Gaza, including by some of Hamas’ own employees. A drop in tax revenue and a jump in spending have made the situation even more difficult.
Hamas in Gaza has been hit financially not only because of Qatar’s cut in aid, but because the Gazans, as a result of their increasing impoverishment, now pay less in taxes, while the government’s spending, in order to support the ever-greater numbers of people living below the poverty line, steadily increases. Poverty, too, helps explain a rise in illnesses, which in turn requires more spending by the Hamas government on medical care.
Most of Gaza’s 2.3 million residents live in poverty, and the economy is dependent on foreign aid. Qatar has paid hundreds of millions of dollars since 2014 for construction projects. It currently pays $30 million per month in stipends for families, fuel for electricity, and to help pay public sector wages.
Qatar had been donating $30 million each month to keep Gaza afloat. That money has paid for essential services – support for poor families, electricity, and the wages of 50,000 government employees. Now Doha has cut that aid, and Hamas has had to stop paying the salaries of those government employees, who had been surviving, just, since 2013, on 60% of the salaries they were officially to be paid. And now even that is gone. Those employees have no other sources of income.
Hamas officials say no salary aid has been received since just over half of a $5-million grant to support the May payroll. The reason for the delay was not clear.
In Doha, Qatar’s International Media Office did not immediately respond to a request for comment.
“The government [in Gaza] is going through a stifling and escalating financial crisis, with a continuous increase in the deficit month after month, which led to the delay of salaries this month,” Awni Al-Basha, the Hamas-appointed deputy minister, told Hamas Aqsa radio.
“We are making significant efforts to pay the salaries, and we hope to do so at the end of this week,” he said.
Without the money that Qatar used to provide and no longer does so, it is hard to see how the salaries of 50,000 government employees will be paid. Is there perhaps another donor willing to step into the breach – which can only mean Iran?
Monthly payroll costs Hamas NIS 125 million ($34.5 million) per month, said Basha….
Qatar’s previous aid amounted to $30 million a month, which almost equalled the amount of monthly payroll costs. Even with that, public sector employees have not been paid their full salaries in a decade; most of them have been receiving only 60% of what they were due.. Those 50,000 salaried government employees are now not being paid at all. If this continues, it will necessarily lead to mass layoffs in the government and to an even greater level of impoverishment in the Strip, where more than half the people already live below the poverty line.
“With 60% (of salaries) we used to meet the basics of our needs at home. What happens when the salary is completely cut off?” said Mahmoud Al-Farra, an employee at the Hamas government media office. “This a big disappointment.”…
Having your salary “completely cut off” is a lot more than a “big disappointment.” It’s a financial nightmare.
Now that the financial condition in Gaza has become so dire, voices are now raised on social media by those Gazans whose desperation makes them willing to criticize Hamas rule directly, despite the possible consequences at the hands of a vindictive regime.
Some Gazans even suggest that the crisis isn’t real, but that the Hamas rulers have been helping themselves to even more of the donors’ aid than in the past. Gazans are well aware that there is massive corruption in the Hamas administration, though the staggering size of it is still not common knowledge. Just two Hamas leaders, Khaled Meshaal and Mousa ibn Marzouk, have each managed to accumulate fortunes of $2.5 billion. In addition, there are 600 “Hamas millionaires,” consisting of the top echelon of Hamas members and their relatives, who live in luxurious villas in Gaza, in communities hidden from view.
We hear a lot about Hamas’ inroads in the West Bank, where it has become more popular than the Palestinian Authority. But in Gaza, it is Hamas that is now losing favor because of the economic collapse, and it may be replaced by other, even more extreme groups, such as Palestinian Islamic Jihad, whose members are perceived as less corrupt – possibly because they haven’t been in power and so have had no chance to divert donor aid to themselves. Perhaps Qatar will in the end come to Hamas’ financial rescue, renewing its aid, but that would mean ignoring the wishes of its powerful neighbors, especially Saudi Arabia and the UAE, who regard Hamas, accurately, as the Gazan branch of the Muslim Brotherhood, and hence a threat to their regimes.
For more on the economic degringolade in Gaza, where the Hamas lords of misrule keep begging for funds, and so far are not being heeded, watch this space.