{{Short description|none}} {{about| the economy of the Gaza Strip | the economy of the rest of Palestine |Economy of Palestine}} {{protection padlock|small=yes}}
[[File:GazaTextiles.jpg|thumb|Backyard industry]]
The '''economy of the Gaza Strip''' was dependent on small industries and agriculture. After years of decline, the [[Gaza Strip|Gaza]] economy experienced some growth in the late 2000s, boosted by [[International aid to Palestinians|foreign aid]].<ref name="Ref_ak">David Wainer [https://web.archive.org/web/20101212090617/http://www.businessweek.com/news/2010-12-08/palestinians-lure-banks-with-first-sukuk-bills-islamic-finance.html] "Palestinians Lure Banks With First Sukuk Bills: Islamic Finance," December 8, 2010, Bloomberg/Business Week</ref>
==History== === 19th century: Traditional economy === In the 19th century, [[Gaza City]] was among six soap-producing cities in the Levant, overshadowed only by Nablus. Its factories purchased ''qilw'' (alkaline soda) from merchants from Nablus and [[Salt, Jordan|Salt]] in [[Jordan]].<ref>Doumani, 1995, p.204.</ref> The city's port was eclipsed by the ports of Jaffa and [[Haifa]], but it retained its fishing fleet.<ref name="Abu-Lughod">Abu-Lughod, 2007, p.155.</ref> Although its port was inactive, land commerce thrived because of its strategic location. Most caravans and travelers coming from [[Egypt]] stopped in Gaza for supplies, likewise Bedouins from [[Ma'an]], east of the [[Wadi Araba]], bought various sorts of provisions from the city to sell to [[Muslim]] pilgrims coming from [[Mecca]]. The [[bazaar]]s of Gaza were well-supplied and were noted by Edward Robinson as "far better" than those of Jerusalem.<ref>Robinson, 1841, p.40.</ref> Its principal commercial crop was cotton which was sold to the government and local [[Arab]] tribes.<ref>Robinson, 1841, p.37.</ref>
=== 20th century: Under four countries === The [[Second Intifada]] led to a steep decline in the economy of Gaza, which was heavily reliant upon external markets. Israel—which had begun its occupation by planting approximately 618,000 trees in Gaza in 1968 and improving seed selection—over the first 3-year period of the Second Intifada, destroyed 10 percent of Gazan agricultural land, and uprooted 226,000 trees.<ref>[[Neve Gordon]], [https://books.google.com/books?id=4RX7t4X8_RMC&pg=PA1 ''Israel's Occupation,''] {{Webarchive |url=https://web.archive.org/web/20221102101202/https://books.google.com/books?id=4RX7t4X8_RMC&pg=PA1 |date=2 November 2022 }} University of California Press, 2008 pp.1–2.</ref> The Gazan population became largely dependent on humanitarian assistance, primarily from UN agencies.<ref name=CIAFB>{{cite web |title=Gaza Strip |url=https://www.cia.gov/the-world-factbook/countries/gaza-strip/ |work=CIA World Fact Book |publisher=Central Intelligence Agency (US) |access-date=25 October 2012 |archive-date=12 January 2021 |archive-url=https://web.archive.org/web/20210112082940/https://www.cia.gov/the-world-factbook/countries/gaza-strip |url-status=dead }}</ref>
=== 21st century: Rises and falls === ==== 2000s: Israel disengages ==== The Gaza economy has become increasingly reliant on external aid, which has not only failed to reduce this dependency but has often exacerbated it. Aid programs are frequently designed to align with Israeli security standards, which inadvertently legitimizes the economic restrictions imposed on Palestinians. This has led to a situation where, despite substantial investments in infrastructure and institutional development since the Oslo Accords, the economic landscape remains fragile and underdeveloped.<ref name="Chapter 3 2005">{{harvnb|Tannira}}: "2 Aid between Low Efficiency and High Dependency The highly securitised aid to Palestinians did not stop or even decrease their dependence on it, but the reverse. As indicated in Chapter 3, donors, when designing their aid programmes, have to follow policies that coincide with the Israeli security standards. In doing so, they implicitly give legitimacy to the latter’s economic warfare and de-development of Palestinians in Gaza. The Gaza Strip, compared to other oPt districts, experienced further negative effects of the Oslo Accords’ death that have come in the form of serious threats to human and economic security. Regardless of the large amount of aid invested by donors in areas of institutional and public infrastructure since Oslo, these investments failed to sustain a developed and independent economy. This fact may apply to other regions within the oPt, but now the reality indicates that efforts for Gaza to build a self-sustaining and open economy that is linked with the WB and the outside world can no longer be possible. The gradual deterioration of the security situation in Gaza, and thus the harsh economic conditions, created a tendency among donor agencies and local NGOs to implement short-term relief and humanitarian programmes that lack sustainability. The aims for these programmes have been often to prevent possible humanitarian crises or provide relief services when these crises occur. Consequently, the outcome of this approach failed to achieve any tangible progress at the social and economic levels. Another factor is that donors and NGOs have always found it easier to implement short-term relief programmes due to fewer security restrictions imposed on these programmes than on development ones. In addition, the disbursement of material goods is a way of spending budgets quickly. There are important consequences for the heightened securitised aid policy imposed by donors, particularly in the period that followed Israel’s disengagement from Gaza in 2005. Donors also have varied aid policies, and NGOs had to comply with each individually. This, as a result, made NGOs lose the sense of networking and coordination between them. These policies became the main reference to deciding the kind of activities NGOs can or are willing to implement with an absence of a common agenda that unites their efforts."</ref> [[File:Palestine refugees enforced to flee Hamad quarter in Khan Younis, southern Gaza Strip, after receiving an evacuation warning from Israeli army 13.jpg|thumb|Before the Gaza war there were around 88,000 registered automobiles in the Gaza Strip. By late 2025, it was estimated that 25,000–33,000 had been destroyed.<ref>{{Cite news |last=Ibrahim |first=Sally |date=14 November 2025 |title=Animal-drawn carts and old tuk-tuks: How Palestinians in Gaza navigate devastated roads |url=https://www.newarab.com/news/how-palestinians-gaza-navigate-devastated-roads |access-date=10 April 2026 |work=The New Arab}}</ref>]] The focus of many donor agencies and NGOs has shifted towards short-term relief efforts rather than sustainable development initiatives. This approach is often a response to the deteriorating security situation, which creates urgent humanitarian needs. However, these short-term programs have not translated into meaningful progress in economic or social development. The ease of implementing relief programs, due to fewer security restrictions, has further entrenched this cycle of dependency.<ref name="Chapter 3 2005"/>
The [[European Union]] paid €420 million in aid to the Palestinian territories in 2001.<ref name=SinclairKassam/> This was in addition to contributions by individual member states. This included €55 million from Germany, €67 million from France, and £63.6 million (about €76 million) from Great Britain in 2007 alone.<ref name=SinclairKassam/> Donation levels have since increased, with the United States and the European Union giving $7.7 billion in 2008–2010.<ref name=SinclairKassam>[https://www.wsj.com/articles/SB10001424052748703995104575388754261573556 "Funding Palestinian Incitement; European taxpayers are made to pay for the propaganda that fuels the Mideast conflict,"] Matthew Sinclair, Raheem Kassam, September 9, 2010, Wall Street Journal.</ref>
In September 2000, 24,000 Palestinians crossed out of Gaza daily to work in Israel.<ref name="Oxfam"/> Many Gazans worked in the Israeli service industry while the border was open, but in the wake of [[Israeli disengagement from Gaza|Israel's 2005 disengagement plan]], Gazans could no longer do so. According to [[OXFAM]], Gaza suffered from serious shortages in housing, educational facilities, health facilities, infrastructure, and an inadequate sewage system, contributing to serious hygiene and public health problems.<ref name="Oxfam"/>
After Israel's disengagement, there was increased freedom of movement within Gaza due to Israel's removal of its settlements. Smugglers, militant groups, and entrepreneurs dug tunnels into Egypt, creating a booming "[[Gaza Strip smuggling tunnels|tunnel economy]]". Israel's disengagement also resulted in loss of the settlement factories, workshops, and greenhouses where Gazans were employed.<ref>{{Cite news |last1=Farrell |first1=Stephen |date=2023-11-02 |title=Israel-Gaza war: a timeline of the conflict's history |url=https://www.reuters.com/world/middle-east/gazas-centuries-war-brief-history-2023-10-30/ |access-date=2023-11-06 |work=Reuters |language=en}}</ref>
==== 2000s: Hamas government in the Gaza Strip ==== {{See also|Hamas government in the Gaza Strip}} Several military conflicts have seriously damaged the economy of Gaza since Hamas took political control in 2005: [[Gaza War (2008–2009)]], [[Operation Pillar of Defense|2012 Gaza War]], [[2014 Gaza War]], [[November 2018 Gaza–Israel clashes]], [[2021 Israel–Palestine crisis]], and the [[Gaza war]] (2023–present). In June 2005, there were 3,900 factories in the city employing 35,000 people, and in December 2007, 195 factories were remaining, employing 1,700 people. The construction industry was also affected, with tens of thousands of employees out of work. The blockade damaged the agriculture sector and 40,000 workers dependent on cash crops were left without income. Unemployment was compounded when Israel ended its reliance on cheap labor from the Gaza Strip in 2005.<ref name="Oxfam" />
In 2007, unemployment in the [[Gaza Strip]] reached 40%. According to [[Oxfam]], the [[private sector]] which employs 53% of all working Gazans was devastated and many businesses went bankrupt. Of the 110,000 workers in this sector, approximately 75,000 lost their jobs. 95% of the city's industrial operations were suspended due to the inaccessibility to inputs for production and the inability to export products.<ref name="Oxfam">{{cite web |url=http://www.oxfam.org.uk/resources/downloads/oxfam_gaza_lowres.pdf |title=The Gaza Strip: A Humanitarian Implosion |access-date=2009-01-19 |publisher=[[Oxfam]] |url-status=dead |archive-url=https://web.archive.org/web/20090123012503/http://www.oxfam.org.uk/resources/downloads/oxfam_gaza_lowres.pdf |archive-date=2009-01-23 }}</ref>
In 2007, households spent an average of 62% of their total income on food, compared to 37% in 2004. In a decade, the number of families depending on UNRWA food aid increased tenfold.<ref name="Oxfam"/>[[Food prices]] rose during the blockade, with wheat flour going up 34% and rice up 21%. The number of poor Gazans increased sharply, with 80% relying on humanitarian aid in 2008 compared to 63% in 2006.
==== 2010s: Construction boom ==== [[File:Flickr - Israel Defense Forces - Gaza by Night.jpg|thumb|Gaza at night, 2012]] {{See also|2019 Gaza economic protests|We Want to Live movement}} According to the [[International Monetary Fund]], the unemployment rate was falling. The economy of Gaza grew by 16% in the first half of 2010, almost twice as fast as the economy of the [[West Bank]].<ref name=Economistgaza>{{cite web|url=https://www.economist.com/middle-east-and-africa/2010/09/23/contradictory-noises |title=Hamas and the Peace Talks| page=59 |publisher=Economist.com |date=2010-09-23 |access-date=2014-08-02}}</ref> Increasing prosperity has led to the widespread replacement of donkey carts with [[Auto rickshaw|tuk-tuks]].<ref>{{cite web|url=http://www.maannews.net/eng/ViewDetails.aspx?ID=314523 |title=Tuk Tuks replace mules on Gaza streets|publisher=Maan News Agency |date=2010-09-15 |access-date=2014-08-02}}</ref> In 2011 Gaza's economy increased by 27% while unemployment fell to 29%, its lowest in a decade.<ref>{{cite web | url=http://www.nybooks.com/blogs/nyrblog/2012/oct/26/gaza-isolation-way-out/ | title=Gaza: A Way Out? | publisher=The New York Review of Books | date=October 26, 2012 | access-date=October 31, 2012 | author=Pelham, Nicholas}}</ref>
In 2012, [[Qatari support for Hamas|Qatar donated 400 million dollars]] towards construction projects in the Gaza Strip.<ref>{{cite web |author=Ellen MacArthur |url=http://www.euronews.com/2012/10/24/qatar-s-landmark-visit-to-gaza-a-victory-for-hamas/ |title=Qatar's landmark visit to Gaza a victory for Hamas |publisher=Euronews.com |date=2012-10-24 |access-date=2014-08-02 |archive-date=2016-03-04 |archive-url=https://web.archive.org/web/20160304094023/http://www.euronews.com/2012/10/24/qatar-s-landmark-visit-to-gaza-a-victory-for-hamas/ |url-status=dead }}</ref> That year, 250 trucks a day passed through the [[Kerem Shalom border crossing]], transporting goods from [[Israel]] to the Gaza Strip.<ref name="haaretz.com">{{cite web|last=Issacharoff |first=Avi |url=https://www.haaretz.com/2012-09-04/ty-article/those-who-lie-down-with-dogs/0000017f-e0d2-d804-ad7f-f1fa4bbd0000 |title=Egypt's holy war against Sinai jihadists leaves many questions unanswered |publisher=Haaretz.com |date=2012-09-04 |access-date=2014-08-02}}</ref> In the early 2010s, NIS 75 million have been invested in upgrading and expanding the crossing, which is capable of handling 450 trucks a day.<ref name="haaretz.com"/> The Palestinian side of the crossing is operated by two families who were granted a franchise by the Palestinian Authority and authorized by Hamas. The Ministry of Commerce and Industry in Ramallah coordinates activity with Israel. The two sides are 400 meters apart, separated by a drop-off zone for unloading goods.<ref name="haaretz.com"/> [[File:A_Gaza_boy_drags_his_belongings_in_front_Gaza's_only_power_plant,_bombed_by_an_Israeli_tank_shell.jpg|thumb|The Gaza Power Plant was attacked by the Israeli army during the 2014 Gaza War.]] The Palestinian Authority estimated that the damaged caused by the 2014 Gaza War would cost US$7.8 billion to repair. 20,000 homes were destroyed as a result of the conflict.<ref>{{Cite web |last=Culzac |first=Natasha |date=2014-09-10 |title=Israel-Gaza Crisis: Reconstruction of flattened Gaza will cost |url=https://www.independent.co.uk/news/world/middle-east/israelgaza-crisis-reconstruction-of-flattened-gaza-will-cost-ps5billion-palestinian-officials-say-9713905.html |access-date=2026-04-10 |website=The Independent |language=en}}</ref>
==== 2020s: Economic collapse and war ==== {{See also|2023 Gaza economic protests|Economic impact of the Gaza war}}
In 2020, the GDP of the Gaza Strip was US$1,049 per capita, much lower than the corresponding figure for the West Bank.<ref name=":0">{{Cite news |date=2022 |title=Gaza_15 years of blockade |url=https://www.unrwa.org/gaza15-years-blockade |archive-url=http://web.archive.org/web/20250514051242/https://www.unrwa.org/gaza15-years-blockade |archive-date=2025-05-14 |access-date=2026-04-10 |work=UNRWA |language=en}}</ref> In August 2020, Ali al-Hayek, the head of the Palestinian Businessmen's Association in Gaza, told The Media Line that "Gaza's economy has completely collapsed, especially amid the latest escalation, where closing the Kerem Shalom cargo crossing and not allowing the entry of fuel and industrial materials led to an economic catastrophe," he said. The industrial sector has come to a complete halt, leaving thousands of workers without jobs, added to the already collapsing situation, Hayek said. "The private sector in Gaza is almost dead; we're facing a serious collapse that is reflected in social issues because of the suspension of the economic system. "Economic activity has completely stopped in Gaza," he said. Hayek said 2020 was the Strip's worst year yet, with the current difficulties coming atop the problems suffered since 2007, when Gazans faced daily closures. "But today, we are talking about a complete stop [to economic activity] because of the previously existing crisis and the current halt of electric service."<ref>{{cite web |last1=Abumaria |first1=Dima |title=Amid Escalating Tension, Gaza's Economy Comes to a Halt |url=https://themedialine.org/top-stories/amid-escalating-tension-gazas-economy-comes-to-a-halt/?fbclid=IwAR3Ej5yHx_IN7RFiMWDNwiiL4jFsY-jWPrkYpFC6Qz0tx9kKFxPUCONgJOE |website=The Media Line |publisher=The Media Line Ltd. |access-date=23 August 2020}}</ref>[[File:Damage in Gaza Strip during the October 2023.jpg|thumb|Highrise residential building ″Palestine Tower″<ref>[https://www.youtube.com/watch?v=UdH7aehL_IY Gaza hit by Israeli strikes, buildings destroyed] AFP News Agency</ref> in Gaza following an Israeli strike during the [[Gaza war]].]]
In 2022, 81.5% of people in Gaza lived in poverty.<ref name=":0" /> In recent years, Israel has permitted thousands of Gaza Palestinians to work within its borders. In 2021, 7,000 Gazans held Israeli work or trade permits. In 2022, the permit quota was raised to 17,000, with a planned increase to 20,000. Defense officials stated that granting more work permits would bring more income into Gaza and encourage stability.<ref name=":1">{{cite news |last=Fabian |first=Emanuel |title=Israel okays 1,500 more entry permits for Gaza workers, bringing total to 17,000 |url=https://www.timesofisrael.com/israel-okays-1500-more-entry-permits-for-gaza-workers-bringing-total-to-17000/ |access-date=2023-10-15 |website=[[The Times of Israel]] |language=en-US |issn=0040-7909}}</ref>
== Sectors == === Agriculture === The major agricultural products are strawberries, [[citrus]], [[date (fruit)|date]]s, [[olive]]s, flowers, and various vegetables. Pollution and massive [[population pressure]] on water have reduced the productive capacity of the surrounding farms.<ref name="Abu-Lughod"/>
=== Manufacturing === Small-scale industries in Gaza City include the production of plastics, construction materials, textiles, furniture, [[Palestinian pottery|pottery]], tiles, copperware, and carpets. Following the [[Oslo Accords]], thousands of residents were employed in the various government ministries and security services, while others were employed by the [[UNRWA]] and other international organizations that support the development of the city.<ref name="Abu-Lughod"/> Gaza City contains some minor industries, including textile production and food processing. A variety of wares are sold in Gaza's street bazaars, including carpets, pottery, wicker furniture, and cotton clothing.
=== Tourism === {{Main|Tourism in Palestine#Gaza Strip|label 1 = Gaza tourism}}
There are several hotels in Gaza including the hotel at the [[Gaza Museum of Archaeology]] and the Palestine, Adam, al-Amal, al-Quds, Cliff, and Marna House hotels. All, except the Palestine Hotel, are located along the coast. The [[United Nations]] (UN) has a beach club on the same street. Gaza is not a frequent destination of tourists, and most foreigners who stay in hotels are journalists, aid workers, UN and [[Red Cross]] personnel. Al-Quds Hotel is known as the "poshest" hotel in the city.<ref>Jacobs, 1994, p.454</ref> The upscale [[Roots Club]] is among the nicest of several new restaurants in Gaza.<ref name=CBS>{{cite web|url=https://www.cbsnews.com/news/israels-gaza-blockade-baffles-both-sides/ |title=Israel's Gaza Blockade Baffles Both Sides|publisher=Cbsnews.com |date=2010-05-28 |access-date=2014-08-02}}</ref>
In 2010 Gaza experienced a boom in the construction of for-profit recreational facilities serving the local population, including the many employees of international aid organizations.<ref name=Mcintyre>[https://www.independent.co.uk/news/world/middle-east/as-the-israeli-blockade-eases-gaza-goes-shopping-2035432.html "As the Israeli blockade eases, Gaza goes shopping"], Donald Macintyre, 26 July 2010, ''[[The Independent]]''.</ref><ref name=Reuters1>[https://www.nytimes.com/reuters/2010/08/02/test/life-us-palestinians-hamas-investment.html?emc=eta1 "New Gaza Leisure Projects Focus on Fun Not Hardship" August 2, 2010, Reuters, New York Times]</ref> Some of the new amusement parks and restaurants are [[Hamas]] business ventures.<ref name=Mcintyre/><ref name=Yaghi>{{cite web |url=http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=117431#axzz0uzIHgdQk |title="Hamas commercial ventures thrive in Gaza's besieged economy," Mai Yaghi, Agence France Presse (AFP), July 26, 2010, Daily Star |publisher=Dailystar.com.lb |date=2010-07-26 |access-date=2014-08-02 |archive-date=2010-07-27 |archive-url=https://web.archive.org/web/20100727071919/http://www.dailystar.com.lb/article.asp?edition_id=10&categ_id=3&article_id=117431#axzz0uzIHgdQk |url-status=dead }}</ref><ref>{{Cite web |last=Zayed |first=Eman Abu |title=The dark side of Gaza’s new fancy cafes and restaurants |url=https://www.aljazeera.com/opinions/2026/5/2/the-dark-side-of-gazas-new-fancy-cafes-and-restaurants |access-date=2026-05-05 |website=Al Jazeera |language=en}}</ref> The many new leisure facilities include the [[Crazy Water Park]], the [[Al-Bustan resort (Gaza)]], the [[Bisan City tourist village]], and [[Gaza Mall]]. Among the many new restaurants are the [[Roots Club]], the [[Faisal Equestrian Club]] and the new restaurant at the [[Gaza Museum of Archaeology]].<ref name="Mcintyre" /> The luxury [[Blue Beach Resort, Gaza]] opened in 2015.<ref name="BoothBeach">{{cite news |last1=Booth |first1=William |date=25 August 2015 |title=Gaza Strip's middle class enjoys spin classes, fine dining, private beaches |url=https://www.washingtonpost.com/world/middle_east/gaza-middle-class-discovers-spin-classes-fine-dining-private-beaches/2015/08/23/7e23843c-45d5-11e5-9f53-d1e3ddfd0cda_story.html |access-date=25 August 2016 |newspaper=[[Washington Post]]}}</ref> The Crazy Water Park was burned down a few months after it was built,<ref>{{Cite web |date=2010-09-19 |title=Gaza water park burned down after shut down by Hamas |url=https://www.jpost.com/middle-east/gaza-water-park-burned-down-after-shut-down-by-hamas |access-date=2024-01-17 |website=[[The Jerusalem Post]] |language=en-US |issn=0792-822X|last=Toameh|first=Khaled Abu|archive-url=https://web.archive.org/web/20250426145206/https://www.jpost.com/Middle-East/Gaza-water-park-burned-down-after-shut-down-by-Hamas|archive-date=2025-04-26}}</ref> and the Bisan City tourist village was so damaged by Israeli shelling in 2014 that they had to send animals to Jordan for safe-keeping.<ref name="AP">[https://www.timesofisrael.com/gaza-lions-go-to-jordan-after-zoo-damage/]"Gaza lions go to Jordan via Israel," AP.</ref>
=== Utilities === Providing the population of the Gaza Strip with a 24/7 power supply requires about 600 megawatts of electricity. Yet the Gaza Strip receives only 180 megawatts — 120 directly from Israel via 10 power lines, and 60 generated by Gaza's power plant with Qatari-funded fuel provided by Israel. As a result, residents usually receive power in eight-hour rotations: eight hours on and eight hours off. In summer, the power can go off for up to 12 hours. Bombing the power plant 14 years ago<ref>{{cite news |last1=McGreal |first1=Chris |title=Camp swelters with little power or water |url=https://www.theguardian.com/world/2006/jul/03/israel |accessdate=16 May 2021|date=3 July 2006 |work=The Guardian}}</ref> and preventing its rehabilitation since has limited its capacity to generate electricity. In addition, Israel hampers vital repairs and upgrades to the power system and forces the authorities to buy fuel from Israel alone.<ref>{{cite web |title=Summer 2020: Gaza's electricity crisis deepens again, with 4 hours of daily supply |url=https://www.btselem.org/gaza_strip/20201029_gaza_electricity_crisis_deepens_summer_2020?fbclid=IwAR1iDWPA3C_eoLPasAECHy15a8UdKJ8d6PJGwAUWlE9sxd3QmwK9Hzw2bb4 |website=B'Tselem – The Israeli Information Center for Human Rights in the Occupied Territories |access-date=29 October 2020 |location=Jerusalem, Israel}}</ref>
==Israeli policies and their impact==
Former deputy mayor of Jerusalem, [[Meron Benvenisti]], described Israeli policy in the occupied territories as motivated primarily by the notion that Palestinian claims to economic and political rights are illegitimate. He described the economic policies as stifling Palestinian economic development with the primary goal of prohibiting the establishment of a Palestinian state.<ref name="Meron Benvenisti">{{cite book|author=Meron Benvenisti|title=The West Bank Data Project|url=https://books.google.com/books?id=2KNtAAAAMAAJ&pg=PA|year=1984|publisher=American Enterprise Institute for Public Policy Research |isbn=978-0-8447-3545-0|pages=}}</ref> Political economist [[Sara Roy]], the leading authority on the economy of the Gaza Strip, describes Israeli policies in Gaza as policies of "de-development," which are specifically designed to destroy an economy and ensure that there can be no economic base to support local, independent development and growth. Roy explained that the framework for Israeli policy established between 1967 and 1973 would not change, even with the limited self-rule introduced by the Oslo Accords in the 1990s, but would grow dramatically more draconian in the early 2000s.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016.</ref>
===Access to resources===
Given the economy's heavy reliance on agriculture, access to water is fundamental for Gaza's development. While under military governance, Israeli policy consistently reduced the amount of water available for consumption by Palestinians in Gaza and has specifically not contributed to improving the quality or quantity of water that is available. Access to water was subject to Israeli priorities, which is highlighted by the water consumption of Gaza's Palestinian population compared to its Jewish settler population; in 1986, annual water consumption among Palestinians was 142 cubic meters per year, compared to over 2,000 cubic meters per year for the Jewish settlers. Palestinians were subject to strict water consumption quotas and were prohibited from establishing new water sources under military order 158; this restriction did not apply to Jews.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, Chapter 7.</ref>
Sewage and wastewater systems were (and remain) wholly inadequate, with 80% of towns and villages having systems that empty into pits and often overflow onto roadways and into homes, particularly in densely populated refugee camps where conditions are the worst. Estimates from Israeli planners indicated that the issue of water quality and availability would be dramatically improved given appropriate investment in wastewater management. However, development was subject to the priorities of the Israeli government. For example, over ten years after the planned construction of five sewage treatment facilities, only a single facility had been completed, with two canceled entirely due to planned settlement activity. Similarly, the construction of a main sewage pipeline was prohibited since it did not fit in with Israeli plans (which the Israeli administration refused to make public).<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 162-175.</ref>
Despite the worsening living conditions in Gaza, the Israeli government continued to invest minimally throughout the military government's rule. This was the case even though 70% of the budget came from taxes imposed in Gaza, with the rest primarily funded by wage deductions from Palestinian workers in Israel. Industry, housing, and water received no development budget at all between 1983 and 1987, with the entire development budget amounting to less than the total spend on the police force in Gaza. Only 0.1% of the development budget was allocated to professional development and 0.4% to housing. The Gaza budget did not impose any financial burden on Israeli taxpayers, despite statements from Israeli officials that limited investment was due to financial constraints. From the 1970s and throughout the duration of the Israeli military government's authority, income tax deductions from Palestinians in Gaza have exceeded Israeli expenditure, resulting in a net transfer of money from Gaza into Israel.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 189-199.</ref>
By 1990, Israel had seized control over 58% of the area of the Gaza Strip for the exclusive use of Jewish settlers and the Israeli government. Land use mirrored water use and budget allocation, with 85 times as many people per dunam among Palestinians in the Strip compared to Jews in 1993. The Jewish population was 0.5% of the total Gaza population but was allocated more than 25% of the land in Gaza. The population density in the refugee camps was almost 200,000 people per square mile by 1993, compared to Hong Kong's 14,000 per square mile. Gaza's housing crisis further exacerbates the effects of its high population density. The Israeli military government adopted a single housing program during its authority, which came in the form of a refugee resettlement program. This program was driven primarily by political needs rather than humanitarian and economic ones. Specifically, the program required a refugee who participated to submit a written statement renouncing their status as a refugee. It also required them to demolish their camp shelter, which would then become state property and sometimes used as outposts by the Israeli military. The program's political nature is underscored by the fact that refugees were frequently resettled in areas close to, or even within, refugee camps, where living conditions were nearly identical to those in the camps. Ultimately, the program did not lead to an improvement in overcrowdedness in the camps.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 175-188.</ref> Roy observes: "The idea of placing more land at the disposal of the Arab population in order to avoid such a zero-sum outcome appears not to have been considered."<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 188.</ref>
===Orientation of the economy===
Israeli economic policies in Gaza tied long-term development directly to conditions and interests in Israel rather than to productive domestic structural reform and development. With reduced access to its own resources, Gaza's economy grew increasingly dependent on external sources of income. Israeli policies under the authority of the military government exacerbated dependence while externalizing (or reorienting) the economy towards Israeli priorities. This reorientation of the economy included shifting the labor force away from developing domestic agriculture and industry towards labor-intensive subcontracting jobs supporting Israeli industry in addition to unskilled labor jobs in Israel itself. Notably, white-collar roles in public services (with the exception of services such as street cleaning) were barred. Israeli efforts to expand employment within Gaza were largely through relief works, as a purely income-generating project that does not contribute to development.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, Chapter 8</ref> The Israeli military government's expenditure on industry in the Gaza Strip between 1984 and 1986 was 0.3% of the total budget, with the development of industry receiving no investment at all.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 189.</ref>
The result was the continuous transfer of local resources out of Gaza's economy and the increased vulnerability of the economy to external conditions such as Israeli market needs, but most vividly seen by the impacts of the current Israeli blockade and Israel's destructive military campaigns in Gaza. The economy's extreme dependence on Israel during this period is highlighted by the fact that by 1987, 60% of Gaza's GNP came from external payments, primarily through employment in Israel. Israeli policies also undercut any potential competition from Gazan products through generous subsidies to Israeli agriculture. Further, Israel banned exports to all Western markets, and enterprises that might compete with Israeli counterparts suffered as a result of the military authority's regulation. For example, permits from military authorities (which could take five years or longer to acquire) were required in order to plant new citrus trees or replace old ones, and farmers were prohibited from clearing their own land without permission. In addition, military authorities constrained fishing areas to prevent any threat of competition with Israeli products. Even juice and vegetable processing factories (which could make productive use of crop surpluses) were prohibited by the Israeli government until 1992.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, Chapter 8.</ref> As Sara Roy describes, Gazan "[e]conomic activity is determined by state policies, not market dynamics."<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, pp. 234.</ref>
===Development of institutions===
Israeli policies in Gaza also restricted and undermined institutions that could support and plan for productive investment and economic development. Permission from Israeli military authorities was required, for example, for the development of any new programs and even for personnel change. Permission was also required to hold a meeting of three or more people. From the start of the occupation until 1994, municipalities did not have authority over, for example, water and electricity allocation, public markets, public health, and transportation. Decision-making and the initiation of new projects required the approval of the military governor. Even under the Oslo agreement, Israel maintains authority over zoning and land use. Further, municipal governments had no authority to generate revenue. Specifically, they could not introduce taxes or fees without approval from Israeli authorities. Accordingly, municipalities and local institutions often relied on donations from external sources, although access to the funds was often denied even after they had been deposited in Israeli banks. At the start of the occupation, the military government closed all Arab banks in the occupied territories. Branches of Israeli banks were allowed to transfer funds and provide services for importing and exporting businesses. Further, no banks were allowed to supply long-term credit, which seriously limited the potential for economic development.<ref>The Gaza Strip: The Political Economy of De-development, 3rd ed., by Sara Roy. Washington, DC: Institute for Palestine Studies, 2016, Chapter 9.</ref>
==See also== *[[Blockade of the Gaza Strip]] *[[Bank of Palestine]]
==References== {{reflist|30em}}
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{{whole Gaza Strip}} {{Palestine topics}} {{Middle East topic| Economy of }}
[[Category:Economies by region|Gaza Strip]] [[Category:Economy of the Gaza Strip| ]] [[Category:Economy of Palestine|Gaza Strip]] [[Category:Gaza Strip]]