Report: The economic toll on Gaza after Israel’s attacks

The Israeli military offensive against the Gaza Strip from 27 December 2008 to 18 January 2009, was the most violent and deadly offensive by Israel since the second intifada began. According to the UN, 1,434 Palestinian residents of Gaza were killed by the Israeli forces, and over 5,000 were injured. Thousands of homes and businesses were destroyed, and the Gazan economy remains in ruins. Israel has been controlling and limiting the amounts of international aid that are allowed into the Gaza Strip, and has thus caused a mounting humanitarian crisis in Gaza, including an acute shortage in clean drinking water, food, medical supplies, power, construction and repair materials, and sanitation.

The attack drew the attention of the entire world, and shocked local activists with the intensiveness of the onslaught.

Background to the attack

  • The Gaza Strip was populated by refugees deported from Israel in 1948, beginning its dependency on aid. In 1967, Israel occupied the Gaza Strip, and despite the 2005 redeployment, Israel remained the only sovereign country in Gaza, and, stemming from its role as the occupier, continues to hold full responsibility for the well-being of the population there, as mandated by international humanitarian law. This is because Israel never allowed the population of Gaza the freedom to use their territorial waters, to control their own borders, to manage their own airspace or to trade freely with the world.
  • Israel has striven towards a separation of Gaza from its surroundings, in order to better control it, and to avoid a merging of the Palestinian and Jewish populations.
  • The Gaza Strip has become the world’s most aid-dependent region in the world, with over 90 percent of the population relying on aid shipments of some sort.
  • In order to deal with the forbidding siege placed on the Gaza Strip by Israel, hundreds of tunnels were dug to connect Gaza with Egypt, and the smuggling of products through the tunnels has become the main coping mechanism of Palestinians in Gaza to obtain essential products. The tunnel economy, however, is likely to have long-term negative repercussions on the economy of the Gaza Strip.
  • The Free Gaza Campaign has attempted to break the siege on Gaza by sending boats laden with humanitarian supplies and peace activists. These boats, however, were attacked by the Israeli navy.
  • Hamas took over the Gaza Strip in 2007 by force, after its victory in the Palestinian general elections in 2006 was overturned, and a non-elected government was instated in its stead.

The course of the attack

  • The ceasefire between Israel and the Hamas held up for about six months, but was broken in Israel in November 2008, by killing six Palestinians and inuring four. Hamas retaliated by firing 35 rockets into Israel. A month later Israel began its attack.
  • The attack began with a massive air bombardment on the first day, in which over 257 Palestinians were killed, and at least 597 were injured.
  • The bombardment proceeded to destroy basic infrastructure in Gaza, and also forced aid agencies to stop their relief efforts due to the dangers of operating under bombardment. About half of the population in Gaza lost access to drinking water.
  • After a week of bombing, Israel began its ground invasion of Gaza.
  • The population of Gaza had nowhere to flee, with Egypt preventing civilians from fleeing south, and Israeli forces closing in on all other sides, leading to high numbers of civilian casualties.
  • Israel captured fewer prisoners during the attack than anticipated, because the fighting was very intense and people in the path of the advancing Israeli army were more often killed than captured. Nevertheless, about 200 Palestinian prisoners were taken, and held in unsanitary, undignified and dangerous conditions, denied sufficient food, showers and toilets, and abused by soldiers.
  • Residential houses were shelled by Israeli forces, based on suspicions that some of the residents may be affiliated with Hamas. Targets also included the al-Wafa Hospital, several schools, the Islamic University, an UNRWA (UN agency for Palestine refugees) enclave, and press agencies.
  • Israeli forces opened fire on medical teams as they were rushing to rescue injured Palestinians, killing 23 emergency medical personnel and injuring 50. Thousand of injured Palestinians languished in pain without medical attention.
  • The attack ended when Israel declared a unilateral ceasefire. Sporadic shelling by Israel and a few rockets fire by Hamas continued after the ceasefire.

Legal aspects

  • A team of Israeli legal experts advised the Israeli military on how to avoid committing war crimes during the attack, but the advice was ignored.
  • Multiple evidence exists that Israel used illegal weaponry against civilian targets, and violated numerous clauses of international war law.
  • Several international organizations found that Israel has committed war crimes during its attack on Gaza, including the UN, Human Rights Watch and Amnesty International.
  • Israel has taken action to evade legal prosecutions by concealing the names of officers who participated in the attacks, and by creating a task force to deal with international lawsuits against Israeli officers.

Gaza after the attack

  • The continuing siege on Gaza has prevented the clearing of dangerous rubble, the restoration of water and sewage systems to normal working order, and the rebuilding of damaged and destroyed houses.
  • A survey found that 59 percent of fathers and 75 percent of mothers in Gaza were diagnosed with post-traumatic stress disorder (PTSD).

Economic aspects of the attack

  • Damage to the Gaza Strip from the attack is estimated at over US $2.2 billion. The recovery plan proposed by the Palestinian Authority focused not only on rebuilding and restoration but also on taking over the Strip from Hamas.
  • The cost of the attack to Israel was relatively small, estimated at about US $1.5 billion, about 10 percent of the cost of the 2006 war on Lebanon. The direct impact of the attack and of the Hamas rockets has been largely considered minor, especially compared with the 2006 war on Lebanon.
  • Many Israeli companies actually profited from the attack, especially weapon companies, but also companies providing logistics and fortifications.
  • Israeli farmers have used their influence over the Israeli military to decide which products will be allowed through the siege to Gaza, getting rid of surplus in order to control prices within Israel.
  • The siege has jacked up prices inside Gaza, creating shortages and lowering the standard of living of Palestinians. Food prices, for example, rose by 28 percent in the months after the attack.
  • International aid to Gaza is profitable to the Israeli economy, which continues to collect taxes and fees from every shipment of humanitarian goods going into Gaza.
  • Donor states convened at Sharm al-Sheikh and pledged US $4.5 billion in funds to reconstruct Gaza, but Hamas has been excluded from the committee, and is not allowed to have anything to do with the reconstruction. As a result, the funds have been frozen and reconstruction has been delayed.
  • The failure of international governments to hold Israel accountable for its crimes in Gaza has increased the public support that Hamas enjoys in the Gaza Strip.
  • Also, grassroots activists and civil society organizations were prompted to step up their campaigns against Israel, and many have joined the call to boycott Israel.

Download the full report [PDF - 4 MB]

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