The Palestinian economy…and Israeli security
Taking into account the importance of the increase in the number of countries calling for a “two-state solution,” and their willingness to recognize an independent Palestinian state and full membership in the UN Security Council, and in light of the results of “systematic destruction” that led to massive historical losses that are unparalleled in situations of conflict and wars since World War II, Dr. Abdullah Dardari, Assistant Secretary-General and Regional Director for Arab States at the United Nations Development Programme, announced that “the destruction taking place today may prevent the establishment of a Palestinian state in the economic sense.”
It seems that the most dangerous stage after the war is the vacuum period between the start of the ceasefire and the start of the restoration of normal life, which may extend for several years. This is note that when the current war began in the Gaza Strip, on the seventh of last October, work was still continuing to remove the rubble of the 2014 war, amounting to about 37 million tons. With the estimated amount of rubble resulting from the destruction of the seven-month-long Gaza war at about 40 million tons, the process of removing it will take more than the next 14 years. Damage figures vary depending on their sources. The World Bank estimated it at about $18.5 billion, equivalent to 97 percent of the GDP of Gaza and the West Bank combined (the figure only covers between October 7, 2023 and the end of January 2024), and the number may have exceeded $25 billion by the end of last April.
However, according to the United Nations Development Programme, the cost of reconstruction exceeds 30 billion dollars, and may reach about 40 billion dollars, as a result of the massive and unprecedented scale of destruction. The Palestinian economy lost $4 billion in production, amounting to $19 million per day, a number that does not include direct losses in property and assets. UNCTAD explained that the economy in Gaza will not be able to restore its 2022 GDP growth before 2029. According to the Palestinian Bureau of Statistics, the economy lost 8.7 percent of its real GDP during the past year, and is expected to lose 25.8 percent this year. If the war continues, the loss may reach 29 percent, equivalent to $7.6 billion.
But the greatest and most dangerous loss remains the Palestinian person. The scenario of the continuation of the war portends a frightening decline in the human development index by about 17 years, while its extension to 9 months will exacerbate the decline to 20 years. While the Palestine Monetary Authority is optimistic about restoring the growth process, it warns of the challenges and dangers that threaten the economy and limit its ability to grow and achieve sustainable development, most notably the continuation of the Israeli occupation and the economic dependency it imposes, despite the fact that Israeli institutions have become aware that the Israeli economy cannot It is impossible to develop without the development of the Palestinian economy. Most studies are consistent with the vision of the Israeli military establishment, which considers resolving the economic crisis of the Palestinian Authority an important guarantee of Israeli security.
A study by the Moshe Dayan Center for Middle East Studies warned of the danger of postponing the solution to the current economic crisis, especially after it became clear that the strategic understanding of maintaining stability and security calm in the West Bank depends on a permanent improvement of the economic situation. The study cited the opinions of many experts in Israel, stating that “this approach is a means of achieving economic peace, that is, ensuring security stability, even without negotiations or a political settlement.” The most prominent risks that the study warns of if a solution to the economic crisis is not found are “the outbreak of a third intifada, waves of dangerous operations, the weakening of the authority in the West Bank, and the emergence of threats against Israel.”
*A Lebanese writer specializing in economic affairs
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