Chronicle of the Middle East and North Africa

Hamas Selling Government-Owned Land to Resolve the Salary Crisis in the Gaza Strip

December 31, 2014 - Gaza City, Gaza Strip, Palestinian Territories: Palestinians hold posters during a rally organized by employees of former Palestinian government demanding their salaries to be paid, in front of the headquarters of the Council of Ministers. Some 40,000 civil servants employed by the Hamas government stopped receiving salaries soon after the formation of the Palestinian unity government in June. (Ashraf Amra/APAImages/Polaris)
Palestinians during a rally of former Palestinian government employees demanding their salaries to be paid, in front of the headquarters of the Council of Ministers. Gaza City, December 31, 2014. Photo Ashraf Amra/Polaris.

According to United Nations reports, the latest war in Gaza, in 2014, left more than 2,250 Palestinian dead and more than 10,800 persons wounded. In addition to the many people killed and wounded, a great deal of infrastructure and property was destroyed. Despite the reconstruction conference held in Cairo in 2014 and the expansive promises of donor countries, and despite international reports after the war, including the UN report that called for lifting the siege of Gaza without conditions or restrictions, the reconstruction process did not get under way properly, and more than ten thousand families remain homeless or live in caravans that do not offer adequate protection from cold or heat.

In 2015, continuing social and economic crises in the Gaza Strip meant that many Gazan families could not earn a living. According to international reports, the poverty rate in the Gaza Strip has increased to more than 80 per cent, an unprecedented level. Power outages last for more than 12 hours per day, and the Rafah border crossing is rarely open. Gazans are unable to communicate with the outside world. The de facto Hamas government in the Gaza Strip is unable to pay its employees their salaries. Other issues include the intrusion of salty seawater into wells, and occasional shortages of cooking gas, petrol, and diesel fuel.

Israeli Siege and Tunnel Economy

The crisis dates back to 2006, when Hamas won the Palestinian legislative elections and formed a government that Israel, the European Union, and the United States refused to recognize because Hamas was considered a terrorist group. In mid-2007, Israel declared the Gaza Strip a hostile entity after Hamas took it over, and Israel imposed a political and economic blockade that severely limited the movement of people and trade to and from the Strip. Israel besieged Gaza from land, sea, and air. The Israeli siege, which has continued since 2007, has affected all aspects of the Gaza Strip economy.

In the early years of the blockade, an alternative solution for Hamas was to build hundreds of tunnels that cross under the Palestinian-Egyptian border. These tunnels alleviated some of the suffering of the Gaza Strip caused by the shortage in goods and closed border crossings resulting from the blockade. The de facto Hamas government in Gaza decided to levy duties and tariffs on all goods exported and imported through “tunnel trading.” There are no official statistics on the total volume of the tunnel trade, but it has been estimated at $1.5 billion annually. The subsequent closure and destruction of the tunnels by Egypt was a painful blow to the Gaza economy and severely affected government revenues. Studies suggested that the unofficial gross economy (i.e., the tunnel economy) accounted for more than two-thirds of the total economy of the Gaza Strip.

Palestinian Consensus Government

Hamas had no choice but to accept Palestinian national reconciliation, later known as the al-Shati Agreement, signed on 23 April 2014. As a result, a Palestinian consensus government was formed by Rami al-Hamdallah on 2 June 2014 to assume responsibilities in the Gaza Strip and work on lifting the blockade, to integrate the employees who were appointed after the Palestinian divisions deepened, and to resume the reconstruction of the Gaza Strip.

However, the Israeli surprise attack, starting on 8 July 2014 and lasting more than 50 days and was later referred to as the third war on the Gaza Strip in six years, made it difficult for the consensus government to undertake responsibilities in the Gaza Strip. Observers of affairs in the Gaza Strip recognize that trust between the parties to the Palestinian conflict is almost non-existent, given the disputing parties’ struggle over power, their accusations back and forth, and the delay of the handover the government’s administrative duties.

The suffocating accumulation of crises—the most serious of which was the constant closure of the Rafah crossing, which was open for humanitarian cases for just 19 days in 2015 —has angered the Gazan people. They later launched a campaign on social media, under the slogan “Give in on the crossing,” to apply pressure on the Hamas-controlled government to hand over the Rafah crossing to the consensus government in Ramallah so that the Egyptian state could approve a normal opening of the crossing. So far, there is no solution in sight, because Hamas insists on having a presence at the Rafah crossing, which the Egyptian state rejects categorically.

Electricity Crisis

The continual power outages are another crisis that has continued for years. The power grid has long supplied residential areas with electricity for eight hours, followed by power outages of eight hours. This system, which Gazans were forced to cope with, has been in effect since the first war on the Gaza Strip, when at the end of 2008, the only power plant in the Strip was destroyed and later partially repaired. The Strip has suffered a chronic electricity crisis because it receives only about 210 megawatts of the approximately 380 megawatts (MW) it needs: 120 MW come from Israel, approximately 65 MW from the power plant in the Strip, and only 25 MW from Egypt.

The crisis deepens when the Gaza Strip’s power plant fails to receive a supply of industrial diesel fuel, as a result the total power that the Strip receives is less than 145 megawatts, which is only one-third of the electricity that Gaza needs. As a result, residential buildings would receive just six hours of electricity only per day and the power will remain off for 18 hours of the day, which causes great confusion.
There is no immediate solution to the crisis; attempts have failed to improve or increase the power supply to the Gaza Strip over the past years, either for political reasons related to the refusal of the Palestinian Authority (PA) to deal with Hamas, or for reasons related to the coverage of costs in light of the dilapidated internal power grid

Government Salaries

The crisis over the salaries of government employees is one of the most serious problems in the Gaza Strip, afflicting, as it does, a large part of Gazan society. Following the outbreak of Palestinian divisions in mid-2007, the government in Ramallah issued a decision banning employees from returning to work in the Gaza Strip and asking them to stay at home. The Palestinian National Authority’s decision was intended mainly to thwart efforts by the government in Gaza to carry out its functions normally. This majority of employees, mostly members of the security services and the police, chose to comply with the Ramallah government’s decision and stay at home, and Ramallah continued to pay their salaries.

The remaining employees, particularly those in the ministries of education and health, did not, for ethical reasons, abide by the decision, feeling it was morally wrong to leave the patients in hospitals without treatment or students in schools without education. They continued to do their work normally, and the Ramallah government responded by freezing their salaries: the rule was, “Those who do not work will receive salaries, but those who work will not receive salaries.”
For its part, Hamas compensated the employees who were not paid salaries and hired replacements for those who boycotted, making the total number of employees registered in military and administrative sectors approximately 42,000. After the revenues of the Gaza government plummeted, especially with the blocking of tunnels and the diminished customs duties, the Gaza government found itself able to pay only 40 per cent of the salaries per month, which was not a good long-term solution.

As a result, Hamas chose reconciliation, under which the Ramallah government handled Gaza’s financial expenses, including salaries. The reconciliation document signed by Fatah and Hamas and promulgated in al-Shati refugee camp on 23 April 2014, integrated the old and new employees, but President Mahmoud Abbas refused to recognize the legality of the employees in the Gaza Strip, demanding that all old employees be reinstated in their previous positions and that any new positions be filled. Hamas accused the Palestinian president of excluding employees for their political views.

Land as Salary

By January 2016, none of the provisions of the reconciliation document had been implemented, even though it had been promulgated a year and a half earlier. Hamas tried to find a way to solve the issue of the employees whose salaries and other financial obligations had become a burden on the government. Ziyad Zaza, a member of the political bureau of Hamas who served as Minister of Finance in the government of the Gaza Strip, announced on 21 November 2015 that Hamas planned to distribute “government-owned land” to the employees of the government of Gaza as compensation for what they were owed. According to Zaza’s remarks, the land to be distributed was in the form of housing lots of land totaling approximately 1,200 dunums (a dunum is equivalent to 1,000 square metres).

According to previous statements by Ihab al-Nahhal, Deputy Head of the Public Officials Association in the Gaza Strip, the total entitlements of some 40,000 public officials, both civilian and military, on the Gaza government amounted to approximately $500 million.

This announcement sparked a major controversy among Palestinians. Some described the move as necessary, while others argued that it would have disastrous effects similar to those of the political divisions existing between Hamas and Fatah. Some people believed that the de facto authority in the Gaza Strip was using this as a tactic to threaten the PA’s authority, but the serious decisions taken by the Hamas-dominated Palestinian Legislative Council (PLC) in the Gaza Strip and the PLC’s endorsement of a draft resolution allocating the “housing compounds built on government-owned land” to employees showed that the threats had become concrete actions.

PLC member for Hamas, Atif Adwan considered the council’s statement “legal” and not in conflict with Palestinian law. He noted, “The consensus government that abandoned its responsibilities toward the Gaza Strip and reneged on the rights of employees has no right to object to this decision.” The PA government in Ramallah rejected the draft resolution on distributing the land to former government employees in lieu of wages and other financial obligations. The Minister of Works and Housing in the consensus government, who lives in Gaza, said that “Hamas is taking a dangerous and illegal step, and such a decision widens the divisions between the West Bank and the Gaza Strip.” Other Palestinian factions also rejected the draft resolution. For example, the Popular Front for the Liberation of Palestine said that it is “wrong, does not serve the public interest, and aggravates the [Palestinian] divide,” demanding that Hamas renounce its decision immediately.

Will compensating the employees with these housing lots help Hamas after two or three years? Is Hamas going to distribute more lots in the Gaza Strip? In fact, everyone knows that it is unreasonable to deny thousands of employees their rights and not to sympathize with their suffering, which worsens day after day. At the same time, however, the land belongs to no political faction; it is an asset of the entire Palestinian people. The Gaza Strip is very small geographically, and its population is growing rapidly, and there is an urgent need for civil development and the construction of public facilities such as schools, hospitals, roads, and even cemeteries.

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