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Suitcase funds unlikely to relieve Hamas debt

The Palestinians’ Hamas-led government has brought more than $20 million in cash across the border this week to help finance their government, financially crippled by debt and international sanctions.
/ Source: The Associated Press

The Palestinians’ Hamas-led government, nearly bankrupted by international sanctions, has resorted to bringing in cash in suitcases to help keep itself afloat.

But given the government’s crushing debt, a scolding from European border monitors and Israeli concerns the money could be used for violence, the tactic could fizzle out fast.

Twice this week, Palestinian Cabinet ministers returned to the impoverished Gaza Strip at the border crossing with Egypt with millions of dollars stuffed in their luggage.

Information Minister Youssef Rizka said he brought in $2 million Thursday. Foreign Minister Mahmoud Zahar trumped him a day earlier, delivering $20 million. Lower-level officials have carried in about $1 million in recent weeks.

The money was turned over to the government, most likely for long-overdue salaries to civil servants, officials said.

“It’s not our fate to surrender and to give up to this siege,” said government spokesman Ghazi Hamad.

Ease the situation
Still, the money barely puts a dent in the hundreds of millions of dollars Western powers and Israel have cut off to pressure Hamas to disarm militants and end its call for Israel’s destruction.

The dryup of international funding has rendered the cash-starved Palestinian government unable, since February, to pay employees who support one-third of the Palestinian population.

The Cabinet’s cash couriers are providing a much-needed fix. But with government expenses totaling $160 million a month, the money can stretch only so far.

The cash coming in from the crossing could “ease the situation for a month or two, but it is not the best way” to run the government, conceded Ahmed Youssef, a political adviser to Prime Minister Ismail Haniyeh of Hamas.

Youssef would not say how much money Hamas hoped to bring in through the passage.

Ministers do not have to submit their bags for inspection, raising the possibility that other funds are being smuggled in to finance violent activities against Israel or clashes with Abbas’ Fatah group.

“The amount of money being brought in by cash is not enough to run the PA (Palestinian Authority) government. But unfortunately, it’s enough to keep a terrorist infrastructure very much alive,” said Israel Foreign Ministry spokesman Mark Regev.

“We have raised our concerns with the relevant parties,” he said, but wouldn’t disclose their reactions.

Western powers might stop tactic
Another question is whether Western powers will let Hamas continue ferrying in money through the Rafah border crossing.

After Israel withdrew from Gaza last year, the U.S. brokered a deal giving Palestinians control over Rafah, under the observation of European Union monitors. Using the border to circumvent Western sanctions might not sit well with Washington or European capitals.

While denying reports that the European observers would pull out over the money issue, Julio De La Guardia, a spokesman for the monitors, said they sent a letter to the Palestinians demanding that all people crossing into Gaza declare funds over $2,000.

“What should be declared is the exact quantity, origin, and destination of money, in order to implement international standards,” he told The Associated Press.

Too soon to say
A Western diplomat said it was too soon to say whether the cross-border cash flow violated anti-terrorism laws. He spoke on condition of anonymity because the matter is still being debated.

Rizka returned to Gaza on Thursday from a trip to Qatar, Saudi Arabia and Egypt. Zahar came back after visiting Indonesia, Malaysia, Brunei, China, Pakistan, Iran, Syria and Egypt. In both cases, the money came from private donations and Islamic charities, Hamas officials said.

The big bucks, though, would have to come from Arab governments, which have promised $660 million in aid this year. If history is any judge, they may not deliver.

Arab governments have shortchanged the Palestinians on past pledges, and have offered little help offsetting the Western and Israeli boycott. They are under U.S. pressure to turn off the taps to Hamas, and in many cases, are reluctant to fund a group that is part of a global Islamic movement they view as a threat.

Hamas says Arab and Muslim states have deposited more than $60 million into an Arab League account in Egypt. But international banks have refused to allow the group to transfer money electronically to Palestinian territories, fearing sanctions from the U.S., which labels Hamas a terror group.