Global media have cast a spotlight on Israel’s genocide in Gaza. Rightly so: the suffering of Gazans is unbearable. But in doing so, it has missed another crucial part of the story: the impact the war is having on the Israeli economy and Israelis themselves.
Four hundred thousand Israel Defense Forces (IDF) soldiers have served extended tours of duty in Gaza, the West Bank, and northern Israel. They have left families and jobs and, in many cases, lost their businesses. In addition, almost 250,000 Israelis have become refugees due to fighting with Hezbollah. This has had a massive impact on the Israeli economy. Economic growth and GDP have plummeted.
Forty-six thousand businesses have failed since October 7. That number will increase to sixty thousand by the end of 2024. This has a ripple effect throughout the economy. Bankruptcies hit the bottom line of the lenders who extended credit to the failed businesses. Vendors and suppliers also take a hit, while the lives of many small business owners have been reduced to shambles. They have sunk into debt and often are forced to rely on handouts from friends, family, and charities:
Many of those [IDF] fighters are close to a breaking point. Exhausted and in some cases demoralized, they are struggling to balance family and work with military service, while the economic toll from their absences mounts.
The Israeli Population Authority reported that in the past year, 575,000 more Israelis left the country than returned to it. The immigration rate has halved since October 7.
Activity in the construction sector, reliant on over two hundred thousand Palestinian workers who are now barred from entering Israel, has declined by 25 percent. This has led to the collapse of building contractors and developers.
The Palestinian economy has been decimated and driven residents into penury. The desperation they face will lead inevitably to bitter resentment and future violence. Tourism, once a powerhouse of…
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Auteur: Richard Silverstein
