In Gaza, every day is a struggle to find bread and water. Without safe water, many people will die from deprivation and disease.
UN NEWS
The war in Gaza has resulted in an unprecedented level of destruction to its economy which will take tens of billions of dollars and decades to reverse, UN trade and development body UNCTAD said in a new report on Wednesday.
The preliminary assessment of the social and economic impacts of the conflict examines Gross Domestic Product (GDP) loss, recovery timelines and the enduring effects on poverty and household expenditure.
It is estimated the annual GDP of Gaza declined by $655 million last year, equivalent to 24 per cent.
“If Gaza is to remerge 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,” the report recommended.
Accelerated economic decline
Gaza has been under blockade since 2007, after Hamas seized power, and had an average growth rate of 0.4 per cent through 2022.
UNCTAD estimated that the economy had already contracted by 4.5 per cent in the first three quarters of 2023.
“However, the military operation has greatly accelerated the decline and precipitated a 24 per cent GDP contraction and a 26.1 per cent drop in GDP per capita for the entire year,” it said.
The report found that if fighting were to stop immediately with reconstruction starting right away, and the 2007-2022 growth trend persists, it would take until 2092 just to restore the GDP levels of 2022, with GDP per capita and socioeconomic conditions declining.
“However, even with the most optimistic scenario that GDP could grow at 10 per cent annually it would still take Gaza’s GDP per capita until 2035 to pre-blockade level of 2006.”
Dire socioeconomic conditions
Conditions were already dire in the Gaza Strip, which is one of the most densely populated places on the planet, with more than two million Palestinians confined to 365 square kilometres, or 141 square miles.
The majority, 80 per cent, relied on international aid; two-thirds of the population lived below the poverty line, and unemployment stood at 45 per cent before the war. People lacked adequate access to clean water, electricity and a proper sewage system. Additionally, much of the damage from previous Israeli military operations remained unrepaired.
Restoring pre-conflict socioeconomic conditions will take decades and requires substantial foreign aid, UNCTAD said, noting that the ongoing military operation has displaced 85 per cent of Gaza’s population. Economic activity has ground to a halt, and poverty and unemployment have deepened.
Today, nearly 80 per cent of the labour force is unemployed, while some 37,379 buildings — equivalent to 18 per cent 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,” UNCTAD said.