According to data taken from the Central Bureau of Statistics in Israel, by the financial time, the war on Gaza might collapse Israel’s economy as it has already destroyed thousands” of businesses.
The Financial Times released an amazing analysis on November 6th, tracing the catastrophic economic costs of Israel’s war on Gaza and how they are affecting individuals’ personal money, employment opportunities, companies, sectors, and the Israeli government itself.
According to the Financial Times, the battle has destroyed and upended “thousands” of businesses, many of which are on the verge of going bankrupt, and entire industries have been thrown into an unprecedented crisis.
According to data taken from the Central Bureau of Statistics in Israel, since Operation Al-Aqsa Flood began on October 7 and damaged Israeli public trust, one in three firms have either closed their doors or are only operating at 20 percent capacity. This is a dire situation.
Over 50% of organizations experience revenue losses that are more than 50%. The majority of enterprises in the southern regions—which are closest to Gaza—are either closed or operating “to a minimum.”
Subscribe to GreatGameIndia
The situation is made worse by the fact that the Israeli Labour Ministry says that 764,000 people, or about 5% of the country’s workforce, are unemployed as a result of reserve duty call-ups, school closures that necessitate childcare arrangements, or evacuations.
The toll on Tel Aviv’s trade and tourism
Bloomberg calculated the financial effects of Tel Aviv’s military aggression on Monday: The Israeli economy has already suffered damages of about $8 billion as a result of the Gaza war, and those losses increase by $260 million every day.
Prime Minister Benjamin Netanyahu, who depends heavily on support from ultra-Zionist right-wing political groupings, continues to provide “vast sums” to settler-colonial and non-essential ideological programs in spite of this catastrophic situation, deviating from the standard wartime economic protocol.
For the five political parties that make up his coalition government, Netanyahu has set aside a record 14 billion shekels ($3.6 billion) in discretionary spending, the majority of which is designated for the establishment of illegal Jewish settlements in the occupied West Bank and religious schools.
One sad irony of the conflict in Gaza is that many Israeli building projects, which mostly relied on abusing Palestinian laborers, have temporarily come to an end. According to the Financial Times, Zionists “don’t want to have Palestinian workers there” because they “are upset at the sight of Arab workers holding heavy tools.” This disenfranchisement occurs even though a lot of businesses are now reduced to begging for contributions in order to survive.
Take Atlas Hotels, a small chain that welcomed “displaced” Palestinian liberation fighters into its 16 locations throughout the apartheid state. They were so desperate that they turned to vendors, international contacts, clients, and even coworkers for help.
When questioned by the Financial Times, a senior executive candidly acknowledged that the company would fail if such revenues continued. Since the start of the war, Israeli consumer spending has drastically decreased; this surely applies to many businesses that rely on discretionary spending to stay in business.
Gregory Daco, chief economist at EY-Parthenon, Ernst & Young’s global strategy consulting arm, told the New York Times that the Israel-Hamas conflict may cost the global economy $2 trillion.
Even though tourism could be Tel Aviv’s economic lifeline, it doesn’t provide much relief. According to data compiled by the Organisation for Economic Co-operation and Development (OECD), travel abroad accounts for only 2.8% of Israel’s GDP and sustains 230,000 jobs, or slightly more than 6% of the labor force.
Despite concerted efforts to boost tourism throughout 2022, October experienced a sharp fall of 76 percent year over year. Travel was severely disrupted by the start of the Al-Aqsa Flood, as the number of daily flights to and from Ben Gurion Airport fell from 500 to just 100.
In contrast, more than 370,000 foreign arrivals were recorded in October 2022. Given the ongoing conflict and the mass exodus of Zionist settlers, it is unlikely that Tel Aviv will once again be a sought-after vacation spot.
‘The Economic War’
Tel Aviv’s economists, 300 of whom called on Netanyahu and his financial ministers to “come to your senses” on November 1st, citing the “grave blow that Israel was dealt,” are aware of the tragedy that is unfolding.
“A fundamental change in national priorities and a massive rechannelling of funds to deal with war damage, aid to victims, and the rehabilitation of the economy,” is how they see the cataclysm. The Prime Minister boldly promised to establish an “economy under arms” in response.
“My guidance is clear: we are opening the taps, pumping money to everyone who needs it…Whatever economic price this war exacts on us, we will pay it without hesitation…We will beat the enemy in the military war and we will win the economic war, too.”
Despite all of this verbal grandstanding, there are many signs that the Zionist state is just as dangerously misguided about its ability to sustain its economy as Israel is about its military might. The “think tank” Start-Up Nation Policy Institute (SNPI) in Tel Aviv has released reports that paint a bleak picture.
The group released research on the harm done to Israel’s tech industry, which was once a source of pride and delight for the country and a predictor of future development, just two weeks after the Al-Aqsa Flood began. The results were startling.
Based on its study, SNPI predicted a quickly approaching “economic crisis whose force is still unknown” even at that early stage. Overall, the deteriorating “security situation” in Israel was cited as a cause of damage by 80% of Israeli IT companies, with 25% citing “double damage, both in human resources and in obtaining investment capital.”
Just 10% of tech companies were “managing to have meetings with investors” at all, while over 40% of them had postponed or canceled investment agreements. The analysis concluded.
“The uncertainty and the resulting decision of many investors to ‘sit on the fence’ due to the current situation hits an ecosystem that was already struggling to raise capital, partially due to the political instability on the eve of the war, combined with the worldwide economic recession.”
Unmentioned by SNP but looked into by The Cradle on October 13, another factor contributing to the collapse of the Israeli tech sector was Al-Aqsa Flood’s disclosure of Tel Aviv’s weaknesses in its electronic warfare and surveillance systems.
Given that the Palestinian resistance operation marks serious and maybe fatal damage to the “Startup Nation” reputation, which mainly depends on cybersecurity, the analysis found that it would “likely lead to a significant decline in the fortunes of Israel’s cybersecurity sector.” This prophesy has come true in the events that followed.
On November 2nd, SNPI released an additional report that examined Israel’s economic resilience to security crises in the past, using data from “significant combat events of the last twenty years,” including Operation Protective Edge in 2014.
SNPI presented a more positive picture than previously, stating that Tel Aviv has “proven its ability to overcome crises of this sort in the past and…emerge stronger,” even though it acknowledged that recent events had “naturally” raised “big concerns among foreign investors, partners, and customers” of Israeli businesses.
Based on the fact that the 2014 attack on Gaza only incurred 0.3% of Israel’s GDP—roughly 8 billion shekels in current currency—this optimistic assessment is made. Furthermore, neither the short-term nor long-term “sharp fluctuations” in Tel Aviv’s stock exchange nor a lasting disruption of the financial system were brought about by that military operation. According to SNPI, Operation Swords of Iron on Gaza today may therefore be expected to have the same effect—or not.
However, the Protective Edge scenario is called into question due to the exceptional scope of the Al-Aqsa Flood, which compelled the deployment of 360,000 Israeli troops, as well as the escalation of military clashes with Hezbollah in Lebanon on the northern front and the ongoing economic destruction. Just 5,000 soldiers were called into action during a 49-day military operation by the Israeli Occupation Force in 2014.
Even though these goals are still a long way off, Netanyahu at least seems to wish to eradicate Hamas and put an end to the organization’s control in Gaza. Additionally, there are clear signs that the US and Britain want to engage in a long-lasting, significant proxy war throughout West Asia, not just in Palestine. This unholy triumvirate might be about to experience an unbearably unpleasant lesson about the actual, contemporary boundaries of their power.
The unexpected achievements of Operation Al-Aqsa Flood have put established security procedures to the test and may have heralded the start of a more comprehensive collapse of the Zionist goal. There has never been a greater risk for Israel. The future of Tel Aviv’s settler-colonial economy, which depends on the enslavement of Palestinians, could be uncertain; it could be the next domino to fall in this sequence of events.