On May 20, 2021, after 11 days of the worst conflict since 2014, Israel and militants in Gaza agreed to a cessation of hostilities. Losses have been recorded on both sides, including more than 260 dead in Gaza according to the Palestinian Authority (PA) and the Office of the United Nations High Commissioner for Human Rights (OHCHR), as well as extensive destruction of residential buildings and commercial. In Israel, 9 Israelis and 3 foreign workers were killed according to the Israeli Foreign Ministry. In Gaza, the conflict damaged various basic physical and digital infrastructure, in particular buildings, hospitals and health centers, water and sanitation facilities, as well as transport, energy networks. and communication. Exacerbated by previous trauma, this new wave of violence has a particularly severe impact on children’s mental health as they are more susceptible to the effects of high levels of stress.
Beyond the human tragedy and the immediate humanitarian aid that followed that was channeled to Gaza, the economic impact of these 11 days of conflict has severely weakened an economy already shrunk to a fraction of its potential. Gaza is one of the most densely populated regions in the world, with an estimated 2.1 million people living in a total area of 365 square kilometers. For almost 15 years, the movement of people and goods to and from Gaza has been subject to restrictions imposed by the Government of Israel (GoI) due to security concerns. This isolation, in addition to multiple episodes of conflict and a damaging internal political divide, has created a grave humanitarian situation in Gaza which has been exacerbated by recent hostilities.
The 2021 Gaza Damage and Needs Rapid Assessment (RDNA) was jointly launched by the World Bank Group (WBG), the European Union (EU) and the United Nations (UN) to estimate the total damage and the losses suffered in Gaza as a result of the latest conflict. . In addition, it seeks to estimate immediate and short-term needs, covering the period 0-6 months and 6-24 months respectively, in order to recover and rebuild the affected areas. Accordingly, the ultimate goal of this RDNA is to inform the Palestinian Authority, the WBG and its partners, donors and other stakeholders of the most urgent recovery and reconstruction needs. The RDNA will be presented and discussed at the technical meeting of the Ad Hoc Liaison Committee (AHLC) scheduled for July 6, 2021 and thereafter at the ministerial-level meeting in early fall.
Based on the findings of this RDNA, the damage is estimated at between 290 and 380 million US dollars. The social sectors, defined in this report as housing, health, education, social protection and employment, suffered the most damage estimated at between 140 and 180 million US dollars. The housing sector alone accounts for nearly 93 percent of total damage to social sectors. In addition, the infrastructure sectors, spanning municipal services, transport, water and sanitation, energy and digital infrastructure, suffered between US $ 60 million and US $ 85 million in damage. It is estimated that the productive sectors, encompassing agriculture, industry, commerce and services, and the financial sector, suffered between US $ 75 million and US $ 90 million in damage. Finally, cross-cutting sectors such as governance and the environment suffered damages in the order of 15 to 25 million US dollars. The economic losses amount to between 105 and 190 million US dollars.
Once again, the social sectors suffered the largest share of the losses, ranging from US $ 60 million to US $ 80 million. About 87 percent of these losses are due to losses suffered, or to be sustained, as a result of additional health and social protection costs and unemployment, with conflict having a significant impact on fragile sources of livelihood and safety nets. safety of the most vulnerable. The infrastructure sector suffered losses of between US $ 10 million and US $ 35 million, while the productive sectors suffered losses of US $ 35 to 70 million. Finally, the governance and environment sectors lost around US $ 2 million to US $ 5 million.
Immediate and short-term recovery and reconstruction needs (within the first 24 months) are estimated at US $ 345 million to US $ 485 million. This assessment focuses on Building Back Better (BBB), an approach that ensures recovery and reconstruction efforts consider resilience and sustainability, going beyond simply rebuilding destroyed assets and networks. or damaged at pre-conflict levels. In this regard, the total needs took into account the cost of physical reconstruction as well as the interventions proposed to reduce Gaza’s vulnerabilities and incorporates actions that promote greater inclusion, greater climate and environmental resilience, transparency and responsibility, and ensure the sustainability of the recovery process.
In the immediate term (0-6 months), by the end of 2021, the recovery needs are estimated between 125 and 195 million US dollars; Short-term (6-24 months) recovery and reconstruction needs range between $ 220 million and $ 290 million thereafter. Again, the social sectors carry the largest share, accounting for some 36 percent of immediate needs and 52 percent of short-term needs. The immediate needs of the infrastructure sectors vary between US $ 35 and 60 million and short-term needs between US $ 50 and 75 million. The needs of the productive and financial sectors are estimated between 70 and 95 million US dollars, while the cross-cutting sectors are estimated between 30 and 45 million US dollars for recovery and reconstruction.
Due to the impact of the conflict on the capital stock and the halt in economic activity during the 11 days of conflict, Gaza’s gross domestic product (GDP) is expected to contract by 0.3% in 2021, against a growth rate estimated at 2.5% previously. to the most recent conflict. If the security situation remains stable, the economy can rebound from a weak base. However, the impact of the reduction in the capital stock is expected to last for at least the next two years, hampering future growth unless reconstruction efforts are accelerated. The losses in GDP have resulted in a deterioration of social conditions. Moreover, unemployment in Gaza, already high before the conflict, is expected to rise to 50% in 2021, mainly due to damage to businesses, physical injuries and the general decline in economic activity. This rate is believed to be the highest since the early 1990s when the Oslo Accords were signed.