Gaza's Economy Suffers From Egyptian Military's Crackdown JABALYA, Gaza Strip - The only sound that could be heard on a recent weekday at Abu Eida's concrete-mixing plant in the north of Gaza was birdsong. The pumps, mixers and other heavy vehicles had been idle for days. The factory floor was empty. In a prayer room inside the air-conditioned management section, five men were taking an afternoon nap. Work here has been at a virtual standstill since the Egyptian military's ouster of President Mohamed Morsi early this month, staff members said. Along with the takeover in Cairo, the Egyptian military stepped up its campaign against Islamic militants operating against its forces in the rugged Sinai Peninsula, which borders Gaza. The clampdown has resulted in the destruction or closing of around 80 percent of the tunnels that run beneath the Egypt-Gaza border, long used for smuggling weapons and fugitives but also for construction materials restricted by Israel, cheap fuel and other goods. So now, Abu Eida has no cement or gravel to operate his factory, one of the biggest in Gaza, the Palestinian coastal territory. Manar al-Batsh, an accountant at the plant, said 40 employees were sitting at home. "If the crisis lasts until the end of this month, we won't be able to keep those workers on our payroll," he added. For Hamas, the Palestinian Islamic militant group that runs Gaza and has its roots in the Muslim Brotherhood, Mr. Morsi's ally in Egypt, the upheaval next door means the loss of an important friend and a looming economic crisis if the tunnel restrictions continue. Hamas, which refuses to recognize Israel and is considered a terrorist organization by much of the West, faces increasing physical and political isolation. New restrictions at the Rafah border crossing, Gaza's main gateway to Egypt and the outside world, limit travel to holders of foreign passports and to patients with official medical referrals from the Hamas-run Ministry of Health. Hamas officials are unable to leave Gaza, and given the security situation in Sinai, aid missions are not coming in. More materially, Hamas relies on the taxes it collects from the underground trade. Experts have estimated the group's annual budget at $900 million. Hamas employs almost 50,000 government workers in Gaza, and two-thirds of the budget is said to be spent on salaries. Omar Shaban, a Gaza economist and the director of PalThink, an independent research institute, said taxes collected from the tunnel trade made up about a third of the budget. Additional income has come from taxes on local businesses, many of which also depend on cheap commodities from the tunnels that are now in short supply. Fuel from Egypt is sold here at half the price of fuel imported from Israel. Hamas had already been suffering from a sharp drop in financing from Iran in recent months because it did not stand by President Bashar al-Assad of Syria, its former patron, in his struggle against rebel forces. Yasser Othman, Egypt's representative to the Palestinian Authority in the West Bank, told a Palestinian newspaper this week that the security measures along the border were not directed against the Palestinian territory but were to "protect Egypt's national security." He added that the measures would end "once the exceptional situation ended." But in Egypt, a news media campaign is under way against Hamas, as critics of Mr. Morsi associate the group with the violence along the Sinai border. Egyptian military officials have told state news media that scores of Hamas fighters and snipers have been making their way into Egypt to battle the anti-Morsi demonstrators, and newspaper columnists have accused Hamas of interfering in Egypt's affairs. Salah al-Bardawil, a Hamas official in Gaza, said in a telephone interview that the Egyptian news media were being "pushed by the enemies of resistance" and some Arab states that want to see Hamas toppled like the Brotherhood in Egypt. He acknowledged that Hamas's options for dealing with the crisis were limited but said that the Palestinian people were used to putting up with hardship to preserve their "dignity and national principles." Some analysts have questioned whether a weakened Hamas would remain committed to its cease-fire with Israel. In November, Mr. Morsi played an instrumental role in brokering a truce, ending a fierce eight-day Israeli offensive. Hamas has since worked to rein in rocket fire against southern Israel. For a while after Mr. Morsi's election victory last year, Hamas felt empowered. In October, the emir of Qatar became the first head of state to visit Gaza since Hamas took full control in 2007, and he pledged $400 million for major housing and infrastructure projects here. But because of a lack of supplies, most infrastructure projects, including the Qatari-financed ones, have come to a temporary halt. Abdul-Fattah al-Zeri of the Hamas-run Ministry of Economy said this week that 50,000 workers who depended directly or indirectly on the construction sector, like carpenters, engineers and aluminum window manufacturers, were out of work. "Today we are seeing a crippled economy, postponed contracts and losses among contractors," he said. Israel eased its blockade on Gaza in 2010 under intense international pressure. The increased flow and variety of goods from Israel freed up the smuggling tunnels for more industrial materials, setting off a building boom in Gaza. Unemployment had dropped to 26 percent from nearly 36 percent over the last three years. Mr. Zeri said there are worries that it will rise again, adding, "We are on the brink of a crisis in terms of economy." Other commercial sectors are also feeling the effects of the Egyptian clampdown. Most of Gaza's fishermen have not been going out to sea for lack of cheap fuel. And Gaza's fish market was almost empty of fish and buyers. One fisherman, Ali Ayyad, 28, stood on the deck of his family's fishing boat, which remained anchored in the harbor, and tried to catch some mullets with a rod. "It's better than begging," he said. Mayy El Sheikh contributed reporting from Cairo.