Attacking Gaza Takes Toll on Israeli Economy

Since Israel chose to engage in this war for reasons other than rescuing hostages, in my opinion, that makes the cost for the war of choice a direct result of the option Israel chose to exercise

The Cradle

On 6 November, the Financial Times published an extraordinary investigation tracking the devastating economic toll of Israel’s war on Gaza – its impact reverberating across personal finances, job markets, businesses, industries, and the Israeli government itself. 

The FT reports that the war has disrupted and ravaged “thousands” of companies, many teetering on the brink of collapse, with entire sectors plunged into an unprecedented crisis.

Data cited from Israel’s Central Bureau of Statistics reveals a bleak reality – one in three businesses have either shuttered or are operating at 20 percent capacity since Operation Al-Aqsa Flood commenced on 7 October and punched a hole in Israeli national confidence. 

More than half of businesses face revenue losses surpassing the 50 percent mark. The southern regions, closest to Gaza, bear the brunt, with two-thirds of businesses either closed or functioning “to a minimum.”

The toll on Tel Aviv’s trade and tourism 

On Monday, Bloomberg put numbers to the economic impact of Tel Aviv’s military belligerence: The Gaza war has cost the Israeli economy almost $8 billion to date, with a further $260 million in losses incurred with every day that passes.

Despite this dire situation, Prime Minister Benjamin Netanyahu, who is heavily reliant on support from right-wing, ultra-Zionist political factions, persists in allocating “vast sums” to non-essential ideological and settler-colonial projects, diverging from the typical wartime economy protocol.

Netanyahu has earmarked a record 14 billion shekels ($3.6 billion) in discretionary spending for the five political parties comprising his coalition government, much of it intended for religious schools and the development of illegal Jewish settlements in the occupied West Bank.

In a bitter irony of the war on Gaza, multiple Israeli construction projects have temporarily ground to a halt as they primarily relied on exploiting Palestinian laborers. The FT reports that Zionists “are upset at the sight of Arab workers holding heavy tools,” so they “don’t want to have Palestinian workers there.” Such disenfranchisement comes despite many businesses being reduced to pleading for donations to remain afloat.

‘The Economic War’

The catastrophe unfolding is not lost on Tel Aviv’s economists, 300 of  which, on 1 November, urged Netanyahu and his finance ministers to “come to your senses,” due to the “grave blow that Israel was dealt.” 

They believe the cataclysm “requires 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.” In response, the Prime Minister boldly pledged to create an “economy under arms”:

“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 such rhetorical bombast, there are ample indications the Zionist state is as dangerously deluded about its economic sustainability as its military prowess. Reports published by Tel Aviv’s Start-Up Nation Policy Institute (SNPI) “think tank” reveal a grim outlook. 

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