Without lifting economic restrictions, enabling recovery, and investing in development, the Palestinian economy may not be able to restore pre-war levels and advance forward by relying on humanitarian aid alone.
Cairo, 22 October 2024--A new assessment that the UN Development Programme (UNDP) and the UN Economic and Social Commission for Western Asia (UNESCWA) launched today, estimates that poverty in the State of Palestine will rise to 74.3 per cent in 2024, affecting 4.1 million people, including 2.61 million people who are newly impoverished.
The assessment, titled 'Gaza War: Expected socioeconomic impacts on the State of Palestine' also projects that the gross domestic product (GDP) will contract by 35.1 per cent in 2024 compared with a no-war scenario, with unemployment potentially rising to 49.9 per cent.
The new assessment builds on and updates the findings of two earlier assessments published in November 2023 and May 2024. The new assessment also examines the extent and depth of deprivation, employing Multidimensional Poverty indicators and includes recovery prospects in the State of Palestine after a ceasefire is reached.
The assessment suggests that a comprehensive recovery and reconstruction plan, combining humanitarian aid with strategic investments in recovery and reconstruction along with lifting economic restrictions and promoting recovery-enabling conditions, could help put the Palestinian economy on a restorative track to realign with Palestinian development plans by 2034. But this scenario can only play out if recovery efforts are unrestricted.
"Projections in this new assessment confirm that amidst the immediate suffering and horrific loss of life, a serious development crisis is also unfolding - one that jeopardizes the future of Palestinians for generations to come," said Achim Steiner, UNDP Administrator. "The assessment indicates that, even if humanitarian aid is provided each year, the economy may not regain its pre-crisis level for a decade or more. As conditions on the ground allow, the Palestinian people need a robust early recovery strategy embedded in the humanitarian assistance phase, laying the foundations for a sustainable recovery."
The assessment considers three scenarios of early recovery, an approach that includes a wide array of actions that assist in rapidly meeting immediate, life-saving needs, but done in a manner that helps sustain self-reliance in communities and gradually reduce full dependence on humanitarian relief, thus laying the foundations for longer-term sustainable recovery.
"Our assessments serve to sound the alarm over the millions of lives that are being shattered and the decades of development efforts that are being wiped out," said ESCWA Executive Secretary Rola Dashti. "It is high time to end the suffering and bloodshed that have engulfed our region. We must unite to find a lasting solution where all peoples can live in peace, dignity, and reap the benefit of sustainable development, and where international law and justice are finally upheld."
The assessment's first two scenarios consider Restricted Early Recovery (RER) or No Early Recovery (NER) at all. Under these two scenarios, the current strict ban imposed on Palestinian workers persists as well as the withholding of "clearance revenues" to the Palestinian Authority (PA).
The only difference between these scenarios is the level of humanitarian aid allocated to address immediate needs. With no early recovery at all, the assessment assumes aid would remain unchanged from current levels. Under the restricted recovery scenario, it assumes a rate of humanitarian aid of US$280 million annually.
Projections of impact yield almost identical results for the two scenarios - where recovery to pre-war levels would take at least 10 years, revealing the limitations of relying solely on humanitarian aid for the economic recovery of the State of Palestine.
Under the Non-Restricted Early Recovery (NRER) scenario, restrictions on Palestinian workers are lifted, and withheld clearance revenues are restored to the PA. In addition to US$280 million in humanitarian aid, US$290 million is allocated annually for recovery efforts. The result would be an increase in productivity by 1 per cent annually, enabling the economy to recover and putting Palestinian development back on track. This scenario predicts significant improvements in poverty, with more households gaining access to essential services and a substantial reduction in the unemployment rate - expected to fall to 26 per cent.
More key findings from the assessment:
- By the end of 2024, development as measured by the Human Development Index (HDI) could drop to levels not seen since HDI calculations for the State of Palestine began in 2004. However, using linear backward extrapolation, the assessment projects that:
- For the State of Palestine, the HDI will fall to 0.643-a level estimated for 2000, setting development back by 24 years.
- For Gaza the HDI is projected to drop to 0.408-a level estimated for 1955, erasing over 69 years of progress.
- The HDI for the West Bank is expected to decline to 0.676, reflecting a loss of 16 year, which is likely to further worsen, the assessment warns, if military incursions into the West Bank expand.
- The assessment finds that the war has also severely exacerbated the extent of deprivation as measured by the Multidimensional Poverty Index (MPI).
- For the State of Palestine, the MPI is projected to rise sharply from the 10.2 per cent measured in 2017 to an estimated 30.1 per cent in 2024. The most affected dimensions, where all indicators have significantly worsened, include housing conditions, access to services, and safety.
- The greatest increases in deprivation rates across MPI indicators are observed in freedom of movement, monetary resources, unemployment, access to healthcare and school enrolment. The number of people living in multidimensional poverty has more than doubled during this period, rising from 24.1 per cent to 55.4 per cent.
To download the assessment, please use this LINK.
