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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.

Chart from Ed Conway, Sky's Economics & Data Editor, on the economics of the Palestinian territories.

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.

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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.

Chart from Ed Conway, Sky's Economics & Data Editor, on the economics of the Palestinian territories.

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.

Chart from Ed Conway, Sky's Economics & Data Editor, on the economics of the Palestinian territories.

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.

Chart from Ed Conway, Sky's Economics & Data Editor, on the economics of the Palestinian territories.

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.

Chart from Ed Conway, Sky's Economics & Data Editor, on the economics of the Palestinian territories.

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.

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Ukraine and Europe cannot reject Trump’s plan – they will play for time and hope he can still be persuaded to desert the Kremlin

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Ukraine and Europe cannot reject Trump's plan - they will play for time and hope he can still be persuaded to desert the Kremlin

“Terrible”, “weird”, “peculiar” and “baffling” – some of the adjectives being levelled by observers at the Donald Trump administration’s peace plan for Ukraine.

The 28-point proposal was cooked up between Trump negotiator Steve Witkoff and Kremlin official Kirill Dmitriev without European and Ukrainian involvement.

It effectively dresses up Russian demands as a peace proposal. Demands first made by Russia at the high watermark of its invasion in 2022, before defeats forced it to retreat from much of Ukraine.

Ukraine war latest: Kyiv receives US peace plan

(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP
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(l-r) Kirill Dmitriev and special envoy Steve Witkoff in St Petersburg in April 2025. Pic: Kremlin Pool Photo/AP

Its proposals are non-starters for Ukrainians.

It would hand over the rest of Donbas, territory they have spent almost four years and lost tens of thousands of men defending.

Analysts estimate at the current rate of advance, it would take Russia four more years to take the land it is proposing simply to give them instead.

It proposes more than halving the size of the Ukrainian military and depriving them of some of their most effective long-range weapons.

And it would bar any foreign forces acting as peacekeepers in Ukraine after any peace deal is done.

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Is Moscow back in Washington’s good books?

The plan comes at an excruciating time for the Ukrainians.

They are being pounded with devastating drone attacks, killing dozens in the last few nights alone.

They are on the verge of losing a key stronghold city, Pokrovsk.

And Volodymyr Zelenskyy is embroiled in the gravest political crisis since the war began, with key officials facing damaging corruption allegations.

Read more from Sky News:
Witkoff’s ‘secret’ plan to end war
Navy could react to laser incident

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Ukrainian support for peace plan ‘very much in doubt’

The suspicion is Mr Witkoff and Mr Dmitriev conspired together to choose this moment to put even more pressure on the Ukrainian president.

Perversely, though, it may help him.

There has been universal condemnation and outrage in Kyiv at the Witkoff-Dmitriev plan. Rivals have little choice but to rally around the wartime Ukrainian leader as he faces such unreasonable demands.

The genesis of this plan is unclear.

Was it born from Donald Trump’s overinflated belief in his peacemaking abilities? His overrated Gaza ceasefire plan attracted lavish praise from world leaders, but now seems mired in deepening difficulty.

The fear is Mr Trump’s team are finding ways to allow him to walk away from this conflict altogether, blaming Ukrainian intransigence for the failure of his diplomacy.

Mr Trump has already ended financial support for Ukraine, acting as an arms dealer instead, selling weapons to Europe to pass on to the invaded democracy.

If he were to take away military intelligence support too, Ukraine would be blind to the kind of attacks that in recent days have killed scores of civilians.

Europe and Ukraine cannot reject the plan entirely and risk alienating Mr Trump.

They will play for time and hope against all the evidence he can still be persuaded to desert the Kremlin and put pressure on Vladimir Putin to end the war, rather than force Ukraine to surrender instead.

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South Africa is making history with its first G20 summit, but the continued exclusion of its oldest communities is a symbolic threat

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South Africa is making history with its first G20 summit, but the continued exclusion of its oldest communities is a symbolic threat

This is the first time the G20 summit is being hosted on African soil.

Heads of state from 15 countries across Europe, Asia and South America are expected to convene in South Africa’s economic capital, Johannesburg, under the banner of “solidarity, equality and sustainability.”

The summit is facing challenges from the Oval Office as US President Donald Trump boycotts the event, where the G20 leadership is meant to be handed over to him by South African President Cyril Ramaphosa.

The US has also warned South Africa against issuing a joint declaration at the end of the summit. The challenges to South Africa’s G20 debut are also domestic.

Trump had a contentious meeting with Cyril Ramaphosa in the Oval Office earlier this year. File pic: AP
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Trump had a contentious meeting with Cyril Ramaphosa in the Oval Office earlier this year. File pic: AP

Nationwide civic disobedience has been planned by women’s rights charities, nationalist groups and trade unions – all using this moment to draw the government’s attention to critical issues it has failed to address around femicide, immigration and high unemployment.

But a key symbolic threat to the credibility of an African G20 summit themed around inclusivity is the continued exclusion and marginalisation of its oldest communities.

“There is a disingenuous thread that runs right through many of these gatherings, and the G20 is no different”, Khoisan Chief Zenzile tells us in front of the First Nations Heritage Centre in Cape Town, “from any of them”.

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“I am very concerned that the many marginalised sections of society – youth, indigenous people, are not inside the front and centre of this agenda,” he added.

Khoisan Chief Zenzile says land developments on indigenous land are the 'most ridiculous notion'
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Khoisan Chief Zenzile says land developments on indigenous land are the ‘most ridiculous notion’

As we speak, the sounds of construction echo around us. We are standing in a curated indigenous garden as South Africa’s Amazon headquarters is being built nearby.

After years of being sidelined by the government in a deal that centres around construction on sacred Khoisan land, Chief Zenzile said he negotiated directly with the developers to build the heritage centre and sanctuary as a trade-off while retaining permanent ownership of the land.

“There are many people who like to fetishise indigenous people who want to relegate us to an anthropoid state, as if that is the only place we can, as if we don’t have the tools to navigate the modern world,” he says when I ask about modern buildings towering over the sacred land.

“That is the most ridiculous notion – that the entire world must progress and we must be relegated to a state over which we have no agency.”

An hour and a half from Cape Town’s centre, Khoi-San communities have seized 2,000 hectares of land that they say historically belongs to them.

Knoflokskraal is a state where they exercise full agency – filling in the infrastructural gaps around water and electricity supply that the provincial government will not offer to residents it categorises as “squatters”.

“We are – exactly today – here for five years now,” Dawid De Wee, president of the Khoi Aboriginal Party, tells us as he gives us a tour of the settlement. “There are more or less around 4,000 of us.

“The calling from our ancestral graves sent us down here, so we had an urge to get our own identity and get back to our roots, and that was the driving motive behind everything we are here now to take back our ancestral grounds.”

'We are here now to take back our ancestral grounds,' Dawid De Wee says
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‘We are here now to take back our ancestral grounds,’ Dawid De Wee says

Dawid says they have plans to expand to reclaim more swathes of land stolen from them by European settlers in the 1600s across the Cape Colony.

Land reform is a contentious issue in post-Apartheid South Africa, with a white minority still owning a majority of the land.

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Indigenous land is even further down the agenda of reparations, and South Africa’s oldest communities continue to suffer from historic dispossession and marginalisation.

For many Khoi-San leaders, G20 represents the ongoing exclusion from a modern South African state.

They have not been invited to officially participate in events where “solidarity, equality and sustainability,” are being discussed without reference to their age-old knowledge.

Instead, we meet Khoi-San Queen Eloise at a gathering of tribal leaders from around the world on the most southwestern tip of Africa in Cape Point called the World Tribal Alliance.

Khoi-San Queen Eloise tells Sky that the G20 'is a politically-based gathering'
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Khoi-San Queen Eloise tells Sky that the G20 ‘is a politically-based gathering’

“In order for us to heal, Mother Nature and Mother Earth is calling us, calling our kinship, to come together – especially as indigenous people because with indigenous people we are still connected to our lands, to our intellectual property we are connected to who we are,” Queen Eloise tells us.

“G20 is a politically-based gathering – they are coming together to determine the future of people politically.

“The difference is that we will seek what Mother Earth wants from us and not what we want to do with technology or all those things politically, but the depth of where we are supposed to go.”

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Britain rattles its sabre at Russia’s spy ship – but is it a hollow threat?

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Britain rattles its sabre at Russia's spy ship - but is it a hollow threat?

A fierce warning from Britain’s defence secretary to Vladimir Putin to turn his spy ship away from UK waters or face the consequences was a very public attempt to deter the threat.

But unless John Healey backs his rhetoric up with a far more urgent push to rearm – and to rebuild wider national resilience – he risks his words ringing as hollow as his military.

The defence secretary on Wednesday repeated government plans to increase defence spending and work with NATO allies to bolster European security.

Russian Ship Yantar transiting through the English Channel. 
File pic: MOD
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Russian Ship Yantar transiting through the English Channel.
File pic: MOD

Instead of focusing purely on the threat, he also stressed how plans to buy weapons and build arms factories will create jobs and economic growth.

In a sign of the government’s priorities, job creation is typically the top line of any Ministry of Defence press release about its latest investment in missiles, drones and warships rather than why the equipment is vital to defend the nation.

I doubt expanding employment opportunities was the motivating factor in the 1930s when the UK converted car factories into Spitfire production lines to prepare for war with Nazi Germany.

Yet communicating to the public what war readiness really means must surely be just as important today.

Russia's President Vladimir Putin. Pic: Reuters
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Russia’s President Vladimir Putin. Pic: Reuters

Mr Healey also chose this moment of national peril to attempt to score political points by criticising the previous Conservative government for hollowing out the armed forces – when the military was left in a similarly underfunded state during the last Labour government.

A report by a group of MPs, released on the same day as Mr Healey rattled his sabre at Russia, underlined the scale of the challenge the UK faces.

HMS Somerset flanking Russian ship Yantar near UK waters. on January 22, 2025.
File pic: Royal Navy/PA
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HMS Somerset flanking Russian ship Yantar near UK waters. on January 22, 2025.
File pic: Royal Navy/PA

It accused the government of lacking a national plan to defend itself from attack.

The Defence Select Committee also warned that Mr Healey, Sir Keir Starmer and the rest of the cabinet are moving at a “glacial” pace to fix the problem and are failing to launch a “national conversation on defence and security” – something the prime minister had promised last year.

The report backed up the findings of a wargame podcast by Sky News and Tortoise that simulated what might happen if Russia launched waves of missile strikes against the UK.

The series showed how successive defence cuts since the end of the Cold War means the army, navy and air force are woefully equipped to defend the home front.

Read more:
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Briton who volunteered as spy for Russia jailed

But credible national defences also require the wider country to be prepared for war.

A set of plans setting out what must happen in the transition from peace to war was quietly shelved at the start of this century, so there no longer exists a rehearsed and resourced system to ensure local authorities, businesses and the wider population know what to do.

John Healey.
Pic: PA
Image:
John Healey.
Pic: PA

Mr Healey revealed that the Russian spy ship had directed a laser light presumably to dazzle pilots of a Royal Air Force reconnaissance aircraft that was tracking it.

“That Russian action is deeply dangerous,” he said.

“So, my message to Russia and to Putin, is this: We see you. We know what you are doing. And if Yantar travels south this week, we are ready.”

He did not spell out what this might mean but it could include attempts to block the Russian vessel’s passage, or even fire warning shots to force it to retreat.

The Russian ship Yantar is docked in Buenos Aires in 2017
Pic: David Fernandez/EPA-EFE/Shutterstock
Image:
The Russian ship Yantar is docked in Buenos Aires in 2017
Pic: David Fernandez/EPA-EFE/Shutterstock

However, any direct engagement could trigger a retaliation from Moscow.

For now, the Russian ship – fitted with spying equipment to monitor critical national infrastructure such as communications cables on the seabed – has moved away from the UK coast. It was at its closest between 5 and 11 November.

The military is still tracking its movements closely in case the ship returns.

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