Opinion |

Hamas Deserves Blame, but Not for Gaza’s Economic Crisis

Gaza has grown completely reliant on outside aid and that has dried up. Now, it faces a humanitarian crisis and there's no one to help it

David Rosenberg
David Rosenberg
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Palestinian set tires on fire during protests against the high cost of living in the Gaza Strip, March 16, 2019.
Palestinian set tires on fire during protests against the high cost of living in the Gaza Strip, March 16, 2019.
David Rosenberg
David Rosenberg

The growing protests in Gaza against Hamas rule must be leaving its leaders dumbfounded.

Here is an organization that is corrupt, venal and oppressive; most damning of all in its 12 years in charge of Gaza, it has failed to bring the dream of a Palestinian state a single step closer to reality. Yet in spite of it all, the thing bringing Gazans to the streets is the state of the economy -- the one thing that Hamas isn’t directly at fault for.

Indirectly, Hamas is responsible for Gaza economic woes by sacrificing everything for the cause of armed confrontation with Israel. But that is a policy that at least a plurality of Palestinians say they support, so they can hardly blame their leaders for pursuing it.

The logic is pretty simple. You may need concrete and pipes to build your home, but if you want Hamas to fight the good fight against Israel, expect that Hamas will use some or most of the concrete and pipes to build attack tunnels. Therefore, expect Israel to bar imports of concrete and pipes, and expect that you won’t be able to build your house.

But the bigger issue is the Gaza economy. The tiny enclave is often called the world’s biggest concentration camp because of the closure Israel and Egypt have imposed on it. But it would be at least as accurate to call Gaza the world’s biggest soup kitchen.

There’s very little ordinary economic activity in Gaza in the usual sense of the word – of people growing and manufacturing things or providing services. Twenty-five years ago, manufacturing accounted for 16% of gross domestic product and agriculture another 11%; today the figures are 8% and 5%, respectively. The only growth industry is the public sector, which expanded from 12% of GDP to 29%, most of it make-work.

The Second Intifada and Israel’s withdrawal from Gaza gradually cut the Gaza economy off from the world, as Gazans could no longer work in Israel or work as subcontractors for Israeli businesses. Hamas’ takeover of the Strip in 2007 caused Israel to impose its closure and in 2013 Egypt shut down the tunnels that had been the remaining way to move people and goods in and out of the enclave.

An indication of how little economic activity takes place there is the 52% rate of unemployment in Gaza last year, among the highest rates in the world.

Into this economic vacuum flowed international aid and remittances, which today are about the only source of foreign exchange for Gaza.

According to the World Bank, 79% of all Gazans received some kind of international aid in 2017. Even among the wealthiest 20%, nearly half received some kind of assistance. International aid kept Gaza afloat economically and prevented a humanitarian disaster.

What, you say, isn’t Gaza a humanitarian disaster? The numbers don’t quite bear that out. It isn’t a great place to live and many are trying to flee, but by Third World standards, Gazans have is pretty good, at least until the situation deteriorated over the last year or so. By measures things such as hospital beds per capita and life expectancy, Gazans are about as well off as people in neighboring countries.

What’s changed is that the outside money that made this all possible has dried up over the last two years. The last wave of assistance to rebuild Gaza arrived after the Protective Edge campaign in 2014, but that has petered out. Meanwhile, the PA has slashed salaries for civil servants in Gaza and the Trump administration has cut off assistance to UNWRA and Palestinian development projects. Suitcases of cash from Qatar haven’t been able to make up the difference.

Hamas was no doubt grateful for the aid when it was coming because it had enabled it to run Gaza without worrying about paying the bills or providing jobs or infrastructure. It never had an economic policy, even a bad one. It did what you’d expect from any ruling group with access to free money, which is to take it. Anyhow, with the borders sealed shut, how much economic development could it possibly implemented?

There was even an upside when the aid began to evaporate because the anger of ordinary Palestinians could be directed at Israel through mass protests and incendiary kites. The lack of jobs and hope meant there was a steady supply of young men ready to risk their lives by marching to the border.

It’s Hamas’ misfortune that its deflection strategy has run its course in the middle of an Israeli election. Netanyahu is already pursuing counterproductive economic policies, like reducing tax transfers to the PA, in order to cater to the basest instincts of rightest voters. Short of a real threat of war with Gaza, which the ever-cautious Netanyahu no doubt wants to avoid, it’s hard to imagine him allowing himself to be seen as coming to the rescue of Hamas anytime soon.

Still, Hamas is more likely than not to survive. It may have little to its credit, but it is a source of stability and that’s nothing to pooh-pooh when the least likely scenario for replacing it is a free, fair and orderly election.

If nothing else, the Arab Spring has taught the Palestinians and the rest of the Arab world that the most likely alternative a revolution will offer to a corrupt, incompetent and oppressive dictatorship is something even worse.

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