The Vision Center for Political Development published a report on the devastating economic effects of the ongoing Israeli war on the Gaza Strip for more than 7 months, indicating that despite the difficult situation, Gaza possesses amazing human capabilities, energies and competencies. Education levels are high, skilled workers are available, in addition to the possession of wealth. Natural marine resources capable of getting it out of its crisis and directing it towards recovery.
The report (written by the researcher and specialist in Palestinian economic affairs, Dr. Raghad Azzam), stated that, speaking about the economy of Palestine, its economic crisis is chronic and has been linked for decades to the existence of the occupation, its arbitrary actions, and its continuous violations, so it cannot be dealt with by the standards in which any other sovereign country is dealt with. It owns its resources and has complete freedom to make its decisions.
In a quick presentation of the effects of the destruction and genocide carried out by the occupation against the Gaza Strip, and based on the latest statistics available to the Palestinian Central Bureau of Statistics as of May 6, the number of martyrs exceeded 35 thousand and the number of wounded exceeded 79 thousand, most of them children and women.
At the level of buildings and facilities:
- The occupation partially destroyed 294 thousand buildings.
- More than 25 thousand buildings were completely destroyed.
- 86 thousand housing units were completely destroyed.
- 103 schools and universities were completely destroyed.
- 309 schools and universities were partially destroyed.
- 32 hospitals were destroyed, leaving them completely out of service.
- Destroying hundreds of mosques, churches and government headquarters.
Gaza’s economy before October 7
The situation of the Gaza economy before October 7 was not normal, as it suffered for many years of siege, restrictions, and marginalization. It was cut off and cut off from the outside world. It was prevented from extracting natural gas from the fields that were discovered in the 1990s in the Mediterranean Sea off the coast of Gaza. It has rich water resources.
This caused catastrophic conditions for the entire Gaza Strip, as the rate of food insecurity in the Strip, according to a World Bank report in May 2023, reached about 53%, meaning that more than half of the population was suffering from the risk of food insecurity. Also, more than half of the workforce was suffering from unemployment, and 83% of workers received less than the minimum wage.
In addition to the crises of shortage in water and electricity supplies to the Gaza Strip, their high cost and irregularity, and other social and economic challenges. This caused the decline of the agricultural sector and the decline of the industrial sector, which constitute the two pillars of the economy. This led to a weak ability to bring about real development in the Gaza Strip, and made the production structure there distorted, tending to the service form, deviating from its productive purpose, and working at less than its natural productive capacity. Much.
Gaza’s economy after October 7
After October 7, the economic situation deteriorated, and the main economic indicators in the sector began to decline at a rapid pace. By the end of December 2023, early estimates showed a sharp decline in living conditions, as the unemployment rate reached 79.3%, and the poverty rate among Gazans rose to about 96%. As for the gross domestic product and its per capita, they recorded a contraction of about 24% and 26%, respectively, compared to the previous year.
The agricultural sector, which contributed to supplying the GDP in the Gaza Strip during the third quarter of 2023 with about $58 million, deteriorated, bringing its productivity to only $5 million during the quarter that followed October 7.
Statistical analysis shows an increase in the percentage of agricultural lands damaged during this aggression from 5.36% in October 2023 to 33.13% last February.
The industrial sector was also affected by widespread destruction, ongoing power outages, and supply chain disruptions as well. Industrial production decreased by about $51 million in the fourth quarter of 2023 compared to the previous one.
The World Bank estimated the percentage of damage and destruction that affected the various economic sectors in Gaza as follows:
- Education sector 73%.
- Health sector 81%.
- Municipal services 75%.
- Water and sanitation 55%.
- Information and communications 75%.
- Transportation 63%.
- Trade 80%.
- Housing 62%.
The United Nations Conference on Trade and Development (UNCTAD) described the conditions in the Gaza Strip as “catastrophic,” and that living conditions in Gaza are at their lowest levels since the beginning of the occupation in 1967.
Prospects for development and reconstruction
Wars always leave a difficult challenge and leave devastating effects on the political, economic and social levels. Their consequences last for long periods and are more complex than the aggression itself. Reconstruction usually takes a long time, requires strenuous efforts, and confronts small and large projects, whether governmental or not. In particular, problems and setbacks limit its ability to continue its activity as required.
The Roya Center report stressed that the reconstruction process requires reform economic policies, targeting the beginning of infrastructure, as a basic necessity to reduce the costs of economic activities later, and facilitate the return of their work to normal. This is followed by restructuring the work of the sectors, and transferring the local economy from dependence on the service sector to the productive side, by exploiting the available natural resources, in addition to providing job opportunities, and alleviating the burden of unemployment and poverty among segments of society.
On May 2, the United Nations Development Program and the Economic and Social Commission for Western Asia (ESCWA) issued a report on estimates of the situation in Gaza and the extent of the destructive effects on the Palestinians, the economy, and human development. He expected the aggression to last from 7 to 9 months. The report estimated that the scenario of the war continuing for nine months would raise the poverty rate in Palestine as a whole to more than double what it was before the war, and gross domestic product losses would reach about 7.6 billion dollars.
The report pointed to the significant decline in the Human Development Index, which was affected by the loss of job opportunities by youth and the workforce.
Gaza is capable
Talking about the possibility of economic development in the Gaza Strip may be a fantasy at the present time, in a land where poverty is spreading in its worst forms. However, the Gaza Strip’s possession of amazing human capabilities, energies, and competencies, high levels of education, and the availability of skilled workers are strengths for the Gazans, in addition to their possession of natural wealth, including marine resources, natural gas fields, and others.
The Gaza Strip is in dire need of a package of development measures, and an indicative model of the experience of one of the regional or international countries, which went through similar conditions of conflict and destruction, lack of security and stability, and were able to bring about tangible change, achieve economic development, and improve their living conditions.
Modern history has witnessed a number of renaissance experiences for nations that it was never possible to imagine that they would one day have an economic future, after having languished for decades at the bottom of political, social and economic crises. They were able, during a record period, to make huge leaps that made them become a major player among economies, such as the reconstruction experience. Angola after the end of the war, the experience of Rwanda’s rise after the end of colonialism and the cessation of the civil war in 2000, and the miracle of Vietnam’s economic recovery that began after the withdrawal of American forces from it in 1974, in addition to the model of the development of Malaysia and Singapore after the departure of British colonialism from them.
