How Gaza went from desperately poor to even poorer – and why that’s important to the current war
The story we’re currently seeing unfolding in Israel and Gaza at present doesn’t seem to have much to do with economics. It’s about murders, terrorism and missile attacks.
But the economics lurks behind the scenes. It can’t explain all of what’s happening in the Middle East. It certainly can’t justify the horrendous attacks on Israel on 7 October – the worst massacre of Jewish people since the Holocaust.
Nor can it explain the intensity of the Israeli response, which has, according to Palestinian representatives, claimed more lives than were lost in the Hamas attack.
But, alongside religion, history, democracy – and the lack of it – economics is nonetheless an important part of the background story to the instability in this region.
Trustworthy data on the Palestinian Territories is hard to come by, but earlier today UNCTAD, the economic wing of the United Nations, published its annual stock-take of the Palestinian economy – perhaps the most reliable assessment of the situation on the ground. And that situation is stark.
It shows that as of last year, in other words before the recent attacks, the economy of Gaza was, by some measures, the most benighted in the world.
Gross domestic product per capita – the broadest measure of living standards – was a whopping 46% below its 1994 levels.
In other words, in the space of a generation, even as most other countries around the world saw their living standards rise sharply, Gaza’s people have become dramatically poorer.
What’s particularly striking when you look through the data is the divergence between Gaza and the West Bank, the other main part of the Palestinian Territories.
The two regions’ economies had roughly similar GDP per capita up until around 2007, when Hamas seized control of the Gaza Strip.
But look at what happened next. Economic growth in the West Bank meant that its economy is now considerably bigger and more prosperous than its 2007 levels.
The Gaza Strip, meanwhile, has seen its levels of prosperity crumple in a fashion rarely seen elsewhere in the world.
It’s a similar story if you look at unemployment rates in each of the regions: while they were relatively close up until 2007 (albeit that the Gaza jobless level was always a few percentage points above the West Bank level) in the post-Hamas period, the two lines have diverged dramatically.
The jobs market in the West Bank is (or was, as of 2022) tough. The jobs market in Gaza was hopeless.
Compare the Gaza Strip to other countries and you see just how much of an outlier it is.
While the unemployment rate in Israel is 3.5%, the comparable rate in the Palestinian Territories is 24% and the rate in the Gaza Strip is at 45%.
This is higher than any other country in the world – and note that the number is significantly higher for women and for young people.
There are plenty of explanations for this divergence. After Hamas took control of Gaza, Israel imposed a series of restrictions on the flow of people and trade in and out of the region.
The border is heavily policed. Entry and exit by air and sea is banned and there are only two crossing points towards the West Bank and East Jerusalem.
The majority of residents have been “locked in” for years, making it more like a prison than a fully functioning state.
Look at this chart of exports from Gaza and the West Bank and you get a sense of what this means in practice.
While the West Bank (and for that matter most other economies) have been able to grow their exports each year, as new businesses seek out opportunities to trade with Israel (the trade mostly goes to Israel), Gaza’s exports have essentially flatlined.
Of course, this does not cover the black market, but it’s the best picture we have available.
Israeli authorities say these restrictions are an essential part of policing Hamas and preventing terrorist activity. Trade is monitored and controlled to prevent weapons coming in and leaving.
That goes, too, even for items like fertiliser and steel tubes, since they could be used to make missiles. And they have more than half a point: Hamas social media accounts have gleefully boasted about how productive its home-made ammunition factories have been – despite these restrictions.
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Reality of Palestinians in Gaza City
These restrictions are not the only explanation for the collapse in Gaza’s economy: corruption is rife throughout the territory, with the upshot that much of what enters the country for the purpose of helping civilians is sometimes seized by Hamas leaders.
It is a sorry story, and the upshot is that Gaza has been a failing economy for many years, with levels of deprivation and poverty which have mounted to world-leading levels.
None of the above can explain, let alone justify, the attacks of October 7. In a parallel universe, Gaza could have been blessed with leadership which would turn the lines in the chart around – though that would also have been reliant on Israel lifting its various restrictions.
But numbers like these tend to make people feel desperate.
Gaza was already desperately poor before Hamas won its election and seized power. It has become significantly poorer, and significantly more desperate, in the years since.
It is one of the most notorious and secret places in Iran.
Somewhere foreign journalists are never allowed to visit or film. The prison where dissidents and critics of Iran’s government disappear – some never to be seen again.
But we went there today, invited by Iranian authorities eager to show the damage done there by Israel.
Evin Prison was hit by Israeli airstrikes the day before a ceasefire ended a 12-day war with Iran. The damage is much greater than thought at the time.
We walked through what’s left of its gates, now a mass of rubble and twisted metal, among just a handful of foreign news media allowed in.
A few hundred yards in, we were shown a building Iranians say was the prison’s hospital.
Behind iron bars, every one of the building’s windows had been blown in. Medical equipment and hospital beds had been ripped apart and shredded.
Debris scattered across what Iran says was the prison hospital
It felt eerie being somewhere normally shut off to the outside world.
On the hill above us, untouched by the airstrikes, the buildings where inmates are incarcerated in reportedly horrific conditions, ominous watch towers silhouetted against the sky.
Evin felt rundown and neglected. There was something ineffably sad and oppressive about the atmosphere as we wandered through the compound.
The Iranians had their reasons to bring us here. The authorities say at least 71 people were killed in the air strikes, some of them inmates, but also visiting family members.
Authorities say this building was the visitor centre
Iran says this is evidence that Israel was not just targeting military or nuclear sites but civilian locations too.
But the press visit highlighted the prison’s notoriety too.
Iran’s critics and human rights groups say Evin is synonymous with the brutal oppression of political prisoners and opponents, and its practice of hostage diplomacy too.
British dual nationals, including Nazanin Zaghari-Ratcliffe were held here for years before being released in 2022 in exchange for concessions from the UK.
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Inmates are held in building on a hill above, which has been untouched by airstrikes
Interviewed about the Israeli airstrikes at the time, Ms Zaghari-Ratcliffe showed only characteristic empathy with her former fellow inmates. Trapped in their cells, she said they must have been terrified.
The Israelis have not fully explained why they put Evin on their target list, but on the same day, the Israeli military said it was “attacking regime targets and government repression bodies in the heart of Tehran”.
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The locus of their strikes were the prison’s two entrances. If they were trying to enable a jailbreak, they failed. No one is reported to have escaped, several inmates are thought to have died.
The breaches the Israeli missiles made in the jail’s perimeter are being closed again quickly. We filmed as a team of masons worked to shut off the outside world again, brick by brick.
Israeli-backed American contractors guarding aid centres in Gaza are using live ammunition and stun grenades as starving Palestinians scramble for food, an investigation has claimed.
The Associated Press has reported the accounts by two contractors from the Gaza Humanitarian Foundation (GHF), although the organisation has strongly denied the allegations, describing them as “categorically false”.
GHF was established in February to deliver desperately needed aid to people in the besieged enclave, but its work has been heavily criticised by international aid groups.
It has also been subject to intense scrutiny about its operations, which Sky News previously reported are associated with a significant increase in deaths.
AP’s claims, which have not been independently verified by Sky News, came from GHF contractors who spoke on condition of anonymity as they were revealing their employer’s internal operations.
Palestinians are shown scrambling for aid in the footage provided to AP. Pic: AP
They said they were motivated to speak out as they were disturbed by what they considered dangerous practices by security staff who were often heavily armed.
AP reported the contractors had claimed “their colleagues regularly lobbed stun grenades and pepper spray in the direction of the Palestinians” and “bullets were fired in all directions – in the air, into the ground and at times toward the Palestinians, recalling at least one instance where he thought someone had been hit”.
Contractor: ‘Innocent people being hurt’
“There are innocent people being hurt. Badly. Needlessly,” the contractor told AP.
Videos reportedly provided by one contractor show aid sites, located in Israeli military-controlled zones, with hundreds of Palestinians crammed between metal gates, scrambling to reach aid.
In the background, gunfire can be heard, and stun grenades are allegedly fired into crowds.
Footage provided to the AP news agency allegedly shows tear gas being fired at an aid distribution site in Gaza. Pic: AP
The footage does not show who was shooting or what was being shot at, but another video shows contractors in a compound, when bursts of gunfire can be heard. One man is then heard shouting in celebration: “Whoo! Whoo!”.
“I think you hit one,” another says, followed by the comment: “Hell, yeah, boy!”
The contractor who took the video told AP that colleagues were shooting in the direction of Palestinians.
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According to the Hamas-run Gaza Health Ministry and witnesses, several hundred people have been killed and hundreds more wounded since the GHF sites started operating more than a month ago, amid claims by Palestinians of Israeli troops opening fire almost every day at crowds seeking to reach the aid.
In response, Israel’s military says it fires only warning shots and is investigating reports of civilian harm. It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
Bursts of gunfire can be heard in the footage as Palestinians run towards aid being distributed. Pic: AP
GHF attacks ‘false claims’
GHF has vehemently denied the accusations, adding that it has investigated AP’s allegations.
In a statement on X, GHF wrote: “Based on time-stamped video footage and sworn witness statements, we have concluded that the claims in the AP’s story are categorically false. At no point were civilians under fire at a GHF distribution site.
“The gunfire heard in the video was confirmed to have originated from the IDF, who was outside the immediate vicinity of the GHF distribution site.
“It was not directed at individuals, and no one was shot or injured. What is most troubling is that the AP refused to share the full video with us prior to publication, despite the seriousness of the allegations.”
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Safe Reach Solutions, the logistics company subcontracted by GHF, told the AP there have been no serious injuries at any of their sites to date.
But the organisation admitted that, in isolated incidents, security professionals fired live rounds into the ground and away from civilians to get their attention.
A Safe Reach Solutions spokesperson told AP this happened at the start of their operations at “the height of desperation where crowd control measures were necessary for the safety and security of civilians”.
Liverpool star Diogo Jota has died in a car crash.
The 28-year-old Portuguese forward died in the accident in the early hours of Thursday morning near Zamora, in northwestern Spain.
His brother, Andre Silva, was also killed in the crash on the Rias Bajas Highway (A-52) near Palacios de Sanabria, heading towards Benavente.
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Jota’s former teammate: ‘This can’t be real’
The site of the accident on the A52
Follow the latest updates following Diogo Jota’s death
Jota and Silva were driving to Santander to catch a ferry back to England ahead of the start of Liverpool’s pre-season training on Monday, CNN Portugal reports.
The news outlet reports that Jota was advised against flying back to England due to recent surgery.
Police said the accident happened at 12.30am when the Lamborghini the pair were travelling in veered off the road.
Palacios de Sanabria in the north of Spain
“A vehicle left the road and everything indicates a tyre burst while overtaking,” the Guardia Civil in Zamora told Sky Sports News in a statement.
“As a result of the accident, the car caught fire and both people were killed. Pending the completion of forensic tests, one of the deceased has been identified as Diogo Jota, a Liverpool FC player, and his brother, Andre Felipe.”
A Spanish government source told the PA news agency that police were investigating the crash as “a possible speeding incident”.
The aftermath of the crash. Pic: AP
Pic: AP
Police added that no other vehicles were involved in the incident.
Pictures of the aftermath of the crash showed debris scattered along the side of the road, including what appeared to be charred parts of the vehicle.
It comes just 10 days after the player married his long-term girlfriend, Rute Cardoso.
Diogo Jota holds the Premier League trophy aloft after the club’s title win in the 2024/25 season. Pic: Reuters
Diogo Jota walks the pitch with his family in 2022.
Pic: PA
He had three children.
The footballer, who played as a striker for Liverpool, began his career in his native Portugal and played at Atletico Madrid in Spain before moving to England.
He joined the Merseyside club from Wolverhampton Wanderers in 2020.
Former Liverpool manager Jurgen Klopp with Diogo Jota. Pic: PA
Portugal’s Cristiano Ronaldo (left) and Diogo Jota (right) during a training session. Pic: PA
Jota played an important role throughout his five years with the Reds, including scoring six times in Liverpool’s recent Premier League-winning season.
He scored a total of 47 times in 123 matches for the club. He also played 49 times for the Portugal national side, scoring 14 times.
Silva, 25, played for Penafiel, a Portuguese second division club.
Diogo Jota holding the trophy on the team bus during the Premier League winners parade in Liverpool. Pic: PA
Teammates and football legends pay tribute
A statement issued by Liverpool FC said the club was “devastated” by their player’s death.
“The club have been informed the 28-year-old has passed away following a road traffic accident in Spain along with his brother, Andre,” the club said in a statement.
“Liverpool FC will be making no further comment at this time and request the privacy of Diogo and Andre’s family, friends, teammates and club staff is respected as they try to come to terms with an unimaginable loss.
“We will continue to provide them with our full support.”
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Sky’s Greg Milam reports from Anfield Stadium where Liverpool fans are hearing about the death of Diogo Jota.
The Portuguese football federation said it was “utterly devastated by the deaths”.
“Far beyond being an exceptional player, with nearly 50 caps for the national team, Diogo Jota was an extraordinary person, respected by all teammates and opponents, someone with a contagious joy and a reference within his own community.
“We have lost two champions. The passing of Diogo and Andre Silva represents irreparable losses for Portuguese Football, and we will do everything to honour their legacy daily.”
The Portugal and Spain women’s teams held a minute’s silence for Jota and Silva before their match in the Women’s Euros in Switzerland on Thursday evening.
Floral tributes left at Anfield this morning. Pic: Sky
It came after Liverpool’s manager Arne Slot said in a statement: “What can anyone say at a time like this when the shock and the pain is so incredibly raw? I wish I had the words but I know I do not.
“All I have are feelings that I know so many people will share about a person and a player we loved dearly and a family we care so much about.
“My first thoughts are not those of a football manager. They are of a father, a son, a brother and an uncle and they belong to the family of Diogo and Andre Silva who have experienced such an unimaginable loss.”
Jota’s former manager at Liverpool, Jurgen Klopp, offered his thoughts in a post on Instagram.
“This is a moment where I struggle! There must be a bigger purpose, but I can’t see it,” he said.
“I’m heartbroken to hear about the passing of Diogo and his brother Andre. Diogo was not only a fantastic player, but also a great friend, a loving and caring husband and father.
“We will miss you so much. All my prayers, thoughts and power to Rute, the kids, the family, the friends and everyone who loved them.”
Liverpool captain Virgil van Dijk posted on Instagram: “What a human being, what a player, but most importantly what an unbelievable family man.
“You mean so much to all of us and you always will!”
Cristiano Ronaldo, Jota’s captain in the national team, said: “It doesn’t make sense. Just now we were together in the National Team, just now you had gotten married.
“To your family, your wife, and your children, I send my condolences and wish them all the strength in the world.
“I know you will always be with them. Rest in Peace, Diogo and Andre. We will all miss you.”
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Diogo Jota married his long-term girlfriend just two weeks ago
Jota’s Liverpool teammates Darwin Nunez, Cody Gakpo and Dominik Szoboszlai have also paid tribute.
Szoboszlai wrote: “Words cannot describe how heartbroken and devastated we are… Your smile, your love for the game will never be forgotten.
“We will miss you so much, but you will stay with us forever, on and off the pitch.”
Jota’s former teammates Trent Alexander-Arnold, Sadio Mane, Roberto Firmino and Thiago Alcantara have also shared messages on social media.
Mane posted a picture of himself and Jota with heartbreak emojis.
It came as Liverpool legend Kenny Dalglish wrote on X: “You feel helpless, knowing there’s so little we can do to ease the pain for his wife of just two weeks, his three beautiful children.”
Liverpool legend Steven Gerrard shared an image of Jota on Instagram and wrote: “Condolences to his family and friends during this incredibly sad time.”
Liverpool owners Billy Hogan, John Henry and Tom Werner, who are part of the Fenway Sports Group, said: “This tragic situation and the reality of it is truly shocking, devastating and has left us numb with grief.”
Football icon Lionel Messi has also paid tribute, sharing an image of Jota on Instagram with the message “QEPD” – short for the Spanish phrase ‘que en paz descanse’, which translates to “may he rest in peace'”.
European football clubs such as Barcelona and AC Milan have also shared messages, along with basketball player LeBron James and tennis icon Rafael Nadal.
Meanwhile Liverpool FC have opened a physical and digital book of condolence for supporters and members of the public to sign.
The physical book is at the club’s stadium, in the Anfield Road Stand reception area until Sunday evening.
An avid video gamer, Jota also owned an eSports team and regularly streamed on Twitch.
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