The Economic Impact of the Electricity Crisis on the Gaza Strip

Unpublished working paper. Prepared during postgraduate study at the Doha Institute for Graduate Studies; not published in a peer-reviewed journal. The full text is in Arabic and available as a PDF from the top of this page.

Abstract

This study examines the economic effects of the sustained electricity crisis in the Gaza Strip over more than fifteen years, using descriptive and quantitative analysis based on data from official sources.

It finds that the crisis has affected every economic sector, raising operating costs by between 30% for commercial enterprises and 50% for industrial and agricultural ones. That increase stems from reliance on alternative power — generators and solar — for most working hours. The effect passes through to operating profit, then to productivity, and in turn to sectoral value added, which has oscillated since 2006 between marginal gains and contraction, leaving GDP at depressed levels.

Given World Bank projections that electricity consumption will keep growing at around 4.9% a year to 2030, the study argues that the fundamental remedy lies in national political consensus rather than temporary fixes — treating access to energy as a human right — alongside support for renewable energy projects, reducing their cost, and resolving how to extract the natural gas discovered off the coast.

Keywords: electricity · economic sectors · GDP · Gaza Strip · energy crisis.

Structure

The paper reviews the literature on the crisis, sets out its methodology and data sources, analyses the effects across economic sectors, and closes with findings and recommendations. It draws on the Palestinian Central Bureau of Statistics, the MAS Institute, the World Bank, OCHA and the ICRC.