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Last Updated: Thursday, 30 March 2006, 23:53 GMT 00:53 UK
Tough task awaits Hamas finance chief
By Roger Hearing
BBC world affairs correspondent

Dr Omar Abdel Razeq has the least enviable job in the new Palestinian government.

Dr Razeq with Hamas politicians in Ramallah
Dr Razeq's colleagues will rely on him to make their plans possible

As minister of finance, this tall, bearded, 46-year-old US-educated economist is faced with squaring a nightmare circle of ever-growing debts and ever-diminishing income.

The latest analysis from the World Bank's assessment of the Palestinian Territories makes grim reading.

It highlights a budget deficit of $800m in 2005 alone, alongside further increases in public sector salaries and the numbers of government workers, while almost one in four Palestinians remains unemployed, and 43% live below the poverty line.

The word the World Bank uses to describe the socio-economic situation is "precarious".

'Nothing is easy'

Meanwhile the stated aims and methods of the Hamas party Dr Razeq represents mean that it is beyond the pale for Israel, the US and the EU, so donor contributions - worth $340m in budget support last year - and the $50m of Israeli-administered tax revenues are drying up too.

Palestinian women argue with an Israeli soldier at Hebron
Israel continues to restrict movement in Palestinian territories

But on his first day in his new office, Dr Razeq insisted it was exciting as well as daunting to have to deal with such a mountain of problems.

Only if he finds some way to climb it will his equally new fellow cabinet members be able to do what they want.

"They are all waiting for me," he says, "to provide them with the necessary support."

The crowd of advisers and civil servants he has inherited from the old regime, along with the shiny desk, big flag and filing cabinets on the fourth floor of the ministry building in the hilly Ramallah suburbs, have at least given him some evidence that there are reasons for optimism.

"We have money coming in from other sources, from the Arab sources. We have also some funds that we have to tap and look into. We have also our Palestinian Investment Fund."

"Then we will manage also to rearrange our expenditures in a way that improves the productivity and reduces some of the waste."

"But with the Palestinian situation nothing is easy, because you are under occupation."

Hamas assurance

That's a reality he knows rather well - he himself was released from an Israeli gaol only on 14 March, having sat out the crucial January election that brought Hamas to power in his prison cell.

The authorities thought he was responsible for the funding of Hamas, he says, but he was freed on bail because they could not prove it.

He has another court appearance coming up in May.

Dr Omar Abdel Razeq
Dr Razeq has promised to make Palestinian finances accountable

Which rather underlines the point that Hamas is, after all, an organisation that has carried out suicide bombings in Israel and has given up neither the use of violence nor its wish to see the Jewish state disappear.

Isn't it therefore entirely reasonable for the Europeans and others to withhold millions of dollars they fear may end up funding terrorism rather than welfare?

"We can assure them it will not go to any other uses," Dr Razeq says. "It will be used in the interest of the Palestinian economy and the Palestinian people."

"The whole issue is not actually real. We hope that Europe at least will change its mind and talk to us, and respect the choice of the people."

No time to wait

His idea is that by dealing effectively with the corruption and incompetence that characterised the old Fatah administration and was so dramatically rejected by Palestinian voters last January, Hamas will eventually be able to win round the doubters in the international community.

"What they care about in the West is the way we handle public funds," he says.

Dr Razeq may be right in the end.

However, many in the West Bank and Gaza fear the economy has reached such a dire position that it cannot endure the loss of most international financial help while it waits for the west to make up its mind about Hamas.

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