By Kazim Alam
Gaza-based Palestinian businessman Raid Almuzayen was doing so well for himself that he would spare $100 every month for his relatives in need of financial assistance.
His small factory in Gaza City, which employed seven permanent workers, produced water- and moisture-proofing systems along with decorative insulating exterior coatings.
On his payroll were another 15 to 30 semi-permanent workers who helped install insulation systems in private and public-sector projects.
Then October 7 happened. And Israel invaded Gaza.
“Our factory was destroyed (in an air strike),” Almuzayen tells TRT World through an intermediary, conveying his thoughts in Arabic in a telephone interview.
In the haze of the war, he does not remember the exact date but believes “it happened (sometime) between December 2023 and February 2024”.
His life – like millions of others in the besieged enclave – came down crumbling overnight.
Almuzayen went from being a patent-owning entrepreneur earning about $1,500 monthly to someone living on humanitarian aid by international relief organisations.
His business mirrors the economy of Gaza – a once-bustling, densely populated enclave that has turned into a hellish landscape littered with twisted metal and concrete rubble and bodies of innocent civilians, men, women and children.
Three of every four Gaza residents are refugees in their own land, living as internally displaced people in tents or temporary shelters run by NGOs.
The unemployment rate has soared to 79 percent. Charity is trickling in, but it’s so little that the UN categorises the entire Gaza population of 2.3 million as poor.
According to Rami Alazzeh, an expert in conflict and development economics at the UN Trade and Development (UNCTAD), Gaza is “almost fully destroyed”.
“Hospitals, schools, universities, basic infrastructure for water, electricity, all of that now in Gaza is destroyed,” he says.
A recent report by UNCTAD shows the war wiped out more than 86 percent of Gaza’s economy in just six months.
Gaza’s GDP—which measures the total value of all goods and services produced in an economy—dropped from $672 million before the war to a meagre $92 million at the end of March.
Up to 96 percent of agricultural assets—such as irrigation systems, livestock farms, orchards, machinery and storage facilities—have been “decimated”. Four of every five business establishments in Gaza exist no more.
Alazzeh says rebuilding Gaza would take “way more than the $40 billion” estimate that the UN experts issued earlier this year.
Assuming that post-war Gaza would still be under Israeli blockade with no integration with the occupied West Bank, it will take the area “centuries to recover” from Israel’s indiscriminate bombing, he says.
The number of dead and injured is as staggering as the economic devastation. Israel’s war on Gaza has killed more than 41,000 Palestinians and wounded nearly 96,000. More than 10,000 people are believed to be buried under the rubble of bombed properties.
“Gaza will never recover and the people there will keep suffering… for centuries to come,” he says.
Expect no reparations
Ibrahim Awad, director at the Center for Migration and Refugee Studies at The American University in Cairo, tells TRT World he sees no possibility of Palestinians receiving any reparations for Israel’s genocidal war on Gaza.
War reparations have a long history dating back to the Roman Empire, where one side pays the other to compensate for the damages caused during a war.
Many countries made reparations after the two great wars in the 20th century. More recently, Iraq paid over $52 billion to compensate individuals, companies and governments who proved damages due to its 1990 invasion and occupation of Kuwait.
“There may be assistance to rebuild Gaza. Some may consider it a sort of compensation for what Gaza inhabitants have endured. But reparations? I’m sceptical,” Awad says.
As for who will shoulder the biggest financial burden to rebuild Gaza, Awad says the answer depends mostly on “how” the war ends.
Some Arab countries with deep coffers, the EU and the US may step forward to contribute, he says. But the extent of their support will depend on the nature of the settlement that brings the war to an end.
Measuring the destruction of Gaza after a year-long war in traditional economic terms is absurd, he insists.
“Talking about a drop in GDP gives you the impression that you’re in a normal situation. We talk about a GDP drop when an earthquake hits a city [for seconds]. This here is a year-long war. You cannot talk about GDP. This is normalising the situation,” he says.
Also at war: Occupied West Bank
Alazzeh of UNCTAD says the economic destruction of Palestine is rapidly expanding into the occupied West Bank, which is undergoing the “biggest decline in economic activity” in decades.
The occupied West Bank has lost more than a quarter of its economy since the beginning of the war. The number of lost jobs is more than 300,000, which has pushed the pre-war unemployment rate of nearly 13 percent to roughly 35 percent, he says.
This is the highest unemployment rate recorded in the occupied West Bank. Unemployment wasn’t that rampant even at the peak of the Second Intifada in the early 2000s when the Israeli army invaded the occupied West Bank.
Factors like settlement expansion, land confiscations, demolition of Palestinian structures and increased settler violence are fuelling the “rapid and alarming economic decline” in the occupied West Bank.
He says that at the root of the funds shortage is clearance revenue, which is the tax that Israel collects on Palestinian imports from or via Israel and makes monthly transfers—at least in theory—to the Palestinian government.
The arrangement under the so-called Paris Protocol, which was supposed to expire 25 years ago, leaves over two-thirds of Palestinian fiscal revenue under the control of Israel.
Unsurprisingly, Tel Aviv has routinely suspended these payments, undermining the capacity of the government in the occupied West Bank to pay employees, pensioners and creditors.
“What’s needed now is the political pressure to release the withheld Palestinian revenues, which now amount to over $2 billion. That’ll solve a lot of the problems,” he says.
Hope springs eternal
Palestinian businessman Almuzayen says he “desperately” hopes to rebuild his business after the war ends, even though his expectations remain “very low”.
It’s not the first time Israelis have destroyed his source of income. His factory was partially destroyed in the Gaza war of 2014. Refusing to give up, he borrowed from relatives and friends and asked suppliers and partners to accept delayed payments.
Nine years on, he had rebuilt his factory and resumed production. He still had to set aside as much as $400 every month until last October to repay loans he had taken after the 2014 war.
“...We hope every day for an end to the devastating war. We’ve heard about the talks of a ceasefire, but unfortunately, it doesn’t seem imminent,” he says.
The author, Kazim Alam is a staff writer at TRT World.
