It is a year since Israel invaded Gaza. Many NGOs report that the local Palestinian economy has been devasted. A closer inspection reveals a more complciated picture.

 Israel’s action was a response to the thousands of rockets that had been fired at southern towns since the withdrawl from Gaza in 2005. On the anniversary of the start of hostilities this week, Hamas organised a  “mass” demonstration of support. Estimates of the turnout vary, but as the Assocated Press commented:

…the Hamas call to rally was met with indifference. Ignoring a siren meant to call for a minute’s silence, cars whizzed by and pedestrians kept walking……”I wish they had commemorated the war by opening a factory. That would have been better than this,” said Gaza resident Rami Mohammed, 30.

And that is the problem for the Hamas leadership. Not all the people are stupid all the time. They will not continuously accept that Israel is to blame for their economic problems.

Take a look at the “tunnel economy”. First, it has created a new elite, where many of the members are linked to the Hamas leadership. And in true Orwellian irony, Hamas had ousted the previous Fatah leadership, which was seen as ridden with corruption.

Second, the underground economy has become an employer of child labour, a total contradiction of humanitarian ground rules, and thus a cause for more discontent.

There is another secret side to the economy. On the one hand, Hamas cries “poverty” to whoever will listen. And yet, when the time comes, it showers money on to the streets. Pictures from the Eid religious festival revealed shops full of produce.

Similarly, Hamas is thought to have invested around US$2 m in celebrating its battles against the Israeli army. But also this week,

…… sources in Gaza have reported of a new corruption affair in Hamas’ transportation ministry. According to one testimony, a senior ministry official named Ziad Harara took tens of thousands of dollars and disappeared……

This affair is related to the driving studies industry in the Strip. According to reports, senior transportation ministry officials take about $658-790 for issuing a driving license, even for people who do fail to meet the driving test’s demands. Hamas government workers receive a $100 bribe for letting people pass a theory driving test without taking it.