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2 Months After Cease-Fire, Gaza’s Economy Is at Its Worst
Greenhouses in the northern Gaza Strip destroyed by Israeli airstrikes during the May cross-border hostilities. (Hassan Esleih/The Media Line)

2 Months After Cease-Fire, Gaza’s Economy Is at Its Worst

The coastal strip cannot develop without first lifting Israeli blockade, reopening border crossings, economist says

[Gaza City] The latest devastating round of fighting between Israel and Gaza ended nearly two months ago, leaving behind shattered infrastructure and a paralyzed economy that threatens the livelihoods of the two million residents of the coastal territory.

“The total losses and damages amounted to $479 million, distributed over three sectors: the housing and infrastructure sector, which suffered 61% of the total damage; the economic development sector, with 33% of the damage; and the social development sector, with 7% of the damage,” the Higher Governmental Committee for the Reconstruction of Gaza announced on Monday.

The industrial and the private sectors are the worst affected by the crisis, Ali al-Hayek, head of the Palestinian Businessmen Association, told The Media Line.

“More than 1,000 economic facilities were destroyed during the latest Israeli aggression. The private sector has been particularly targeted since 2000, going through three previous wars without any kind of support,” he said.

If there are no rapid solutions, “there will be successive collapses of the private and all productive sectors in the Strip, which will directly reflect on unemployment and poverty rates,” Hayek said.

One of the facilities destroyed by the Israeli airstrikes during May’s 11-day, cross-border violence was the Khudair Pharmaceuticals and Agricultural Tools Company, located in Beit Lahiya, in the northern Gaza Strip.

“On the 15th of May, the 6-acre site, which contained huge amounts of chemical fertilizers, pesticides, plastic tubing and other agricultural supplies, was directly targeted by the Israeli aerial bombing, which resulted in a massive fire and total destruction of the facility,” owner Abu Haytham Khudair told The Media Line.

I had to choose between losing the crop to drought and losing my life in an Israeli raid. I couldn’t reach my land during the escalation to irrigate the crop; as a result, I’ve lost what was left of it. After all the hard work, everything was gone. This is so painful

Khudair, who lost 100% of his livelihood, said the bombardment caused an estimated loss of 50 million shekels, or around $15 million, and released a mass of toxins that threatens the entire surrounding area.

“The targeted storage facility is now more like Chernobyl. The toxic mix of chemicals is already harming local residents, who have started to suffer respiratory and skin diseases. This will lead to a dangerous environmental and health catastrophe, so I call on authorities, and international organizations, to remove it as fast as possible,” Khudair said.

Israel intentionally hit major economic facilities in Gaza, he said.

“The night my storage facility was hit, more than 35 of the largest companies throughout the Strip were damaged too. Israeli aerial forces targeted sensitive facilities with full knowledge that all the firefighting services in the Gaza Strip wouldn’t be able to put out the fires,” Khudair claimed.

Mohammed Abu Jayyab, a Gaza-based economist, accused Israel of targeting vital economic assets, which will further exacerbate the harsh living conditions of the Strip’s residents.

“More destruction would turn the coastal enclave into a large, [unproductive] area of consumption, rendering any kind of solution to deal with the crisis impractical,” he told The Media Line.

Abu Jayyab suggested the aggravated crises of unemployment, poverty and food insecurity would eventually lead to a strategic shift in the international programs supporting the Palestinian territories, saying “there will only be [rapid] relief programs, instead of strategic development programs that aim to strengthen the role of the Palestinian private sector in ensuring a robust economic cycle.”

According to the Euro-Mediterranean Human Rights Monitor report released in May: “The Israeli military attack led to widespread destruction in the agricultural sector, including agricultural lands and facilities that have been bombed by hundreds of air and ground raids. … In addition to the damage caused by the direct bombing, hundreds of dunams and farms suffered massive losses as a result of farmers’ inability to reach their lands and irrigate or harvest crops during the days of the attack.” One dunam is about 0.25 acres.

Ahmad Abu Owda is a small farmer from the northern Gaza Strip who lost his only source of income during the escalation, two dunams of land planted with cucumbers.

“Sixty-five percent of my greenhouses were damaged after being hit by Israeli airstrikes,” he told The Media Line.

“But that is not all,” he added. “I had to choose between losing the crop to drought and losing my life in an Israeli raid. I couldn’t reach my land during the escalation to irrigate the crop; as a result, I’ve lost what was left of it. After all the hard work, everything was gone. This is so painful.”

Given his accumulated debt and deteriorated living conditions, Abu Owda could not replant after the fighting ended.

Naji Sarhan, the deputy head of Gaza’s Public Works and Housing Ministry, told The Media Line that “the Gaza Strip, which has been living under Israeli blockade for more than 15 years, can bear no more delay in the reconstruction process.

“It has to start immediately because any procrastination will lead to a bigger humanitarian crisis. At that point, no one will be able to predict the Palestinians’ reaction, because they will have nothing more to lose,” Sarhan said.

Any kind of real economic development can’t happen without fully lifting the Israeli blockade, unconditionally reopening crossings, and empowering the Palestinian economy via assured rights of movement to and from the Strip

There are unconfirmed reports that Israel may open border crossings in the coming days to allow the entry of some materials into the Strip, such as medicines, food and limited types of non-dual-use raw materials, meaning raw materials that cannot be used for military purposes. But Abu Jayyab denied this would have any positive impact on Gaza’s economy.

Even if this happens, “we can’t expect much development on the economic level. In fact, this would be worse than before, because what would be allowed to enter [according to this scenario] is only 50% of what was allowed before the escalation,” he said.

“We’re talking about basic goods for the daily consumption of Gazan residents while the great majority of other materials remains banned, depriving economic and productive sectors of any chances to grow and develop,” he continued.

“Any kind of real economic development can’t happen without fully lifting the Israeli blockade, unconditionally reopening crossings, and empowering the Palestinian economy via assured rights of movement to and from the Strip,” Abu Jayyab said.

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