Desperate Gazans crowded into banks on Monday, jostling to get to the front of lines as they raced to withdraw money from accounts that have become largely inaccessible because of Israeli sanctions.
Israel has refused to allow currency notes to enter Gaza in recent weeks as part of its strategy to put pressure on the ruling Hamas militant group. With the cash supply dwindling, banks have limited withdrawals over the past two weeks, and some have posted signs telling customers they cannot take out any more money.
The UN stopped distributing cash handouts to Gaza’s poorest last week, and economists and bank officials warn that tens of thousands of civil servants won’t be able to cash their paychecks when they get their salaries next month.
PHOTO: AP
“No society can operate without money, but that’s the situation we are reaching in Gaza,” Gaza economist Omar Shaban said.
Israel and Egypt have restricted movement through Gaza’s border crossings since the Islamic militant Hamas seized control in June last year.
Since then, closures have been eased or tightened, depending on the security situation. But even in quiet times, when Gaza militants refrained from firing rockets at Israeli border towns, only limited shipments of food, medicine and commercial goods were allowed in.
Israel has not allowed cash into Gaza since last month. Earlier this month, it tightened the blockade further in response to rocket fire.
The latest closures led to widespread power blackouts, disrupted water supplies and caused severe shortages of cooking gas and flour.
On Monday, Israel allowed in 30 trucks of food and medicine. It also enabled diesel fuel to reach Gaza’s power plant, EU officials said, just enough to keep it running for a day. Aid officials said, however, the deliveries would have little impact on dire shortages of basic goods.
Israel decided late on Monday to close the crossings again yesterday because a rocket was fired at Israel on Monday evening, the defense ministry said.
Israel has said it keeps out the cash because it fears Hamas will use it to fund attacks. But the shortage has little effect on Hamas, which funnels money into Gaza through smuggling tunnels from Egypt.
The militant group distributes cash to its own loyalists and the thousands of people it employs in its network of social services. It does not deal with the formal banking system.
The Israeli shekel is a widely used currency in the Gaza Strip, and the territory needs at least 400 million shekels, or about US$100 million, each month in new currency to replace aging notes and to pay salaries, economists said.
The main source of currency is the moderate Palestinian government in the West Bank, which sends cash shipments each month to pay 70,000 civil servants. The government still claims authority over Gaza, despite losing control of the territory to Hamas last year.
Shaban said the cash crunch worsened because residents tend to keep savings at home, rather than in banks. Gaza businessmen pay in cash for goods imported from Israel, further bleeding money out. Gaza’s tunnel smugglers, who bring diesel and goods into Gaza from underground passageways linked to Egypt, also pay in shekels for purchases.
Jihad al-Wazir, who heads the Palestinian Monetary Authority in the West Bank, said his agency had asked Western officials to pressure Israel to allow in cash for payment of next month’s salaries.
International Middle East envoy Tony Blair and the World Bank had also contacted Israel.
Israeli defense officials said they had not ruled out further cash transfers, but said nothing could be delivered while fighting persists.
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