Authored by Israeli analysts Ehud Yaari and Eyal Ofer, the report said
the newly-rich Palestinians benefited from the huge smuggling trade from
2007 until 2010. The authors said the more than 800 tunnels between Egypt
and the Gaza Strip yielded up to $850 million per year at its peak.
"Much attention has already been devoted to the goods smuggled into
Gaza, such as fuel and cement," the report said. "Less well understood is
the fact that, in exchange for these goods, cash has been steadily exported
out of Gaza through the tunnels, at a rate of roughly $750 million per
The report said new wealthy class has amassed a huge amount of cash in
the Gaza Strip and was transferring funds abroad at an annual rate of $750
million. In February 2009, Israel Central Bank received a request from Gaza
banks to deposit their excess cash reserves.
"Cash is also flowing out of Gaza through the tunnels and via bank
transfers to safe havens in Persian Gulf countries and Europe," the
report said. "The new wealthy class many associated with Hamas as well
as established capital owners are concerned about keeping their money inside
Gaza, preferring to move it abroad. And even with huge sums flowing out of
the territory, there is still more cash than opportunities to invest it."
Hamas has formed an economic empire over the last four years. The report
said Hamas has acquired a range of fronts, often by intimidating
Palestinians to sell their businesses for cheap.
"Frequently, new Hamas businesses are registered under the names of
straw owners or individuals from Hamas cadres," the report said. "The group
has also taken over all the land belonging to the former Israeli settlement
of Gush Katif, along with parts of the Gaza beachfront."
The report said an average of $2 billion per year was being transferred
into the Gaza Strip from Palestinian banks since the Hamas takeover in 2007.
The PA was said to relay $1.2 billion per year, which included salaries and
pensions for 77,000 civil servants, to Gaza banks. PA Prime Minister Salam
Fayad said 54 percent of the 2010 budget of $3.17 billion went to the Gaza
"Most of that figure appears to be salaries, although it also covers
what the PA pays directly for electricity, fuel, and water provided to Gaza
by Israeli firms," the report said.
Ofer and Yaari argued that Hamas has hardly been affected by the Western
boycott. They said Hamas has managed the Gaza economy, including raising
$250 million per year on taxes alone.
"This state of play demonstrates Hamas's major success in overcoming the
system of blockade, boycott, and denial of recognition and assistance
imposed by Israel, the PA, most Arab countries especially Egypt and
the West," the report said.
"In addition to its own direct spending, Hamas
has been able to tap into financial resources transferred by the PA and aid
agencies, ensuring payments to supporters who have replaced Fatah loyalists
in government jobs. In total, thousands of Hamas members, including many
military personnel with fake civilian positions, are paid by outside