World Bank Warns of Economic Fallout from Israeli War on Gaza
World Bank President Ajay Banga has issued a stark warning regarding the escalating conflict in Gaza and Lebanon, emphasizing that the ongoing war could have severe implications for the global economy. The conflict, which has resulted in a tragic loss of life, is described by Banga as "unacceptable," particularly given the toll on civilians, including women and children. He noted that while the immediate economic impact has been relatively contained, a broader escalation could involve key global economic players, particularly those in the commodities sector.
Banga stated, "If it spreads regionally, it will become a completely different matter," indicating that the conflict could disrupt vital economic resources such as oil and minerals, significantly affecting global markets. The war, which began on October 7, 2023, has already resulted in over 42,000 Palestinian deaths, according to health authorities in Gaza. Additionally, the conflict has extended to include mutual shelling with Yemen and Iran, as well as military actions in Lebanon and Syria.
Humanitarian Crisis and Material Damage Estimates
The humanitarian situation in the region is dire, with over 1.2 million people displaced in southern Lebanon alone, as reported by the Lebanese Health Ministry. Israeli airstrikes have claimed at least 2,350 lives in Lebanon and injured nearly 11,000 people over the past year. Banga detailed that the material damage from the Israeli military campaign in Gaza is estimated to be between $14 and $20 billion, a figure that could rise with the ongoing destruction in Lebanon.
In response to the crisis, the World Bank has allocated $300 million to the Palestinian Authority, which is significantly higher than usual, but still falls short of the extensive resources required to address the devastation. Banga emphasized the need for both private and public funding to support recovery efforts and hinted at the formation of a coalition of experts from various nations to devise strategies for potential peace and reconstruction.
Call for Ceasefire and International Response
As the conflict continues, some Western nations are advocating for a ceasefire between Israel and Hezbollah, as well as in Gaza. However, the United States, a staunch ally of Israel, has reaffirmed its support and plans to provide additional military resources, including an anti-missile system. The ongoing violence and humanitarian crisis underscore the urgent need for a coordinated international response to mitigate the suffering and prevent further escalation of the conflict.
