Change in political landscape leaves Hamas in financial shortfall

Thanks to the empowerment of fellow Islamists in the Arab world, Hamas seems to be emerging from the regional isolation, but it is struggling to cash in.

Ismail Haniya, the Hamas premier, flashes the V for "victory" sign at the Rafah border crossing, as he embarks on a regional tour.

JERUSALEM // Keeping up with the dramatic changes in the political map of the Middle East is one reason the leaders of Hamas are buzzing around the region in an unprecedented diplomatic campaign. Another less talked about reason is money. The rulers of the Gaza Strip are desperate for it, analysts say.

The group's leader, Khaled Meshaal, and its prime minister, Ismail Haniyeh, have spent recent weeks visiting eight countries including Jordan and Qatar. Such trips would have been almost unthinkable before the Arab Spring.

Thanks to the empowerment of fellow Islamists in the Arab world, Hamas seems to be emerging from the regional isolation imposed on it primarily by Israel and the United States. But despite its rising political credit, Hamas is struggling to cash in, according to Talal Okal, an independent Palestinian analyst who lives in Gaza.

"Hamas is hoping to get more money during these visits," said Mr Okal. "The financial situation is not as good as it was before, which is why Hamas is aiming to turn its improved political support into more financial support."

Hamas discloses little about its finances. It has publicly announced that its estimated budget this year for administering the Gaza Strip, which it controls, will surpass $700 million (Dh2.57bn). Where the money will come from is unclear as Hamas keeps most of its revenue sources secret.

But Mr Okal and other analysts say there are strong indications that the Arab Spring has actually harmed the group financially. Coupled with Israel's blockade on Gaza, it has made Hamas even more desperate for cash.

Over the past year, Hamas has increased the prices of petrol and heating fuel in Gaza. Moreover, Gazans complain about a recently imposed system of indirect taxation in the form of obscure fines for "offences" such as public smoking, and dramatically increased fees for renewing taxi licences or extending a house.

Hamas donations from its allies in movements and parties linked to the Muslim Brotherhood that have gained power in the region in the past year may actually be falling, said Omar Shaban, an economist and head of Pal-Think, a research organisation in Gaza.

After election successes by Islamist parties in Egypt, Tunisia and Morocco, he said, "the Muslim Brotherhood has different responsibilities these days, because they are increasingly concerned with taking care of themselves and their domestic constituencies.

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The Hamas leadership, at a crossroads due to the Arab Spring, have been travelling extensively in the Middle East in order to reassess the group's strategic alliances. Hugh Naylor reports from Jerusalem.

"Hamas is no longer the priority for the Muslim Brotherhood, and so their ability to donate to Hamas is of course less than before."

Political reasons for withholding funds may also be at play.

Turkey's deputy prime minister, Bulent Arinc, this week denied media reports that Ankara would donate $300m to Hamas, after a visit last month by Mr Haniyeh. Turkey is a Nato member and an ally of Washington. The United States considers Hamas a terrorist organisation.

But perhaps the biggest financial shortfall is in donations from Iran, a known Hamas financier and ally of the Syrian president, Bashar Al Assad.

Tehran is reported to have suspended its financial aid to Hamas - amounting to $300m a year - last August, in retaliation for Hamas's refusal to back the brutal repression of Syria's pro-reform demonstrators by Mr Al Assad's security forces.

Even so, Mr Haniyeh is expected to visit Iran tomorrow. This would also seem at odds with his previous visits to Kuwait, Bahrain and Qatar, all nations that share concerns about Iranian influence.

But until Hamas starts receiving money from its Arab allies, it will have to keep its coffers open to donations from just about anyone, said Waleed Al Modallal, professor of political science at the Islamic University in Gaza.

"If there is support from the Arabs, they would not go to Iran," he said. "But until then, if Iran offers them support, they will not say no."

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