As Gaza’s economy collapses, so does any hope of peace

The moment long feared is fast approaching in Gaza, according to a new report by the World Bank. After a decade-long Israeli blockade and a series of large-scale military assaults, the economy of the tiny coastal enclave is in “freefall”.

At a meeting of international donors in New York on Thursday, coinciding with the annual meeting of the United Nations General Assembly, the World Bank painted an alarming picture of Gaza’s crisis. Unemployment now stands at close to 70 per cent and the economy is contracting at an ever faster rate.

While the West Bank’s plight is not yet as severe, it is not far behind. Countries attending the Ad Hoc Liaison Committee were told. Gaza’s collapse could bring down the entire Palestinian banking sector.

In response, Europe hurriedly put together a €40 million aid package, but that will chiefly address Gaza’s separate humanitarian crisis – not the economic one – by improving supplies of electricity and potable water.

No one doubts the inevitable fallout from the economic and humanitarian crises gripping Gaza. The four parties to the Quartet charged with overseeing negotiations between Israel and the Palestinians – the United States, Russia, the European Union and the UN – issued a statement warning that it was vital to prevent what they termed “further escalation” in Gaza.

The Israeli military shares these concerns. It has reported growing unrest among the enclave’s two million inhabitants and believes Hamas will…

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