The Economy of Uncertainty

While a large majority of Gazans are stricken with systematic unemployment and acute poverty, shops are still stocked with consumer goods, and there are still restaurants and cafés operating, some of them quite elegant. With the borders closed, industry ruined, and exports impossible, who is buying these goods at inflated prices? Where is the money coming from? The Gazan economy is so bizarre that it is worth taking a moment to trace the cash flows.

The United Nations Relief and Works Agency (UNRWA), which provides all services to the Palestinian refugee population, is one of the principal employers in Gaza, paying decent salaries to 11,000 people. These individuals in turn support many unemployed family members. The United States was the main UNRWA donor until President Trump slashed all funding for the organization in 2018, provoking a major crisis in the organization. No one in Gaza failed to note the irony of U.S. expenditures to feed and educate the same people it also pays (by way of aid to Israel) to bomb and imprison: “They feed us with one hand and strangle us with the other” was the common refrain.