World Bank puts Gaza reconstruction cost at $52B as Arab leaders mull plan
The World Bank has estimated that damage to physical structures alone will take around $30 billion to address, with housing accounting for 53% of the damage.
Gaza’s reconstruction will cost an estimated $52 billion, according to an assessment by the World Bank, United Nations and the European Union released late Tuesday.
The report comes as a fragile ceasefire between Israel and the Gaza-based Hamas militant group manages to hold and hostages and prisoners continue to be traded.
On Oct. 7, 2023, after Hamas launched a surprise attack on southern Israel, killing more than 1,200 people and abducting 250 more, Israel declared war on the group. Since the war began, at least 46,600 Palestinians have died from Israel’s ground and air campaign in the enclave, according to Gaza’s health authorities. Other estimates put this figure much higher.
Under the first phase of the ceasefire agreement, which came into effect on Jan. 19, Hamas agreed to release 33 hostages and in exchange Israel would release 1,900 Palestinian prisoners. Talks on progressing to the second phase — which would see the remaining hostages released and Israeli forces withdrawing from Gaza — are due to begin this week, Israeli Foreign Minister Gideon Saar told a press conference in Jerusalem Tuesday.
The World Bank report estimated that damage to physical structures alone was around $30 billion, with housing accounting for 53% of the damage, followed by commerce and industry at 20%. Critical infrastructure such as health, transport and water is estimated to be over 15% of the total damage.
The Washington-based multilateral lender estimated economic losses from reduced productivity, foregone revenues and operating costs at $19 billion, with health, education and commerce bearing the heaviest toll.
In addition to the funding needed to address damaged buildings, the report shows that funds would be needed for the management of between 41 and 47 million tons of debris and rubble.
The war has completely halted economic production in almost all sectors in Gaza, with inflation pushing prices over 300% in 2024. Food was up by 450%, the report said.
Gaza’s economy is projected to have contracted by 83% in 2024. The enclave’s total contribution to the Palestinian economy is now only 3%, despite being home to 40% of the population in the Palestinian territories.
The West Bank’s economy has also been impacted by the war and is projected to have shrunk by 16% in 2024, according to the same source.
Know more: US President Donald Trump has put forward a plan to evacuate the whole of Gaza's population of over 2 million people to neighboring Egypt and Jordan for the United States to take over and rebuild it. The UN warned that any forced displacement of civilians from occupied territory was equivalent to ethnic cleansing.
Alarmed by Trump’s suggestion, Arab leaders are formulating their own plan. Reuters reported Tuesday that Egyptian President Abdel Fattah al-Sisi is expected to travel Thursday to Riyadh, where he is expected to discuss a plan for the enclave that may include up to $20 billion from the region for reconstruction. Egypt, Jordan, Saudi Arabia, the United Arab Emirates and Qatar are reported to be part of the plan, which is due to be presented at an Arab summit in Cairo on March 4.
