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Lack of cash worsens Gaza humanitarian crisis

UNDP says lack of cash flow delays aid to Gazans

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Palestinians in the Gaza strip are facing a monetary crisis of immense proportions as salaries have been frozen, humanitarian aid deleted and welfare checks cancelled in the face of a banking and liquidity crisis brought on by Israel’s blockade.

Although Israel allowed a $12 million transfer into the impoverished Gaza strip earlier this week,, cash transfers have been tightly restricted since
Hamas took control of Gaza in June 2007 and especially since the war that ended this past January, the UN office for the Coordination of Humanitarian Affairs said Monday.

After Hamas took control of Gaza Israel began restricting flow of cash transfers to irregular transfers of 50-100 million shekels ($ 12 million),

The $12 million cash infusion will go towards paying the salaries of 65,000 Palestinian Authority staff in Ramallah in the West Bank, who have frequently gone without salaries since the lack of cash has hampered basic financial transactions.

The European Commission, which contributes about $33 million to pay PA salaries each month and $250 to each of the 48,000 welfare cases per month, is one of the biggest donors to the Gaza strip.

But without enough physical cash available they may have to slash donations next month.

“Our main operations in Gaza are cash-based. We assist the PA in Ramallah to pay salaries and pensions and the European Commission pays support to vulnerable families via their bank accounts, but there is not enough physical cash in the banks to allow the payments to be made,” EC representative Christian Berger told IRIN NEWS.

Israel restricts cash flow into Gaza as a “security” measure. It enters from the Erez crossing once per month under supervision of the Israeli Defense Ministry, which fears an abundance of cash could be used by its arch foe Hamas to fund its resistance efforts, including weaponry.

"Israeli banks no longer deal with banks in Gaza after the Hamas take over," an Israeli ministry of Defense spokesperson told Al Arabiya.

There is not enough physical cash in the banks to allow the payments to be made

Christian Berger, European Commission

Among the U.N. humanitarian programs likely to be affected by the cash shortage are UNDP, which reported difficulty in following through with relief payment schemes to help Palestinians who lost everything in the wake of Israel's three week offensive on Gaza.

"We are facing a looming crisis in Gaza because of the liquidity problem," Husam Toubil from UNDP in Gaza told Al Arabiya. "The delay in transfers comes from banks having little money and this affects our efforts to assist the homeless and dispossessed," Toubil explained.

The UNDP program has about 13,000 families registered for assistance 4,300 of which have not received financial aid to get back on their feet.

We are facing a looming crisis in Gaza because of the liquidity problem

Husam Toubil, UNDP Gaza

Gabali al-Sakran, 43, and father of eight, has been waiting for $3500 from the program after his house was bombed in Tal al-Hawa during the offensive. Al Sakran told Al Arabiya he has been waiting for the money for over a month and that this delay is wearing his family down.

"We don't live in one place. Five of my children live with my wife and I and the rest are dispersed at their relatives' " Al Sakran told Al Arabiya, adding that shortage of funds and resorting to relatives in times of minimal resources increases tension between families.

"There is a limit that everyone can take. We in Gaza stand by each other's side but after the offensive and total breakdown in Gaza on all levels, it has become harder for people to be generous with one another," he explained.

We don't live in one place. Five of my children live with my wife and I and the rest are dispersed at their relatives'

Gabali al Sakran, Gaza