On the Hamas government's budget: a small step on the long road to transparency

*Omar Shaban

From a movement to a government

Until the year 2007 the Hamas movement was concerned with its members, whose number at that time did not exceed ten thousand, and with its educational and social institutions, and with a budget that did not exceed 4-5 million dollars monthly. Since its assumption of rule in the Gaza Strip in June 2007, after the internal fighting with the Palestinian Authority, its government became responsible theoretically for more than a million and a half Palestinians, and with an annual budget that reached 890 million dollars for the year 2013.

Helping it in that are dozens of international, Arab, Western, and Islamic institutions that implement numerous relief and development projects in the Gaza Strip, and likewise the Palestinian Authority, which still pays the salaries of its employees in the Gaza Strip, whose number is estimated at about 55,000 employees, and the programmes of aid to poor families and the contribution to the electricity supplies and the medical referrals. Since that time the Hamas government has persisted in presenting an annual budget: it presented its first budget in 2009 at a value of 428 million dollars, and that budget was characterised as very primitive compared with what governmental budgets ought to be characterised by. The Hamas government continued preparing and presenting an annual budget, and with it continued the steady rise in its value: in the year 2010 it reached 540 million dollars, in the year 2011 it reached 630 million dollars, and 769 million dollars for the year 2012, until it reached the amount of 890 million dollars for the year 2013. The Hamas government's persistence in presenting a budget like the rest of the governments indicates many meanings, yet the road is still long before it to reach the required level of professionalism, transparency, precision, and communal oversight.

A summary of the 2013 budget

The Hamas government presented to its Legislative Council at the end of last December the budget of the year 2013, whose value was 897 million dollars. The budget expects that 243 million dollars of local revenues will be realised — that is, a proportion of 27% — with a deficit whose value is 654 million dollars, that is nearly 73%, which is supposed to be covered from external donations.

The general budget of the Hamas government is composed of four items, which are

1. Salaries and wages, to which an amount of 449 million dollars was allocated, “50%” of the budget, to cover the salaries and wages of 42,000 employees representing the totality of its bureaucratic apparatus.

2. Operating expenditures, which cover the expenses of operating the ministries, the water and electricity services, and the missions of travel and post, and whose value is 103 million dollars, “11.48%” of the total public expenditures.

3. Transfer expenditures, by which are meant retirement pensions and social-welfare allocations, and to which 110 million dollars were allocated, that is a proportion of 12.26% of the total public expenditures.

4. Capital and development expenditures, which include buying new assets and implementing development projects such as cutting roads and building schools, and to which an amount of 235 million dollars was allocated, that is a proportion of 26%

Analysis of the budget

1. The rise of the budget allocated to security compared with the other sectors.

The budget allocated an amount of 241 million dollars (30%) of the budget to the sector of security and public order, while an amount of 281 million dollars, “34%”, was allocated to a number of fundamental ministries combined, which are finance, endowments, the water authority, and the retired — while an amount of 12 million dollars, that is a proportion of 1.5%, was allocated to economic development. Here there is no great difference with the Palestinian government in Ramallah, which allocates more than 30% of it to security — which affirms that security is the most important priority for both of them.

2. A gap between the planned and the realised:

It has been observed in the multiple budgets the Hamas government in Gaza prepares that what is actually realised, whether on the side of revenues or expenditures, differs to a great degree from what was estimated when the budget was set. While the revenues for the year 2012 were estimated at about 173 million dollars, what was actually realised of revenues reached 221 million dollars — that is, an actual increase over the estimate by a proportion of 28%. Whereas the expenditures estimated for last year were 869 million dollars, the expenditures actually implemented did not exceed 445 million dollars, that is less than half. The clear difference between the estimates at the beginning of the year and what is actually realised at its end indicates either the modesty of the professional experience in the field of financial planning, or that it is a deliberate inflation of expenditures with the goal of drawing more solidarity and backing.

3. Clarity in the expenditures matched by great ambiguity in the revenues item:

While the budget clarifies the items of disbursement and their allocation to the different ministries and bodies, the budget does not clarify completely the sources of revenues and what the proportion of the contribution of external donations to the total revenues is. Many members of the Hamas government and its Legislative Council have previously affirmed “that the Hamas government in Gaza relies on four fundamental sources of funding: the first, the revenues of taxes, education, and service and customs work, and others; the second, exploiting some of the evacuated settlements in developing the agricultural sector; the third, volunteer employees and others donating money; and the fourth, Arab and Islamic support from outside the Gaza Strip, among them large institutions that donate for the government's benefit”. The budget is supposed to clarify in detail the items of revenues so that following them up and evaluating them is made easy.

Important conclusions:

·It remains important to read the Hamas government's insistence on preparing and presenting an annual budget as an attempt by it to affirm that it behaves as a government and practises the works of the other governments. The Hamas government's preparation of its budget can be considered one of the important instruments the Hamas government and its movement use to draw recognition of it, and an attempt by it to affirm that it administers the Gaza Strip in an organised and professional manner.

·Self-approval: the Hamas government presents its budget before the Legislative Council, which is composed only of its deputies, as the rest of the deputies have not participated in the sessions of the Palestinian Legislative Council since the internal fighting. The Hamas government takes the approval of its deputies in the Legislative Council in what can be called: self-approval, and without a public discussion about its items. Without diminishing the importance of this process, it remains deficient without participation from society in its preparation and in following up its implementation.

·The budget does not clarify the dividing line between the Hamas government's budget and the budget allocated to the movement itself, for there are many intersections and overlaps between the two bodies, especially regarding the employees in the security and police apparatuses and the services the religious, social, and political arms of the Hamas movement present.

· The budget does not include the large projects implemented by the international institutions, and especially those that coordinate with the Hamas government in Gaza — for example the projects of the Qatari grant allocated to reconstruction, when the Emir of Qatar pledged during his visit to Gaza in September 2012 to pay 450 million dollars. The Hamas government justifies not including these projects in the budget by saying that the Qatari government will fund these projects directly. The general budget must include all the revenues, whether monetary or in kind.

· It is good that the Hamas government prepares its budget, but it must not stop at that stage; rather the more important is following up the mechanism of its implementation and making room for communal discussion about it. Disclosing the budget is nothing more than a frozen picture at some moment in time, as is the picture of an X-ray snapshot, which determines the state of the sick person at the moment the picture is taken without pointing to the subsequent stages. Participation in preparing the budget and monitoring its implementation is the most important thing in the oversight over the financial and monetary policies of any government. The Hamas government's striving to show itself as applying the standards of professionalism and transparency is not sufficient by itself, since it does not clarify its oversight bodies and lacks communal oversight.

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