The eyes of the world have once again turned towards Gaza as recent clashes between the Israeli Defense Forces and Gaza militants and large marches are occurring at the border. Lost in the shuffle, however, are Gaza’s mid-March protests directed not against Israel, but instead held in opposition to tax increases imposed by the ruling Hamas government. These protests, referred to by participants as "The Revolt of the Hungry," were met with violent crackdowns and sweeping arrests by Hamas. The demonstrations have been widely characterized by the media as a rebuke of Hamas’ governance and as a manifestation of the growing frustration over twelve years of the fundamentalist organization’s poor leadership.
While Hamas is certainly deserving of the criticisms levied against it, identifying Hamas’ economic mismanagement as the sole cause of the economic unrest in Gaza ignores multiple contributing factors which have sparked this crisis. Policies enacted by Israel, Egypt, the United States, and Fatah (which governs Palestinians in the West Bank) have impacted the Gaza Strip in ways that make such protests and the economic crisis that sparked them inevitable. Conditions in Gaza are unlikely to improve absent sweeping policy changes towards the Gaza Strip or an unlikely and permanent resolution to the ongoing feud between Fatah and Hamas, dooming Gaza’s populace to years of continued economic insecurity and social unrest.
Observers of Gaza should hardly be surprised that the territory’s poor economic conditions are a source of grassroots frustration. Gaza has a poverty rate greater than 80 percent, endured 52 percent unemployment in 2018, and 92 percent of Gaza’s residents suffer from “personal anxiety related to the overall economic conditions” in the beleaguered territory. Widespread electricity outages are commonplace, with residents averaging only a few hours of electricity per day. International financial institutions such as the World Bank have warned that greater economic calamity could still come, and to add insult to injury, the United Nations predicted a few years ago that Gaza’s deteriorating social and economic institutions would make the region unlivable by 2020.
Hamas’ emergence as a target of protesters’ ire is equally unsurprising, and the militant group certainly deserves its share of the blame for Gaza’s economic woes. Hamas has done little to encourage the development of private industry in Gaza and has dedicated far too many resources to waging its forever war against Israel in lieu of economic development. Earlier this year, Hamas rejected a $15 million donation from Qatar to help pay the salary of government employees, despite having to dramatically cut the salaries of its nearly forty thousand workers in recent years. Hamas is also beset with credible allegations of corruption which it seems unwilling to address, instead pursuing criminal charges against journalists who expose the mismanagement of government funds by Hamas officials. It was ultimately under Hamas’ leadership that this collapse took place, and their government was ill-prepared to properly address it.
Still, Hamas cannot solely shoulder the blame for Gaza’s economic crisis—indeed, there are many actors playing at least as large a role in the ongoing collapse of Gaza’s economy. Most easily identifiable is Israel, whose decade-long blockade of Gaza has strangled its economy, resulting in GDP losses above 50 percent. Repeated attacks by Israel, frequently initiated in retaliation to rockets launched from Gaza into Israeli territory, have damaged homes, businesses, and economic infrastructure. Israeli airstrikes have destroyed essential water infrastructure and the blockade has slowed the delivery of the materials needed to repair the damage, resulting in 97 percent of Gaza’s water being undrinkable. As long as Israel and Hamas remain in conflict, the economic status quo is likely to continue in Gaza, creating serious impediments to business growth and meaningful private investment in the territory.
However, Gaza’s economy has also been significantly weakened by the actions of fellow Palestinians. Fatah, which previously controlled Gaza before losing it in a conflict with Hamas in 2007, is attempting to strangle Gaza’s economy in hopes that doing so will break Hamas’ hold over the territory and force them to implement a 2017 reconciliation agreement giving Fatah civilian control over Gaza. This strategy has led Fatah’s leadership to repeatedly slash salaries for its thousands of employees in Gaza, close border crossings, delay social service payments, and briefly refuse to foot the bill that Gaza owes to Israel for its electricity payments. Fatah ultimately hopes to increase its authority over Gaza in the coming years and has proven willing to allow Gaza’s economy to fall into disrepair in order to incite public dissatisfaction with Hamas’ leadership.
Egyptian actions towards Gaza have further damaged their economy. Hamas’ initial response to the Israeli blockade was to utilize a series of tunnels into Egypt to move goods in and out of Gaza, helping to preserve existing markets for Palestinian businesses, create opportunities for Gazans to purchase foreign goods, and generate significant revenue for Hamas through the taxation of the tunnel trade. While Egypt tolerated this underground economy under the leadership of Mohammed Morsi and the Muslim Brotherhood, the ascension to power of Egyptian president Abdel Fattah el-Sisi in 2014 saw the Arab Republic crack down on this illicit trade. Egypt’s ensuing destruction of the underground tunnels brought with it the destruction of a major source for consumer goods as well as taxation revenue that could be used to fund Hamas’ growing payroll and avoid unpopular tax increases.
Finally, the United States also bears some responsibility for the Gaza’s current economic crisis. In 2018 President Donald Trump ended America’s support for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), an organization that provides essential humanitarian aid and social services to Palestinians in Gaza. The United States was previously the organization’s largest donor having given $364 million in 2017, and its departure has left the agency struggling to fulfill its commitment to 1.3 million people in Gaza who rely on UNRWA to provide them with education, healthcare, and vital social services. America’s decision to terminate support for UNRWA has placed Gaza’s already vulnerable population in even more dire straits, and it has become clear that Hamas was woefully unprepared to manage a functioning economy in a world without American financial support.
The United States and Israel both desire to see Hamas weakened in Gaza to the point of obsolescence, an understandable aim considering that both states have designated Hamas as an international terrorist organization. However, there is little evidence to suggest that this strategy is working. Hamas remains more popular in Gaza than its political rivals, and while “The Revolt of the Hungry” does show mounting frustration with the group’s economic mismanagement, these demonstrations still pale in size and intensity compared to protests directed against either Israel or Palestinian Authority president Mahmoud Abbas. Gazans have not forgotten the rampant corruption and incompetence that led to the Abbas government falling from power in 2007, and many recoil at the prospect of seeing Abbas’ authority in Gaza grow at the expense of Hamas. There is no viable political alternative to Hamas in Gaza, and absent an unexpected push towards implementing the existing Fatah-Hamas reconciliation agreement, Gaza will remain under its stewardship as it slides further into abject poverty.
Gaza appears caught in an endless economic death spiral from which the prospects for recovery in the foreseeable future seem dubious. Hamas will remain in Gaza and continue its campaign against Israel, which will result in greater punitive economic punishment. Lost in the shuffle are those who continue to suffer most from these circumstances: the people of Gaza. Plagued with poor leadership, a hostile political climate, and outside forces repeatedly willing to use their economic wellbeing as a means to an end, it is little wonder why Gaza’s residents are becoming increasingly vocal in their dissatisfaction with their collective economic lot in life. Hamas certainly bears its share of responsibility for the conditions that led to the “Revolt of the Hungry,” but the actions of Israel, Fatah, Egypt and the United States all helped to make this economic crisis an inevitability, and one that is unlikely to go away any time soon.
Matt Reisener is a program associate at the Center for the National Interest. Image: Reuters