The initial evaluation of the consequences on society and the economy caused by the conflict analyzes the decrease in Gross Domestic Product (GDP), the time it takes to bounce back, and the lasting consequences on poverty and household spending.

The Gaza Strip’s yearly gross domestic product (GDP) is believed to have decreased by $655 million in the previous year, which is approximately a 24 percent decline.

The report suggests that for Gaza to reestablish a sustainable economy, the military conflict must come to an immediate end and the rebuilding process must start promptly. The international community must take action before it becomes too late.

Accelerated economic decline 

Since 2007, Gaza has been subjected to a blockade after Hamas gained control. From 2022, it had an average growth rate of 0.4%.

According to UNCTAD, the economy had shrunk by 4.5% in the first nine months of 2023.

According to the statement, the military operation has significantly hastened the decrease and resulted in a 24% decrease in GDP and a 26.1% decrease in GDP per capita for the entire year.

The study discovered that halting conflict immediately and beginning reconstruction efforts would not be enough to fully recover from the effects of war. Despite continued growth, it would take until 2092 to reach the same GDP levels as 2022, while also experiencing a decline in GDP per capita and socioeconomic conditions.

Even if the GDP of Gaza were to increase by 10% every year, it would still take until 2035 for the GDP per capita to reach its 2006 level before the blockade.

Dire socioeconomic conditions 

The situation was already critical in the Gaza Strip, known as one of the most densely populated areas on Earth, with over two million Palestinians living in a confined space of 365 square kilometers 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. 

According to UNCTAD, it will take many years and significant international assistance to return Gaza to its pre-war state. The current military actions have caused 85% of the population to be displaced, resulting in a complete stop to economic growth and worsening poverty and joblessness.

Currently, around 80% of the workforce is without a job, and approximately 37,379 buildings in Gaza, which accounts for 18% of all structures, have suffered damage or been completely destroyed.

According to UNCTAD, the Gaza Strip is currently almost unlivable for its population, which is made up of mostly children. People in this area are struggling with insufficient income, limited access to water, sanitation, healthcare, and education.

Break the cycle 

The United Nations organization cautioned that a fresh stage of financial recovery cannot just be a reversion to the state of affairs before the conflict. It is essential to break the cycle of destruction and incomplete rebuilding.

The article stated that Gaza’s economy is heavily restricted due to 56 years of occupation and a 17-year blockade. In order to unlock its potential for growth, there needs to be a deep understanding of the situation and practical strategies. These strategies may include restoring the Gaza International Airport, which is currently not functioning, constructing a seaport, and allowing the Palestinian government to utilize the natural gas fields found in the Mediterranean Sea near Gaza in the 1990s. This could help fund the reconstruction of essential infrastructure.

The report stressed the significance of promptly assisting the Palestinian government in their attempts to avoid a larger collapse. It pointed out that foreign aid decreased from $2 billion, or 27% of GDP, in 2008 to $550 million, or less than 3% of GDP, in 2022.

The UNCTAD emphasized the importance of stopping the military operation and lifting the blockade in order to resolve the crises in Gaza. These are crucial actions in achieving a two-State solution between Israelis and Palestinians.

Source: news.un.org