Israel’s economy is COOKED!

Right, so Israel’s economy is tanking and tanking fast, in fact tanks are a good item to bring up, because they’re running out of them! Their war in Gaza continues to rage on Benjamin Netanyahu cannot countenance ending things lest it dump him out of power, but what exactly he’s going to continue to preside over is another question entirely, because without an economy, Israel has no future. It actually casts a whole new slant on the ongoing genocide, which now sees the likes of Israeli newspapers and the BDS Movement on the same page as each other, as more and more politicians around the world shift their opinions and stances on the ongoing destruction going on in the Middle East, as Netanyahu expands his atrocities, his warfare and doesn’t wind it down. So much of the support Israel has had, to many ordinary people’s eternal shame, has been as a result of keeping that ally, that footprint, that platform in the Middle East for Western powers, but if they go bust, as Netanyahu seems determined to spend whatever is necessary to ensure his ridiculous total victory over Hamas, which he’s been told repeatedly cannot be achieved, what the likes of the US, the UK and the EU have continued to enable isn’t assisting Israel to win, but has actually just carried onwards to now be verging on the edge of being a failed state.
Right, so Israel’s economy. Without it being strong it cannot continue to functionally operate as a state and certainly cannot carry on it’s genocide in Gaza, that much is obvious, but the situation there is a story that’s gone grossly underreported in light of all the violence, death and destruction of Gaza and actually this is something that has to be addressed, because it’s demonstrated that not only is Netanyahu determined to destroy Gaza, his actions show he is hell bent on destroying Israel if that is what it takes to win. It would be an abject symbol, right up there with the clapping of Netanyahu as we saw in Congress in the US this week, sickening scenes that will go down in history, already being compared to similar scenes from 1930s Germany, if Israel as a nation collapsed under the weight of it’s own crushing debt and economic mismanagement by a man who is completely consumed with the destruction of another race, namely the Palestinians.
When commentators talk about Israel’s economy and the impacts on it, often as a result of the news coverage, it often gets looked at in terms of the Houthis attacking shipping, half the staff in the southern port of Eilat for instance having been laid off because of this interference in support of the people of Gaza, which has of course now prompted several military responses against the Houthis, including by Israel itself after a successful Houthi drone strike in Tel Aviv, but that isn’t really the full story.
Israel’s economy is incredibly reliant on sea trade. It does not have good relations with it’s neighbouring countries that it might more readily trade with, possibly one of the biggest understatements going, given we’ve seen how they are engaged in warfare to the north with Lebanon and Iraq, to the east with Syria and to Yemen in the south. It relies on import and export further afield to get by. I know people who want to avoid buying Israeli produce for example are having to dodge clever labelling tricks or abject refusal by various retail outlets to stop stocking such items, this is what Israel relies on, but all that shipping interference is having an effect and so is BDS, Boycott, Divestment & Sanctions, but by a long shot, these are not the most damaging issues Israel is facing financially. So as good as Netanyahu is at spending Israel’s money on arms, where is it losing it exactly? Why is their economy tanking to the extreme precipice it appears to be verging on?
Well lets start with what is doing well economically. Arms sales unsurprisingly are high in Israel, Israel has numerous arms companies, they are doing well, un fortunately for Israel’s economy though, most of the sales are domestic and that doesn’t include all manner of other military necessities from abroad from ammunition to the aforementioned tanks to parts for F-35 jets as manufactured here in the UK. The tech sector is also doing well, though this is mainly as a result of Israeli tech-heads putting their wares up for sale in the hope that a foreign corporation might pick their business up and give them a way out of Israel. One example was Google recently showing interest in purchasing the cyber security company Wiz, which was founded by former IDF cyber security officers, the sale of which would enable them to leave Israel. Not exactly a shining recommendation for anybody wishing to do business in Israel is it?
That’s the extend of where the economy is doing OK – weapons and a tech company fire sale, everything is up a certain creek without a paddle.
While on the subject of doing business in Israel, who exactly would want to invest there right now with all the unrest and warfare going on, warfare it has to be said is mainly leaving Israel untouched at that, making the whole economic picture somehow even worse, but actually there’s an aspect to this that makes matters even worse than you might already be thinking.
If I told you that foreign investment was down 60% in Israel would that surprise you? Probably not given the last 10 months, but if I told you that stat came out a full month before the events of October 7th, would that surprise you? Well quite possibly. Investment collapse is a story that predates the invasion of Gaza by Israel and all the death and destruction that has been reaped, where investments dropped by a third on the previous year and sales of start up businesses in Israel to foreign investors also plummeted. Matters will only have got worse since.
Another aspect to this is the investment of ordinary Israelis and the fact so many of them have been moving their financial assets out of the country. Pensions, insurance funds, savings are all being shifted all of the time because people living in Israel don’t want their finances tied to the fate of their own nation. So much of this has gone on that it had a weird effect on the economy in Israel by actually stabilising it for a while. All of a sudden funds that ended up being invested in foreign stocks and bonds as the likes of pensions and other investments are, ended up generating a profit for Israel in foreign currency. That bubble burst very quickly though and that was down to the biggest Boycott, Divestment & Sanctions action we’ve still yet seen to date, when Intel pulled the plug on a $25bn investment plan in Israel last month.
We’re still only scratching the surface though.
Tourism is another big business for Israel. This is the holy land for three world religions after all, it’s a huge thing for Israel and for the Occupied Palestinian Territories too, with Israel bringing in some $8.46bn a year and Palestine around $1bn a year in tourism revenue. But even if people still wanted to go, many tourism companies and airlines won’t take you over safety concerns and therefore the tourism industry has ground to a halt. A direct consequence of Netanyahu’s ongoing actions.
Following Israel’s stupid decision to take potshots at Iran’s embassy in Syria a few months ago, nothing quite like the prospect of war with a far greater nation than Israel is used to taking on to make credit agencies nervous, and Israel has had it’s long term credit rating reduced following that by not one, but two US credit agencies.
And just last week, news came out that official figures for the number of businesses that have gone under in Israel, gone bust since October 7th, so all a direct consequence of the war in Gaza have hit 46,000 and are expected to rise to 60,000 by the end of this year. Here’s an excerpt from The New Arab on that:
‘Around 46,000 businesses have been forced to close in Israel since the start of the war on Gaza on 7 October, Hebrew newspaper Maariv reported this week, adding that Israel is now "in collapse".
The report states the ongoing war on the besieged enclave has hit the economy heavily, with many of the companies affected being small businesses.
The CEO of an Israeli credit risk management firm under the name CofaceBdi told the Hebrew paper that other sectors have also been impacted.
"…About 77 percent of the businesses that have been closed since the beginning of the war, which make up about 35,000 businesses are small businesses, with up to five employees, and are the most vulnerable in the economy," Yoel Amir said.
"The most vulnerable industries are the construction industry, and as a result the entire ecosystem that operates around it, ceramics, air conditioning, aluminium, building materials and more," he added, based on their risk ratings.’
So this is an issue with a series of ongoing knock on effects still to come, still to be felt, as we’re talking about industries which make up a lot of Israeli infrastructure, not just economic benefit.
I’ll add another point to that though, by bringing up Israel’s power grid. Israel is reliant on coal fired power stations, despite having moved over to natural gas more, which is more readily available in that part of the world. Their coal meets demand though and that comes from Columbia, who have announced that there will be no more coal shipments until the atrocities in Gaza are over. For a nation so heavily invested in tech companies, they won’t get very far without a basic like electricity. Israel will go from an image of being a developed country to being back in the stone age so to speak, very shortly without a shift.
It’s no longer just about this war of attrition with Gaza for the people of Israel anymore, their nations survival likely depends on ditching Netanyahu and countries so invested in Israel and it’s future, like the US, like the UK, need to decide whether they support Israel or Netanyahu, because the two don’t seem to be mutually compatible any longer.
So far those countries haven’t shown a choice between those two what I consider basic truths at this point, proven beyond doubt when they assisted Israel in a strike on civilian territory in Yemen recently, full details of which you can get on this video recommendation here as your next watch and I’ll hopefully catch you on the next vid. Cheers folks.