Gaza suffered damage worth up to $380 million during the most recent conflict with Israel, with the housing sector representing more than 40% of that amount, according to an assessment conducted by the World Bank in partnership with the United Nations and European Union.
The Gaza Rapid Damage and Needs Assessment, released Tuesday, estimates that between $345 million and $485 million will be needed for recovery efforts over the next two years, much of which will likely have to come from donors. That’s provided a new conflict does not break out.
Gaza’s economy will likely contract by 0.3% this year, compared with the 2.5% growth that was projected prior to the conflict, according to the report. The unemployment rate could rise to 50% — the highest on record since the 1990s.
The Palestinian territory was hit with up to $190 million in economic losses in the latest conflict in May, which lasted 11 days. This adds to the lasting damage of past wars and the economic blockade imposed by Israel and Egypt since Hamas seized power of Gaza in 2007.
About 4,100 housing units were damaged, including 1,600 that were totally destroyed. There was up to $45 million in damages to farms and agricultural businesses, raising concerns about worsening food insecurity.
The report recommends that the international community support short-term measures, including job creation programs and repairing damage to infrastructure and essential services. It calls for a “building back better” approach, “moving beyond simply rebuilding the assets and networks destroyed or damaged to pre-conflict levels” by creating an environment conducive to long-term development goals, private sector investment, and democratic reforms.
It also warns that without improved relations between Israel and the Palestinians, as well as internal reconciliation between the main Palestinian factions, a sustainable recovery would be hamstrung.
The United States has typically been the world’s largest donor to Palestinians. Former President Donald Trump’s administration had a frosty relationship with the Palestinian Authority and cut aid. President Joe Biden’s White House, meanwhile, pledged to renew hundreds of millions of dollars in assistance and confirmed it would help Gaza with its reconstruction.
But so far, there have been holdups in the U.S. Capitol.
Sen. Jim Risch, a Republican from Idaho, has supported blocking aid until the Palestinian Authority ends what he describes as “terror payments.” Democrats — led by Rep. Jamie Raskin of Maryland, who is Jewish — have been urging him to release $75 million for humanitarian aid groups working in Gaza.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
