Israel's Policy Enables Hamas Financial Recovery, Analyst Argues
An Israeli policy of not establishing a governing alternative to Hamas in Gaza has allowed the organization to rebuild its military capabilities and regain control over populated areas of the Strip, according to Yitzhak Gal, a senior researcher at the Mitvim Institute and the Dayan Center.
Gal argues that Hamas has developed a sophisticated revenue system to fund its operations and military buildup, leveraging a policy described as "Hamas is an asset" attributed to Prime Minister Netanyahu. While the war disrupted this structure, Hamas has largely restored it, with control over emergency aid and commercial imports becoming its primary income source. This is supplemented by pre-war methods like smuggling, imposing "taxes," and extorting payments from businesses.
Hamas is currently engaged in a dual effort to consolidate its control over the streets and maintain informal influence within a future technocratic Palestinian government, in response to U.S. and international efforts to implement the Trump plan and install such a government. This includes positioning loyalists in management roles within the prospective administration, as indicated by Hamas's July announcement regarding the dissolution of its emergency government committee.
Gal contends that the Netanyahu government's deliberate delay in admitting the technocratic government, as part of the Trump plan's implementation, effectively allows Hamas to remain the de facto ruler of Gaza. This undermines the technocratic government's authority, postpones Gaza's disarmament and reconstruction, and risks a futile cycle of conflict.
To stabilize Gaza, Gal advocates for a new policy focused on establishing the technocratic government as a replacement for Hamas rule. This requires a comprehensive plan to dismantle Hamas's power and control systems. Alongside security measures like disarming Hamas and dismantling its organizational structure, and political steps to install the technocratic alternative, Israel must lead effective economic actions. These include replacing senior public service officials with individuals not affiliated with Hamas, reorganizing aid and import supply chains under the technocratic government's full control, transferring all customs and taxes collected by Israel on Gaza imports to the technocratic government, and drying up Hamas's other income sources, including informal taxes and fees within Gaza, as well as combating illicit financial transfers from abroad, smuggling, and crypto activities.
Gal emphasizes that Israel has a vital interest in leading these measures in conjunction with the U.S. administration, the technocratic government, the Palestinian Authority, and Egypt. This coordinated approach aims to uproot Hamas's control and establish the technocratic government as an effective alternative capable of managing aid, enforcing law and order, providing public services, and advancing Gaza's reconstruction.
