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Al-Monitor · 2016-04-11
An Al-Monitor report by Adnan Abu Amer on Hamas's financial crisis in Gaza and residents' discontent over taxes. Shaban says Hamas's fiscal policy was right to adapt to the blockade through austerity in its ministries, but wrong to impose ever more taxes, which weakened the economic cycle, caused recession and pushed traders out of economic activity.
An Al-Monitor report by Adnan Abu Amer on Hamas's financial crisis in Gaza and residents' discontent over taxes. Shaban says Hamas's fiscal policy was right to adapt to the blockade through austerity in its ministries, but wrong to impose ever more taxes, which weakened the economic cycle, caused r…
## The features of the financial crisis that Hamas is suffering in Gaza are becoming more apparent day by day, following the closure of the tunnels that had been generating money for it, and the decline in Iranian support, which has driven the government in Gaza to adopt new fiscal policies that have stirred major debate in Palestinian financial and economic circles... The article discusses Hamas’s fiscal policy in Gaza, and whether it is sufficient to manage the lives of the Palestinians there?
Palestinians in Gaza have been sensing the manifestations of the financial crisis Hamas has been experiencing since 2013, when Egypt began closing the tunnels connecting Gaza and Sinai, as they were a main source of income for Hamas, coinciding with the gradual halt of the support that Iran had been providing to Hamas following their disagreement over the Syrian file, and the cessation of the entry of international solidarity convoys into Gaza, which used to bring financial aid with them, making it necessary to present an evaluative reading of Hamas’s fiscal policy in Gaza.
The Palestinian economic expert and Director General of PalThink for Strategic Studies, Omar Shaban, told Al-Monitor that “Hamas’s fiscal policy in Gaza during the past years is open to both right and wrong. It was right when it adapted relatively to the conditions of the blockade on Gaza through the austerity of its ministries and government departments to reduce expenditures, but it was wrong in imposing more taxes that weakened the economic cycle in Gaza, caused stagnation in the market, and reflected Hamas’s short-sightedness, because it thought that imposing taxes would increase its financial resources, but at the same time it drove merchants not to engage in the economic process.”
Hamas’s financial crisis has resulted in its inability to provide regular salaries to its more than 40,000 employees, and in a decline in the services provided to Palestinians in Gaza, along with the continuing shortage in the supply of electricity and the growing scale of popular discontent. This financial crisis has pushed Hamas during the last two years to adopt economic policies to overcome it, such as imposing taxes and granting its employees incomplete salaries.
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