War is devastating to economic growth - the stats

Introduction

How war affects the economy of a place often does not require special science to see it. The level of destruction of live and livelihoods often leaves a once prospering economy in ruins. While many watch in horror has war leaves death and destruction behind, it would be more clearer when figures are used to measure the extent of economic damage done by regional conflict.

Right now, there is war going on in Ukraine between the Russians and the national defenders in Ukraine. Another devastating war is raging in the Gaza strip as Israeli Defense Forces (IDF) battle Hamas terrorists. The hotbed of that conflict is right now in the city of Rafah. But then, reports coming from these two major conflicts suggests that the economic impact of war should all be avoided if possible. Its far easier to destroy than to build.

The International Labor Organization (ILO) has made a report about the ongoing conflict in Gaza and its economic implications. This article takes a look at keys stats and figures from that report to highlight the implications of war to the economy of a place. Take a look

War, death and the economy

One of the biggest impact of war in terms of economic impact is that it kills people that were once productive members of a society. The war in Gaza has been anything but destructive. It has caused a massive loss of human lives - men, women and children. At the end of the day, the society losses people that should be working in different sectors to contribute to economic growth.

The war is now into its 8th month and death has been widespread through many causes. One direct cause of death is the bombing of houses and other infrastructure. Death does occur when bombs and other explosives are dropped in living quarters. Apart from death caused by explosives, collapsed structures also fall on people and kill them. Many physical structures in the Gaza strip have experienced some form of physical damage.

Death can also happen as a result of malnutrition. It is very difficult to obtain food in Gaza as people are simply running for their lives. Disease can also cause death during conflicts as it is in fact happening in Gaza. These and may more situations created as a result of armed struggles in a place have resulted unfortunately in loss of lives.

How many have already died as a result of the war in Gaza? The report has come up with numbers that you would like to check out:

As of May 29, 2024, the toll stands at a staggering 36,171Palestinians killed and 81,420 Palestinians injured source

Imagine how much contribution more than 36,000 dead Palestinians would contribute to the growth of the economy of that area if they had been working productively for 8 months since the war began. All of a sudden, these number of people are removed from being able to add value to the economy. But that is not all.

War and Infrastructure

War brings damage or complete destruction of infrastructure. As bombs are dropped in Gaza, it damages or destroy critical infrastructure that are required to grow the economy. Such infrastructure include roads, houses where people live, factories, hospitals, schools and every other facility that serve a purpose or two. These critical infrastructure are left in such a bad state that becomes very difficult or virtually impossible to use them for any fit purpose.

After 8 months of non-stop bombing, very little is left of any infrastructure in Gaza. The images that accompany news reports from that region shows houses that are bombed out. Some structures are levelled to the ground. Other structures that are not completely destroyed would require significant repairs to bring them back to a working condition. Exactly how much infrastructure has been destroyed as a result of the conflict in Gaza?

According to the Gaza Strip Interim Damage Assessment report jointly issued by the World Bank, EU, and UN, as of January 2024, direct damages totaling around USD 18.5 billion have ravaged Gaza's built infrastructure. source

Infrastructures are very important for economic growth. Take for example housing. People that are homeless often contribute little to the economy of a place because they cannot afford a place to live. If there is a housing crisis such as those caused by war, displaced people often struggle to hold down any regular jobs or do business. So lack of housing makes people to be less productive and thus affects the economy of a place.

Other critical infrastructure like roads, hospitals, schools, courts, and other infrastructure form the very foundations of a working and vibrant economy. The absence of any or all of them will almost always have a direct bearing on how the economy grows. Markets for example are where buying and selling takes place. If this important infrastructure is destroyed as a result of war, then it would be difficult of people in a particular area to trade value and contribute to economic growth.

Stats about losses elsewhere

The above shows what war has done to the Gaza strip economy. It will apply to just any other place like Ukraine where fighting is going on. Conflicts like that can disrupt the economy of any place. The above data just shows how the war in Gaza is affecting human lives and infrastructure. But consider two other sectors that have been badly ravaged by the war:

• Losses in the private sector:

the Occupied Palestinian Territory incurred an estimated loss of USD 2.3 billion in private sector production value during the first four months of the war, equating to USD 19 million per day, excluding losses in properties and fixed assets. source

• Losses in the labor market

estimates based on PCBS projections indicate a rise in the unemployment rate to an average of 50.8 per cent in the OPT. This reflects a 31.9 per cent
unemployment rate in the West Bank and a staggering 79.1 per cent in the Gaza Strip. source

Conclusion

Losses everywhere isn't it? That is what war does to the economy of any place where fighting is taking place. It drastically reduces economic growth. In some cases, it takes many years after the war ends to rebuild the economy of a place after the war ends.

So does war make sense?

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