A new position paper by the Peres Center for Peace released Thursday, stated that Israel's policies vis-à-vis Hamas have failed to damage Gaza-rulers' financial base.
The study suggests that Gaza's business sector now has a new élite, whose members are highly connected within the regime, and whose power-base relies on the booming "tunnels economy."
The Peres Center concludes that if Israel wants to undermine Hamas' financial base, it should allow more free trade via the Gaza crossing, allow Gazan businessmen entry to Israel and subject any trade limitations to "pure security considerations."
The Peres Center said its conclusions were derived following a series of discussion with Israeli, Palestinian and international sources; and that an analysis of the financial effects of Israel's blockade of the Strip has led to the conclusion that the siege is feeding the "tunnel economy," and has subsequently allowed Hamas-affiliated businessmen to gain control of the trade in Gaza.
Hamas, added the report, has been able to leverage that into creating a climate where it basically has to sanction all financial activity in the Strip.
Additionally, Hamas has gained even more financial power since the Palestinian Authority never stopped funding Gaza's governmental institution – even while the two factions were warring – thus allowing Hamas to use the budget to bolster its own bodies.
Yitzhak Gal, a senior economist and researcher with the Peres Center, noted that "Hamas' budget has increased from $40 million in 2006 to $500 million in 2010, and the majority of these resources fund military activities.
"The financial reality that has been formed in Gaza as a result of Israel's polices – and those of the PA – enabled that."
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