Hamas Is Not Without Alternative Resources

The United States and 25-member European Union, the main foreign donors to the Palestinian Authority, have suspended direct payments totaling $500-600 million a year to the Hamas government, as well as to Palestinian Authority chairman Mahmoud Abbas. Washington has cut $400, while redirecting $105 to “augment ongoing humanitarian and democracy-building programs.” So the real cutback amounts to $300m. And unknown sum of aid forked out by the European Union “is already in the pipeline.” Its disposition is still be decided.
Several loopholes are built intothese cutoffs.
Israel too has halted the transfer of $70-80 million in monthly revenues on incoming and outgoing Palestinian commodities. The Olmert government will “cooperate with international agencies” on appropriations for “humanitarian needs” and for averting a meltdown of the Palestinian economy.
The total shortfall for the Palestinian budget appears to be in the region of $1.5 billion a year, including 140,000 salaries for security services personnel and civil servants. In its first month in office, Hamas failed to cover this payroll, although it put together $10 million for the families of “martyrs” and jailed Palestinians.
That the Palestinian Authority coffers register empty since Hamas took office is due to two causes:
1. The Persian Gulf donors including Saudi Arabia are holding back promised funds – not because they object to a Hamas government but because of a sanctified tradition, whereby pledges are an expression of goodwill but do not have to be fully translated into every dollar and cent – and certainly not in haste.
2. The American and European clampdown has made the banks which until now handled Palestinian Authority finances wary of carrying out transfers. The Arabian Bank which is owned by a Jordanian Palestinian family and the Bank of Cairo fear their branches in the United States and other countries may be shut down in reprisal for handling the accounts of a terrorist organization.
Even so, the Palestinian treasury needs not be insolvent. The Palestine Investment Fund – PIF – set up to conceal and invest the funds Yasser Arafat diverted from international donations to the Palestinian people – is now in the hands of Mahmoud Abbas.
The capital is estimated at $1.2-1.4 billion and its monthly yield counted in tens of millions.
However, Abu Mazen, who holds the key to this hoard, will not hand over a single dollar until Hamas recognizes – not Israel, but the Palestinian Liberation Organization as the paramount authority of the Palestinian people. Abu Mazen argues the PIF belongs to the PLO and he may not release funds to an organization that refuses to recognize its authority.
In the unresolved tug-o’-war over supreme authority over Palestinian government institutions, Abbas is also using the fund to put the squeeze on Hamas. He wants to be recognized as top boss of Palestinian government rather than Hamas prime minister Ismail Haniya. He also insists on acceptance of his role as the commander of the Palestinian security and intelligence services – not the Hamas interior minister, Said Siam.
On the face of it, the economic blockade policy initiated by the Bush administration and Israel’s new leaders Ehud Olmert and foreign minister Tzipi Livni, is working. They believe Hamas will be cornered into coming up to scratch – recognizing Israel, renouncing violence and accepting all previous PLO and PA accords.
However, Hamas may be financially distressed, but its leaders believe they still have several weeks to play with before the crunch. For the time being, Israel may talk tough and even crack down on terror, but it has not switched off the flow of fuel, fuel products, electricity, water and medicines to the Gaza Strip – free of charge for now.
Hamas is managing to avoid spending any money on government administration. Its tacticians plan to foist the payroll on Abu Mazen, who they say cannot both claim to be top man in the Palestinian Authority and duck responsibility for its personnel’s paychecks.
In other words, while the US, Europe and Israel hope the financial standoff will raise Abbas’ standing with the Palestinian public, Hamas is blackening his name accusing him of acting as a collaborator in the schemes of Washington and Jerusalem to hobble elected Palestinian government. In a matter of weeks, they believe Abbas will be forced to come to Haniya, cap in hand.
In the meantime, London helped Hamas float a trial balloon through some British media, which was picked up also by some Israeli outlets, by a reference to “a two-state solution” of the Palestinian issue. This indirect recognition of Israel was designed to give the European Union an opening for starting contacts with Hamas officials, grounds for resuming aid and dividing the ranks of the US-European front.
The ploy foundered when Hamas foreign minister Mahmoud a-Zahar and prime minister Haniya denied having accepted a two-state formula. Theyalso turn to Arab and Islamic governments, such as Iran, for succor through alternative routes to Arab banking institutions.
But debkafile‘s Palestinian and counter-terror sources estimate that, if these efforts are unavailing and the campaign to bring about the Palestinian government’s downfall gains impetus, Hamas is capable of stepping its anti-Israel missile bombardment to a dangerous level – whether as a war operation launched by the government and mustering all Palestinian factions, or an action limited to its military arm, the Ezz e-Din al-Qassam.