The war in Gaza has caused an unprecedented level of material destruction that will require tens, if not hundreds, of billions of dollars and decades to rebuild, the United Nations – UNConference on Trade and Development (UNCTAD) said in a report this year.
A preliminary assessment of the social and economic impacts of the conflict examines gross domestic product (GDP) losses, recovery timelines, and lasting effects on poverty and household costs. It is estimated that Gaza’s annual GDP fell by $655 million last year, or about 24 percent.
“If the world wants Gaza to re-establish a viable economy, military attacks on the Strip should stop immediately and reconstruction begin in earnest and without delay. The international community should act now, before it is too late, if not already,” the report recommends.
Moderate economic decline
Gaza has been under blockade since 2007, after Hamas took power, and had an average growth rate of 0.4 percent until 2022. UNCTAD estimated that the economy was already contracting by 4.5 percent in the first three quarters of 2023. The report states that if the fighting stopped as soon as reconstruction began, it would take decades for GDP to return to 2022 levels. More precisely, until 2092. Two generations would not live to see it.
“However, even under the most optimistic scenario that GDP could grow at a rate of 10 percent per year, Gaza should return GDP to pre-blockade levels of 2006 by 2035.”
“Bosnian scenario”
The 1990s and the inertia of the international community to stop the conflicts in Bosnia and Herzegovina (BiH), the destruction and genocide, will remain recorded as the biggest crime against humanity on European soil after the Second World War. After the Dayton Peace Agreement, the international community began to invest billions of dollars in the country, highlighting the long-term effects of the conflict and the deteriorating economy.
After the end of the war, BiH faced long-term stagnation and instability, while the infrastructure, economy and social institutions were almost completely destroyed. The international community, recognizing the need for reconstruction, reacted late, leaving BiH without adequate support in the crucial years after the war. Through various programs and projects, billions of dollars are channeled into building infrastructure, rebuilding the economy and supporting social development.
These programs encompassed a wide range of activities, including building roads, rebuilding schools and hospitals, supporting economic development and employment, and strengthening government institutions. However, although investments have contributed to the improvement of the situation in BiH, there are still numerous challenges facing the country, including political instability, corruption and ethnic divisions.
Through the continuous support and engagement of the international community, BiH is slowly recovering from the consequences of the war and creating the foundations for sustainable development. However, long-term and consistent investment is needed to ensure a stable and prosperous future for all citizens of BiH. Although we are already three decades away.
Gaza’s disastrous socioeconomic conditions
Conditions were already catastrophic in Gaza, which is one of the most densely populated places on the planet, with more than two million Palestinians trapped in 365 square kilometers.
The majority, 80 percent, relied on international aid; two-thirds of the population lived below the poverty line, and unemployment was 45 percent before the war. There was a lack of adequate access to clean water, electricity and a proper drainage system. In addition, much of the damage from previous Israeli military operations remains unrepaired.
Break the “vicious cycle”
The report emphasized the importance of providing immediate support to the Palestinian government in efforts to prevent a wider collapse, noting that foreign aid has fallen from a total of $2 billion, or 27 percent of GDP, in 2008 to $550 million in 2022, or less than three percent of GDP, N1 writes.
E.Dz.
