About two thirds of Gaza jobs lost amid Israeli bombardment, ILO says

The spillover effect of Israel-Gaza war has cut employment levels in West Bank by 24 per cent

A closed petrol station in Rafah in the southern Gaza Strip. Economic activity has come to a grinding halt as the war rages on. AFP

With economic activity at a standstill, about 61 per cent of jobs in Gaza have been lost as Israel continues to bombard the Palestinian enclave, the International Labour Organisation has said.

More than 182,000 jobs have been lost in the besieged strip alone and the spillover effect of the conflict in the occupied West Bank has cut employment levels by 24 per cent, equivalent of 208,000 jobs, since the war broke out on October 7, the ILO said in its latest report on Monday.

“The total estimated 390,000 job losses in the two areas … translate into daily labour income losses of $16 million,” the ILO said. “These figures are projected to increase if military operations in Gaza intensify and the humanitarian crisis in the enclave continues to unfold.”

Unemployment rate in Gaza, at about 46.6 per cent in the second quarter of this year, was among the highest in the world even before the war broke out.

With the seizure of Gaza’s economic activity, the unemployment rate has surged close to 100 per cent, the Ramallah-based Palestine Economic Policy Research Institute (Pepri) said in a report this week.

Israel continues to bombard the enclave of 2.4 million people, destroying infrastructure and killing residents.

More than 9,700 Palestinians have been killed in Israeli air strikes on Gaza so far, according to the Health Ministry in Gaza.

The World Bank as well as the International Monetary Fund have voiced concern about the war, its rising human toll and the effect it will have on Middle Eastern economies.

The continued bombardment of Gaza has turned into a humanitarian crisis and the economic fallout of the siege and devastation is the worst the territory has experienced.

The ILO said the escalating crisis in Gaza has severe implications on the labour market, employment prospects and livelihoods not only in the enclave but across the entire occupied Palestinian territories.

“Our initial assessment of the repercussions of the tragic current crisis on the Palestinian labour market have yielded extremely worrying results, which will only worsen if the conflict continues,” said ILO regional director for Arab States Ruba Jaradat.

“The ongoing hostilities not only represent an enormous humanitarian crisis in terms of loss of lives and basic human needs, [but] they also represent a social and economic crisis which has caused vast damage to jobs and businesses, with reverberations that will be felt for many years to come.”

The devastation wrought by the war and the continued destruction of infrastructure in the narrow strip means it will take years for Gaza and the broader Palestinian economy to recover, the UN Conference on Trade and Development said in its October 25 report on the Palestinian economy.

The outlook was grim even before the war broke out and it continued to operate “below potential in 2022 as persistent challenges intensified”.

Unemployment remained high last year – at 24 per cent, across the occupied Palestinian territories, 13 per cent in the West Bank and 45 per cent in Gaza – with women and youths hit the hardest, according to the UN agency.

In Gaza, real gross domestic product per capita last year was 11.7 per cent below the 2019 level and close to its lowest level since 1994, Unctad data showed.

Israel imposed a land, sea and air blockade on the Gaza Strip in 2007 that has severely hampered the movement of people and goods and hit the enclave's economy hard.

The Gaza Strip’s contribution to Palestine’s economy began to decline after 2006, from about 35 per cent to 25 per cent in 2013. After 2014, it reached about 19 per cent, declining further to 17 per cent in 2022, according to Pepri data.

“After 2007, Israel declared Gaza to be ‘enemy territory’. The siege and successive wars inflicted significant [direct and indirect] economic losses on the Gaza Strip, estimated by the UN to amount to about $16.5 billion," the report said.

The ILO said entire neighbourhoods in Gaza have been destroyed, infrastructure has been severely damaged, businesses have closed, large-scale internal displacement has occurred and the lack of water, food and fuel are crippling economic activity.

“We are working tirelessly with government, worker and employer partners, other UN agencies and humanitarian actors to provide immediate assistance to impacted workers and businesses,” Ms Jaradat of ILO said.

“We will also support them in the longer term … to the utmost extent of our mandate,” she added.