At the beginning of 2023, the Palestinian territories – the West Bank and Gaza – were considered a lower-middle-income economy with a poverty level of six dollars a day per person, said the Executive Secretary of the Economic and Social Commission for Western Asia, Rola Dashti. In January, Gaza was already struggling with high unemployment of around 46%, which is three and a half times higher than in the West Bank, according to a United Nations (UN) report in November.
Since the start of the latest conflict, the number of Palestinians living in poverty has increased by an additional 500.000, according to United Nations Development Programme (UNDP) Arab States. Poverty in Gaza was already at an alarmingly high level even before Israel’s October campaign – with 61 percent of the population considered to be living below the poverty line.
More than 20.000 Palestinians have been killed and two million people displaced in Gaza since fighting began in October, according to the UN Relief and Works Agency (UNRWA), while Israel’s blockade of fuel supplies combined with severe restrictions on food, water, and medicine has sparked a humanitarian crisis. Access to the crowded enclave of about 2 million people has been severely restricted by Israel and Egypt for the past 17 years in what the non-governmental organization Human Rights Watch has characterized as a violation of basic human rights.
In the first month of the conflict alone, 61 percent of employees in Gaza and 24 percent of employees in the West Bank were wiped out, the UN report warns. In the first month of the war, Palestinian GDP fell by 4.2 percent compared to pre-war estimates, amounting to a loss of about 857 million dollars. In the second month of the war, that figure rose to 1.7 billion dollars, a loss of about 8.4 percent of GDP, the UN report added. The latest outbreak of war has only deepened the economic crisis.
How the Palestinian economy works
Israel’s occupation of the Palestinian territories, the barrier this occupation has built along and inside the West Bank, as well as the land, air, and sea blockades in the Gaza Strip, have placed severe constraints on any attempt for Palestinian economic policies to succeed.
A complex network of checkpoints and roadblocks makes it difficult for Palestinians to travel within the Palestinian territories for business, banking, or commerce. Farmers whose land is now behind the barrier must apply for ‘visitor permits’, which Israel routinely refuses. A World Bank report shows that Israeli restrictions on the West Bank alone cost the Palestinian economy 3.4 billion dollars a year, or 35% of its GDP.
Until the outbreak of the conflict, most Palestinians were employed in the construction sector, followed by manufacturing and agriculture. A survey by the main Palestinian trade union found that only 11% of workers in Israeli settlements said they had job security, more than half received less than the minimum wage, and 65% were exposed to toxic substances.
Officials in Israel have not given any public indication of the expected length of the military offensive in Gaza, other than to say that the war is likely to be long and that the goal of the air and ground offensive is the complete elimination of Hamas. Israeli Prime Minister Benjamin Netanyahu has reiterated that he will not grant a ceasefire until all hostages held in Gaza are freed.
However, questions have been raised about the post-war governance of Gaza, after Netanyahu said Israel should have “overall security responsibility” in the Palestinian enclave for an “indefinite period”. His advisers have since said that Israel will seek security control in the region, not power.
The UNDP did not provide an estimate of the cost of reconstruction in Gaza once the ceasefire is reached, given the uncertainty over the length of Israel’s campaign. Assistant Secretary General of the UNDP Abdallah Al Dardari said the UNDP would likely eventually be involved in rebuilding the damaged enclave, although he warned that a continued Israeli blockade would complicate the process.
“From a technical point of view,” he said, “mass reconstruction and blockade do not go hand in hand.”
Palestinian workers in Israel are Palestinian nationals of the Palestinian Authority who are employed by Israeli nationals in the State of Israel and Israeli settlements in the West Bank. Most of them work as unskilled workers in sectors such as agriculture and construction, Forbes reports.
E.Dz.
