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How big can Biden administration go with aid to Gaza?

A World Bank economic strategy for the West Bank and Gaza released just before the recent Israel-Hamas exchange deserves a closer look.
Palestinian volunteers and municipal workers clear the rubble of the Hanadi compound, recently destroyed by Israeli strikes, in Gaza City's Rimal district, on May 25, 2021.

US can follow World Bank road map

The Biden administration has made reconstruction and humanitarian assistance to Gaza a priority following the Israel-Hamas cease-fire, but the challenge of channeling aid to the territory is large.

US Secretary of State Antony Blinken announced $38 million in humanitarian assistance to Gaza on May 26, most of it through the United Nations Relief and Works Agency (UNRWA), in addition to $250 million in economic, development, security and humanitarian aid announced earlier this year.

Combined with pledges so far of $500 million each from Egypt and Qatar, $22.5 million from the UN, $9.8 million from the EU, $49 million from Germany, $4.5 million from the UK, and $1 million from China (see our breakdown here), and probably more to come from the Gulf, it adds up — which makes sense, because the people of Gaza desperately need the help.

But it’s always a challenge for Washington, which maintains a close alliance with Israel, to navigate the politics and needs of the Palestinian territories. US President Joe Biden has made clear that he will work with and through Palestinian Authority (PA) President Mahmoud Abbas to assist Gaza, even though the PA doesn’t govern in Gaza. The Biden administration can’t and won’t deal with Hamas, which does rule there but which the United States considers a terrorist group. Abbas, who governs from the West Bank, canceled elections last month before a likely setback at the polls. Instead of the elections strengthening Palestinian unity, as Abbas had hoped, the preelection campaigning instead revealed Abbas’ weakening coalition. Biden’s embrace at Abbas’ political low-point is a lifesaver, and potentially puts Abbas back in the game.

The catch of course is that the reach of Abbas and the PA is limited in Gaza. Any reconstruction and assistance collaboration will be scratchy at best, given the political friction, as Daoud Kuttab and Adnan Abu Amer explain.  

While short-term reconstruction and humanitarian assistance to Gaza via international and nongovernmental aid can help in the short term, you can’t build and grow an economy by working around the government there.

This is not to say that the United States should deal with Hamas. It’s just a statement of fact that the Gaza economy is in dire straits for the foreseeable future, especially after the damage inflicted in the recent conflict with Israel.

This suggests a second track for US policy.

Let’s recall that even before the latest round of fighting Gaza’s economy was described by the UN as in "near collapse," as we explained here. According to the World Bank, 36% of Palestinian youths are unemployed; in Gaza the number is 66%, including 91% for women. The Palestinian economy, already weak, contracted by 11.5% last year. Nearly a third of Palestinians, approximately 1.4 million, live in poverty.

Now factor in 242 Palestinians killed and 1,948 injured, the vast majority in Gaza, in the latest fighting, as well as 53 schools and 17 hospitals and health centers damaged and 77,000 Gazans displaced, and you get a sense of the scale, and the needs, well beyond the urgent short term humanitarian and reconstruction infusion.

Given the damage to Gaza, many Palestinians are questioning whether the latest round of fighting was the “victory” that Hamas is saying it is, as Rasha Abou Jalal explains.

The Biden administration is well placed to go big by leading with an economic strategy for the West Bank and Gaza, working with and through the World Bank and IMF.

On April 29, just days before the escalation in Jerusalem, which led to the Israel-Hamas war on May 10, the World Bank released a four-year assistance strategy for the West Bank and Gaza, focusing on the need for resilience and connectivity between the West Bank and Gaza. The report referenced to the Palestinian Authority’s National Development Plan 2021-23.

The International Monetary Fund (IMF) has also sized up the needs of the Palestinian economy before the latest fighting. IMF Managing Director Christine LeGarde said at the conclusion of her visit to Bahrain for the Peace to Prosperity workshop in June 2019 that the Palestinian economy requires "(i) comprehensive reforms … focusing on enabling private sector-led growth and jobs, containing fiscal imbalances, and ensuring financial stability; (ii) eased restrictions by Israel on the movement of goods and people and capital both within West Bank and Gaza and on its trade with the rest of the world; and (iii) stronger financial support from international and regional donors to ensure the right kinds of investment."

The World Bank and IMF plans are just a start. The United States can lead by encouraging international and regional partners and donors to back this process, which would also provide Abbas more economic leverage in his dealings with Hamas and Arab states looking to help stabilize the situation. And given the deep political divides between and within both Israeli and Palestinian politics, it’s best to lead for now with the economic track.

Gaza picks up the pieces

Meanwhile, Palestinians in Gaza are picking up the pieces under a volunteer "we will rebuild it" campaign, as our Al-Monitor correspondents report.

Hanady Salah writes on the impact of having 44 cultural centers and other facilities damaged or destroyed, including buildings housing three companies in the publishing and book distribution sector.

Mervat Ouf describes how the dilapidated state of Gaza’s Civil Defense organization led to inadequate assistance to those in need during the bombing, including those trapped under rubble for hours.

Ahmad Abu Amer reports on how Gazans have volunteered to assist in clearing the rubble of 800 fully demolished, and 16,800 partially destroyed, housing units.

Entsar Abu Jahal reports on how Israeli airstrikes on two pipelines disrupted water supplies to 20% of the city’s population (nearly 200,000 people), exacerbating Gaza’s water crisis.

Hana Salah described here the impact of the loss of a beloved ice cream factory and shop, as well as Gaza’s "industrial zone’s infrastructure such as water lines, roads and electrical systems, including solar panels. … Food and cleaning services were also hit, including the Harb Company, the Clever Company, the Tal-Zuhoor Company and the BS Company for Solar Energy."

Mai Abu Hasneen describes the outstanding reporting by female journalists, including those writing for Al-Monitor, and some of whom are mothers. As Abou Jalal explains, they had to put their emotions aside, working while worrying for their families during the Israeli air attacks. 

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