Israel’s relentless bombardment in its war on Gaza following the surprise offensive by Hamas on 7th October has killed and injured tens of thousands of Palestinians; the human cost is incalculable. It has wiped out entire neighbourhoods and reduced businesses to rubble. It has also jolted global financial and energy markets.
The toll on infrastructure is massive, resulting in absolute destruction and a lack of basic requirements to sustain life. Homes, schools, hospitals, churches, and mosques have all been targeted.
Whoever runs Gaza after the war ends will have to rebuild the besieged enclave and create a functioning economy. Who compensates Palestinians for the destruction? Will Gaza ever receive enough aid?
While many keep inquiring about the impact of the war on Gaza on the Palestinian economy, the United Nations has warned that the war could severely set back development in the Palestinian territories. The Palestinian territories are dependent on Israel for their labour and goods markets and for basic services like water and electricity. They are locked in a cycle of underdevelopment caused by decades of Israeli restrictions and occupation.
The United Nations says that the humanitarian catastrophe in the Gaza Strip is “worsening by the hour”, with over 15,000 people killed, entire neighbourhoods flattened, and nowhere safe to go. Palestinians trapped in Gaza are being denied the essentials for life – food, drinking water, shelter, medical care, and fuel necessary to power life-saving machines.
Close to two months since Israel started its military offensive and imposed a total siege on the strip, humanitarian aid to Gaza remains limited, with the United Nations saying that Gaza needs billions of dollars in aid to fix an economy “stifled’ by years of an Israeli blockade.
Philippe Lazzarini, Commissioner-General of the United Nations’ Palestinian refugee agency (UNRWA) said that “Gaza is being strangled and it seems the world has lost its humanity”. He has warned of an unprecedented humanitarian catastrophe.
Last year, Palestinian GDP stood at just over $20bn. By comparison, Israel’s economy is worth nearly $500bn. But what is the initial cost of the war on the Gaza Strip and on Israel? The UN says the war on Gaza could set back development by as much as 16 years.
The situation in Gaza before the war was already dire, and it is now expected to get even worse. However, even Israel’s economy is bearing the brunt. Israeli stocks and currency fell after Hamas launched its operation, and many businesses and schools remain closed. International airlines have also cancelled many flights to Israel.
The economic effects of war can be long-lasting. Even after the fighting has stopped, it can take years to rebuild an economy and recover from the damage caused by the armed conflict.
Photo: Mahmud Hams/AFP/Getty Images