The protracted Israel-Hamas conflict in Gaza is causing profound and unprecedented economic devastation, with severe consequences for the Palestinian territories, according to a recent statement from the World Bank. As the war enters its third month, the global financial institution highlights the unparalleled loss of life, extensive damage to infrastructure, and a sharp contraction in the Palestinian economy. This article delves into the key findings and implications outlined by the World Bank, shedding light on the multifaceted challenges faced by the Palestinians.
Unprecedented Losses and Damage:
The World Bank’s analysis, conducted as of mid-November, reveals alarming statistics on the extent of damage inflicted by the conflict. Approximately 60% of information and communication infrastructure, as well as health and education facilities, have been damaged or destroyed. Commerce-related infrastructure has suffered even more, with 70% left crippled or ruined. The war has also taken a devastating toll on transportation networks, with almost half of all primary, secondary, and tertiary roads damaged or destroyed.
Humanitarian Crisis and Displacement:
Beyond the economic impact, the conflict has led to an acute humanitarian crisis, with the United Nations estimating that 1.9 million out of Gaza’s 2.4 million people have been displaced, half of them children. The death toll exceeds 18,400 people, with the majority being women and children, according to the Hamas-run health ministry. The World Bank underscores the urgency of addressing the escalating crisis, emphasizing the need for immediate protection of civilians and intensified efforts to prevent further suffering.
Economic Contraction and Unemployment:
Even before the conflict, Gaza’s contribution to the overall Palestinian economy had diminished significantly, dropping from around 36% in 2005 to 17% last year, according to the Palestinian Central Bureau of Statistics. The ongoing hostilities have further exacerbated economic challenges, leading to a staggering 85% unemployment rate in Gaza. Israel’s response to the conflict, including shutting its doors to Palestinian workers from the West Bank, has left nearly 200,000 people jobless.
World Bank’s Economic Projections:
The World Bank initially forecasted a 3.2% increase in the overall Palestinian economy for this year. However, due to the severity of the conflict, the institution now expects a contraction of 3.7%. The outlook for 2024 is even more grim, with an anticipated overall contraction of 6.0%, assuming a decrease in conflict severity. The economic impact could worsen if the war persists, posing significant challenges to recovery and reconstruction efforts.
Inflation and Financial Support:
The conflict has led to a surge in prices in Gaza, with a 12% average increase in October, reflecting heightened demand for essential products amid market disruptions. In response to the crisis, the World Bank has announced additional financial support of $20 million for emergency relief, medical care, and humanitarian needs in Gaza. This assistance complements the $15 million already delivered by the World Bank, aiming to address the immediate challenges faced by the affected population.
The World Bank’s stark warnings about the severe economic consequences of the Israel-Hamas conflict underscore the urgent need for international intervention and diplomatic efforts to bring about a sustainable ceasefire. As the Palestinian territories grapple with the dual challenges of conflict and a worsening economic crisis, coordinated global initiatives become crucial in mitigating human suffering and fostering long-term recovery.
