Gaza's economy on a downward spiral

World bank report warns that economy of Gaza strip is at risk of ‘collapse’

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Unemployment rate the highest in years in Gaza, "blockades, war and poor governance have strangled" the economy of the Gaza Strip, according to the World Bank.

World Bank's report says Gaza's GDP would have been four times higher if not for conflicts and restrictions.

Israel and Egypt imposed the blockade on Gaza after Hamas seized the territory from forces loyal to the Western-backed Palestinian President Mahmoud Abbas, critics argue the blockade amounts to collective punishment.

Gaza's economy was badly hurt as a result of the fighting with Israel, especially the agriculture, construction, manufacturing and electricity sectors.

It also said about 43 percent of Gaza's 1.8 million residents are unemployed; a figure it said is the highest in the world. Youth unemployment reached about 60 percent by the end of last year, it said.

"The current market in Gaza is not able to offer jobs leaving a large population in despair particularly the youth," Steen Lau Jorgensen, World Bank country director for the West Bank and Gaza, said in the report. "The ongoing blockade and the 2014 war have taken a toll on Gaza's economy and people's livelihoods."

The report warned that the "status quo in Gaza is unsustainable." It said the coastal territory's recovery depends on an easing of the blockade and on donor countries honouring their pledges made at an international conference in Cairo after last year's war.

TRTWorld and agencies