It could take until the closing years of this century for Gaza’s economy to return to its pre-conflict scale if hostilities in the Palestinian enclave end immediately, the UN trade body said in a report released today.
More than 26,000 people were killed in the Israeli offensive on Gaza after the Hamas attack on October 7, local authorities said. They state that the infrastructure and means of livelihood of 2.3 million inhabitants have been decimated.
The United Nations Conference on Trade and Development (UNCTAD) said the conflict caused Gaza’s GDP (gross domestic product) to drop by 24 percent, and GDP per capita to drop by 26.1 percent for the full year 2023.
UNCTAD said that if the military operation ended and reconstruction began immediately, and if the growth trend recorded in the period 2007-2022 were to continue, at an annual average rate of 0.4 percent, Gaza could return to a GDP volume of and to the pre-conflict level by 2092.
In the best-case scenario that GDP could grow by ten percent per year, it would still take until 2035 for Gaza’s GDP per capita to reach the level of 2006, before Israel imposed a permanent land blockade in 2007 , sea and air, citing safety concerns.
“It will take until 2092 for Gaza to return to the level of 2022, when it was not a good place to live at all,” said Rami Alazzeh, an economist who works on the occupied Palestinian territories at UNCTAD, and added:
“I think the main conclusion from the report is that the level of destruction we are witnessing in Gaza is unprecedented. It will take a lot of effort from the international community to rebuild and recover Gaza.”
UNCTAD said the enclave’s needs were about $3.9 billion for recovery after Israel’s previous military intervention in Gaza in 2014. Those needs would be significantly greater after the current conflict, the report said.
“Given the level of destruction and intensity of damage we are currently witnessing in Gaza, and that the military operation is still ongoing, the figure needed for recovery in Gaza will be many times higher than the $3.9 billion needed after the 2014 war,” he said.
Gaza’s economy was in shambles even before the conflict due to Israel’s economic blockade, with the enclave’s economy shrinking by 4.5 percent in the first three quarters of 2023, according to UNCTAD estimates.
Two-thirds of the population lived in poverty and 45 percent of the workforce was unemployed before the conflict. Since December, unemployment has risen to a whopping 79.3 percent, UNCTAD said.
“I don’t think the international community or the residents of Gaza can afford decades of humanitarian disaster. Gaza should be part of the development agenda, not be treated as a humanitarian case,” Alazzeh said.
