The two-year Gaza war and economic restrictions have triggered an unprecedented collapse in the Palestinian economy, threatening its very survival, a United Nations report has found.
Rebuilding the Gaza Strip will cost more than $70 billion and could take several decades, the UN trade and development agency stated in the report, stressing that the war has negatively impacted both the Strip and the occupied West Bank.
“The military operations have significantly undermined every pillar of survival” from food to shelter to healthcare, “and plunged Gaza into a human-made abyss”, the report said.
“The sustained, systematic destruction casts significant doubt on the ability of Gaza to reconstitute itself as a liveable space and society.”
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Even “in an optimistic scenario of double-digit growth rates facilitated by a significant level of foreign aid, it will take several decades for Gaza to return to pre-October 2023 welfare levels”, it estimated.
The UN agency calls for a “comprehensive recovery plan” combining “co-ordinated international assistance, restoration of fiscal transfers, and measures to ease constraints on trade, movement and investment”.
The Palestinian GDP per capita by the end of last year returned to that of 2003, erasing 22 years of development progress, the report found. The resulting economic crisis is among the 10 worst globally since 1960.
Tuesday’s report is only the latest in a series of warnings from economists and other experts on the dire state of the Palestinian economy and the enormous task of reconstruction required. Brookings Institution expert Hady Amr noted last month that it is unclear when Gaza reconstruction will begin and who will finance the effort.
[ Controversial US-backed Gaza Humanitarian Foundation ceases aid operationsOpens in new window ]
About 83 per cent of all buildings in Gaza City alone were damaged during the war, according to the UN satellite centre, with about 40 per cent of those buildings destroyed.
“I don’t think there’s any modern comparison to what’s going to need to happen in the Gaza Strip right now,” Mr Amr, the former US representative for Palestinian affairs from 2022 until 2025, said. “The level of destruction and devastation is just absolutely immense.”
Arab and European nations have indicated a willingness to contribute to Gaza’s reconstruction, but are reluctant to do so as long as diplomatic uncertainty prevails and the danger exists that hostilities between Israel and Hamas may reignite.
The West Bank is also suffering its most severe downturn on record, driven by movement and access restrictions and the loss of opportunities across all sectors of the economy, the UN report said.
Israel’s right-wing government has withheld the transfer of funds to the Palestinian Authority, which used to constitute 68 per cent of total revenues, forcing the authority to rely on bank loans and international bailouts.
