Yes, that’s right. The World Bank reports data for West Bank and Gaza together, but you can corroborate that this holds true (from other sources) even if you just look at Gaza as a standalone economy. India’s per capita GDP is around $2400, and seems like the metric for the Gaza strip hovers somewhere around $2,800.
This isn’t a post trying to disprove claims that "Gaza is an open-air prison”, although if you’re looking for that, I’d recommend this by Coleman Hughes. I’d like to explore why this seems surprising to us and how we should square our initial intuitions - of India as a “richer” country with higher welfare and living standards - with the data that contradicts it.
Start with the least interesting and most obvious. India obviously has a higher GDP, and a much larger population. This means you’ll likely see multiple Indian billionaires but virtually no Gazan billionaires (yes, yes, I know). You’ll see Indian products in your supermarkets but probably no Gazan ones. This is just a numbers game.
For related reasons, your intuitions around India are just wrong. The median Indian is not the Indian you’re used to seeing around you in New York or San Francisco. That’s not even the Indian at the 75th percentile or the Indian at the 90th percentile for the most part. The average income of the top 1% of Indians in ~$36,000 and even that is a mean measure that’s skewed by the right tail that includes the very richest Indians. As of 2011, under 30% of households had a concrete roof, under 50% owned a television and fewer than 10% owned a computer. Almost every human development metric has a higher average value in the Palestinian territories than India. So yes the representation of India that’s available to the western world today is as skewed to the positive as Gaza’s is skewed to the negative, due to active conflict there.
Purchasing power works in India’s favor. This is by far the most interesting point. The purchasing power adjusted per-capita GDP of the Palestinian territories is ~$6,700, significantly lower than India’s $8,400. Why might this be?
All else equal, larger countries can produce more domestically with cheaper labor than a smaller country which will have to import at least some items from a higher cost country or from another low cost country that’s far enough to make it effectively high cost (Shipping costs etc)
Companies enjoy economies of scale in larger countries. The cost of building or selling anything can be amortized across a larger population, which means the ability to charge less per person.
This is somewhat true for governments and public goods too. But I doubt this is relevant in this particular case since we can’t talk about public goods in Gaza without getting into its political idiosyncrasies. Some of Gaza’s “public goods” are either unaccounted for in GDP (like the military) or just straight up free (electricity).
Future expectations and narratives sneak their way into our intuitions about the current state of affairs. Given India’s growth rate and Gaza’s well…Hamas, It’s unlikely that this claim would still hold true in a decade. Our current intuition might just be pricing some of this in.
Important to note that Gaza (and the West Bank) have incomes below that of the surrounding Arab countries like Jordan at $4,000 or Egypt at $3,700. (Not to mention much higher incomes in Syria and Lebanon before their recent declines).
Point 3 is quite bizarre.
a) Why are low cost countries further away on average than high cost countries? Also, large countries would be paying the same amount for shipping(intranationally) - goods should be expected to move the same amount of distance. Is there anything specifically about crossing national borders that is costly?
b) Same - it would be a very strange kind of good whose production function includes fixed costs per country
c) Electricity is both rivalrous and excludable. In any case it's weird to have a country as a unit fixed costs for versus, say a city or a settlement