The Economic Costs of the War to the Palestinians

Hamas brought poverty and violence to Gaza long before its attacks on Israelis on October 7. The poverty has been the result of two developments. First, there is the colossal corruption, which began as soon as Hamas won an election in 2006, and then took full control over the Strip in 2007, having killed or chased out hundreds of members of Fatah. That corruption at the top allowed the three most senior Hamas leaders — Khaled Meshaal, Mousa abu Marzouk, and Ismail Haniyeh — to appropriate for themselves a total of eleven billion dollars that donors had intended for the people of Gaza. Second, Hamas chose to spend other billions of dollars not on the welfare of Gazans, but rather, on a vast network of underground tunnels, that were enormously expensive to build, where Hamas could hide and transport underground both men and weapons. More than 800 of these tunnels have been uncovered so far; the IDF now believes the network includes 300 miles of these tunnels. The total spent on them is at least $3-$4 billion, money that might have been spent to create jobs in Gaza, instead of these tunnels that are now being systematically reduced to rubble by the IDF.

Now the Gaza war, that Hamas started with the atrocities it carried out on October 7, has resulted in further economic losses to the Strip. More can be found here: “The Palestinian economy has lost billions since October 7, yet no one is protesting for Hamas to return the captives,” Elder of Ziyon, December 29, 2023:

The Palestinian Central Bureau of Statistics issued a report showing the economic costs to Palestinians  of the Gaza war, in both Gaza and the West Bank, through the end of November.

During the war, Israel has not allowed Palestinian workers into Israel. It has also not allowed Israeli Arabs to go to the PA-controlled areas of the West Bank, where they would often shop and obtain services at a lower price than they could get in Israel.

Israel, quite understandably, halted the guest-worker program for 20,000 Gazans who, before October 7, were allowed into Israel to work, and were able to earn three to five times as much as they could in Gaza. It is now clear, according to Israeli authorities, that some of those workers from Gaza collected intelligence on the kibbutzim that were later attacked. At the same time, 100,000 Palestinians living in the West Bank who had been working in Israel and the settlements also saw their work permits withdrawn. And Israeli Arabs, no longer able to travel to the Palestinian-controlled parts of the West Bank, where they used to shop in stores where goods were cheaper than in Israel, have also paid a price for the Hamas attacks, and Israel’s response to them.

As a result, the Palestinian private sector lost about $1.45 billion compared to what would have been expected in October and November. It is losing about $25 million a day.

This is not including direct losses from the war of property damage.

Tens of billions of dollars in damage have been the result of the IDF’s relentless campaign to destroy Hamas’ weapons in their hideouts, its command-and-control centers, its rocket launchers, its 300 miles of tunnels dug deep underground, and the buildings — including apartment buildings, schools and pre-schools, mosques, stores — where Hamas combatants have been deliberately hiding among the civilians it uses as human shields.

Productivity in the West Bank has gone down by roughly half, which shows how dependent the Palestinian economy is on Israel. In Gaza, predictably, productivity has been slashed some 86%, The only sectors doing well in Gaza are humanitarian aid and health.

So the “health sector” is doing well. How can this be? The media keeps telling us that the “medical system in Gaza is near collapse.” Which is it? “Near collapse” or “doing well”?

Yet there are no protests in the West Bank demanding that Hamas end the war. Zero.

Far from deploring the Hamas atrocities visited upon Israelis on October 7, that have also brought much misery to the people of Gaza, the Palestinians in Gaza are now much more supportive of Hamas. Before October 7, 67% of people in Gaza were opposed to continued rule by Hamas. After October 7, 62% now say they support Hamas — an astonishing reversal of fortune for the terror group.



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EDITORS NOTE: This Jihad Watch column is republished with permission. ©All rights reserved.

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