The scale of Gaza's reconstruction is enormous, with 70% of buildings destroyed and investments estimated in the tens of billions. Despite available funding from various nations and the great potential to attract businesspeople worldwide, investments won't materialize if Gaza remains... well, Gaza. In this fascinating analysis, Ofer Petersburg explores the challenges.
US President Donald Trump is many things, and one of them is that he certainly understands a thing or two about construction.As a tycoon who has built complexes, towers, and projects worth billions throughout his life, his proposals for Gaza's reconstruction might sound far-fetched: he initially talked about relocating residents to Malaysia or Indonesia, and when he discovered the transportation costs were too high, he shifted focus to Jordan or Egypt, presenting their leaders with a difficult proposition.
It may sound absurd, but Trump understands what others haven't yet grasped: the world's largest refugee camp has only grown since October 7. Satellite imagery reveals that approximately 70% of residential buildings in Gaza have been destroyed – more than 170,000 structures, including hundreds of public buildings, educational facilities, and hospitals. Rehabilitating Gaza's healthcare system, including all its hospitals, will require an investment of about $15 billion; infrastructure damage is estimated at $20 billion. More than two-thirds (68%) of the road network has been destroyed, and water supply stands at just a quarter of what it was before October 7.
Money, of course, isn't the issue. Saudi Arabia, for example, announced four years ago in 2021 "The Line" project – a smart city called "NEOM" featuring thousand-foot-tall skyscrapers stretching across ten miles.
To put the project's scale in perspective – Israel has 100,000 construction workers at best, while this Saudi smart city requires twice that number. Its construction cost is about $2 trillion, many times more than Gaza's reconstruction costs. In a phone call just last week, Crown Prince Mohammed bin Salman (MBS) informed that the kingdom wants to expand its investments and trade relations with the United States by $600 billion over the next four years, with potential for growth if new opportunities arise.
It's worth mentioning the UAE's massive investments as well. According to Bloomberg's "World's Richest Families" ranking, Abu Dhabi's ruling Al Nahyan family, with assets of $305 billion, took first place after five years of Walmart heirs, the Walton family, leading the list. The Qataris are also known for their financial capabilities and diverse investments.
And of course, there are the Chinese, who have invested extensively throughout Africa and taken control of infrastructure, including our Haifa Port. They're eager to invest and increase their geopolitical leverage in the region.
There isn't a single entity, country, corporation, or company not seeking good and stable investments, including in Israel. Just this week, Russian businessman Anton Bakov announced a development project in Gaza and hopes to secure reconstruction contracts. The entrepreneur believes a tender for reconstruction work will soon open in the area, which until recently housed over 2 million people. According to him, Gaza could interest investors worldwide; there's a need for new roads, communication infrastructure, hotels along the Mediterranean coast, low-rise and high-rise buildings to provide housing, and more.
Bakov is currently consulting with representatives from both sides – Israel, which controls the territory, and the Palestinians. For now, these are verbal agreements that the entrepreneur hopes to formalize into contracts later.
He's not alone. Gaza, with its excellent location between Israel's Start-Up Nation and ancient Egypt, could become like Singapore. This aligns with Defense Minister Israel Katz's vision, who, along with Yitzhak Teshuva, once planned an artificial island here in the not so distant past.
Gaza's problem lies with its people and who controls it; none of the aforementioned countries, not even Qatar, will invest a dollar here if the Strip continues to serve as an Iranian proxy. Tens of billions have already been invested here, only to vanish overnight in one bombing. The funds that went into building the extensive tunnel network, which barely protected any innocent child or resident in Gaza, won't be given again.
Investing in Gaza isn't just an investment – it's backbreaking work. The debris removal phase alone, estimated by the UN at 42 million tons, is expected to take at least 10 months and cost about $1.2 billion. This is in addition to underground damage that needs to be considered and the necessity of building a port for raw material transportation, as relying solely on Ashdod or Cyprus isn't feasible. People will have to work day and night to rebuild this "city of the future," but what future will it have under the current leadership? Everything will be destroyed again and again. No economy will invest the $80 billion required for its reconstruction.
PROF. Kobi Michael, a senior researcher at Tel Aviv University's Institute for National Security Studies and the Misgav Institute, and a visiting professor at the International Center for Policing and Security at the University of South Wales in Britain, wrote: "Without reconstruction, problematic and complex implications will become apparent, both for Israel and other players and regional stability. At some point, Israeli responsibility for humanitarian aid delivery will be required and will inevitably create ongoing friction with relatively low-intensity terrorism and guerrilla manifestations, albeit with fluctuating higher-intensity outbursts. International pressure on Israel will increase, and it may face crises in its relations with Egypt and Jordan, as well as with the Abraham Accords countries.
"Furthermore, and perhaps more seriously – crises with the American administration and other Western allies" will arise, he wrote. "Such a reality will reduce the likelihood of progress in the normalization process with Saudi Arabia, and will likely adversely affect the Palestinian Authority's stability and the level of violent friction in the West Bank."
According to him, involving the local population in the reconstruction process through legitimate leadership is crucial, as the population needs to be part of the process and influence it; international experience in rehabilitating conflict zones and failed states demonstrates the importance of involving the local population in the process and avoiding imposing engineering solutions on them; involving the population in reconstruction prevents resistance and reservations, creates employment sources and commitment, and primarily shapes a sense of community and ownership of the process and its outcomes.
In conclusion, Gaza, as we know, cannot remain in its current state much longer. A real humanitarian disaster isn't a question of if, but when; if Gaza's residents don't understand this soon and take matters into their own hands -- without fantasies about continuing "Al-Aqsa Flood" -- something might happen. In the end, it mostly depends on them -- and a little bit on us.