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Postwar reconstruction

Gaza's Reconstruction: A $70-Billion Project of Unsustainable Promises

Strategic Insights

— 2 min read

Gaza lies in ruins, ravaged by war and conflict. The devastation is on a scale comparable to Hiroshima or Dresden, with approximately 85% of the built environment severely damaged or destroyed. The urgent need for reconstruction has sparked discussions of a massive rebuilding project, with estimates suggesting a staggering $70 billion in costs, surpassing the cost of rebuilding Gaza after the 2014 war between Israel and Hamas. The international community is assessing its role in one of the largest rebuilding projects since the Second World War, with the United Nations, World Bank, and European Commission leading the charge.

Key Takeaways:

  • The reconstruction of Gaza requires a new version of the Marshall Plan, a U.S.-led initiative that rebuilt Western Europe after the Second World War, with costs estimated to be around $70 billion in inflation-adjusted per capita terms.
  • The devastation in Gaza is on the scale of Hiroshima or Dresden, with about 85% of the built environment severely damaged or outright obliterated, according to the United Nations and the World Bank.
  • Key areas such as water-purification systems, electrical grids, fibre-optic networks, urban sanitation systems, and farmland have been destroyed.
  • Hospitals and schools that still exist are in dire need of reconstruction, while many others have been entirely destroyed.
  • The repair bill is estimated at around $70 billion, or almost 20 times the cost of rebuilding Gaza after the 2014 war between Israel and Hamas.
  • The international community is cautious, with countries and companies hesitant to commit until the war is truly over and guarantees of stability are in place.
  • The main sources of funding, technical expertise, governance, project implementation, and macroeconomic oversight are likely to come from the wealthy Gulf States, the European Union, the United States, the World Bank, the International Monetary Fund, and various aid agencies.
  • Private and publicly listed construction and infrastructure companies from Turkey and Egypt are expected to play a significant role in the rebuilding process, with Gulf, Chinese, EU, and American companies potentially involved in specialized or high-value work.
  • Turkish companies, backed by Turkish President Recep Tayyip Erdogan's support for the Palestinian cause, are likely to have the upper hand, although Egyptian companies have advantages due to their shared border with Gaza.
  • Companies like Limak Holding, Ronesans, ENKA Insaat, and Kalyon Construction, mentioned in a report by Habib Badawi, have impressive track records in building infrastructure projects in unstable countries.

Statistics:

  • 85% of the built environment in Gaza has been severely damaged or outright obliterated, according to the United Nations and the World Bank.
  • The repair bill is estimated at around $70 billion, or almost 20 times the cost of rebuilding Gaza after the 2014 war between Israel and Hamas.
  • Gaza has a pre-war population of approximately 2.1 million people.
  • The strip is 41 kilometres long and 12 kilometres wide at its widest.
  • Approximately two-thirds of Palestinians in Gaza lived below the poverty line before the war began on October 7, 2023.

Sources:

  • Yezid Sayigh, senior fellow at the Carnegie Middle East Center in Beirut
  • United Nations and the World Bank
  • European Commission
  • Donald Trump-inspired ceasefire
  • Habib Badawi, professor of international relations at Lebanese University
  • Carnegie Middle East Center
  • Limak Holding
  • Ronesans
  • ENKA Insaat
  • Kalyon Construction

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