CATF Reports Jul. 1, 2016, 9:55am


The people of Gaza have been directly affected by the inability of Hamas’ leadership to secure stable financial support in recent years. Recent political changes in the region and for Hamas have destabilized the group’s financial alliances and cornered it into an organizational predicament.

Increased Taxes on Gaza

Gazans have felt the effects first hand as the Gaza strip, a Hamas governed region, has been under the imposition of increased taxes to offset a dip in the organization’s funds. Their finance ministry recently installed new taxes for licensing on commercial enterprises such as shops, restaurants, hotels and bakeries, as well as on imports on goods entering Gaza including fruit, vegetables, livestock, automobiles, and cigarettes as of this past December. In the past year total taxes collected in the region have increased by 600% in order to administer salaries of 40,000 public employees. In the past, the government used to collect approximately $2.5 million in taxes per month, and now it has increased to $15 million per month. Gazans have had to pick up the bill for Hamas’ expenses, and are additionally taxed by the Palestinian Authority and Israel for imports into Gaza, all of which translate into higher prices for residents and no solution for their high levels of poverty.

Transitions in Financial Support

Such drastic economic and financial changes are due to a number of factors, many of which stem from the political transitions originating from the Arab Spring.  One of the most difficult changes Hamas has dealt with has been nearly severing ties with Iran and Syria in light of the Syrian Civil War. Under Khaled Meshaal’s leadership, Hamas abandoned its Damascus headquarters in 2012 signaling to Iran its unwillingness to take a side in the Syrian Civil War. Iran, on the other hand, has backed Bashar al-Assad in the conflict, and with Hamas refusing to pledge loyalty to Iran’s strategic goals in the region, Iran cut back funding to the party – previously amounting to over $100 million a year. To add to the complications, Hamas’ relationship with Egypt in recent years has been quite tumultuous. Following Morsi’s election into office, Hamas experienced a brief period of close relations with Egypt under the Muslim Brotherhood leader. However, Hamas felt increasingly isolated after Morsi’s downfall and further destabilized after Egypt’s decision to close the tunnels of Rafah which connect Gaza Strip and the Sinai Peninsula. These crossing points have served as a major trading route for Hamas, as it is the only area that gives Gazans access to outside areas that are not under Israeli control, thus adding to the financial strains.

Qatar and Turkey remain Hamas’ two primary state sponsors. Qatar has shown continued support for Hamas, sending over $400 million in donations for Gaza infrastructure as well as the funding of the payroll of over 24,000 civil, servants, as stated by Qatar’s emir, Sheikh Hamad bin Khalifa al-Thani in October of 2012. The latest contribution publicly acknowledged was a pledge of $1 billion in a Gaza reconstruction donor conference held in October of 2014. Though it is difficult to attach additional figures for Qatar’s support since then, their political role has been evident for Hamas. Not only are they hosting Khaled Meshaal in Doha, but they have also served as the group’s primary negotiator in discussions between Hamas and Israel, Egypt, Saudi Arabia and the United States in recent Gaza conflicts. Furthermore, Qatar was instrumental in strengthening the relationship between Hamas and Jordan after a 13 year rift by arranging and mediating a meeting between King Abdullah II of Jordan and Khaled Meshaal, the latter of whom was banished from Jordan since 1999. Qatar has continued to step into such mediating roles as recently as June of 2016 in coordinating meetings between Hamas leadership and Fatah leadership aimed towards reconciliation efforts. Additionally, Qatar was suspected to be complicit in sending 3 tons of bomb-making materials to Hamas hidden amongst shipments of paint thinners and other materials for Gaza reconstruction at the Nitzana border crossing.

Turkey, a strategic political and geographical ally, is another vital relationship for Hamas, especially in light of the recent reconciliation deal it made with Israel. Turkey has consistently been providing support for Hamas, donating approximately $300 million in annual funds to Hamas’ government in Gaza beginning in 2011 and $200 million pledged in a donor conference held with 50 countries regarding Gaza reconstruction and humanitarian efforts in 2014. However, their support to Hamas had been a major roadblock in the negotiation process to normalize relations with Israel since the flotilla incident of 2010. As of June 26th, 2016 negotiations were finalized as the deal to restore diplomatic ties with Israel went through. This deal directly impacts Hamas both politically and financially, especially with original bargaining chips encompassing Hamas controlled territory, Gaza, and Hamas’ relationship with Turkey. The initial negotiations for this reconciliation agreement included Turkey requesting Israel to remove the blockade from Gaza and Israel requesting that Turkey cut ties with Hamas and shut down their offices in Istanbul. These offices are known to have hosted designated Hamas terrorists such as the exiled military leader and U.S. Treasury designated terrorist Salah Arouri, who conducted a kidnapping and killing operation of 3 Israeli teens in West Bank, leading to a war between Israel and Hamas lasting 51 days. Other prominent and dangerous Hamas figures in Turkey include Bakri Hanifa, a major Hamas financier, Maher Ubeid, exiled member and international relations operative, and Mahmoud Attoun, who was convicted of kidnapping and killing a 29-year old Israeli and a self-professed terrorist machinist. These and many others have relocated to Turkey since at least August 2014, and remain active in the country via Turkish and Arabic television, social media, and other means.

Both requests have been taken off the table, and the current agreement allows for Hamas to carry out only political activities within Turkey, requiring Turkey to restrict any planning and execution of terrorist activities to Israel by Hamas on Turkish soil. Meanwhile, Turkey can continue to send assistance to Hamas-controlled Gaza in the form of reconstruction efforts and humanitarian aid including the construction of a hospital, power station, and desalination facility, all via the Israeli port, Ashdod, while Israel promised to ease the Gaza blockade.

Effects on Structure and Leadership

However, these fundraising attempts have not proven to be enough to overcome the setbacks under Meshaal’s leadership. These complications have left the body of Hamas in shambles, and such frustrations do not come without political consequences for the organization’s political structure. Though it has been rumored for the past few years, a recent announcement by Mahmoud al- Zahar, Hamas foreign minister and co-founder, to Arab media has been made that Khaled Meshaal, the current leader of Hamas since 2004, will not be represented in this year’s internal elections. His influence has decreased significantly, as he has been managing the organization from abroad while the focus has shifted to local leadership in the organization’s military wing, especially with the recent military flare-ups with Israel.

Possibilities for future Hamas leadership include Ismail Haniyeh, former Gaza prime minister with a hard-lined stance on Israel, Moussa Abu Marzouk, with priority for reconciliation with Egypt, while not completely cutting ties with Iran, and Yahia Sanwar, military official in the organization who prioritizes mending relations with Iran for the sake of weapons and military advantages. The implications for Israel and could be problematic as well depending on which approach is taken, especially with reconciliation between Fatah and Hamas on the table. Regardless of who takes the cake, Meshaal’s successor will be placed in a difficult position. Future leadership will continue to be under pressure to secure steady financing while juggling a political web to balance out the interests of Hamas, Gaza, and its allies.

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