The United Nations report highlights the destructive effects of war on the Palestinian economy.
UNITED NATIONS —
A recent report from the United Nations depicts a bleak portrayal of the deterioration of the Palestinian economy due to a month-long conflict and Israel’s complete blockade of Gaza.
The United Nations reported that the conflict in the West Bank and Gaza led to a 4% decrease in the gross domestic product and pushed over 400,000 individuals into poverty during the first month of the war. This economic impact is unprecedented in comparison to past Israel-Hamas wars as well as conflicts in Syria and Ukraine.
On October 7th, the Hamas leaders of Gaza unexpectedly launched an attack on Israel, resulting in the deaths of over 1,400 individuals, predominantly civilians. Additionally, approximately 240 people were taken hostage.
Over two-thirds of the 2.3 million people living in Gaza have been forced to leave their homes due to Israel’s prolonged and intense bombing campaigns, along with their ongoing ground operation aimed at destroying Hamas. The Health Ministry in Gaza, which is controlled by Hamas, reported on Thursday that a total of 10,818 Palestinians, including over 4,400 children, have lost their lives as a result.
On Thursday, the U.N. Development Program and the U.N. Economic and Social Commission for West Asia published a report that quickly assessed the economic aftermath of the Gaza war. This was the first U.N. report to reveal the severe effects of the conflict, particularly on the Palestinian people.
If the war persists for an additional month, the United Nations estimates that the Palestinian Gross Domestic Product (GDP) of $20.4 billion prior to the war will decrease by 8.4%, resulting in a loss of $1.7 billion. If the conflict extends into a third month, the Palestinian GDP is expected to decrease by 12%, causing losses of $2.5 billion and potentially pushing over 660,000 individuals into poverty.
At a press conference to introduce the report, Abdallah Al Dardari, Assistant Secretary-General of the U.N. Development Program, stated that a 12% decline in GDP by the end of the year would be incredibly significant and something that has never been seen before. In comparison, during the peak of Syria’s conflict, their economy experienced a 1% decrease in GDP each month and it took Ukraine a year and a half of fighting to lose 30% of its GDP, an average of approximately 1.6% per month.
In January of 2023, the Palestinian territories, including the West Bank and Gaza, were classified as a lower middle-income economy, according to Rola Dashti, Executive Secretary of the Economic Commission. She also noted that the poverty level was $6 per day per person.
According to the report, Gaza was facing a significant unemployment rate of approximately 46% in January, which was 3.5 times greater than the West Bank’s rate of 13%.
However, the few weeks of conflict have resulted in the loss of hundreds of thousands of job opportunities.
According to the report, after one month of conflict, approximately 61% of jobs in Gaza (equivalent to 182,000 jobs) and 24% of jobs in the West Bank (equivalent to 208,000 jobs) have been lost.
Al Dardari mentioned the significant disturbance to the West Bank’s economy, which accounts for 82% of Palestinian GDP. He noted that this is typically the time for olive and citrus farmers to harvest their crops, but due to the ongoing war, they are unable to do so. Additionally, he stated that the tourism season has been greatly affected, and both agriculture and tourism make up 40% of the West Bank’s GDP.
Furthermore, according to Al Dardari, there have been significant disturbances in trade and the transfer of funds from Israel to the Palestinian Authority, which governs the West Bank. Additionally, there has been a lack of investment.
According to Dashti from the Economic Commission, the extent of devastation in Gaza is inconceivable and unparalleled.
According to a recent report, as of November 3rd, approximately 35,000 homes have been completely destroyed and around 220,000 homes have sustained partial damage. The report also stated that at least 45% of Gaza’s housing units have been impacted by destruction or damage.
If this continues, most residents of Gaza will not have any place to live. Al Dardari stated that even if the conflict were to end immediately, there would still be a significant number of people who would be displaced for a long period of time, resulting in various humanitarian, economic, and security issues.
Al Dardari expressed deep sorrow over the fact that the Palestinian territories have now become classified as lower middle income economies. He believes that if the ongoing conflict persists, all the progress and advancements made in the past 11, 16, or even 19 years will be lost and the region will revert back to its state in 2002.