What did the Gaza war do to the Palestinian economy?

What did the Gaza war do to the Palestinian economy?

According to a report by the United Nations Development Programme (UNDP), the recent Gaza war has significantly damaged the fragile economic infrastructure of Gaza and the southern coast. It is said that the Israeli military attacks have caused a 10-year setback in the Palestinian economy. It is also estimated that if the war continues for another month, Palestinian citizens will experience a 20-year setback in terms of livelihood.

The UNDP has reported severe economic conditions in Gaza and the southern coast. This report, based on information published by the Palestinian Ministry of Health and prepared by Abdullah al-Dardari, the UNDP director in the southern coast, has been covered by the media. According to the statistics in this report, the unemployment rate in Gaza has surpassed 70-75 percent, and people’s livelihoods have been severely disrupted. The report focuses on the economic consequences of the Gaza war and highlights the depth of the economic tragedy in Gaza and the southern coast.

Destruction of infrastructure and displacement of the workforce

According to the statistics provided by the Ministry of Health in Gaza, over 15 million Palestinian citizens have been displaced in the narrow Gaza Strip in the past month. Reports indicate that many of them have lost their homes and belongings due to Israeli army bombings.

Furthermore, the majority of Gaza’s displaced people have been forced to evacuate the northern areas of the region following Israel’s ultimatum on November 9, 2023. Therefore, it can be said that in addition to the humanitarian tragedy unfolding in Gaza, the conflict in this region has other dimensions, with one of the most significant being the displacement of the workforce. This can have long-lasting consequences on the Palestinian population.

The poverty line has no meaning in Gaza.

According to a report by the United Nations Development Programme (UNDP), more than two-thirds of the population in the Gaza Strip live below the poverty line and face the most difficult living conditions. It should be noted that the end of the war will not mean a return to the days before the Israeli army bombings in the Gaza Strip. In other words, the lost jobs and displaced workforce due to the destruction of infrastructure will not be able to resume productive economic activities anytime soon.

However, there have been reports indicating that the absolute poverty population in the Gaza Strip has increased by approximately 400,000. However, this statistic is very different from the poverty line report in the Gaza Strip, as it is based on extreme and absolute poverty. Therefore, UNDP has expressed concern that if Israel does not allow international aid to enter Gaza in the coming weeks, the hunger crisis in this region will intensify.

In other words, it can be said that the poverty line in the Gaza Strip has lost its meaning and definition as defined in economic forums, as the majority of citizens in the Gaza Strip are considered poor, and a significant number are considered absolutely poor.

A 20-year setback

The unemployment rate in the Gaza Strip had reached about 48% before the operation known as the Al-Aqsa Storm on October 7, 2023. However, evidence suggests that about 70% of jobs in the Gaza Strip have been lost, resulting in an unemployment rate of over 80% in Gaza. It should be noted that the 20% currently employed are also residents of the southern areas of Gaza, and if the Israeli army continues to occupy land in the Gaza Strip, we will soon witness the disappearance of job opportunities for this small group as well.

On the other hand, the unemployment rate in the Gaza Strip has increased from 12% before October 7, 2023, to over 30% currently. This unprecedented level of change in the occupied territories is sounding the alarm for a widespread economic crisis in the Gaza Strip.

Abdullah Aldardari, the Director of the Planning and Development Office of the United Nations in the Gaza Strip, also stated in this regard to CNN, ‘I have been directly involved in reporting on the Israeli-Palestinian conflict for over 30 years, but I have never witnessed such a tremendous shock. If the war continues for another month, the Palestinian economy will experience a setback of 20 years.’

According to the UNDP report, if the Gaza war continues until mid to late November, approximately 500,000 Palestinians will be added to the population of the hungry and absolute poor. In other words, in the event of ongoing war, the absolute poverty rate in the Gaza Strip and the narrow strip of Gaza will increase from 15% to 32%.

As previously mentioned, UNDP has reported the destruction of economic infrastructure in both Gaza Strip and the West Bank. The UNDP director in the West Bank told CNN that almost everything built in Gaza since 2002 has been destroyed, and the market’s employment opportunities are practically inaccessible.

The collapse of a weak economy.

On the other hand, reports have been communicated regarding the significant number of investors and entrepreneurs in Gaza and the West Bank being killed or injured. Simply put, neither the infrastructure is in place nor is there any money available to rely on for the reconstruction of Gaza Strip and the West Bank. The small and weak Palestinian economy, which has a volume of less than $20 billion, is not only experiencing a 20-year setback, but also will practically be unable to fulfill the basic needs of its citizens without international assistance.

While all the mentioned cases and estimations are true if Israel stops the continued bombardment, the war is halted, and a ceasefire is established. Otherwise, the dimensions of the tragedy will worsen day by day, and practically nothing will remain of the weak Palestinian economy except ashes.