Planning the post-war reconstruction and recovery of Gaza

Hind Al Soulia - Riyadh - GAZA — The destruction wrought across the Gaza Strip by Israel in the six months since the massacre of Israeli and other citizens by Hamas on Oct. 7, 2023 makes for grim reading – over 33,000 people killed and, according to the World Bank, over one million Palestinians are without homes, close to 90 percent of health facilities have been damaged or wrecked and schools have been destroyed or turned into shelters for the newly homeless.

In a statement issued on Saturday marking six months of conflict, UN Emergency Relief Coordinator Martin Griffiths noted that each day the war claims more civilian victims, after the horror of Oct. 7 and the death and devastation rained down on the people of Gaza since.

“Rarely has there been such global outrage at the toll of the conflict with seemingly so little done to end it and instead so much impunity”, he said.

He said the grim milestone should not be just a moment of remembrance and mourning, “it must also spur a collective determination that there be a reckoning for this betrayal of humanity.”

It’s still unclear how much more destruction and death Gaza will endure before peace settles across the troubled enclave, nor what type of society will emerge from the conflict, but six months after hostilities started UN agencies are already strategizing for the future, however uncertain.

“Gaza has witnessed an almost complete destruction of economic activity in all sectors.” That’s the damning analysis of Aya Jaafar, an economist at the UN’s International Labor Organization (ILO).

The ILO estimates that more than 200,000 jobs have been lost in Gaza, some 90 per cent of the pre-conflict workforce.

The UN agency further calculates that income losses there have reached $4.1 million per day, which equates to an 80 percent decrease in the enclave’s GDP (the amount of money earned from the sale of all goods and services).

This includes Palestinians who received salaries for work carried out in Israel but who are now unemployed in Gaza.

Construction has typically been one of the most important industries in Gaza, but according to the ILO, activity in the sector is down some 96 percent. Other key productive areas, including agriculture and the industrial and services sector, have also all but ceased.

The few businesses that are still operating are generally small-scale local enterprises, including bakeries, other food-related businesses and some pharmacies.

The ILO estimates that perhaps 25 percent of the people killed in Gaza have been men of working age — generally, women do not work. Jaafar said the loss of these “breadwinners” will mean that families “will face some economic hardships after the war ends”.

This could mean more children in a future Gazan labor market raising concerns about exploitative child labor.

In the immediate post-war situation, some emergency employment programs will be “critical to provide incomes to workers who have lost their jobs” as they seek to support their families, Jaafar said.

It is expected that micro and small enterprises will need emergency grants and wage subsidies as part of the process of restoring activity and to facilitate local economic recovery.

Extensive skills development and vocational training will also be required.

A key task for any future government of Gaza is to “identify economic strategies that aim not only at improving the economic conditions, but also ensuring that economic growth creates decent jobs”, she added.

Investment-heavy ILO programs which provide employment opportunities for local communities while supporting the reconstruction or rehabilitation of the destroyed infrastructure will also play an important role.

Access to food has remained a critical concern of humanitarians since the early days of the conflict and, according to FAO’s AbdelHakim Elwaer, “many in the north do face a serious situation of malnutrition, starvation with some of the population classified as being hit with famine.”

Before the conflict, Gaza had a thriving agricultural and fisheries sector both for export and local consumption. Indeed Gaza had “partial self-sufficiency of production of fruits and vegetables”, he said.

The sector has largely collapsed due to the relentless bombing across the enclave. Almost 50 percent of agricultural land has been destroyed according to Elwaer.

Much of Gaza’s food needs were met by imports by the private sector, but that supply chain has all but collapsed.

Some livestock is still farmed, but animal feed, which some Gazans are now reportedly eating for lack of other food, has been in short supply. FAO reported that it took three months to get approval from the Israeli authorities for a delivery of 500 tons of feed.

Reactivating local production

“The people of Gaza are ready to reactivate local production,” said Elwaer, “but they require seeds, fertilizers and pesticides.”

While small-scale farming may be relatively straightforward to kick start, revitalizing the commercial agricultural sector to its pre-Oct. 7 level will be more challenging.

“Over 50 percent of all agriculture assets have been destroyed, so massive investment will be needed,” said Elwaer. “We need to recover what’s been damaged, rebuild capacity and then hope the private sector will re-engage.”

He believes that the recovery will be humanitarian-led for at least two years until there is “some level of stability, trust and confidence” which will allow people to return and revive their businesses.

It is too early to say how much it will cost to rebuild Gaza as the destruction is continuing.

However, according to Rami Alazzeh of the UN Conference on Trade and Development (UNCTAD), “it will take decades and the will of the international community to fund tens of billions of dollars of investments to reconstruct Gaza.”

The World Bank calculates the figure at $18.5 billion, but that only accounts for damage up until the end of January 2024. Housing will be most costly to rebuild (taking up 72 percent of the overall costs) followed by public service infrastructure such as water, health and education (19 percent). 

That figure obviously does not include the costs of keeping people alive with humanitarian assistance over the next several years. And deadly unexploded bombs will also have to be cleared across the enclave which, according to the UN’s Mine Action Service, “will take years”.

It is not immediately clear if the money for reconstruction will be forthcoming, and there are some other big “ifs.”

If reconstruction were to start immediately after hostilities ended and if the Israeli blockade of Gaza, which has been in force for 18 years, was ended and if Gaza were able to sustain a 10 percent growth over the coming years, it would take until 2035, for the enclave “to get back to where it was prior to the 2006 blockade”, according to Alazzeh.

However, in the worst-case scenario, where the economy grows by 0.4 percent a year, as has been the case in recent years, then Alazzeh believes it will take Gaza “until 2092, or seven decades, just for it to go back to its economic level of 2022”.

Politics will play a role as well, according to the UNCTAD expert.

“The cycle of destruction and insufficient reconstruction is not an option for the people in Gaza,” he said. “We need to restore hope in people for the future, and I think that only comes through a comprehensive political plan which includes the two-State solution.” — UN News