Israeli Defense Officials Worry the Global Economic Crisis Could Stir Instability in Gaza

Officials estimate that by 2035 three million people will call Gaza home, and that if Hamas stays in power it will be impossible to improve the quality of life in the Strip

Yaniv Kubovich
Yaniv Kubovich
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An IDF Jeep on patrol near the newly-completed barrier fence along the Gaza border in July.
An IDF Jeep on patrol near the newly-completed barrier fence along the Gaza border in July.Credit: Eliyahu Hershkovitz
Yaniv Kubovich
Yaniv Kubovich

Israeli defense officials are worried that the food and energy crisis propelled by the Russian invasion of Ukraine could worsen the already difficult economic situation in the Gaza Strip.

The rise in prices of basic commodities like wheat and vegetable oils as well as energy products has had an effect the world over. Officials are worried that in Gaza the result will be security instability, and the renewal of rocket attacks on Israel.

Early morning on Saturday, the Israeli military bombed targets in the Gaza Strip, shattering a two-month lull in the region, after a rocket was fired from the Strip into southern Israel overnight.

“The issue of the cost of living in Gaza today is one of the issues worrying us the most when we examine the possibility of security instability in the region,” said a senior defense official this week in a closed forum about the civil economic situation in Gaza after Operation Guardian of the Walls in May 2021.

Defense officials see negotiations with Gaza as a dead end, making the possibility of reaching agreements difficult, even when it comes to economic aid for the Strip.

Since discussions between Gaza and Israel began through the mediation of Egypt and other countries from the Gulf and Europe, Israel has seen an improvement in the standard of living of residents in the Gaza Strip. While defense officials still describe the situation in Gaza as very serious, the easing of some conditions has allowed for an improvement in the quality of life in the Strip, even if only a little.

After the fighting in Gaza in May of last year, the security establishment supported the entry of workers from the Strip into Israel, and granted entry permits for 12,000 workers per day. On Thursday, the Coordinator of Government Activities in the Territories, Maj. Gen. Ghasan Alyan, announced approval for another 3,000 workers per day. Ultimately, the IDF is interested in raising this number to 20,000 workers.

Palestinian men gather to apply for work permits in Israel, at Jabalia refugee camp in the northern Gaza Strip in October.Credit: Mahmuds Hams / AFP

Since the beginning of 2021 unemployment rates in Gaza dropped from 50 percent to 44.7 percent, in part because of the entry of workers into Israel. Moreover, additional hours of electricity provided to the Strip – 12 hours a day instead of four – allowed for longer working hours. Another factor for the improvement in employment rates was the increase of industrial exports from Gaza to Israel and the Palestinian Authority, which allowed for more factories to be opened and created more jobs.

However, in spite of the slight drop in unemployment, security officials estimate that about 53 percent of Gazans are still living under the poverty line, with the average daily wage being about 60 shekels ($17.30).

Attacks by the IDF during Operation Guardian of the Walls caused hundreds of millions of dollars worth of damage to economic and civil infrastructure throughout the Gaza Strip. As of today, about 95 percent of the water in Gaza is unfit for drinking, and some 50,000 cubic meters of untreated raw sewage spill into the Mediterranean Sea every day.

But, since the Gaza strip in ruled by the Hamas government, which has declared its opposition to the existence of Israel, it has been difficult for the latter to form an aid mechanism for Gazans. Designated as a terrorist organization by most Western countries, Hamas has limited economic and diplomatic relations with other nations, leaving Gaza depended on funds transferred by the Palestinians Authority, totaling at about $123 million a month. Israeli defense officials claim Hamas uses this money to rebuild its tunnels and army which were seriously damaged in last year's fighting.

The security establishment recently held a closed forum to analyze what the situation in Gaza will be like in 2035. Figures concerning demography stood out among the results presented.

In 1948, some 96,000 people lived in the Gaza Strip, according to Defense Ministry figures. In 1967, that number climbed to 350,000 and in 1987 the 1 million mark was crossed. By 2021, 2.1 million people populated Gaza. The estimate is that this number will reach 3 million by 2035, and that if Hamas continues to rule the Gaza Strip it will be impossible to improve the standard of living there.

Now, Israel is trying to contain the deteriorating situation in the Strip, in spite of existing – and expected – problems.

Bedouin women work in a field near the Israeli side of the Gaza border, as the IDF secures the area.Credit: Eliyahu Hershkovitz

Israel has thus set a number of goals which intelligence services believe that, once implemented, can influence the situation in Gaza. After several rounds of fighting in recent years, which senior IDF commanders think had little influence on the situation and were, in fact, a mistake, the defense establishment is focused on maintaining security stability in Gaza through different means. These include: deepening the separation between the Gaza Strip and the West Bank, changing the leadership within Gaza, cutting off the growing ties between Hamas, Hezbollah and Iran, and preserving a functioning economy in the Strip. Should Hamas force Israel into more rounds of fighting, these would be used as opportunities to deter and weaken the organization.

As part of the IDF’s strategy, forces near Gaza have been deployed differently over the last year in order to reduce the friction between soldiers and Hamas militants operating near the border fence.

The completion of the fence along the entire Gaza border enabled the IDF to deploy in a way that has made routine life in the region near Gaza easier. The new operational strategy, known as the “Iron Wall,” redefines how the Gaza Division acts at times in which there is increased potential for friction in the border region.

Brig. Gen. Nimrod Aloni, the commander of the Gaza Division, presented this new strategy to military correspondents and explained that in recent years the defensive barrier has been improved significantly. Over the past four years every crossing of the barrier was discovered and a warning was provided. Furthermore, Aloni said, the IDF has created a buffer zone between the barrier and the original border, allowing forces to operate freely, without putting soldiers and Israeli residents at any unnecessary risk.

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