The territory’s only remaining source of income is foreign aid
Heavily damaged buildings after an Israeli airstrike in Beit Lahia, Gaza, November 21, 2023. © Getty Images / Anadolu
Israel’s conflict with the Palestinian militant group Hamas has completely destroyed Gaza’s economy, CNBC reported on Thursday, citing experts.
According to the report, the current escalation of the conflict, which started on October 7, has deprived the territory of its sole source of income – access to Israel’s labor market. Over the past month, approximately 182,000 Gazans have lost their jobs, representing 61% of its workforce, according to the International Labor Organization. With the enclave’s unemployment rate one of the highest in the world at over 40% even prior to last month, this has left nearly the entire Gazan population without work.
“Gaza’s economy is 100% dependent on two sources of revenue: foreign aid and access to Israel’s labor market. The latter is now gone, probably forever. The only thing remaining is foreign aid,” Marko Papic, chief strategist at Clocktower Group, told CNBC.
According to the United Nations, before October 7, 80% of Gazans relied on international aid for their livelihood and were deemed food insecure. The ongoing escalation has already left nearly 15,000 Palestinians dead and some 1.5 million people displaced – the majority of Gaza’s population.
While Gaza’s economy was close to stagnant for the past 15 years, ever since Israel imposed an air, land and sea blockade on the enclave after Hamas gained power, “Gaza’s economy ceased to function… and will continue to be so indefinitely,” according to the Palestine Economic Policy Research Institute.
READ MORE: Israel’s war debt forecast to balloon
Experts warn that Palestine will only be able to revive the enclave’s economy with outside help.
“Ultimately, some form of a deal to end the conflict will have to be put in place. But that deal is likely to have to see Gulf Arab monarchies and Saudi Arabia footing much of the bill for the viability of Gaza in the future,” Papic stated.
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