Gazans using tattered notes because of cash crunch
By IBRAHIM BARZAK,Associated Press Writer AP - Tuesday, November 25
GAZA CITY, Gaza Strip - Desperate Gazans crowded into banks Monday, jostling to get to the front of lines as they sought to withdraw money amid a worsening currency shortage caused by Israeli sanctions.
Israel has refused to allow cash to enter Gaza in recent weeks to ratchet up pressure on the ruling Hamas militant group. With the supply of currency 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 United Nations halted cash handouts to 98,000 of Gaza's poorest residents last week, and economists and bank officials warn that tens of thousands of civil servants won't be able to cash their paychecks next month.
"No society can operate without money, but that's the situation we are reaching in Gaza," said Gaza economist Omar Shaban.
Israel and Egypt have restricted movement through Gaza's border crossings since the Islamic militants of Hamas violently seized control of the coastal territory in June 2007.
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 permitted currency shipments into Gaza since October. Earlier this month, it tightened the trade blockade in response to rocket fire, bringing widespread power blackouts, disruptions in water supplies and severe shortages of cooking gas and flour.
On Monday, Israel allowed in 30 trucks of food and medicine and it also let diesel fuel reach Gaza's power plant. But European Union officials said it was just enough oil to keep the plant running for a day, and aid officials said the food and medicine deliveries would have little impact on dire shortages of basic goods.
Israeli officials decided late Monday to close the crossings again Tuesday because a rocket was fired at Israel during the evening, the Defense Ministry said.
Israel has said it keeps out currency because it fears Hamas will use the money to finance attacks.
But the cash shortage has little effect on Hamas, which sneaks money into Gaza through smuggling tunnels from Egypt and does not deal with the formal banking system. The group pays out its cash to its loyalists and the thousands of people employed in its network of social services.
The Israeli shekel is a widely used currency in the Gaza Strip, and the territory needs at least 400 million shekels, about $100 million, each month in new currency to replace aging notes and to pay salaries, economists say.
The main source of currency is the moderate Palestinian government in the West Bank, which normally sends cash each month to pay 70,000 civil servants. The government still claims authority over Gaza, despite losing control of the territory to Hamas.
Israeli defense officials said they had not ruled out further cash transfers, but said nothing could be delivered while fighting persists.
Shlomo Dror, an Israel Defense Ministry spokesman, questioned the seriousness of the currency shortage. "We are used to the Palestinians inventing things and we are looking into their claim," he said.
In Gaza, some people go to banks almost daily to withdraw their salaries in installments.
"I'm begging the bank to give me shekels," said civil servant Shawkat Othman, who had to stand in line four hours last week. His bank informed customers they could withdraw only 700 shekels ($175) a day.
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