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Will Gaza’s public employees accept land in lieu of salaries?

Hamas resorted to drastic measures to cater to the employee salary crisis, as the consensus government has been neglecting this issue since it was formed in 2014.
Palestinian Hamas-hired civil servants wait to receive payment at a post office in Gaza City October 29, 2014. Some 24,000 civil servants hired by the Islamist group Hamas, many of whom have not received a full salary in almost a year, finally got some pay on Wednesday from the new Palestinian unity government based in the West Bank. The funds were supplied by the gas-rich kingdom of Qatar, which is an ally of Hamas. But the fact the cash was delivered by the West Bank administration gave a boost to hopes t

Hamas dropped a figurative bomb on Gaza when it announced Nov. 21 that public employees who had not received salaries in months will be paid with acres of land.

Ziad al-Zaza, a member of the Hamas Political Bureau and a former deputy prime minister, said in coming weeks, employees will receive their entitlements through land distribution. Zaza estimated that the parcels will range from 965 to 1,200 dunums (about 238 to 296 acres) in the north and south of the Gaza Strip. In addition, municipality and electricity debts will be reset as part of a plan to resolve the crisis of salaries and entitlements.

Zaza’s announcement stirred mixed reactions. Mufid al-Hasayneh, minister of public works and housing in the consensus government, said Nov. 21 that Zaza’s decision violates the law and oversteps the consensus government. Hasayneh said Hamas did not consult the government, which will complicate reconciliation and deepen the division between Hamas and Fatah that has existed since 2007.

However, Atef Adwan, head of the economic committee of the Palestinian Legislative Council (PLC), told Al-Monitor, “This idea was put forward a long time ago, and many studies were conducted to ensure its feasibility. The PLC authorized the Palestinian Land Authority to carry out the settlement of the employees’ entitlements.”

In a related development Nov. 11, Youssef al-Kayali, Gaza’s Ministry of Finance undersecretary, announced a new pay schedule for public employees, including military members. Gaza’s employees affiliated with the former Hamas government received payments every 50 days. Under the new plan, employees will receive 40% of their salaries on a monthly basis, with a minimum monthly amount of 1,200 shekels ($310). The average worker's full salary amounts to 3,000 shekels ($774).

Mohammad Siam, head of Gaza’s Association of Public Sector Employees, told Al-Monitor, “In early November, the association reached a final agreement with the Ministry of Finance for the disbursement of at least 1,200 shekels to Gaza’s employees on a monthly basis, and 18,000 employees with low salaries will benefit from this agreement.”

The morning of Nov. 18, Al-Monitor saw thousands of Gaza’s employees standing in front of the headquarters of the Islamic National Bank, the Palestinian Production Bank in Gaza City and post offices scattered in different parts of Gaza to receive their salaries.

Hamas established these banks after it took control of Gaza in June 2007, and the Palestinian Monetary Authority does not recognize them, while other banks refuse to deal with Hamas for fear of Israel and the international community accusing them of supporting terrorism.

Hamas has faced a severe financial crisis since Iran stopped its support in early 2013, and there are no signs that support will return soon. This is in addition to Egypt closing the tunnels between Gaza and Sinai in July 2013. Hamas had benefited from the fees it collected from goods smuggled through the tunnels.

Palestinian economic expert Mohammed Abu Giab described the situation to Al-Monitor.

“Hamas was able to provide regular monthly salaries for the employees of Gaza’s former government, as Hamas succeeded in strengthening the sources of its personal revenues through customs duties and taxes for the protection of the national product," Giab said. "In addition, it has made agreements with the major economic institutions in Gaza, such as banks and telecom operators, to pay certain government expenses such as buying medicines for hospitals and fuel needed to power generators in government ministries, as well as supplies.”

Al-Monitor learned from senior officials in these companies, who preferred to remain anonymous, that they do not pay cash directly to the Gaza government, for fear Israel will accuse them of supporting terrorism.

"They buy the needed supplies for the ministries of health and education based on their social responsibility: Banks and companies allocate 5% of their annual profits to contribute to the development of several areas related to education, youth and sports, health, environment and economic affairs," one official said. "This has helped the Gaza government ease the burden of such expenses and allowed it to reserve the needed cash to pay salaries to its employees. It is now able to pay part of it on a regular monthly basis.”

It seems that these economic institutions assisted the Gaza government under a prior understanding with the Ramallah consensus government in the West Bank. This is probably to protect the institutions’ and banks’ interests in Gaza — since Hamas is in control of security and field affairs in the strip — or because the consensus government fears the security situation in Gaza could explode.

Such a scenario could happen if Gaza government employees continue to be deprived of their salaries. This could lead to further domestic turmoil in the Gaza Strip, as employees sometimes declare strikes and close banks because they aren't paid. Employees have even threatened to escalate actions in Gaza against the consensus government.

Iyad Abu Hein, director general of the treasury's general administration in the Ministry of Finance, told Al-Monitor, “Since the consensus government took over in June 2014, government employees in Gaza would only receive 35% of their salaries from the revenues of Gaza’s Ministry of Finance, which amounted to 100 million shekels [$25.8 million] a month from the tunnels and crossings. After the tunnels and crossings were closed and the siege was tightened, the revenues decreased to 54 million shekels [$13.9 million], which is enough to pay 40% of an employee’s salary on a monthly basis, especially after the 20% rise of financial revenues in Gaza by the end of October 2014.”

However, the consensus government — formed following the Beach Refugee Camp agreement between Hamas and Fatah in April 2014 — has often disregarded Gaza’s employees. They continued their governmental duties in all security, service, health and education sectors without being recognized by the government, which cast a negative aspect on their lives and forced many into poverty.

Hamas’ decision conveys the message that the consensus government is neglecting Gaza’s employees and there are no signs of a breakthrough in this humanitarian crisis. This could drive Hamas to make decisions that all Palestinian factions might not agree on, but such decisions could lead to solutions for Gaza’s disastrous problems.

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