Gaza’s economy was on the verge of collapse, notes the report for the UN General Assembly, entitled “Economic costs of the Israeli occupation for the Palestinian people: The Gaza Strip under closure and restrictions”.
The damage from Israel’s military operations was equivalent to around six times the Palestinian enclave’s annual gross domestic product (GDP) in 2018, or 107 per cent of the total Palestinian GDP, the report said.
Driver of poverty
Gaza’s poverty rate stood at 40 per cent in 2007 but it would have fallen to 15 per cent in 2017 if not for the prolonged military operations, but instead, it has risen to 56 per cent, it said.
The depth of inequality was also far more severe than it could have been.
The “poverty gap”, a measure of how far from the poverty line households are on average, was 20 per cent in 2017, but would have been around 4.2 per cent if not for the impact of military operations, the report said.
Between 2007 and 2017, Gaza’s economy grew by 5 per cent, or less than half a percentage point per year, and its share in the overall Palestinian economy halved from 37 per cent to 18 per cent, UNCTAD’s Coordinator of the Assistance to the Palestinian People, Mahmoud Elkhafif, told a press conference.
Prolonged impact of military action
The report aimed to quantify the impact of three major rounds of Israeli military hostilities since 2008 and the prolonged economic and movement restrictions imposed since Hamas took control in the Gaza Strip.
“The result is the near collapse of the regional Gaza economy while trade is severely restricted from the rest of the Palestinian economy and the world”, the report said.
“Lifting what amounts to the blockade of Gaza is essential for it to trade freely with the rest of the Occupied Palestinian Territory and the world and restore the right to free movement for business, medical care, education, recreation and family bonds. Only by fully lifting the debilitating closure, in line with Security Council resolution 1860 (2009), can we hope to sustainably resolve the humanitarian crisis.”
Most people in Gaza had no access to safe water, regular and reliable electricity supply or even a proper sewage system, the report said.
UNCTAD’s analysis of the potential economic upside of ending Israeli military operations and travel restrictions did not include wider benefits to the Palestinian people, such as the income from a natural gas field off the shores of Gaza.
The report recommended the Palestinian government should be allowed to develop those energy resources, and Gaza’s economic potential should be boosted with investments in seaports, airports and water and electricity projects.
Richard Kozul-Wright, Director of UNCTAD’s Division on Globalization and Development Strategies, said the 2 million Palestinians living in Gaza were now facing a health emergency because of the COVID-19 pandemic. But he added that there was “cautious optimism” that the incoming U.S. administration of President-elect Joe Biden could lead to a positive change of tone in Washington, DC.
“That obviously raises hopes that there may be changes in the relationship between Israel and Palestine,” he said.