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Monday, October 09, 2023
The Commercialized War Between Israel and Hamas
Kung Chan

The sudden assault of Hamas of Israel has resulted in unprecedented humiliation for the country. Generals were captured, female soldiers were taken hostage, and many civilians found themselves helpless. Palestinian armed personnel openly marched on the streets of Israel, shooting its citizens. Israel mobilized once again, after a decade or more, calling up reserves and recruiting personnel for combat. Israelis around the world hurriedly purchased tickets to return to their homeland for battle, something that has never been seen after the Yom Kippur War.

What exactly led to the outbreak of war between Hamas and Israel? Some might have attributed the United States to be behind it. In reality, President Joe Biden and the right-wing government of Israel are currently experiencing one of the most strained moments in their historical relationship. Benjamin Netanyahu's right-wing government sought to alter the judiciary through what they termed a "judicial reform", weakening democracy and potentially leading to authoritarianism. This sparked massive demonstrations by hundreds of thousands of Israelis. The U.S. expressed strong dissatisfaction with Netanyahu over this, hence the deteriorating relations between the U.S. under Biden's leadership and Israel.

It is reported that after the war began, Netanyahu did request assistance from the U.S. However, the response seems to have been unclear or limited, as up to now, the U.S. has only offered little verbal support. Furthermore, even Netanyahu no longer mentions the issue of the U.S. relationship when discussing the goals and progress of the conflict.

Many also consider Iran to be the center of war instigation, viewing it as Israel's archenemy. While Iran is undoubtedly pro-Hamas, even pro-Israel individuals in the U.S. have shown necessary restraint. They have pointed out that it is premature to claim Iran as the culprit. Other theories involving Saudi Arabia, Qatar, and the like are not worth discussing. Hence, the real problem likely lies within the Hamas regime itself. This regime operates as its own authority, although it is not a nation. It functions similarly to a nation, with finances, diplomacy, business, friends, relationships, and an army. It is an independent quasi-state organization, essentially a PMC (private military company) group with a military and territory, akin to the Wagner Group. However, I must emphasize that Hamas operates even more effectively than the Wagner Group.

Based on my research and analysis, it is possible that Hamas as a PMC initiated this war due to financial problems, driven by the need for money. They strongly felt that their living space was being squeezed out and that there were uncertainties, which resulted in the current situation.

The financial issues left behind by the Palestinian Authority (PA) have always been a major problem in the Middle East. Before Hamas took sole control of Gaza, there were approximately 58,000 civil servants working in public institutions in Gaza. After the split between Hamas and Fatah, the Palestinian Authority, dominated by Fatah (hereinafter referred to as the Abbas government), withdrew from Gaza and requested that the civil servants in Gaza stop working but continued to provide them with salaries. To maintain the normal operation of the Gaza government, Hamas appointed its own civil servants, employing approximately 50,000 staff members, and established an administrative system parallel to the West Bank.

Since 2014, the Abbas government has repeatedly cited financial difficulties as a reason to cut the salaries of Gaza civil servants originally affiliated with Fatah, leading to dissatisfaction among them. On November 4, 2014, tens of thousands of Gaza civil servants went on strike, demanding that the Abbas government pay their overdue salaries. Reports indicate that the strike paralyzed most administrative institutions in the Gaza Strip. After about 24,000 civil servants went on strike, all government departments and public utility agencies, except schools, came to a standstill.

On July 4, 2017, the Abbas government decided to allow 6,145 civil servants in the Gaza Strip to retire early, which was seen as pressure on Hamas. However, it stated that the administration would consider withdrawing this decision if Hamas relinquished control of Gaza and accepted Abbas's conditions.

Hamas, of course, would not readily accept any suggestions or pressure to change its status. Hamas is a PMC and it chooses to fight. In fact, in the past, Hamas had many businesses and various sources of income and funding.

Since Hamas emerged in the First Intifada in 1987, it has received substantial economic aid, especially from Gulf countries such as Saudi Arabia and others. At that time, the deteriorating political, economic, and social crisis in Palestine provided Hamas with an opportunity to invest in establishing a significant social service network, including the construction of mosques and prayer halls. Hamas considers its economic activities to be top-secret, but some sources of income have been disclosed.

Firstly, there are individual donations from Palestinians, Arab countries, and the international community. Hamas has received hundreds of millions through donation campaigns initiated by religious figures, such as the fundraising drive of the organization Itilaf al-Khayr (Union of Good) by prominent Qatar-based Yusuf al-Qaradawi. Islamic charitable organizations within Israel and charities affiliated with Hamas in Gaza also have close ties, with most of their donations directed toward the Palestinian people ending up in Hamas.

Secondly, there is Zakat. For Muslims, Zakat is one of the religious obligations, involving giving alms to those in need. Hamas utilizes such Islamic practice, not only organizing individuals to collect Zakat from wealthy individuals in various Palestinian locations but also receiving assistance from institutions in Arab and Islamic countries, even from those of the U.S.

Thirdly, it is through money laundering. Hamas launders some of its funds through intermediaries or Palestinian importers. Importers use Hamas’ money to make payments when purchasing goods abroad.

Fourthly, Hamas has established some financial and commercial institutions. Israel recently cracked down on many currency exchange companies and food businesses in Gaza, claiming they had ties to Hamas. It is reported that, with investments from Hamas, many commercial institutions have become profitable, and as a result, Hamas has gained a certain percentage of profits from them.

Fifthly, there is also economic assistance from Islamic countries. During its rule, Hamas has sent officials abroad multiple times to raise funds. Now, with Hamas being isolated by countries like the U.S. and Israel, it appeals to countries like Iran and Qatar for assistance. Iran has pledged to provide USD 100 million in aid to Hamas. Some other international organizations also occasionally offer assistance to Hamas under the guise of providing aid to the Palestinian people. Hamas uses this money to develop charity programs, thereby gaining popularity and reputation.

Due to the U.S. ban on financial institutions sending money to Hamas, many organizations have started opening accounts under different names. For example, the Islamic Action Front in Jordan and the Muslim Brotherhood in Egypt have never acknowledged providing assistance to Hamas.

In the past, I have written many briefings on the Palestinian financial situation, and after visiting the Middle East, I have also written briefings on the networks and scale of operations involved in Middle East oil smuggling and the smuggling of refined oil. Now, with the outbreak of war, looking back, it is clear that all of these are interconnected and explain the root causes of the problem.

The global power space has become hierarchical, with different levels of capabilities. PMCs capable of conducting commercial warfare are one such aspect, Western alliances and coalitions form another, superpowers form another, and ordinary majority countries constitute yet another level. The capabilities and control of these countries vary, and unless it is one of the world's major powers, one is not necessarily a match for PMCs. For instance, many African countries are not as powerful as the Wagner Group. Hamas, as a PMC, has a similar existence in the Middle East, and for a long time, even a strong nation like Israel has had difficulties dealing with it.

This is a commercialized war, and the world has indeed changed.

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