THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Hamas unable to pay government workers

Associated Press / May 3, 2010

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

  • E-mail|
  • Print|
  • Reprints|
  • |
Text size +

GAZA CITY, Gaza Strip — Hamas confirmed yesterday it is unable to pay thousands of government workers in full for a second straight month — a new sign that the Islamic militants are caught in what may be the most serious cash crunch in three years of ruling Gaza.

Hamas dismisses rumors of a financial crisis and insists its money woes are temporary.

However, it has resorted to an unpopular tax drive to raise money, suggesting that a heavy blockade on the territory, an Egyptian crackdown on smuggling, and an increasingly expensive government bureaucracy are taking their toll.

The hunt for revenue has prompted a rare public backlash, hinting at a small crack in Hamas’s hold on power.

A 40 percent tax on cigarettes set off a flurry of angry text messages among smokers, and a small opposition group warned the new taxes could unleash a popular revolt.

Hamas acknowledges it is having trouble bringing in money from abroad — no small problem for a government that says it raises only 10 percent of its revenue locally.

The Islamists are secretive about the sources of their money, but they are believed to get large sums from Iran and a network of Hamas supporters abroad.

Cash is typically smuggled through a network of tunnels under Gaza’s border with Egypt.