The United Nations reports that Israel’s blockade has greatly weakened Gaza’s economy, resulting in 80% of its residents relying on foreign assistance. This was the case even before the current crisis began.
According to a report by the UN Conference on Trade and Development (Unctad), the Palestinian territory experienced challenging conditions last year. It was reported that 2/3 of Gaza’s population lived in poverty and the unemployment rate, which stood at 45%, was among the highest globally.
The United Nations Conference on Trade and Development (Unctad) reported that Gaza’s economy has been severely impacted by a prolonged blockade. The flow of aid, which has helped sustain the living conditions of a population of approximately 2 million, has also ceased.
The Geneva-based organization compiled the report prior to the attack by Hamas fighters on 7 October, which resulted in the death of 1,400 individuals and the abduction of 222 hostages into Gaza. The resulting Israeli airstrikes have caused significant damage to infrastructure and caused further economic turmoil, resulting in the deaths of over 5,000 Palestinians.
According to Unctad, the implementation of limitations and shutdowns, along with military actions, has led to a decrease in investment and productivity, ultimately causing the Gaza economy to crumble. This has also resulted in Gaza being cut off from the global community and isolated from the rest of the Palestinian economy in the West Bank and East Jerusalem.
According to Unctad, the economy has been hindered, access to health and necessary services has been obstructed, and the living conditions of over 2 million Palestinians have been undermined due to the blockade, frequent military operations, and limitations on movement and trade.
According to the report, the living conditions for Palestinians in Gaza are worse compared to those living in the West Bank. There is a 65% chance of poverty, a 41% chance of giving up on finding employment due to hopelessness, and for those seeking employment, a 45% chance of being jobless. The standard of living, as indicated by the gross domestic product per capita, has decreased by 27% since 2006.
“The restrictions on movement also impede access to health and other essential services, as 80% of Gazans depend on international aid. Living in Gaza in 2022 meant confinement in one of the most densely populated spaces in the world, without electricity half the time, and without adequate access to clean water or a proper sewage system.”
Unctad said in the past donor aid had helped “soften the impact of occupation”. However, in 2022 the Palestinian government received only $250m (£206m) in donor budget support and $300m for development projects – down from a total $2bn in 2008. As a share of GDP donor aid had fallen from 27% to 3% since 2008.
The report stated that unemployment rates remained at a high 24% in the occupied Palestinian territories, with a rate of 13% in the West Bank and 45% in Gaza. The most affected groups were women and young individuals.
Unctad reported that Gaza has experienced multiple military attacks and has been subjected to a blockade on land, sea, and air since June 2007. The residents of Gaza must obtain permits in order to enter or leave the area through two land crossings, which are both under the control of Israel.
The economy in Gaza has been severely weakened due to limitations on travel for people and goods, frequent military operations that result in damage to productive assets, and a ban on importing essential technologies and materials.