How much could it cost to rebuild Gaza after Israel's war with Hamas?

With the Israel's war in Gaza entering its seventh month, leaving eight in 10 Gazans homeless, here's how the Palestinian enclave could be rebuilt.

Palestinians walk through the destruction left by the Israeli air and ground offensive after they withdrew from Khan Younis, southern Gaza Strip, Sunday, April 7, 2024. (AP Photo/Ismael Abu Dayyah)
Palestinians walk through the destruction left by the Israeli air and ground offensive after they withdrew from Khan Younis, southern Gaza. (AP)

Palestinians have been returning to their homes in Khan Younis, after Israeli forces withdrew from the city in southern Gaza.

Six months into Israel's war with Hamas, which has seen one of the world's most densely populated places hit with frequent air raids, residents say they've had nothing to come back to.

“I couldn’t find my home because of all the destruction,” he said as he stood in front of the rubble," Magdy Abu Sahrour told the Associated Press. "Where is my place, where is my home? … It’s a tragic situation.”

The Israel Defence Forces' (IDF) withdrawal from Khan Younis does not mean an end to the war, however, with fears looming of a long-anticipated invasion of the southern Gaza city of Rafah. About 1.5 million people are sheltering in the city, the last southern refuge in the besieged Palestinian enclave. Campaigners have expressed grave concern for their safety, but Israel has insisted it needs to press ahead with the assault to take out Hamas.

More than 33,000 people have been killed in Gaza in the past six months, according to the Palestinian Ministry of Health. Those who do survive a potential invasion in Rafah are likely to remain destitute, with the UN agency for Palestinian refugees, UNWRA, claiming in December that eight in 10 Gazans are now homeless.

We still don't know how long this war will go on, but some estimates have been made over its total cost, as Yahoo News explains here.

What is the cost of damage in Gaza?

As of the end of January 2024, $18.5bn (£14.6bn) worth of damage had been inflicted on infrastructure in Gaza, according to a recent report by the World Bank and the United Nations.

It says that, of this, more than four-fifths is concentrated on residential buildings (72% of the total) and businesses (9%), while the remaining 19% has been on other critical infrastructure such as schools and hospitals.

To put the sheer scale of destruction into perspective, the World Bank estimated rebuilding costs of $485m after an 11-day war between Israel and Hamas in May 2021.

As well as rebuilding, getting rid of unexploded ordnances and clearing up debris is also likely to be a major obstacle, according to the report, published on 29 March. It said approximately 26 million tons of rubble had been left in Gaza.

Based on the World Bank and United Nation's estimate, the table below shows how researchers think it will have to be divided.
Housing is predicted to take up the vast majority of reconstruction costs. (World Bank/United Nations)

How will Gaza rebuilt?

The shock to Gaza's economy as a result of the current war is "one of the largest observed in recent economic history", the UN and World Bank report says. Gaza’s gross domestic product dropped by 86% in the last quarter of 2023, equivalent to a 24% year-on-year drop, and it could contract by over 50% year-on-year if reconstruction doesn't begin in 2024.

With the territory's economy in tatters, it will rely heavily on support from overseas. If a ceasefire is achieved, Turkey has said it "do whatever is necessary to compensate for the destruction caused by Israel".

"We will make efforts to rebuild the damaged infrastructure in Gaza and rebuild the destroyed schools, hospitals, water and energy facilities," Turkish President Tayyip Erdogan told reporters in November.

Egypt, which has been acting as a mediator and has been facilitating much of the delivery of aid into Gaza, is also likely to play a role. In February, Erdogan met his Egyptian counterpart Abdel Fattah al-Sisi in Cairo and said the two countries are ready to cooperate in helping to rebuild the Palestinian enclave.

Israeli Prime Minister Benjamin Netanyahu has reportedly told a Knesset panel that Saudi Arabia and the United Arab Emirates would foot the bill for a restoration of Gaza, the Times of Israel reported in December. However, neither Gulf state had said anything about this at the time.

Arab states are unlikely to get involved with the rebuilding of Gaza without an agreement on a two-state solution, Bloomberg reports, something the Israeli government has not expressed an interest in.

Stressing the importance of securing Palestinian statehood as part of a longer-term solution, US Secretary of State Anthony Blinken warned in January that Arab states are reluctant to get involved if Gaza is "levelled" again in a few years time.

How long will it take to rebuild Gaza?

While the political complexity of the region, and the sheer scale of destruction, make this difficult to predict, we do have some clues of how long rebuilding could take.

After the 2014 war in Gaza, a reconstruction framework was agreed between the Palestinian Authority (PA), the Israeli government and the United Nations.

This "privileged Israeli security concerns and maintained Israeli control over the entrance of goods to Gaza", according to Washington DC-based think-tank the Carnegie Endowment for International Peace.

"Rebuilding did happen through this mechanism, but not enough to repair the damage of 2014 before the next round of violence in 2021," it added.

"The securitisation of aid delivery is likely to be even greater in a future reconstruction system. And the frustrations of organisations involved in supporting whatever rebuilding is permitted will probably be greater as well."

The United Nations Conference On Trade And Development (UNCTAD) said in late January that it will take "decades" to rebuild Gaza and restore it to pre-conflict socioeconomic conditions, and will require "substantial" foreign aid to do so. A report by the body says 79% of Gaza's labour force is unemployed.

Even under the UN's most optimising projection, it will still take over a decade for Gaza's GDP to fully recover, as shown in this chart below.

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