For nearly two decades, Hamas – a U.S.-designated Foreign Terrorist Organization – ruled the Gaza Strip, a sizable part of historic Palestine.
An offshoot of Egypt’s banned Muslim Brotherhood – which has spawned and inspired Islamist terrorist groups across the Middle East, Africa, and Asia – Hamas kept its rule by monopolizing the means of force and systematically targeting political rivals, as well as ordinary dissenters in Gazan society. Arbitrary arrests, torture, violent crackdowns on protests and extra-judicial killings of opposition members and suspected collaborators with Israel became commonplace.
The organization was as adept at making money as it was at staying in power. Its grip on the Strip gave it control over billions of dollars in revenues, much of it coming from Iran, Qatar, Turkey and other international donors. A large portion came from internal taxes and from extortion and protection rackets that Hamas imposed on Gaza’s residents along with the routine theft and sale at steep markups of humanitarian aid. Stolen staples – flour, sugar, lentils, even potatoes – were resold at inflated prices, sometimes more than double the market rate.
The revenues that Hamas controlled were large enough to transform Gaza into a thriving Mediterranean enclave – a model for Palestinian society. But the Islamist group chose a different path. Prioritizing terrorism and military spending, it invested staggering sums in tunnels and weapons, including rockets and rocket factories.
The result of Hamas’s jihad-over-jobs policy was destruction – and self-destruction.
Iran was the organization’s most consistent patron. Bridging Islam’s traditional theological divide, Iran’s Shiite Islamist regime contributed about $100 million a year to Sunni Hamas. Starting in 2018, Qatar delivered cash payments of $15 million a month, later changing the format of its disbursements. Turkey and other donors funneled tens of millions more through front charities and cryptocurrency.
On top of this, Hamas generated revenues by taxing goods and services inside Gaza. By 2023, those internal collections were estimated at around $620 million annually.
In all, Hamas controlled well over $1 billion annually. For a territory of only 2.2 million people, just 141 square miles in size, with a 24-mile coastline, this was not a small budget. With it, Hamas could have built clean water systems, reliable electricity, modern hospitals, and affordable housing.
That did not happen.
Instead, Hamas created a subterranean world for the specific purposes of smuggling, stockpiling, and manufacturing weapons – and committing war crimes. More than $1 billion went into constructing a network of tunnels and bunkers that by 2024 stretched 350 to 450 miles. Thousands of shafts were hidden beneath homes, schools, hospitals, and mosques. According to some estimates, every other building in the Strip had a tunnel shaft. There were even entrances under children’s beds. Cement intended for schools and hospitals was diverted to reinforce tunnels.
This “Gaza Metro” enabled Hamas to effectively produce, store, and launch rockets at Israeli civilian population centers. Underground rails and conveyor systems moved rockets from factories to launch pads undetected.
Since Israel’s withdrawal from Gaza in 2005, Hamas and allied Palestinian terrorist factions have fired tens of thousands of rockets and mortars across the border. In late 2023 alone, more than 10,000 rockets were fired in just a few months.
In addition to building bunkers and tunnels, Hamas spent big on recruiting, training, and supporting a terrorist army and internal security force. Hamas also invested heavily in setting up and running a sophisticated propaganda machine and a system for indoctrinating Palestinian youth that promoted and glorified a ghoulish cult of “resistance” and “martyrdom” – meaning, murder and suicide bombing – in the name of religion.
In short, Hamas turned the Gaza Strip into a totalitarian dystopia dedicated to the physical destruction of its neighbor, Israel, the world’s only Jewish state.
The same resources could have produced a vastly different Gaza – for starters, an entity with modern sanitation. Much of Gaza’s sewage flows untreated into the Mediterranean Sea or seeps into the aquifer, contaminating groundwater and spreading disease. Many neighborhoods rely on cesspits that often overflow. For much less money than Hamas spent on terror tunnels, it could have built modern wastewater treatment plants.
Alongside sanitation, Hamas could have invested in desalination to secure clean drinking water. With steady funding, Hamas had the capacity to build more than one plant over time, creating a sustainable water system for the population and ending the cycle of water shortages and contamination.
Reliable electricity was also within reach. Hamas could have upgraded Gaza’s power plant, expanded interconnections with neighboring grids, and developed solar and battery systems to supplement supply.
Hamas had the resources to modernize Gaza’s transportation system – yet no highways exist even at the level of basic U.S. state roads. The network consists mainly of local, two-lane streets, cracked and riddled with potholes, with rainwater often turning them into muddy pools. Sidewalks are incomplete or missing. Street lighting are sparse and unreliable, and public transportation is limited to battered minibuses and taxis, with no reliable bus lines or modern transit.
The materials poured into tunnels and bunkers could have gone into housing and medical facilities.
Instead of spending years digging underground, Gaza could have risen upward.
Its 24-mile coastline offered an obvious path to economic viability. With even partial openness to regional markets, Gaza could have become a trade-oriented enclave rather than an isolated zone of conflict.
Tourism, too, was possible. Gaza’s beaches, if safe and clean, could have supported a modest industry of small hotels, restaurants, and services. Thousands of young people could have found work in such a sector.
None of this was unrealistic. Other small coastal states – Malta, Cyprus, Singapore – show how geography, focus and investment can create prosperity. Gaza’s problem was never a lack of money or location. It was leadership that directed every dollar toward war – and corruption.
While ordinary Gazans endured poverty, shortages, and broken or non-existent infrastructure, senior figures amassed fortunes estimated in the billions. They lived in luxury abroad – in places like Doha and Turkey – owning lavish homes, investing in businesses, and sending their children to private schools. They made their money by skimming foreign aid, taxing goods and services inside Gaza, and diverting humanitarian supplies into black-market sales. Much of it was laundered through front companies and charities, then invested in real estate and enterprises abroad. Money that could have built Gaza instead financed the personal wealth and comfort of its ruling elite.
Remember that the next time you encounter someone who suggests Hamas should still have some influence, any say at all, in governing post-war Gaza. Remind them of how much money Hamas controlled when it was in power, of how it chose to spend that money – on tunnels, rockets, propaganda, and the personal enrichment of its leaders – and of what it could have built if its rulers had not chosen bloodlust, hate, and thievery over their own people.