World Bank: Gaza needs $485 million for short-term recovery

Economic support needed for 45,000 people after 11-day conflict with Israel

Gaza needs up to $485 million in the next two years following 11 days of hostilities with Israel in May, says the World Bank.

Immediate priorities are providing relief, repairing damage to infrastructure and reinstating essential services to pre-conflict levels, the lender said.

Approximately 45,000 Palestinians require food and assistance, and an additional 20,000 full-time jobs are needed for the coming year, the bank said.

Housing is another priority after more than 4,000 homes were destroyed or damaged. The need to improve food production is also key, along with rehabilitating physical assets.

A preliminary assessment by the Washington-based lender, conducted between May 25 and June 25 in partnership with the UN and EU immediately after the cessation of hostilities, and in co-operation with the Palestinian Authority, estimates up to $380m in physical damage and $190m in economic losses.

“The 11 days of hostilities in May 2021 in Gaza resulted in the loss of over 260 people, including 66 children and 41 women, and exacerbated previous traumas in particular among children. The human toll was aggravated by overall damage and losses to the social, infrastructure, and productive and financial sectors”, the bank said.

The economy of Gaza, which has been under an Israeli blockade since 2007, may contract 0.3 per cent in 2021, compared with the 2.5 per cent annual growth expected before the hostilities, according to the lender.

Unemployment among Palestinians in Gaza is at about 50 per cent, more than half of its population lives in poverty and 62 per cent of Palestinians are food insecure following the May hostilities, the bank said.

“The humanitarian crisis is worsened in an economy with very limited ties to the outside world. With this assessment, we hope to mobilize donors’ support to help restore dignified living conditions and livelihoods in Gaza, and lead the way to recovery", said Kanthan Shankar, the World Bank’s country director for the West Bank and Gaza.

“This is yet another unfortunate episode in which the Palestinian people in Gaza saw themselves in the midst of conflict and destruction."

The cost of damage caused by the hostilities ranged between $290m to $380m, with social sectors bearing the brunt, the bank estimates.

Housing alone represents almost 93 per cent of the total damage to the social sectors. Productive and financial sectors were the second most “severely affected”, with agriculture and services, and trade and industry at the fore.

The conflict generated economic losses in the form of interrupted economic flows, production and services that ranged between $105m to $190m. Social sectors were the most affected, with about 87 per cent of losses caused by increased health and social protection costs and unemployment.

“The conflict significantly weakened livelihoods and the safety nets of the most vulnerable”, the bank said.

“Palestinians in Gaza have suffered from the cumulative costs, human and economic, of recurrent hostilities over the last three decades, as well as prolonged restrictions on the movement of people and commercial goods at border crossings, limits to fishing off Gaza’s coast, and now the effects of the Covid-19 pandemic”, it said.

The ending of the hostilities with Israel “remains fragile”, said UN Special Co-ordinator for the Middle East Peace Process Tor Wennesland. “The UN is continuing its diplomatic engagements with all concerned parties to solidify the ceasefire. In the meantime, we are also ensuring that we do everything we can to meet the most urgent needs that would allow Palestinians in Gaza begin the process of recovery as quickly as possible.”

This assessment carried out by the World Bank and its partners is an important step, Mr Wennesland said. He called on the international community to come together in support of the on-going efforts.

EU representative Sven Kühn von Burgsdorff said “civilian causalities and the devastating socio-economic impact of this round of hostilities remind us once again that we must address the root causes of the conflict”.

“The recovery of Gaza must be backed by a meaningful peace process that will bring security and dignity for all”, Mr Burgsdorff said. “The sustainability of Gaza’s recovery will depend much on the progress of the political process and a negotiated solution. Palestinian unity and democratic renewal through free and fair elections are as well of crucial importance."

Updated: July 7th 2021, 8:46 AM