$80b to rebuild Gaza Strip – but who will rule?

As the ceasefire agreement enters into force, the world looks forward to the enormous economic efforts that the process of rebuilding the Gaza Strip will require. Total destruction looms on the horizon, and questions abound: at what stage will reconstruction work begin, and what is the scale of Israeli intervention compared to international efforts. Who will pay for all this, and how will the Palestinian Authority intervene, which does not have money, while Hamas is still the ruling body in the Gaza Strip? What mechanism will be put in place to examine the quality and quantity of goods and raw materials that will enter the Gaza Strip, and many other questions.

Meanwhile, the United States is considering the option of some kind of population resettlement, in order to rebuild the Gaza Strip. According to NBC, the country being considered to temporarily accommodate Gaza residents is Indonesia, but the Palestinians are reluctant to implement such an idea. The fear is that this is the first step in Israel’s expulsion of the Palestinians from the region.

Universities and mosques

The United Nations estimates that reconstruction work in the Gaza Strip will cost $80 billion, 25 times more than after Operation Protective Edge in 2014. The particularly high cost stems from the fact that about 69% of the buildings in the Gaza Strip (more Of the 170 thousand buildings) about 90% of the housing units were destroyed.

Even before reconstruction, 42 million tons of rubble left by the bombing must be removed. The operation alone is expected to cost $1.2 billion, with a UN assessment last April estimating that it would take 14 years to address the rubble.

Of Gaza’s population of 2.3 million, 1.9 million have been displaced from their homes – including hundreds of thousands living in tents. In the infrastructure sector, damage was estimated in January last year at about $18.5 billion, while the United Nations Office for Humanitarian Affairs indicated last month that water supplies had fallen to less than a quarter of what they were before October 7, 2023.

“Hamas’ use of civilian infrastructure was very widespread,” Dr. Ido Zelkowitz, head of the Middle East Studies Program at Jezreel Valley Academic College, told Globes. “It was intended to conceal the extensive tunnel network, which includes transit, detention, and surveillance.” Some of the tunnel entrances passed through public and civilian facilities, and of course under the homes of senior members of the movement, endangering the lives of civilians living nearby, as any tunnel infrastructure is considered a legitimate military target under international law.”

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Palestinian data reported by Reuters indicate that 17 out of 36 hospitals in the Gaza Strip remained active. In light of this, the World Health Organization estimates that it will take $10 billion over the next five to seven years to restore health infrastructure. In addition, 136 schools and universities, 823 mosques, more than 200 government institutions, and 80-96% of agricultural assets were destroyed.

Unstable economic situation

An analysis conducted by the International Labor Organization and the Palestinian Bureau of Statistics in October 2024 shows that the average unemployment rate in the Gaza Strip between October 2023 and September 2024 was 79.7%, while in Judea and Samaria it was 34.9%. GDP in Judea and Samaria (West Bank) decreased by 21.7% in October compared to October 2023, and by 84.7% in the Gaza Strip.

Despite the many economic challenges facing the Palestinian Authority, Ramallah announced that it had completed all preparations to assume full responsibility for the Gaza Strip, including initial steps to restore basic services such as water and electricity – “in coordination with the Gaza Municipality and the Jabalia Municipality.” The municipality, in cooperation with the International Arab Committee for the Reconstruction of Palestine.” This is despite the fact that the Authority is not a party to the agreement, and did not receive promises to control the Gaza Strip.

Dr. says Zelkowitz: “Ramallah has not had any impact on daily life in the Gaza Strip since 2007, and in recent years it has gradually reduced allotment payments to its people who remained there. Most of the burdens of managing economic life in the Gaza Strip have been under the control of the Hamas regime, which He used this to expand his power base, since Hamas became the largest employer in the Gaza Strip, controlling the public sector and creating a new class of wealthy people who made their fortunes thanks to political connections with the movement, and enjoyed With income from the media and private trade.”

The Palestinian Authority is expected to request foreign aid and thus perpetuate the status quo, just as UNRWA has expanded the refugee phenomenon since then, says former deputy head of the Palestinian arena in the IDF Planning Directorate, Lieutenant Colonel (res.) Amit Yajur. 1949. “The Palestinian Authority wants to convince the world of the possibility of a Palestinian state, while Hamas seeks to end the war to control Gaza. I fear that the Hezbollah model in Lebanon will develop in the Gaza Strip, because it will be convenient for the Palestinian Authority to present itself as in control of the Gaza Strip.” Because it realizes that this is required for the image of a viable state, while Hamas will effectively control the Strip.

Niomi Neumann is a visiting fellow at The Washington Institute and former head of the research unit at the Israeli Security Service (Shin Bet). I wrote in an article published in May 2024 that the Palestinian Authority’s external debt to banks, pension payments and service providers amounts to $5.4 billion. This debt is fed by a monthly deficit of between $110 and $125 million during the war, compared to $50 million during times of calm. One of the solutions they came up with in Ramallah was to reduce the salaries of 145,000 employees in the Palestinian Authority, including the security services, by a rate ranging between 30% to 50%, which may encourage the matter to spread to terrorism and strengthen Hamas’ grip.

Main characters

There are serious questions about the leadership that will succeed 89-year-old Palestinian Authority President Mahmoud Abbas (Abu Mazen). PLO Secretary-General Hussein al-Sheikh and Public Security Chief Majid Faraj stand out as potential future leaders, but Dr. Zelkovich suggests that releasing prisoners as part of the deal might turn things around. “The potential release of Marwan Barghouti may tip the scales, because he enjoys the broadest popular support. The day after the war, we are also expected to see mixed personalities, such as Muhammad Dahlan, playing a major role in the country’s reconstruction.” In the Gaza Strip, the guiding idea in the behavior of the Palestinian Authority is to maintain a normal routine of life with as much freedom of occupation and movement as possible, and therefore they have a lot to lose if it appears that the intifada begins today after Abu Mazen.

Lt. Col. (res.) Yajur concludes that there are reasons to be concerned about the weakening of the Palestinian Authority. “Opinion polls indicate that Hamas’s popularity in Judea and Samaria is greater than its popularity in the Gaza Strip. In the Palestinian Authority, they operated in Jenin until they reached a truce with Hamas and Islamic Jihad. In other words, they accepted the authority of the militants so that if they remained on the ground, they could remain influential.” .

Published by Globes, Israel Business News – en.globes.co.il – on January 19, 2025.

© Copyright Globes Publisher Itonut (1983) Ltd., 2025.