In a sobering revelation, the United Nations Conference on Trade and Development (UNCTAD) projected that Gaza demands tens of billions of dollars and economic recovery could stretch across decades.
GAZA’S ECONOMIC FREEFALL
UNCTAD’s preliminary assessment delved into the social and economic repercussions of the conflict, examining Gross Domestic Product (GDP) loss, recovery timelines, and the enduring effects on poverty and household expenditure. The report revealed a staggering annual GDP decline of $655 million in the previous year, equivalent to a daunting 24 percent contraction.
“If Gaza is to reemerge with a viable economy, the military confrontation should end immediately, and reconstruction should begin in earnest and without delay. The international community needs to act now before it is too late,” urged the report, emphasizing the urgent need for decisive global action.
ACCELERATED ECONOMIC DECLINE
Gaza, under blockade since 2007, witnessed an average growth rate of merely 0.4 percent through 2022. However, UNCTAD’s estimation pointed to a substantial contraction of 4.5 percent in the first three quarters of 2023. The military operation significantly exacerbated the decline, resulting in a staggering 24 percent GDP contraction and a 26.1 percent drop in GDP per capita for the entire year.
The report outlined a daunting scenario – even under the most optimistic projection of 10 percent annual GDP growth, it would take until 2035 to restore Gaza’s GDP per capita to the pre-blockade levels of 2006. The accelerated economic decline raises alarming concerns about the enduring impact on the region.
DIRE SOCIOECONOMIC CONDITIONS
Even before the war, conditions in the Gaza Strip were dire. With over two million Palestinians crammed into 365 square kilometres, it stands as one of the most densely populated places globally. A staggering 80 percent of the population relied on international aid, two-thirds lived below the poverty line, and unemployment stood at 45 percent.
The ongoing military operation, coupled with the damage from previous Israeli military operations that remained unrepaired, has exacerbated the crisis. UNCTAD underscored the urgency of restoring pre-conflict socioeconomic conditions, emphasizing that it would take decades and substantial foreign aid.
URGENT PLEA FOR GLOBAL SUPPORT
With 85 percent of Gaza’s population displaced and economic activity grinding to a halt, the situation is dire. Nearly 80 percent of the labour force is unemployed, and 37,379 buildings, equivalent to 18 percent of total structures in Gaza, have been damaged or destroyed.
“The Gaza Strip, half of whose population are children, is now rendered almost uninhabitable with people lacking adequate sources of income, access to water, sanitation, health or education,” warned UNCTAD.
The agency emphasized that a new phase of economic rehabilitation must break the vicious circle of destruction and partial reconstruction. It called for understanding and realistic strategies to unlock Gaza’s growth potential, including restoring the Gaza International Airport, building a seaport, and enabling the development of natural gas fields off the shore of Gaza.
INTERNATIONAL AID AND BLOCKADE
UNCTAD highlighted the importance of providing immediate support to the Palestinian government to prevent a wider collapse. Foreign aid declined from $2 billion in 2008 to $550 million in 2022, emphasizing the need for sustained financial assistance.
The report underscored that resolving Gaza’s crises requires ending the military operation and lifting the blockade, serving as pivotal steps toward realizing a two-State solution between Israelis and Palestinians.
In conclusion, UNCTAD’s report serves as a poignant wake-up call to the international community. As Gaza grapples with an economic abyss, urgent and coordinated efforts are imperative to alleviate the suffering, rebuild shattered lives, and chart a course towards a sustainable and just future for the region.
