Skip to main content

Hamas Faces Financial Crisis After Egypt Tunnel Closures

Hamas is struggling to pay the salaries of government employees as revenues from smuggling tunnels have drastically dropped due to closures by Egypt.
A Palestinian works inside a smuggling tunnel flooded by Egyptian forces, beneath the Egyptian-Gaza border in Rafah, in the southern Gaza Strip February 19, 2013. Egypt will not tolerate a two-way flow of smuggled arms with the Gaza Strip that is destabilising its Sinai peninsula, a senior aide to its Islamist president said, explaining why Egyptian forces flooded sub-border tunnels last week. To match Interview PALESTINIANS TUNNELS/EGYPT/      REUTERS/Ibraheem Abu Mustafa (GAZA - Tags: POLITICS CIVIL UNRES

The ripple effects of the Egyptian crisis represented by the overthrow of President Mohammed Morsi and the demonstrations that followed have reached neighboring Hamas-ruled Gaza. The supply of goods smuggled from Egypt through underground tunnels has nearly come to a halt, severely exacerbating the economic hardship already being suffered by the Palestinian residents of the besieged coastal strip.

The Hamas government had come to rely heavily on the taxes and tariffs imposed on goods flowing through the crossings with Israel and the tunnels with Egypt to cover monthly costs and payments for governance, especially after the waning of international funding, especially from Iran.

Access the Middle East news and analysis you can trust

Join our community of Middle East readers to experience all of Al-Monitor, including 24/7 news, analyses, memos, reports and newsletters.


Only $100 for annual access.