Brutal UN report on devastation of Palestinian economy shows GDP fell 4 percent after month of war

THE UNITED NATIONS –

A UN report paints a grim picture of the devastation caused by the collapse of the Palestinian economy after a month of war and Israel’s near-total siege of Gaza.

Gross domestic product declined by 4% in the West Bank and Gaza in the first month of the war, plunging more than 400,000 people into poverty – an economic impact unprecedented in the conflicts in Syria and Ukraine, or any another war between Israel and Hamas, the UN said. .

Hamas militants, who rule Gaza, launched a surprise attack on Israel on October 7, killing more than 1,400 people, mostly civilians, and kidnapping around 240 others.

More than two-thirds of Gaza’s 2.3 million residents have fled their homes since Israel launched weeks of intense airstrikes followed by an ongoing ground operation, promising to wipe out Hamas. The Hamas-run Gaza Health Ministry said Thursday that 10,818 Palestinians, including more than 4,400 children, had been killed so far.

The rapid assessment of the economic consequences of the war in Gaza released Thursday by the United Nations Development Program and the United Nations Economic and Social Commission for Western Asia is the first U.N. report showing the devastating impact of the conflict, particularly on the Palestinians.

If the war continues for a second month, the UN predicts that Palestinian GDP, which was $20.4 billion before the war began, will fall by 8.4 percent, a loss of $1.7 billion. of dollars. And if the conflict lasts for a third month, Palestinian GDP will fall by 12 percent, with losses of $2.5 billion and more than 660,000 people pushed into poverty, it is predicted.

Deputy Secretary-General of the United Nations Development Program Abdallah Al Dardari told a news conference that a loss of 12 percent of GDP at the end of the year would be “massive and unprecedented” . For comparison, he said, Syria’s economy was losing 1 percent of its GDP per month at the height of the conflict, and it took Ukraine a year and a half of fighting to lose 30 percent. of its GDP, an average of around 30 percent. 1.6 percent per month.

At the start of 2023, the Palestinian territories – the West Bank and Gaza – were considered a lower-middle-income economy, with a poverty level of US$6 per day per person, said Economic Commission Executive Secretary Rola Dashti.

As of January, Gaza was already grappling with a high unemployment rate of around 46 percent, three and a half times higher than the West Bank’s rate of 13 percent, according to the report.

But just a few weeks of war have destroyed hundreds of thousands of jobs.

“As the war approaches for a month, an estimated 61 percent of jobs in Gaza, the equivalent of 182,000 jobs, have been lost,” the statement said. “Approximately 24 percent of jobs in the West Bank were also lost, the equivalent of 208,000 jobs.”

Al Dardari highlighted the massive disruptions to the economy in the West Bank, which is responsible for 82 percent of Palestinian GDP, explaining that it is supposed to be the season for olive and citrus producers to collect their produce, but that they can’t do it because of the war. And “the tourist season is virtually over – and agriculture and tourism represent 40 percent of GDP in the West Bank,” he said.

In addition, Al Dardari said, there are major disruptions in trade, in the transfer of money from Israel to the Palestinian Authority, which controls the West Bank, and no investment.

The Economic Commission’s Dashti said “the level of destruction is unimaginable and unprecedented” in Gaza.

“As of November 3, it is estimated that 35,000 homes have been completely demolished and around 220,000 homes are partially damaged,” she said. The report indicates that at least 45 percent of Gaza’s housing has been destroyed or damaged.

If this persists, the majority of Gaza residents will no longer have a home and Al Dardari said that even if the fighting ended now, there would be massive displacements in the long term, “with all their humanitarian, economic and security consequences.” “.

Al Dardari said it breaks his heart that the Palestinian territories have become lower-middle-income economies, “because all this growth and development is going to go backwards within 11, 16 or even 19 years if the fighting continue. This will go back to 2002.”