Over the past 13 years, the Gaza Strip has been the focal point of violent clashes between Hamas and Israel, resulting in the mass destruction of critical infrastructure and homes. The Egypt-Israel blockade, imposed in 2007, has significantly crippled the Strip’s economic growth, sparking mass unemployment and rampant discontent. Gaza’s weakening economy has also contributed to the tensions between Israel and Hamas, raising concerns about another devastating war. The Israeli government and Hamas must create a blueprint for economic recovery in the Gaza Strip. Such a plan will help address the territory’s financial woes while promoting political and social stability.
Gaza’s current economic situation results from almost two decades of economic and military strife in the region. In 2006, Hamas landed a surprising victory in the Palestinian parliamentary elections. In 2007, the group assumed control of Gaza. In response, Israel and Egypt imposed a blockade on the Gaza Strip, curtailing the movement of goods and people in and out of the territory. Hamas’ rise to power was of particular concern to both nations as the Islamic militant group is responsible for carrying out numerous violent attacks against Israel, including suicide bombings and rocket attacks. Over the past decade, the United States and the European Union have designated Hamas as a terrorist organization.
According to Israel, the blockade has been critical to ensuring that Hamas does not increase its military capabilities. But, the blockade has had profound economic consequences for the Gaza Strip. Recent figures from the Palestinian Central Bureau of Statistics (PCBS) reveal that the unemployment rate during the last quarter of 2020 was a staggering 43.1%. In addition, Gaza’s workforce is gradually shrinking as more people seek to leave the Strip. This is despite a burgeoning youth population. Figures from the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) suggest that the youth unemployment rate was 70% during the same quarter, with young graduates making up 58% of this population. The unemployment crisis in the territory has become so severe that several young people have resorted to committing suicide.
Gaza’s economy has also profoundly suffered as a result of protracted violence between Israel and Hamas. Over the last 13 years, the Gaza Strip has been the site of four wars and numerous skirmishes. The most recent conflict lasted 11 days and took place in May, resulting in the death of more than 250 Palestinians and 13 Israelis. According to the United Nations, the four wars have resulted in over $5 billion worth of damage to the Strip’s residences, agricultural resources, industry, electricity, and water infrastructure. Over the years, this cumulative damage has severely undermined economic output, exacerbated ongoing financial woes, and decreased the quality of life in the Strip.
Indeed, the current economic crisis in Gaza has also contributed to ongoing tensions in the enclave. For example, Hamas accused Israel of violating the ceasefire that ended the May conflict by tightening the blockade earlier this month. As a result of these new restrictions, reconstruction materials, from Qatar, have not entered the Strip. In response, Hamas organized several protests, many of which saw a rise in violence. Recent estimates from Palestinian medics suggest that at least 14 people were wounded during the protests, including five individuals who were shot. Israel’s concerns around curtailing Hamas’ terrorist activities are legitimate. However, in the interest of peace and stability, the Israeli government must collaborate with Palestinian authorities to create a blueprint for the recovery of the enclave’s economy. This plan should facilitate the reconstruction of the territory and address the ongoing unemployment crisis.