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Gaza war erases 2 decades of progress with economy on verge of collapse - study

People stand next to a house damaged in an Israeli strike, amid the ongoing conflict between Israel and the Palestinian Islamist group Hamas, in Rafah, in the southern Gaza Strip, May 3, 2024. (Photo: Reuters/Hatem Khaled)

By Amina Wako | 03 May 2024

"The conflict has already pushed an additional 1.74 million people into poverty."

A new report has revealed the catastrophic impact of the ongoing war in Gaza, with poverty rates surging to a staggering 58.4 per cent since October 2023.

The joint study by the United Nations Development Programme (UNDP) and the Economic and Social Commission for Western Asia (ESCWA) paints a dire picture of a region teetering on the edge of economic collapse.

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According to the study, the conflict has already pushed an additional 1.74 million people into poverty, with the gross domestic product (GDP) plummeting by 26.9 per cent — a loss of Sh95.8 billion ($7.1 billion) compared to pre-war levels.

“Every additional day that this war continues is exacting huge and compounding costs to Gazans and all Palestinians, now and in the medium and long term. Unprecedented levels of human losses, capital destruction, and the steep rise in poverty in such a short period will precipitate a serious development crisis that jeopardises the future of generations to come,” said Achim Steiner, UNDP Administrator.

If the war continues for nine months, poverty levels could more than double to 60.7 per cent, with a further 1.86 million people falling into poverty.

Experts predict a sharp decline in the Human Development Index (HDI), a measure of well-being, which would set back progress by over 20 years. In Gaza, the HDI could fall to 0.551, a staggering 44-year regression.

“Unlike previous wars, the destruction in Gaza today is unprecedented in scope and scale, and coupled with the loss of homes, livelihoods, natural resources, infrastructure, and institutional capacities, it may have deep and systemic impacts for decades to come," ESCWA Executive Secretary Rola Dashti said.

Dashti projected that Gaza, lacking a functional economy, self-sustainment, employment, or trade capacity, will become entirely dependent on external assistance, a level not witnessed since 1948.

"The region may become fully dependent on external assistance, with deep and systemic impacts for decades to come," Dashti added.

The assessment's findings align with the Joint Interim Damage Assessment by the World Bank and the United Nations, which estimated direct damages to Gaza's infrastructure at Sh249.2 billion ($18.5 billion) as of January 2024, equivalent to 97 per cent of the State of Palestine's total GDP in 2022.

Women inspect as a house damaged in an Israeli strike lies in ruin, amid the ongoing conflict between Israel and the Palestinian Islamist group Hamas, in Rafah, in the southern Gaza Strip, May 3, 2024. (Photo: Reuters/Hatem Khaled)