GAZA (Reuters) - For years, lack of cash has hobbled Hamas’s Gaza government yet the military capabilities of the Islamist group’s armed wing have expanded and it may rake in donations now that it is meeting Israel on the battlefield.
For seven years, Hamas has struggled to run the impoverished and blockaded Gaza Strip. But funding for the Izz El-Deen al-Qassam Brigades has appeared to remain steady as its arsenal of improvised rockets and other weaponry improved.
“It was clear this financial crisis did not affect very much the military wing of Hamas and the group may regain some of its financial power because of the current war,” said Adnan Abu Amer, who teaches at Gaza’s Ummah University.
“The strong fight Hamas’s armed wing is putting up against Israel may pump fresh blood into some of the relations between Hamas and regional powers, especially Iran,” he added.
Relations with Iran soured over Hamas’s refusal in 2011 to back Tehran’s ally, Syrian President Bashar al-Assad, in his war against mainly Islamist rebels. As Sunni Muslims, Palestinians have been an anomaly in Iran’s alliances with fellow Shi’ites from the Gulf, through Iraq to Lebanon.
Diplomatic sources have told Reuters the Islamic republic previously used to give Hamas a $250-million annual subsidy. But though disagreements over Syria hit their relationship hard, Tehran continued to provide some cash. At the same time, another element of the Arab Spring upheavals, in Egypt, helped Hamas.
The rise to power in Cairo in 2012 of the Muslim Brotherhood - of which Hamas is an offshoot - gave the Palestinian movement a friend on its southern border for a year or so, although the army which overthrew the Egyptian Islamists last year had kept a grip on the smuggling tunnels by which Hamas procured munitions.
That a flow of materials necessary to manufacture explosive, rocket fuel and missile parts has been maintained was proven this month. Hamas and allies have struck deeper than ever before into Israel with new types of home-produced rockets.
Hamas sent a drone into Israel and its commandos infiltrated enemy territory by swimming onto beaches and digging tunnels. However, few rockets did much damage, with many shot down by Israel’s air-defense system, the drone was vaporized by a missile and the guerrillas were all promptly killed.
On Friday, 17 fighters were among 27 Palestinians killed when Israeli forces launched a ground offensive over the border.
Hamas seized control of the Gaza Strip from Palestinian rivals in the secular Fatah party in 2007, a year after sweeping a parliamentary election in Gaza and the West Bank.
A punishing Israeli blockade on Gaza followed which battered the economy and helped push unemployment to around 40 percent. Imports of building materials and fuel were severely curtailed and the people mostly barred from traveling.
The crisis deepened when Egypt’s military overthrew the Muslim Brotherhood a year ago and demolished hundreds of border smuggling tunnels that brought in weapons and other goods.
That has since deprived the Hamas government of revenue from taxes it levied on fuel, cigarettes and building materials that used to contribute two thirds of its budget for running Gaza, home to some 1.8 million people along a 40-km stretch of coast.
In 2014, the government budgeted for a deficit of fully $500 million on spending of $800 million, according to Gaza economist Maher al-Tabbaa. Early this year, Hamas cited the shortfall in paying public sector employees only half their salaries.
Hamas and Fatah signed a reconciliation accord in April, after which the authorities passed responsibility for public sector wages on to a unity cabinet of technocrats in Ramallah in the occupied West Bank. Most Gaza public employees did not receive any funds in months of bickering that followed.
It is unclear whether Hamas’s political or armed wings have contributed to the government budget - in principle, both organizations keep their finances strictly separate.
“There is a disconnect between the political movement and the government even on the civil level, so there is even more naturally and obviously a separation between the armed wing and the government,” al-Tabbaa said.
Facing the Israel and Egyptian blockade, Hamas has been adapting its economic strategy for the long haul by investing in agriculture and trade to generate more local revenues, according to Gaza political analyst Hani Habib.
“The group has a keen economic mentality. They’re good merchants,” Habib said.
“I don’t think Hamas’s suffering is permanent. Its ability to bring in money gets limited at times, their methods may have to change. But they remain intact,” he added.
Officials of the group refuse to discuss their financing and insist the bulk of their resources comes from donations by individuals in Arab and Muslim countries rather than states.
While relations with governments may suffer setbacks, Palestinian grievances will always fire the imaginations of donors and ensure a steady flow of fund to their armed wing.
“Our funding comes from ordinary people’s pockets. People pay so that the occupation of Palestine ends, and people pay so that the shedding of Palestinian blood does not go unpunished,” a senior Hamas commander told Reuters several weeks ago.
“We are God’s punishment to the Zionist occupation.”
Writing by Noah Browning in Gaza; Editing by Jeffrey Heller and Alastair Macdonald