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For Hamas, an end to Gaza's tunnel trade may be only the beginning

As Israel eases the Gaza blockade, Hamas is positioned to strengthen its grip on the Gaza Strip. The Gaza tunnel trade that thrived under the blockade provided tax revenues and helped Hamas stay firmly in control.

By Liam StackCorrespondent / August 16, 2010

Palestinian children play at one of two smuggling tunnels damaged in two pre-dawn Israeli air strikes in Rafah town along the border with Egypt in the southern Gaza Strip on August 1, in which one person was injured.

Said Khatib/AFP Photo/Newscom


Rafah, Gaza Strip

Under the watchful eyes of both Egyptian border guards and Hamas tax collectors, more than 1,000 tunnels snake below the border between Egypt and the Gaza Strip. Since Israel and Egypt imposed a blockade on Gaza after Hamas took control in 2007, the tunnels underneath Rafah, a chaotic border town, have helped bring in everything from snack food and cement to a lion for the zoo.

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Without this underground highway system, Gazans say they would not have survived the past three years of sanctions.

But the tunnel trade may be nearing its end. Trade has slowed considerably since June, when Israel began allowing more consumer goods into Gaza. Now Rafah's remaining smugglers mainly bring in cement, cars, and construction materials that remain banned. Once-busy tunnels sit unattended; the plastic tents that used to hide them have become tattered and flap in the wind.

Though the blockade was designed to weaken Hamas and its ability to strike Israel, it's now clear that the blockade helped the group strengthen its grip on Gaza. In addition to providing much-needed goods and supplies, smuggling provided tax revenues for the government. The result is a Hamas government that remains firmly in control.

“The Hamas government and movement have benefited from the siege,” says Mkhaimar Abusada, a professor at Gaza’s Al Azhar University. He adds that economic sanctions rarely succeed in dislodging unfavorable governments, citing US embargoes against Fidel Castro’s Cuba and Saddam Hussein’s Iraq.

According to Mr. Abusada, the blockade has benefited Hamas in two ways: by generating international sympathy, especially from Arab and Muslim countries, and shifting the economy to the black market that it largely controls.

While the new flow of legal imports challenges Hamas's control of the market, Abusada says Hamas is now so firmly entrenched here that loosened import rules pose no threat to its authority.

“Whatever you do to Hamas, it is a win-win situation,” he says. “If you keep the siege going, then Hamas will still be able to portray itself as a victim, and if you ease the siege, they win a political victory.”

Life remains difficult

If Hamas has benefited from the siege, that does not mean that it has governed successfully. Many residents of Gaza describe it as "one big prison." Even with the loosened restrictions, life remains difficult.

According to the United Nations Relief and Works Agency, the UN provides services to 1.1 million refugees in Gaza, about two-thirds of the population. Of those receiving UN assistance, 675,000 live beneath the poverty line. Many are also homeless. Operation Cast Lead, Israel’s 22-day Gaza offensive that began in December 2008, damaged or destroyed 60,000 homes. Bans on cement and other construction materials have made it impossible for residents to rebuild or repair their homes.

Poverty and the blockade have also depleted Hamas's coffers. Hatem Oweida, director general of the Economy Ministry, says that Gaza operates with an enormous monthly deficit. Monthly expenditures average $30 million, while intake from taxes and fees amount to only $5.26 million, one-quarter of which comes from taxes levied on cigarettes and fuel smuggled through the tunnels.