Gaza's Economic Crisis

By Emma Farge and Cecile Mantovani
GENEVA (Reuters) – Gaza's economy has shrunk to less than one-sixth of its size since the Israel-Hamas war began nearly a year ago. Meanwhile, unemployment in the occupied West Bank has tripled, according to a U.N. report released on Thursday, highlighting significant challenges for reconstruction.

The report from the United Nations Conference on Trade and Development (UNCTAD) stated that Gaza's economy is "in ruins" more than 11 months after Israel initiated a military campaign in response to the deadly attacks by Hamas militants on October 7.

UNCTAD reported that the Palestinian Authority (PA), which has limited self-rule under Israeli occupation in the West Bank, is under "immense pressure," threatening its functional capacity.

> "The Palestinian economy is in freefall," said UNCTAD Deputy Secretary General Pedro Manuel Moreno during a press briefing in Geneva.
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> Moreno urged the international community to halt the economic decline, address the humanitarian crisis, and establish a foundation for lasting peace and development, advocating for a comprehensive recovery plan.

The report highlighted that dwindling international aid, along with revenue dedications and withholdings by Israel, estimated at over $1.4 billion since 2019, exacerbates the strain on Palestinians.

Israel's Finance Minister, Bezalel Smotrich, who ordered the fund withholdings, claims the PA supports the October 7 attack. However, the PA has denied any involvement in promoting violence. Additionally, Israel regularly deducts "martyr payments" made by the PA to families of militants and civilians killed by Israeli forces.

The document noted "a rapid and alarming economic decline" in the occupied West Bank, marked by a surge in violence since the Gaza war began.

Job Losses

More than 300,000 jobs have been lost in the West Bank since the war started, according to UNCTAD. Consequently, the unemployment rate surged from 12.9% to 32%.

The decline is attributed to unrest, resulting in over 650 Palestinian deaths since October 7, alongside new Israeli trade restrictions, including checkpoints.

Israel, which does not disclose Palestinian death tolls, reports approximately 40 Israelis killed in attacks by Palestinians outside Gaza since the conflict escalated. Israeli officials indicate that their operations in the West Bank are crucial to countering Iranian-backed militant groups and safeguarding Israeli citizens.

The conflict was ignited when Hamas attacked Israel on October 7, killing 1,200 and taking about 250 hostages, according to Israeli counts. In retaliation, Israel's assault on Gaza has led to over 41,000 Palestinian deaths, as reported by the enclave's health ministry.