The humanitarian system in Gaza stands on the edge of collapse putting 2.2 million people at risk of immediate peril. Each day this war continues, the ripple effect to neighbouring countries in the Arab States region will have lasting socioeconomic setbacks.
Preliminary findings of a new rapid assessment by the United Nations Development Programme (UNDP) and the Economic and Social Commission for Western Asia (ESCWA) show that human development in Egypt, Lebanon, and Jordan is set to fall back. Should the war complete its current third month, initial estimates show that 230,000 additional people will fall into poverty in neighbouring Egypt, Jordan, and Lebanon, by the end of 2023, as the cost of the war in terms of aggregated lost Gross Domestic Product (GDP) may amount to up to about US$10.3 billion or 2.3 percent for these three countries.
The rapid assessment released today, entitled 'Expected Socio-Economic Impacts of the Gaza Crisis on neighbouring countries in the Arab States region' looks at several potential regional spill-over effects, based on lessons learned from previous conflicts in the region, including the 2003 invasion of Iraq, the 2008-2009 war in Gaza and the crisis in Syria, still raging since 2011. Such effects include changes in oil prices; influxes of refugees; pressures on public debt and fiscal space; and tourism and trade, among others. While the impact of these spill over effects may not have fully played out for now, the assessment indicates that they remain risk variables that must be carefully monitored.
"Firstly, there must be an immediate humanitarian ceasefire in Gaza. This war is catastrophic for the Palestinian people. And if it goes on, its impact will potentially reverberate outwards to neighbouring countries in the Arab States region," said Abdallah Al Dardari, Director of the Regional Bureau for Arab States, UNDP. "These countries were already experiencing economic challenges because of COVID-19 and a host of global economic crises, including those precipitated by the war in Ukraine. And we should not lose sight, that the spill over effects from the war in Gaza in trade, tourism, and livelihoods, are exacerbating existing vulnerabilities and putting at risk the modest gains that these neighbouring countries have made to put their economies and societies back on track."
Authors of the assessment estimate that, if the war prolongs beyond three months, the socioeconomic impacts to several neighbouring countries will intensify. The upper bound estimates predict that close to half a million people are expected to fall into poverty and the aggregate total GDP loss would hit US$18 billion or 4 percent for the three countries, in 2024.
The authors employ economic modelling tools to simulate the impacts of the war on neighbouring countries, primarily focusing on Egypt, Jordan, and Lebanon, and including Syria, where data exists. For impact calculations, they consider two scenarios of the conflict-assuming a three-month and six-month duration of the war, both at the current intensity and geographical scope, limited to Gaza and the occupied Palestinian territory.
However, the authors of the assessment warn that if the war expands in geographic scope the escalation of impacts may become more exponentially pronounced. They argue for urgent measures to build social and economic resilience in neighbouring impacted countries, emphasizing that the priority must be for measures to end the war to put an end to the unspeakable devastation and suffering in Gaza and the occupied Palestinian territory.
