By Kung Chan
The sudden assault of Hamas of Israel has resulted in numerous debates on the actual culprit behind it – some argued that it was the United States, as usual, while others point their fingers at Iran.
However, the core issue likely stems from the Hamas regime itself. Despite not being recognized as a sovereign nation, this entity operates autonomously, mirroring the functions of a nation-state, complete with financial resources, diplomatic efforts, business interests, alliances, relationships, and a standing army. It stands as an autonomous quasi-state organization, essentially functioning as a private military company (PMC) group with both military capabilities and territorial control, bearing resemblance to entities like the Wagner Group. Notably, Hamas has displayed a remarkable degree of operational efficiency, surpassing even the Wagner Group in certain aspects.
There is a possibility that Hamas, acting as a PMC, started this conflict primarily due to financial difficulties. They were compelled by the pressing need for funds, feeling a significant constraint on their economic resources and growing uncertainties, which ultimately led to the current crisis.
The persistent financial challenges inherited from the Palestinian Authority (PA) have long been a prominent issue in the Middle East. Prior to Hamas assuming full control of Gaza, it boasted a workforce of around 58,000 civil servants engaged in various public institutions. Following the schism between Hamas and Fatah, the PA, primarily led by Fatah disengaged from Gaza. They requested Gaza’s civil servants to halt their work but continued disbursing their salaries. To ensure the regular functioning of Gaza’s government, Hamas appointed its own civil servants, totaling approximately 50,000 employees, and established an administrative system that ran in parallel with the West Bank.
In April 2017, the PA slashed its employees’ salaries in the Gaza Strip by 30-50%. In July of the same year, it 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 PA would consider withdrawing this decision if Hamas relinquished control of the Gaza Strip and accepted the conditions of Mahmoud Abbas’s government.
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 its emergence during the First Intifada in 1987, Hamas has been the beneficiary of significant economic assistance, notably from Gulf nations like Saudi Arabia, among others. During that period, the worsening political, economic, and social crises in Palestine provided Hamas with an opening to invest in the establishment of an extensive social services network, encompassing the construction of mosques and prayer halls. Hamas maintains a shroud of secrecy over its economic operations, but some income sources have come to light.
Firstly, there are individual contributions from Palestinians, Arab nations, and the international community. Hamas has received hundreds of millions through donation campaigns initiated by religious figures, such as the fundraising efforts of organizations like “Itilaf al-Khayr” (Union of Good) led by the prominent Qatar-based figure Yusuf al-Qaradawi. Islamic charitable institutions within Israel and charitable organizations affiliated with Hamas in Gaza maintain close connections, with a significant portion of their donations aimed at assisting the Palestinian people ultimately finding their way into Hamas’s coffers.
Another method is through money laundering. Hamas utilizes intermediaries or Palestinian importers to launder certain funds. These importers employ Hamas’s ‘black money’ to cover payments when procuring goods from abroad.
In addition, Hamas has established several financial and commercial entities. Israel recently took action against numerous currency exchange firms and food establishments in Gaza, alleging connections to Hamas. It is reported that due to investments from Hamas, many of these commercial entities have become profitable, consequently yielding a proportion of profits to Hamas.
The global landscape of power has adopted a hierarchical structure with varying capabilities. At one level, we find PMCs capable of engaging in commercial warfare, while another level comprises Western alliances and coalitions. Superpowers occupy their tier, and the rest fall into the category of ordinary nations. The capabilities and influence of these entities differ significantly, and unless one belongs to the ranks of superpowers, they may find it challenging to contend with PMCs. Hamas, operating as a PMC, maintains a similar presence in the Middle East, and even a formidable nation like Israel has faced difficulties in dealing with it.
This is a commercialized war, and the world has indeed changed.
About the author:
Founder of ANBOUND Think Tank, Kung Chan is one of China’s renowned experts in information analysis. Most of his academic research activities are in economic information analysis, particularly in the area of public policy.
