2024-01-05 04:19:58
Israel’s offensive in Gaza already leaves more than 22,438 dead, 7,000 missing and 57,614 injured. Furthermore, the Palestinian enclave is being razed and 80% of its 2.4 million inhabitants have been forcibly displaced and now live in overcrowded makeshift camps. At this point, it is worth asking how much it is costing Israel to maintain the war that began on October 7.
The answer was given by economists consulted by the American newspaper The Washington Postwho estimated that this war costs Israel $19 billion, that is, about $220 million per day.
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Since October 7, the Washington Post notes, Israeli government spending and borrowing has skyrocketed, tax revenue has plummeted, and the country’s credit rating could take a hit. The growth outlook for 2024 will fall from the initially estimated 3% to 1%, according to the Bank of Israel.
Israeli soldiers with their tanks gather in a position near the border with the Gaza Strip, in southern Israel, on January 1, 2024. (EFE/EPA/ABIR SULTAN).
The American newspaper cited the former deputy governor of the Bank of Israel, Zvi Eckstein, and his fellow economists at Reichman University, who concluded that during the fourth quarter of 2023, the impact on the coffers of the Israeli State – including the collapse of tax collection – was 19 billion dollars, and in the first quarter of 2024 it will probably be 20 billion. That is as long as the war does not go beyond Gaza.
According to the financial daily Calcalist, a war of between five and ten more months could cost Israel up to $50 billion, equivalent to 10% of the country’s GDP.
“It is important to understand that war has a ripple effect,” Yaron Zelekha, a professor at Ono Academic College and former economist at Israel’s Finance Ministry, told the Washington Post. On the one hand there is the material cost of fighting the war itself, the sharp drop in economic activity and the resulting drop in income. But this deficit spending generates debt that will weigh on the budget long after the fighting ends, the Washington Post reported.
On October 7, Hamas attacked Israel
and killed 1,140 people, mostly civilians. The Islamists took about 240 hostages, of whom 129 remain in Gaza, according to Israeli authorities.
An Israeli artillery unit prepares to fire towards a target in Lebanon from an undisclosed location on the border, on January 4, 2024. (EFE/EPA/ATEF SAFADI).
On December 18, Israeli Prime Minister Benjamin Netanyahu stated that the defense budget must increase by 20 billion shekels ($5.5 billion) a year.
Days earlier, the Israeli Parliament had approved adding another 25.9 billion shekels (about $7 billion) to the 2023 budget to help cover the costs of the Gaza war, including compensation for military reservists and emergency housing for internally displaced people who have had to leave their homes located near the border with the Palestinian enclave.
The destruction in Gaza in December 2023. (AFP).
And the reconstruction of Gaza?
On Wednesday, the Government of Gaza, controlled by Hamas, denounced that the Israeli army has launched more than 45,000 missiles and bombs in the enclave, which add up to a power greater than three nuclear bombs like those launched in Hiroshima.
As of mid-December, more than half of all homes in Gaza had been destroyed by Israeli bombing (about 50,000 units) and more than 200,000 had been damaged, the German network reported. DW. Additionally, dozens of hospitals and medical centers, hundreds of schools and government buildings have been destroyed, as have agricultural facilities.
This photo taken on January 3, 2024 shows a view of buildings destroyed by Israeli bombing in the central Gaza Strip. (Photo by JACK GUEZ / AFP).
How much will it cost to rebuild everything? Early estimates, according to DW, suggest that rebuilding Gaza could cost up to $50 billion.
However, that figure could be short if the most recent precedent is taken into account. During the 2021 Israeli offensive in Gaza, some 1,000 homes and commercial premises were destroyed and another 16,257 were damaged, in addition to 60 schools. The cost of reconstruction was then estimated at around $8 billion, notes DW.
Will Gaza be rebuilt? Israel has assured that its operation in Palestinian territory will end when it completely eliminates Hamas. At the beginning of the war, Benjamin Netanyahu’s government assured that it had no intention of reoccupying Gaza or forcing Palestinians to go to third countries.
But in recent days voices have emerged within the Israeli coalition government arguing that settlers must reoccupy Gaza.
In addition, the digital media the Times of Israel assured that the country is negotiating with several nations, including the Republic of Congo, for the resettlement of Palestinians from Gaza when the war ends.
According to that medium, Netanyahu’s Executive has launched plans for what it calls “voluntary” migration of the 2.3 million inhabitants of the Gaza Strip who want to leave.
But if Israel finally fulfills its promise not to reoccupy Gaza, who should be in charge of its reconstruction?
An aerial view on December 26, 2023 shows destroyed buildings in Beit Lahia following Israeli bombings in the northern Gaza Strip. (AFP photo).
Before voices calling for the reoccupation of Gaza emerged, Israeli media had reported that Netanyahu asked authorities in Saudi Arabia and the United Arab Emirates if they would be willing to foot the bill for reconstruction.
It has also been suggested that both the European Union and the United States could finance reconstruction. Both territories are major donors of humanitarian aid to the Palestinians.
But both the United States and Europe would be hesitant to allocate millions of taxpayer dollars to rebuild infrastructure that will likely be bombed again in the near future, DW said.
“I have heard senior European Union officials say unequivocally that Europe will not pay for the reconstruction of Gaza. (The sums of money required by Ukraine are already mind-boggling),” Gideon Rachman, chief foreign affairs commentator for the British newspaper Financial Times, wrote in December. “The US Congress also appears to be turning against all forms of foreign aid,” he added.
DW specifies that there is a current that believes that Israel is the one who must pay for the damage caused during its current military campaign in Gaza.
The German network recalled that in 2010, Israel agreed to compensate the main United Nations agency working in Gaza with $10.5 million for the buildings it destroyed during its 2009 operation in the enclave, which was much smaller. if compared to the current one.
The war in Gaza on January 3, 2024. (AFP).
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