Economy of the Gaza Strip
This page is subject to the extended confirmed restriction related to the Arab-Israeli conflict.The economy of the Gaza Strip was dependent on small industries and agriculture.
Aid programs are frequently designed to align with Israeli security standards, which inadvertently legitimizes the economic restrictions imposed on Palestinians.
This has led to a situation where, despite substantial investments in infrastructure and institutional development since the Oslo Accords, the economic landscape remains fragile and underdeveloped.
[9] The focus of many donor agencies and NGOs has shifted towards short-term relief efforts rather than sustainable development initiatives.
The ease of implementing relief programs, due to fewer security restrictions, has further entrenched this cycle of dependency.
[18] That year, 250 trucks a day passed through the Kerem Shalom border crossing, transporting goods from Israel to the Gaza Strip.
[19] In August 2020, Ali al-Hayek, the head of the Palestinian Businessmen's Association in Gaza, told The Media Line that "Gaza's economy has completely collapsed, especially amid the latest escalation, where closing the Kerem Shalom cargo crossing and not allowing the entry of fuel and industrial materials led to an economic catastrophe," he said.
The industrial sector has come to a complete halt, leaving thousands of workers without jobs, added to the already collapsing situation, Hayek said.
"The private sector in Gaza is almost dead; we're facing a serious collapse that is reflected in social issues because of the suspension of the economic system.
Hayek said 2020 was the Strip's worst year yet, with the current difficulties coming atop the problems suffered since 2007, when Gazans faced daily closures.
"But today, we are talking about a complete stop [to economic activity] because of the previously existing crisis and the current halt of electric service.
Defense officials stated that granting more work permits would bring more income into Gaza and encourage stability.
[4] Small-scale industries in Gaza City include the production of plastics, construction materials, textiles, furniture, pottery, tiles, copperware, and carpets.
A variety of wares are sold in Gaza's street bazaars, including carpets, pottery, wicker furniture, and cotton clothing.
Gaza is not a frequent destination of tourists, and most foreigners who stay in hotels are journalists, aid workers, UN and Red Cross personnel.
[23] In 2010 Gaza experienced a boom in the construction of for-profit recreational facilities serving the local population, including the many employees of international aid organizations.
The Crazy Water Park was burned down a few months after it was built,[30] and the Bisan City tourist village was so damaged by Israeli shelling in 2014 that they had to send animals to Jordan for safe-keeping.
[33] Former deputy mayor of Jerusalem, Meron Benvenisti, described Israeli policy in the occupied territories as motivated primarily by the notion that Palestinian claims to economic and political rights are illegitimate.
[34] Political economist Sara Roy, the leading authority on the economy of the Gaza Strip, describes Israeli policies in Gaza as policies of "de-development," which are specifically designed to destroy an economy and ensure that there can be no economic base to support local, independent development and growth.
Roy explained that the framework for Israeli policy established between 1967 and 1973 would not change, even with the limited self-rule introduced by the Oslo Accords in the 1990s, but would grow dramatically more draconian in the early 2000s.
Estimates from Israeli planners indicated that the issue of water quality and availability would be dramatically improved given appropriate investment in wastewater management.
This was the case even though 70% of the budget came from taxes imposed in Gaza, with the rest primarily funded by wage deductions from Palestinian workers in Israel.
Land use mirrored water use and budget allocation, with 85 times as many people per dunam among Palestinians in the Strip compared to Jews in 1993.
[39] Roy observes: "The idea of placing more land at the disposal of the Arab population in order to avoid such a zero-sum outcome appears not to have been considered.
With reduced access to its own resources, Gaza's economy grew increasingly dependent on external sources of income.
Israeli efforts to expand employment within Gaza were largely through relief works, as a purely income-generating project that does not contribute to development.
Further, Israel banned exports to all Western markets, and enterprises that might compete with Israeli counterparts suffered as a result of the military authority's regulation.
For example, permits from military authorities (which could take five years or longer to acquire) were required in order to plant new citrus trees or replace old ones, and farmers were prohibited from clearing their own land without permission.
"[44] Israeli policies in Gaza also restricted and undermined institutions that could support and plan for productive investment and economic development.
Accordingly, municipalities and local institutions often relied on donations from external sources, although access to the funds was often denied even after they had been deposited in Israeli banks.
