Good morning. While much of the world’s attention has been focused on Israel’s conflict with Iran, the humanitarian catastrophe in Gaza has worsened by the day. Since March, when Israel broke a ceasefire agreement and imposed a total blockade, very little food or medicine has been allowed in. Though the blockade was partially lifted on 19 May, only a trickle of desperately needed aid has made it through – and yesterday Israelclosed the most direct route. Israeli forces have killed hundreds of Palestinians who are trying to access it, in what aid workers are now calling a “death trap”. Israel is fighting allegations ofgenocide in Gaza, where it haskilledmore than 55,000 people.
Truly to understand the scale of the catastrophe inGaza, it’s necessary to place it in historical context. This isn’t just a crisis born in 2023: it’s the culmination of nearly two decades of siege.
For today’s newsletter, I spoke to British-Palestinian economistZayne Abudaka, senior fellow at the Institute for Social and Economic Progress in Ramallah, about how Gaza’s years of economic strangulation has shaped the current crisis. That’s after the headlines.
Middle East crisis| Iran’s supreme leader, Ayatollah Ali Khamenei, hasthreatenedto respond to any future US attack by striking American military bases in the Middle East.
Welfare| Keir Starmer hasoffered Labour MPs “massive concessions”on his controversial welfare bill in a move that has won over key rebels and is likely to have saved the prime minister from a damaging Commons defeat. The changes will reportedly cost the government several billion pounds over the next few years but will shore up the prime minister’s precarious authority.
UK weather| An amber heat health alerthas been issuedby the UK Health Security Agency for much of England because of predicted temperatures above 30C over the weekend.
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Health| Scientists have developed a test to identify women with an increased risk of miscarriage,which could pave the wayfor new treatments to prevent pregnancy loss.
The blockade of Gaza was imposed after Hamas took overin 2007and Israel declared that it was now a “hostile territory”. With the support of Egypt, Israel sealed Gaza by land, sea and air, devastating its economy, driving unemployment to record levels and leaving the population dependent on aid to survive.
Though it may seem impossibly distant now, life before 2007 was very different, even though Israeli forces were still occupying Gaza. “A lot of people talk about those times as better: there was more money, and a better economy,” Zayne Abudaka said. According to UN Trade and Development, real GDP per capita in Gaza dropped by more than 27% between 2006 and 2022.
Here’s how that happened – and how it shaped the current catastrophe.
What was Gaza like before the blockade?
Before the signing of the Oslo Accords in 1993, a Palestinian in Gaza could get in a car and drive to Haifa in Israel without checkpoints or permits. “Obviously there were no civil rights, there was a lot of oppression, because you had an entire national identity without self-determination,” Abudaka said. “But in terms of freedom of mobility, access to resources, and opening a business, it was pretty straightforward.”
Before the formation of the Palestinian Authority (PA), the economy relied heavily on productive industries like farming, although farmers were, and still are, regularly harassed by Israelis, Abudaka said. Then the PA created a huge raft of public sector jobs. “So all the people whose kids were going to become farmers, they started telling the children, ‘why go through this headache? Why don’t you work for the PA?’”
The influx of aid, which increased rapidly until 2013, further empowered the PA to absorb workers from different sectors. “The things that the Oslo accords had introduced, including the division of the different areas, lack of access to borders and to energy generation created a situation whereby the only jobs that were increasing were public sector and international NGO jobs,” Abduka said. “And all the productive jobs like industry and agriculture started dying down.” He points to a stark statistic: in 1996, more than 20% of the Palestinian territories’ GDP came from industry. Today, it hovers around 10%.
When the second intifada eruptedin 2000, the deaths of thousands of Palestinians and Israelis were accompanied by an intensifying Israeli occupation and the destruction of key infrastructure. “We lost 30 to 40% of our GDP in a single year,” Abudaka said. “Cities were under siege, curfews were imposed, you couldn’t leave your house. It was a dramatic escalation in violence. People were left feeling desperate.”
What has been the impact of the siege?
After Israel imposed its blockade, trade and investment collapsed. “Unfortunately the PA did not direct its finances to investing in the economic productive base,” Abudaka said. “So you have a lack of investment, less jobs, and end up in a situation where two-thirds of young people are unemployed.”
The siege imposed restrictions on a list of items that it was claimed that Hamas could use to make weapons and rockets – many of which were essentials for civilian life. It included wedding dresses, baby bottles and nappies, and water and sewage pumps.
Agriculture also suffered from the territory’s extreme density. Gaza spans just 360 sq km, and its population grew significantly before the war. As a result, traditional farmland quickly became overbuilt. “In the north of Gaza, there was an area called Sheikh Ijlin, which was known for really good grapes. The area has 300,000 people living in one sq km. If you had walked in that area, you would have seen buildings and grapes side by side.”
How did Gaza try to adapt?
Gaza’s local authorities set out new rules to manage the siege economy. “You would go on the ministry website and see how many dunams, a unit of area, of every single plant they had. So they managed to say, ‘We need this many tomatoes, so we’ll do that’,” Abudaka said.
In some ways, Gaza’s strangled economy had the potential to function better than the more prosperous West Bank’s. “The West Bank is not one continuous area,” Abudaka said. “The PA controls these tiny islands that are surrounded by settlements. Although Gaza was seized, it was one area. So the people living there had control over their resources, which meant that they had services that worked. They had agriculture production despite everything.”
But these adapted resources were battered by the wars that followed in 2008, 2012, 2014, 2021, and 2023. After each war came promises of reconstruction, but only a fraction of the aid money that was pledged ever materialised, Abudaka said.
Israel wanted reassurances that aid that went in couldn’t fund Hamas’s military activity, Abudaka said. “This led to the creation of the Gaza Reconstruction Mechanism, which is a security arrangement where Israeli security checks the goods that enter. It didn’t stop Hamas from building tunnels. It did annihilate Gaza’s economy.”
What does the future hold for those living there?
What is now unfolding in Gaza is a process of “de-development,” Abudaka said. In 2006, about 63% of Palestinians in Gaza relied on aid. Today, almost all of Gaza’s 2.3 million inhabitants depend on humanitarian assistance.
A smaller, yet still damaging version of this is playing out in the occupied West Bank. Abudaka pointed to the banking system as one example. “Because we don’t have our own currency, we use four, including the Israeli shekel. But we can’t deposit physical shekels with the Israeli central bank unless we prove where they came from. So Palestinian banks end up holding piles of cash they can’t use. That limits lending, which hurts growth,” he said.
Another issue is clearance revenues. “Because we don’t have a customs authority at the border, the Israeli authorities will collect that tax in our place. And then they’ll send us the money back, but we have to show them receipts, which is often impossible because we don’t control the borders. Then we go to the Israelis and say, ‘You owe us 100m.’ And they say, ‘No … we’re keeping the other 50m because you didn’t provide all the receipts. On top of that, the Israelis take 3% as a fee.”
Now far-right finance ministerBezalel Smotrichis trying to stop the money altogether. “But this isn’t the whole story … He wants the PA to be simply a military force that looks Palestinian, but is actually Israeli. A force that controls Palestinians, but doesn’t provide them with services.”
This crushing Israeli control over every facet of ordinary life, Abudaka said, is forcing young Palestinians to confront a difficult question. “You do see a lot of Palestinian young people who are saying, listen, I love my country. I just don’t have a future,” he says. “We have really been steadfast, but this can’t go on.”
Kirsty Major kicks offa fascinating series on Europe’s housing crisis and how it’s stoking support for the far right – but, she reports, it doesn’t have to be this way. (And do subscribe to our weekly emailThis Is Europe.)Craille Maguire Gillies, production editor, newsletters
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Football| Manchester City won Group G of the Club World Cup with a dominant performance on Thursday,beating Juventus 5-2at Camping World Stadium. Erling Haaland’s goal in the second half marked the 300th of his career.
Cricket| England have fast-tracked Jofra Archer into their squad to face India in the second Test at Edgbaston next week. The 30-year-old fast bowlerreturns to the Test setupfor the first time since February 2021.
Football| Cristiano Ronaldo has signed a newtwo-year dealat Al Nassr, extending his stay with the Saudi Pro League team to June 2027, when the forward will be 42.
TheGuardianleads with “‘Massive concessions’ on welfare bill win over key Labour rebels”. TheFinancial Timeshas “Starmer yields to avert Labour ‘civil war’ over cuts to welfare”. TheDaily Mailand theTelegraphboth go with “Starmer caves in to rebels on benefits”, while theTimeshas “PM pledges protections for disabled to rescue bill”. TheMirrorsays “New hope on PIPs”, while theSungoes its own way, reporting “Killer back stalking Cheryl”.
Our critics’ roundup of the best things to watch, read, play and listen to right now
MusicLorde: Virgin | ★★★★☆
Lorde began her career speaking directly to her fellow teens about stuff that mattered to them – paving the way for Billie Eilish, Olivia Rodrigo et al in the process – and is now continuing to grow up alongside her fans. That’s always a tough job, but one Lorde seems more than capable of thanks to writing that remains as skilful and incisive as it did when she was precociously skewering pop’s obsession with unattainable lifestyles from an Auckland suburb in 2013. Virgin is powerful, moving, personal but universal – andpacked with bangers.Alexis Petridis
TVThe Bear | ★★★★☆
Recalibrate your palate: The Bear isnot the show it used to be. More than ever, it’s a show about family – the traumas they inflict on each other and the power they have to soothe them – and how families extend to friends and colleagues who can be just as beloved and just as maddening. Where once The Bear made pulses pound, now it lets the happy tears flow; the second half of the season is like one long therapy session.Jack Seale
FilmFI | ★★★★☆Brad Pitt gets behind the wheel in this outrageously cheesy butextravagantly shot Formula One melodrama. Along with a lot of enjoyable hokum about the old guy mentoring the rookie hothead, F1 the Movie gives you the corporate sheen, real-life race footage with Brad as the star in an unreasonably priced car, the tech fetish of the cars themselves (almost making you forget how amazingly ugly they are), and the bizarre occult spectacle of motor racing.Peter Bradshaw
GamesDeath Stranding 2|★★★★★
Thislatest offering from Hideo Kojimahas the atmosphere and narrative delivery of arthouse cinema. It’s light of touch in its storytelling but exhaustive in its gameplay systems, and the tension between the two makes it compelling. Of the many things the game is trying to say, the message that comes to the fore is: you are never truly alone. Global disasters, big tech, even death itself – these things might abstract the way we connect to one another, but they can’t sever the connection altogether. Not bad for a game about delivering boxes.Phil Iwaniuk
“It’ll push disabled people into poverty”: Labour’s controversial welfare bill
Guardian columnistFrances Ryanon the reality of being disabled in the UK and the impact of the government’s proposed cuts.
A bit of good news to remind you that the world’s not all bad
Waymap, a new app-based navigation technology designed to assist blind, partially sighted, and disabled people, has been installed atLord’s cricket ground in London. Lord’s is the first sports stadium in the world to use such a personal GPS system.
England visually impaired cricketer Moshfique Ahmed was among the first to test the app at Lord’s. Using his cane and following the app’s voice directions, he was able to move independently around the ground. Although he encountered a few misdirections, these issues were attributed to the app still learning his walking style.
Ahmed expressed hope that this technology could significantly improve accessibility for visually impaired sports fans, “I know so many people who are into sports but don’t go. This would push the door completely open for them.”
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