Transcript: Bank robberies in Gaza

This is an audio transcript of the FT News Briefing podcast episode: ‘Bank robberies in Gaza’

Josh Gabert-Doyon
Good morning from the Financial Times. Today is Thursday, June 20th and this is your FT News Briefing. The European Central Bank is worried about rising debt levels. Gaza grapples with a rise in bank heists.

Mehul Srivastava
When they show up and they open the doors to the building, there was already an armed gang inside. And they pointed a gun at the employees. Somebody fired a shot. Somebody almost had a heart attack.

Josh Gabert-Doyon
And Malaysia seeks more Chinese investment. I’m Josh Gabert-Doyon and here’s the news you need to start your day.

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The European Central Bank has issued a warning about high levels of debt among eurozone countries. The ECB says that an ageing population, climate change and gaps in defence spending are the biggest cause for concern when it comes to public finances in the region. The bank is urging eurozone countries to cut their budget deficits by an average of five percentage points of GDP.

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Palestinians in Gaza are already dealing with a drastic shortage of cash, and now a spate of bank robberies has further rocked the economy. Armed groups have stolen $120mn from banks in Gaza over the last two months. That’s about a third of the cash left in Gaza’s bank vaults according to UN estimates. The robberies are adding pressure on to an economy that’s already reeling from the effects of war, hyperinflation and a lack of available banknotes. Mehul Srivastav is covering the Israel-Hamas conflict for the FT. Hi, Mehul.

Mehul Srivastava
Hi. How are you?

Josh Gabert-Doyon
So what’s the situation with banks in the Gaza Strip right now? How have they been managing since the war broke out?

Mehul Srivastava
It’s an incredibly difficult situation for them. The Israeli government for a long period of time is controlled amount of shekel notes that are allowed in and out of Gaza. This is part of the blockade that had for 17 years or so. But since the war began, as northern Gaza got destroyed, a lot of the bank’s buildings, infrastructure itself was destroyed, but the money was stuck inside these steel vaults. So like two, three hundred million dollars of it by most estimates. And over time, northern Gaza has become completely lawless. And these banks have been trying for a long time to free up the cash, either to move it out of Gaza into their deposits, into the West Bank, or to move it to southern Gaza so that people could access it at the one or two ATMs that are left functioning there, or be able to withdraw their deposits in a safe manner. So people who have had bank accounts are at least able to use that money to buy essential supplies, like food or medicine.

Josh Gabert-Doyon
What about Israel? What stance have they taken towards the cash shortage in Gaza?

Mehul Srivastava
Well, since October 7th, when cash has become perhaps the only way that people can purchase any essential supplies, Israel hasn’t allowed any fresh cash in. They say it’s because of concerns that it would be taken by Hamas, or it will be abused to commit more acts of violence against Israel. But on the ground, what it has meant to the people who had bank accounts, they barely have any electricity or barely have any internet to be able to do online banking transactions to buy food at the few surviving supermarkets or transfer cash to each other. And as physical cash has grown more and more difficult to source, money-changers are charging 10 per cent, 20 per cent in order to free up some of the cash that people have in a bank account. Under normal circumstances, you just go to an ATM and pull it out. By our count, there are now maybe two or three functioning ATMs in all of Gaza. And even to join the queue for an ATM takes a week. And there’s limits to how much to withdraw. So basically, you have some cash in the vaults, very little cash in circulation and a huge cash shortage everywhere.

Josh Gabert-Doyon
And now we’re seeing these bank robberies. Tell me a little bit about those. I mean, how are they orchestrated?

Mehul Srivastava
In these bank robberies, you know, we’ve heard rumours about them early on, but in April, because there’s literally no civil order left in Gaza, there’s no policeman left in Gaza. The bank started hearing that their buildings were being drilled into. And people were stealing money from the ATM cassettes and any cash that was in drawers. But the bank vaults themselves, just steel, you know, reinforced and everything were at that time safe. So the Bank of Palestine made a decision that the best thing that it could possibly do is to encase them in concrete for the duration of the war, until they can come up with a way to take it out. Early in April, they went to one of their branches and they poured concrete around it, and the next morning the neighbours, they heard a massive explosion and they went out and one of them told us they saw banknotes fluttering through the air. But essentially, armed gangs had placed explosive around the concrete and had stolen something like $30mn out of that branch. The bank was so concerned about the situation at a neighbouring branch that they went in the next day, and they told all the depositors and merchants nearby that, look your money is in our bank. If you show up at this time, we’ll try and let you retrieve as much of that, because we’ll open the vaults. But when they showed up and they opened the doors to the building, there was already an armed gang inside. And they pointed a gun at the employees. Somebody fired a shot. Somebody almost had a heart attack. And at gunpoint, they were told to open the vault. And another 30 or $34mn were stolen that day.

Josh Gabert-Doyon
Some of the bank robberies you reported on are supposedly backed by Hamas. What evidence do we have that Hamas is involved here?

Mehul Srivastava
So our understanding is that these are definitely armed gangs, because there’s weapons being used, as explosives that are being used. But the one instance that we just talked about earlier where the doors of the bank were open and armed gangs were inside. They told the Bank of Palestine employees that they were confiscating the cash on orders of the highest authority in Gaza. So the bank is very careful never to say that this was Hamas. But Hamas was, before the war, the highest authority in Gaza. It’s, I can’t think of any instance where a Palestinian militant group has stolen from Palestinian banks before. So this is an extraordinary situation. And it also kind of raises the risk that if this money were going into the hands of criminal gangs or Hamas, it kind of further the fuels both the lawlessness and the insurgency that Gaza is in right now.

Josh Gabert-Doyon
And how is the Israeli military responded to these robberies?

Mehul Srivastava
I mean, we asked the Israeli military what’s going on about this? And one of the things they told us was that the Israeli military itself has seized about 100mn shekels in cash and is being held in some kind of account to the Bank of Israel. Israeli military, told us that they were taking out of, Gaza to make sure they didn’t get into the hands of Hamas. But, 100mn shekels is a significant amount of money for a place that was so impoverished, like Gaza and is so devastated right now.

Josh Gabert-Doyon
Mehul Srivastav is covering the Israel-Hamas conflict for the FT.

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Malaysia is deepening its ties with China in what some say marks a diplomatic pivot away from the west. This week, the Chinese premier is visiting Kuala Lumpur and Malaysian Prime Minister Anwar Ibrahim has been trying to expand bilateral co-operation with China. But the feeling in Malaysia’s government is that Ibrahim may not be Beijing’s top priority. Here to chat about it is Mercedes Ruehl, the FT’s Singapore correspondent. Hi, Mercedes.

Mercedes Ruehl
Hello.

Josh Gabert-Doyon
OK, so a delegation of Chinese diplomats is visiting Malaysia this week. What’s going on here?

Mercedes Ruehl
So Malaysia and China this year celebrate the 50th anniversary of their diplomatic relations. And there was some hope that Xi Jinping, the Chinese president, would take up Anwar Ibrahim, the Malaysian prime minister’s invitation to visit his country for this anniversary. However, they’ve had to make do with Li Qiang, who is still Chinese premier and is very much high profile. But there is a sense from officials and political observers that this is a little bit of a disappointment.

Josh Gabert-Doyon
Interesting. What’s Malaysia’s relationship with China look like over the last few years?

Mercedes Ruehl
Malaysia historically had a pretty good relationship with China. However, I think that what surprised sort of people then more Ibrahim is just how much he’s been encouraging closer ties with China. He was seen as being quite or is seen as being quite a pro-western leader in Asia. So these kind of efforts have, you might say, surprised a few people, in the West.

Josh Gabert-Doyon
Malaysia is a Belt and Road country. I know there’s a lot of trade between Malaysia and China. What are the stakes here for Malaysian Prime Minister Anwar Ibrahim? What would more investment mean for his government.

Mercedes Ruehl
Anwar what has gone out of his way to praise Xi and the BRI. He’s revived talk of an Asian Monetary Fund with China’s renminbi as the reserve currency. He’s also, ahead of the trip, said that Malaysia will join the BRICs bloc of Brazil, Russia, India, China and South Africa. I mean, it does seem to be placing Malaysia more into China’s orbit than many people anticipated. Perhaps that pays off economically for Anwar. I think the jury’s still out on that. And what from these projects and agreements that we get this week. What that translates to on the ground and what actual dollars and benefits Malaysia is going to get, because, I mean, promises are great, but sometimes they end up being just that.

Josh Gabert-Doyon
OK, so I guess we’ll have to wait and see what comes out of this state visit. Assuming there is increased co-operation, what would a stronger relationship between China and Malaysia mean for the region as a whole?

Mercedes Ruehl
I think the reason there’s so much focus on south-east Asia at the moment is that this is the place where the US-China rivalry is really playing out, and how leaders are reacting to both of these superpowers, which they have various economic, defence and other ties with, will be constructive for how other countries around the world react.

Josh Gabert-Doyon
Thanks very much, Mercedes. Mercedes Ruehl is the FT’s Singapore correspondent.

Mercedes Ruehl
Thank you.

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Josh Gabert-Doyon
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You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.