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Who Will Fund Gaza’s Reconstruction? – OpEd

On March 4 Egypt presented to a meeting of the Arab League a detailed and costed plan for the reconstruction, development and administration of post-war Gaza.  It was approved unanimously and is now Arab League policy.  UN Secretary-General Antonio Guterres, who was present at the meeting, "strongly endorsed" the Egyptian plan, and pledged the UN’s full cooperation in implementing it.  The president of the African Union, Joao Lourenco, also attended the Cairo summit and gave the plan his explicit support together with a commitment to help realize it. Since then it has been endorsed by the EU.  Statements from the EU High Representative, Kaja Kallas,  and the President of the European Council, Antonio Costa, confirm that the EU sees the plan as a serious basis for discussions on Gaza's future​.  They have offered "concrete support" from all 27 member countries. In addition France, Germany, Italy and the UK have all separately backed it. The Egyptian initiative addresses both immediate humanitarian needs and the long-term governance and reconstruction of Gaza.  It envisages a three-phase process: first, immediate humanitarian action;  then a multi-year reconstruction effort; and finally establishing a new governance structure for Gaza. The first phase is planned to be completed in about six months; the rebuilding and governance reforms are estimated to last about a further four to five years. The plan explicitly excludes Hamas from any involvement in the future governance of Gaza.  It also bars the Palestinian Authority (PA) from direct administrative control, but it does envisage an umbrella-type council composed of Palestinian technocrats, operating under the auspices of the PA but supported by an international Governance Assistance Mission.  In addition, to maintain security during the transition, it proposes the establishment of an International Stabilization Force to be led by Arab states. It is obvious that the cost of rebuilding Gaza’s towns and cities and their infrastructure will be astronomic.  Egypt’s three-phase plan puts it at $53 billion, to be expended over the 5 years.  For the first six months of humanitarian relief, the reconstruction program is costed at $3 billion.  Phase two, which would involve rebuilding infrastructure such as roads and utilities, and constructing 200,000 permanent housing units, would cost some £20 billion.  The final phase, lasting two-and-a-half years and costing $30 billion, aims to complete infrastructure, build another 200,000 housing units, and develop industrial zones, ports, and an airport. To finance this $53 billion plan, Egypt proposes establishing an internationally supervised trust fund to receive, channel and manage financial support from a wide range of international donors. It specifically calls for the ​involvement of the World Bank: "a World Bank-overseen trust fund will be established to receive pledges to implement the early recovery and reconstruction plan." The plan proposes that Egypt will host an international conference, in cooperation with the UN, to coordinate donor contributions, with the World Bank providing oversight to ensure transparency and effective fund management. The World Bank has a long-standing presence in Gaza and the West Bank, where it ​has been managing similar trust funds and coordinating with international donors for development and reconstruction projects. The task of reconstructing Gaza is enormous, and $53 billion is a very great deal of money to have to find. The donors likely to finance Egypt's plan include a mix of international and regional actors. ​Oil-rich nations such as Saudi Arabia and​ Gulf states like the United Arab Emirates (UAE) ​have deep pockets and a history of regional spending, including in Gaza. ​With an interest in curbing Iranian influence and stabilizing the region​, they are expected to be key contributors, potentially ​expected to provide at least $20 billion initially. ​A number have indicated that their one proviso is that Hamas, with its links to ​the Muslim Brotherhood and Iran, is to have no role in Gaza’s redevelopment and future governance. The Egyptian plan envisions mobilizing diverse sources of international aid and investment, so organizations like the UN and global financial institutions, including the World Bank and the EU, are expected to offer financial support. Development agencies, investment funds, and development banks from various countries ​will also ​be targeted. Egypt is a strategic ally of the US, already supported to the tune of over $1 billion annually, so it is not impossible to envisage the US assisting in the reconstruction program. Washington is interested in regional stability, counterterrorism, and preventing refugee spillover into other regions. Support could be either by way of specialist construction and infrastructure suppliers contracted by the administration, or by direct financial donation provided under the guise of humanitarian aid – a sort of post-conflict Marshall Plan-style initiative. Another possible major donor is China. China and Egypt are already tied closely since Chinese firms are involved in building Egypt’s new administrative capital and in developing a major industrial zone in the Suez Canal region. China may well respond favorably to a request from Egypt to help realize its Gaza reconstruction plan, perhaps regarding it as an opportunity to strengthen its strategic position in the Middle East. China is already investing heavily in the region through its Belt and Road initiative, as well as with strategic investments, trade partnerships, infrastructure development, and diplomatic engagement. Enjoying a relatively neutral position in the Israel-Palestine conflict, China is in a formal strategic partnership with Saudi Arabia and has close ties with the UAE, which is a key re-export hub for Chinese goods to the region and Africa. Chinese firms are involved in post-war infrastructure rebuilding in Iraq, and China is heavily invested in infrastructure and renewable energy projects in Turkey, Jordan and Lebanon. Meanwhile Egypt’s Ministry of Foreign Affairs is actively preparing a major donor conference aimed at securing the required financial commitments. Egypt’s plan explicitly calls for broad-based international ​attendance, including Arab states, the EU, China, the US, and other global actors. Eyebrows may be raised at the idea of the US and China sitting down together to discuss ​the f​inancing of Gaza reconstruction, but in fact they have both taken part in similar multilateral donor processes in the past, even when their broader relations were tense. Examples are the 2019 Global Fund’s conference, and the International Donors’ conference “Together for the People in Turkey and Syria” in 2023. The urgency of Gaza’s humanitarian crisis and the need for broad international legitimacy make their participation likely. Both would expect to benefit from contracts worth millions of dollars to construct or reconstruct elements of a restored Gaza, but even so the program’s directors may need to look further afield to find specialist firms to undertake elements of the extensive building and infrastructure operations required. When the tenders go out for these lucrative contracts, competition will be fierce. As for the donor conference, it has waited for an end to hostilities in the region. Given the current political climate, it might soon be convened.