As Situation in Gaza Deteriorates, UN Hangs Its Hopes on Private Sector

Data from reports show that amid the past decade’s worsening economic, health and education indicators, the world shouldn’t just view Gaza as a humanitarian disaster but also count on its resilient economical capacities

A Palestinian boy with cystic fibrosis sits next to his mother after receiving oxygen therapy from a system powered by a backup battery during a power cut, Gaza City, July 2, 2017.
MOHAMMED SALEM/REUTERS

Two more United Nations reports on the situation in the Gaza Strip joined the hundreds of others already on the virtual and real-world bookshelf two weeks ago. The reports paint a grim picture of the hopelessness in the enclave and once again sound the alarm while marking two specific dates: a decade of the blockade and three years since the last war there.

The first report, entitled, “Gaza Ten Years Later,” was released July 11 by the UN Country Team in the Occupied Palestinian Territory. The main question it addresses is whether something has changed – for better or for worse – since 2012, when a report from the same organization “predicted that based on the trends we were seeing then, Gaza was on track to become ‘unliveable’ by 2020.” UNCT OPT’s answer is the “deterioration has accelerated.”

The data in this report and the second one, issued a day later by UNDP’s Program of Assistance to the Palestinian People in Gaza, describe the scope of the disastrous situation. Although the two reports don’t really tell us a great deal of new information – especially now, when the worsening electricity crisis in the Strip is attracting more attention – we still learn that unemployment has now reached 42 percent, compared to 29 percent in 2012, and that 60.3 percent of young people aged 20 to 24 are unemployed, compared to 50.6 percent in 2012.

In 2005, the gap between the gross domestic product in the Gaza Strip and the West Bank was still small: $1,375 per capita in Gaza (in 2004 dollars) compared to $1,515 in the West Bank. In 2015 the figures were very different, with the per capita GDP in Gaza at $996, as compared to $2,267 in the West Bank. In 2005, Gaza was responsible for 37 percent of the Palestinian GDP, but by 2015 this figure had fallen to only 24 percent. Since March 2015, Israel has only allowed a small fraction of what is produced in Gaza to be exported – only 20 percent of what was exported during the first half of 2007, which was already much lower than the volume of exports from the Strip in the 1990s.

Some 30,000 people who lost their homes in the 2014 onslaught are still homeless. The housing shortage has grown from 71,000 units in 2012 to 120,000 today.

The number of doctors, nurses and hospital beds per capita is falling steadily. The pace of construction of new schools is slow because of limitations on the import of building materials. The school day in Gaza is only four hours long, and 61.7 percent of government schools and 70.4 percent of those run by the UN Relief and Works Agency for Palestine Refugees operate in two shifts. Over 1 million people have some level of food insecurity, even though many receive food and other aid.

Reading between the lines of the two reports, one can clearly see amazement at the Gazans’ resilience. The UNDP report, entitled, “Three Years After the 2014 Gaza Hostilities - Beyond Survival: Challenges to Economic Recovery and Long-Term Development,” urges the international community not to treat the Strip only as a place in need of short-term humanitarian help but to imagine going beyond the survival stage and see the human and material development within. And at the heart of this potential is the Palestinian private sector.

Palestinian protesters gather during clashes with Israeli troops over the border, central Gaza Strip, July 21, 2017.
IBRAHEEM ABU MUSTAFA/REUTERS

The focus on the Palestinian private sector in general and the productive sector in Gaza in particular is nothing new. The international community has been discussing this topic since the Oslo Accords, and has linked the enclave’s economic prosperity to the peace process. What is absurd is that since Oslo in 1994, the situation of economic enterprises in Gaza has only worsened, mostly due to Israeli restrictions on movement and later because of the destruction of infrastructure caused by recurring fighting.

But the deterioration of the humanitarian situation after three wars has caused people to forget the productive sectors. At the conference of donor nations in Cairo, held immediately after the 2014 war, only $16 million was allocated to the private sector in Gaza – even though it was estimated that $602 million was needed to rehabilitate it. The UNDP report hopes to draw back some of this lost attention to the farmers, fishermen, technology (information technology and communications) and traditional industry (furniture, clothing, food manufacturing and construction) in the Strip, as well as highlighting commerce and services.

Since 2012, the threat of 2020 has overshadowed every discussion about Gaza. The great majority of the parameters examined in 2012 have deteriorated much quicker than originally forecast, such as the drop in per capita GDP, the rise in unemployment and the declining health services. At the same time the population continues to grow: 400,000 more people live in Gaza than did in 2012.

The trend has moderated slightly in only one area: water. The appropriate standard for water usage is 100 liters per person per day. According to data in the UN reports, the water supply needs to reach 73 million cubic meters a year to suffice for the entire Gaza Strip, but Gazans only receive 58.32 million cubic meters a year. Ninety-seven percent of the water pumped out of the ground in Gaza is unfit for drinking. In 2012, the forecast was that this groundwater would be unusable by 2016 because of many years of overpumping from the aquifer under the Strip.

This harsh decree was reevaluated and postponed until the end of 2017 for a very simple reason: Israel doubled the amount of water it sells to Gaza from 5 million cubic meters a year to 10 million through the national Mekorot Water Company. (Some estimates say the actual amount that reaches Gaza is less due to infrastructure problems along the way.) Another 3 million cubic meters were added by the Strip’s seawater desalination plant, but desalination requires much greater technological effort than an additional supply of water from Israel's infrastructure, which can be the fastest and surest solution to the Gazans' thirst.

This solution is just hinted at in the UN country team's report since the organization is committed to the position of the Palestinian Authority and the Quartet, which say that money and effort should mostly be invested in seawater desalination plants.

At the Cairo conference, the donor nations promised to contribute to the rehabilitation and recovery of Gaza. The UNDP report quotes a World Bank study from April: By the end of 2016, only 51 percent of the promised funds – $3.5 billion – had actually been transferred to Gaza. Out of this amount, $1.769 billion – only 37.3 percent of the money – had actually been allocated for the rehabilitation plans. The rest of the money went to cover other expenses: support for the Palestinian government’s budget, fuel, humanitarian aid, UNWRA operations and other purposes.

In 2014, oil-rich Arab states promised to finance over half of the rehabilitation plan, but they have put up very little real money. Qatar promised $1 billion and has made good on only $216 million of this promise (as of the end of 2016). Saudi Arabia pledged $500 million and gave $91 million; the United Arab Emirates promised $200 million and has paid only $59 million. Of the $200 million pledged by Kuwait, only $49 million ever arrived.

In comparison, the United States has provided the entire $277 million it pledged, the European Union has paid $296 million of the $348 million it promised and Turkey has provided $140 million of its pledged $200 million.

The two reports mention Israel’s severe limitations on the entry of raw materials and construction supplies into Gaza, which has greatly slowed the process of rehabilitation and recovery. Medical equipment, pesticide and water pumps for sewage plants (which are needed to deal with spills) are also limited by the complicated, slow and petty Israeli bureaucratic procedures of inspection and approval.

The bottom line of the two reports, which is not so new, is that real change is not possible without removing the political causes of the disaster: the bitter conflict between Hamas and Fatah, and especially the Israeli blockade and policy of separating Gaza from the rest of the Palestinian territories.

But the UNDP report also proposes not waiting until pressures to change the political circumstances bear fruit. In terms of funding, planning and regulation, the organization believes that international and internal Palestinian focus on Gaza’s private sector could alleviate the effects of the humanitarian crisis for residents and provide leverage for development and future growth. “Gaza’s private sector has long been known not only for its resilience (i.e., its ability to adapt to and withstand pressure), but also for its entrepreneurial capabilities, creativity, and dynamism, “ states the report.