New Budget Cuts Impact Gaza Envelope Reconstruction
Recent reports from Calcalist indicate that the Israeli government is implementing significant budget cuts that will affect the reconstruction efforts in the Gaza envelope area. The proposed 'Tekuma' bill, which aims to grant this region a special legal status, originally included a budget allocation of 5 billion shekels (approximately $1.4 billion). However, about 1.5 billion shekels (around $420 million) will be cut from this budget, raising concerns about the future of the area’s recovery following recent conflicts.
Allocation of Funds and New Legal Status
Of the cuts, approximately 1.2-1.3 billion shekels ($340-350 million) will be redirected to investments in the settlements of Netivot and Ofakim. These areas, while not classified as part of the Gaza Envelope, have been significantly impacted by events such as Operation Protective Edge on October 7, 2023. The Tekuma Law introduces a new legal definition for the Gaza Envelope, designating it as a “national focus area,” which provides it with enhanced powers for reconstruction efforts. This special status is intended to last for seven years, compared to the three-year duration typically associated with National Priority Areas.
Challenges Ahead for Tekuma Administration
Despite the establishment of the Tekuma Law, the budget faces considerable challenges. An additional 200 million shekels ($56 million) will be cut from the overall budget for all ministries in 2025. Furthermore, the management of the Tekuma initiative has shifted from the Prime Minister's Office to the Ministry of Finance, leading to a perceived reduction in its influence. Finance Minister Ze'ev Elkin is now tasked with balancing the reconstruction needs of both the Gaza Strip and northern Israel, amidst delays in the reconstruction plans that have already exceeded a year.
