More financial woes for Hamas

Al Arabiya has more about Hamas' financial woes that I mentioned yesterday:

Hamas has begun taxing Gaza street vendors and shopkeepers, raising speculation the ruling Islamist group is in a financial crisis fuelled partly by Egypt's building of a border wall to stop smuggling tunnels.

Experts said on Monday that perhaps only a few dozen of the hundreds of tunnels are still functional as a result of the steel wall being pounded deep into the ground along the 14-km (8-mile)-long frontier.

For Gaza's Hamas government, which takes a cut from Palestinian merchants who move items ranging from cars to fuel to food along the subterranean route, that means lower revenues in an impoverished enclave under an Israeli-led blockade.

Weapons, and it is widely believed cash, also come in via the tunnels.

"There is a real financial crisis," Palestinian economist Omar Shaban said.

The Hamas administration, he said, employed 34,000 people in the Gaza Strip and had put much of its liquidity into the purchase of buildings and land.

"The crisis may also indicate either a lack of foreign financial support, Arab and Islamic, or a difficulty to get that support into the territory for some reasons," Shaban said.

For the first time since Hamas seized the Gaza Strip from the rival Fatah movement of Western-backed President Mahmoud Abbas in 2007, it has begun to collect taxes from street merchants and small business owners.

"They asked me to pay 1,100 shekels ($290) a month. How much did I earn to give them what they asked for?" asked the owner of a shop selling falafel (fried chickpea) snacks.

"Instead, I asked them to take the store and pay me the 1,100 shekels every month. It would be a better deal for me," he joked.

A Hamas lawmaker confirmed that the Islamist group ruling Gaza was facing a financial "crisis" because of Egypt's moves to seal its border and a boycott by local banks.

"The government is facing a crisis," MP Jamal Nassar said in a statement. "The siege on the (Hamas-run) Palestinian government has been tightened recently and because of this it has been unable to bring in funds from abroad."