Exclusive Translation: Life in Gaza is Collapsing.. The Other Face of War!

SadaNews Economics Translation - The Associated Press, the American international agency, published a report on the reality of life in the Gaza Strip amidst significant political, economic, and social crises.

The report described, as translated by the SadaNews Economics section, life in Gaza as collapsing economically, stating: "Cash is the lifeblood of Gaza's collapsed economy, and like food, fuel, and medicine, it has become an extremely rare commodity as almost all bank branches and ATMs are out of service, forcing residents to rely on a vast network of powerful cash traders to obtain money to cover their daily expenses, with a commission that has risen to about 40%".

Ayman Al-Dahdouh, a school director in Gaza, told the Associated Press: "People are crying blood because of this situation. It is suffocating us and starving us".

The report indicates that with rising inflation and unemployment, the severe cash shortage is increasing financial pressures on families, some of whom are forced to sell their possessions to buy necessities.

It noted that the current banknotes are also losing value, as the Gaza Strip uses the shekel, but due to the lack of new cash supplies from Israel, companies, institutions, traders, shop owners, and workers in the markets refuse to accept worn-out bank notes, in a market where cash is a basic requirement for life, leading to the value of worn banknotes being less than zero.

The report's authors say the roots of the crisis lie in war and economic policy, as Israel has been preventing cash transfers to Gaza since the beginning of the war, in a bid to limit Hamas's ability to finance weapons and pay salaries to its fighters. At the same time, wealthy Gazan families withdrew their money from banks and left the territory, while business owners and shopkeepers refuse to sell their goods digitally, preferring cash payments. Thus, with decreasing cash liquidity and escalating public despair, the commission charged by cash traders has surged from 5% at the war's outset to nearly 40%.

The report adds: The process is simple yet painful: money is transferred to the trader digitally, and moments later, you receive a few cash notes that are worth only a fraction of the amount, noting that these traders operate both openly and covertly.

Mohammed Bashir Al-Fara, a refugee from Khan Younis, said: "If I need $60, I transfer $100; that's the only way we can buy flour and sugar.. we lose almost half the money, just to be able to use it".

The report adds: Gaza lives on cash, which is completely absent.

According to the World Bank, inflation in Gaza rose by 230% in 2024, dropping slightly during the ceasefire in January before rising again after Israel withdrew from the agreement in March, with the unemployment rate among the population reaching 80% by the end of 2024, and the figure is likely higher today, as translated by the SadaNews Economics section.

The few workers receive their salaries through bank transfers, but when they want to buy vegetables, water, medicines, or even travel, they need cash.

Shahd Ajour, whose home and shop were destroyed, said she had to sell her jewelry to buy flour and canned goods. Her family now spends $12 on flour every two days, which is three times its price before the war, while the price of sugar has risen even more: according to some residents, a kilogram of sugar is sold at a price ranging from $80 to $100, compared to less than $2 in the past, and a liter of gasoline costs about $25 ($95 a gallon), which is also a reduced price, leading these amounts to deplete any savings residents might have.

The report states, as translated by the SadaNews Economics section, that after almost two years of war, most banknotes in Gaza are worn out.

Mohammed Al-Awaini, who lives in a tent in southern Gaza, said: "The currency is extremely fragile; it feels like it will dissolve in your hands".

Business owners are forced to ask customers for usable currency because their suppliers also demand only new banknotes.

Thaer Suhail, a flour trader from Deir al-Balah, said suppliers demanded payment with banknotes of only 200 shekels, which are extremely rare in Gaza, while most customers pay with worn-out 20 shekels notes, which are refused.

The report points to the emergence of a new occupation related to repairing banknotes, with prices ranging between 3 to 10 shekels, while the value of a $50 bill is almost zero.

The report noted that the repaired notes are sometimes rejected by traders, vendors, and others, keeping the authority of this matter in the hands of these individuals without oversight or accountability from anyone, as banks have been closed since the beginning of the war, turning cash holders into centers of power.

Mohammed Akel, a resident of southern Gaza who was displaced from his home, said: "The people are at the mercy of these... no one stops them".

The report indicates that the Palestinian Monetary Authority attempted to break the cash dependency through a digital payment system called "iBaraa," which about half a million citizens, or a quarter of the population, joined, but most traders refused to accept digital payments, causing the project to falter.

The report questions: Who really benefits from all this? The matter remains unclear, as Israel has tightened restrictions on humanitarian aid, claiming that Hamas seizes some shipments.

Some experts assert that cash traders also serve Hamas, but there is no clear evidence of that. The report clarifies, according to the translation of the SadaNews Economics section.

Omar Shaaban, head of the PalThink Research Institute in Gaza, said: "The war has turned everything into darkness.. no one knows who brings cigarettes into Gaza.. it’s like the mafia".

According to him, these resilient traders are likely the directors of cash trade and suppliers of essential goods at the same time.

He added: "They are making money from these fees or currencies they obtain".

For the residents of the Gaza Strip, when the money runs out, they are left with only humanitarian aid to feed their families.