There’s been remarkably little coverage in the Western press about how well, or not, Israel’s economy is holding up under the impact of what is turning out to be a protracted conflict in Gaza and heightened hostilities on other fronts. John Helmer has provided some good accounts, and there was also a flurry of reporting after Israel reported what was widely seen as an unexpectedly bad GDP decline at the annualized rate of nearly 20% for its final quarter of 2023.
Israel should be reporting a first quarter GDP soon. Bear in mind that anything other than something of a bounceback, which seems vanishingly unlikely, will be very bad news. Even though the contraction is not likely to continue at the precipitous level of the fourth quarter. Or even if it has, the figures will be manipulated so it will not be reported so as to keep the Confidence Fairy out of the ICU. I have not idea how the official data mavens work in Israel, but the easiest way to fool with GDP reports in the US is by understating inflation, which for the purpose of estimating GDP is done through the GDP deflator.
Regardless, continued contraction from the already lower level at year end means that the loss of activity is at greater risk of becoming permanent. Note that this outcome is not an accident. Alastair Crooke has repeatedly pointed out that Israel and the US are both set up to wage short, air-firepower dominated wars. Iran, Lebanon, and Iran set out to thwart that by moving critical military infrastructure and decision-making well underground, too deep to be hit by air strikes. They have also set out to engage in longer war, which Israel would find hard to sustain, and in particular to control the escalation. Iran’s very carefully calibrated response to Israel’s attack on Iran’s embassy grounds in Damascus suggests they are actually good at that sort of thing. Iran made the point that it pulled its punches while not backing down and penetrating Israel’s layered defenses to strike the three targets. This is not what Israel and the US expected.
And that is before getting to the widely-reported asymmetry in costs, with Israel spending an estimated $1.2-$1.3 billion its defense, and the total expenditure across Israel and its allies as high as $3 billion. This compares to an estimated attack cost for Iran of $60 million.
Crooke has focused on the military calculus, of Israel not being set up to wage a long war. He’s mentioned, albeit not as often, Israel’s economic vulnerability. Here Iran and Hezbollah arguably have glass jaws too, since one of the big reasons for both of them to want to avoid a hotter war is Lebanon is in terrible economic shape, and Iran is only just now getting on a good footing after sanctions strangulation. But it seems, particularly due to the impact of the Houthis attacks on Israel’s trade, that Israel is suffering proportionately more from the conflict dragging on.
For instance, due to the intense focus on how Israel would respond to Iran’s drone and missile strikes, the fact that S&P downgraded Israel’s short and long term debt last Thursday, with a negative outlook, went largely under the radar. The ratings agency specifically cited the war being more protracted than initially expected as a big factor in its action. Via Fox Business:
“Under our baseline scenario, we still expect a wider regional conflict to be avoided, but the Israel-Hamas war and the confrontation with Hezbollah appear set to continue throughout 2024,” S&P Global Ratings wrote. “This is in contrast to our October 2023 expectation of military activity not lasting more than six months.”
Interestingly, the Independent woke up to the issue of the economic side of the Israel conflict in the last few days, with a story titled, Can Iran win an economic war of attrition against Israel? It reports:
The focus on so-called “kinetic” warfare is distracting us from the economic war that preceded the missile strikes between Iran and Israel this month, and is likely to intensify now….
Until last October, Israel seemed as invulnerable to economic warfare as it was to a military onslaught.
Only student groups in elite Western universities seemed enthusiastic for boycotts and disinvestment – and wouldn’t Columbia’s graduates grow up to be investment analysts recommending Israeli tech stocks?
But Israel has an achilles heel.
It is intellectual property rich, but natural resources poor, while Iran squanders its intellectual capital because it has oil and gas to waste on a covert war with Israel.
Israel’s problem today is less disinvestment – though there are straws in the wind in Belgium and Holland – than a good old-fashioned physical blockade. From attacks on Red Sea shipping by Iran’s Houthi allies in Yemen, to the Islamic Revolutionary Guards’ seizure of Israeli-owned shipping in the Persian Gulf, insurance and cargo delivery costs are hiking. Alternative road routes across Jordan to UAE ports are more expensive than sea routes for heavy goods – such as foodstuffs, machinery and vehicles…
Because of the Gaza campaign, as well as security demands in the West Bank and on the Lebanese and Syrian borders, huge numbers of workers have been called up into uniform in the IDF.
In the past, Israel won decisive victories quickly. Its first prime minister, David Ben-Gurion, warned that it could not survive prolonged wars of attrition…
Maybe Iran’s ability to survive decades of would-be economic strangulation is a sign that being more economically primitive (as well as repressive) makes a state less vulnerable to economic warfare.
Israeli society has been most cohesive in the face of external threats – until now. Benjamin Netanyahu’s Marmite effect on public opinion is re-emerging as the war drags on. Add economic and social costs to the human toll, and a new uncertainty haunts Israel.
I’ve included the digs on Iran as supposedly backwards (a look at its number of engineering graduates and its progress in building a domestic pharma industry disproves that) to show that an article with an obvious bias still has trouble finding happy outcomes for Israel.
As we’ll soon discuss, an anecdotal account at the BBC indicates conditions in Israel are continuing to deteriorate.
There is remarkably little on Twitter on the state of Israel’s economy, and what there is comes from parties with a vested interest. That does not mean it is not directionally correct, particularly since it echoes the Independent on the impact of the de facto blockade:
Ismail Haniyeh: Israel's economy collapsed because of Yemen
Head of the Hamas political movement Ismail Haniyeh:
No one could have thought that a country like Yemen would have such a powerful impact and stop the transit flow in the Red Sea. This Yemeni action destroyed the… pic.twitter.com/msAFwfhqsP
— S p r i n t e r F a c t o r y (@Sprinterfactory) April 23, 2024
And the neighbors have taken a bruising too:
Israel's war on Gaza has not only destroyed the Gaza Strip and the Palestinian economy, but its effects extended to impact the economies of the entire region. pic.twitter.com/UaFYR7xQJG
— Bin Ghalib (backup account) (@bgh2_ac3b) April 22, 2024
Even with this warmup, the BBC story comes off as grim. From We need a miracle’ – Israeli and Palestinian economies battered by war:
More than six months into the devastating Gaza war, its impact on the Israeli and Palestinian economies has been huge.
Nearly all economic activity in Gaza has been wiped out and the World Bank says the war has also hit Palestinian businesses in the occupied West Bank hard.
As Israelis mark the Jewish festival of Passover, the much-vaunted “start-up nation” is also trying to remain an attractive proposition for investors.
The cobbled streets of Jerusalem’s Old City are eerily quiet. There are none of the long queues to visit the holy sites – at least those that remain open….
Just 68,000 tourists arrived in Israel in February, according to the country’s Central Bureau of Statistics. That’s down massively from 319,100 visitors in the same month last year.
While it may be surprising that any visitors pass through Jerusalem at a time of such tension, many of those who do are religious pilgrims from across the globe who will have paid for their journeys well in advance.
Admittedly, the BBC reporting from Jerusalem will put the impact on tourism in focus. We cited reports earlier that put tourism narrowly defined at 2% to 3% of GDP and its broader impact at 5% to 6%. One has to wonder if those figures include travelers visiting and staying with relatives. The flights are presumably included, but their additional in-country spending is probably missed.
Back to the BBC:
It’s not just in Jerusalem’s Old City that they need a miracle.
Some 250km (150 miles) further north, on Israel’s volatile border with Lebanon, almost daily exchanges of fire with Hezbollah since the war in Gaza began have forced the Israeli army to close much of the area and 80,000 residents have been evacuated further south…
Agriculture in this part of Israel is another economic sector that has been hit hard…
Although they provide a living for thousands of people, agriculture and tourism account for relatively small parts of both the Israeli or Palestinian economies.
So what does the wider picture show?
The BBC describes how life in Tel Aviv seems unaffected, how nearly $2 billion was invested in startups in the first quarter, and no multinational has exited. Note that the latter does not mean there have been no cutbacks. Even with the shock and awe sanctions in Russia, most multinationals in Russia mothballed their operations, continuing to pay rent, in some cases continuing to pay what amounted to a skeleton staff, and other obligatory expenses. The Russian government forced them to fish or cut bait (forgive me for not rechecking the precise mechanism, but the government wanted the foreign businesses either to resume paying suppliers and staff at normal levels or sell out).
Back again to the text of the BBC account:
The economics professor [Elise Brezis] at Bar-Ilan University near Tel Aviv acknowledges that despite the last quarter’s GDP figures, Israel’s economy remains “remarkably resilient”.
“When it comes to tourism, yes, we have a reduction in exports. But we had also reduction in imports,” says Brezis. “So in fact, the balance of payments is still okay. That’s what is so problematic is that from the data, you don’t really feel that there is such a terrible situation in Israel.”
But Prof Brezis detects a wider malaise in Israeli society that isn’t reflected in economic data.
“Israel’s economy might be robust, but Israeli society is not robust right now. It’s like looking at a person and saying, ‘Wow, his salary is high,’ […] but in fact he’s depressed. And he’s thinking, ‘What will I do with my life?’ – That’s exactly Israel today.”
We’ll have a better idea of conditions in Israel when first quarter figures come out. But anything less than a strong bounce would not be good at all.
‘Israel should be reporting a first quarter GDP soon.’
If Israel adds the $26 billion that Congress just voted for them, would that not make the first quarter look pretty good then? They could put it under earnings. :)
That would be in the second quarter even if they could include that and then all at once.
Not to mention that imports count against GDP, as the formula economists use subtracts imports from exports to create “net exports” as a contributory item.
Note that:
(1) I’m not an economist; and
(2) who knows what cheating goes on and how that aid is actually accounted for. It is really more of a gift than an import as it is not paid for.
If there are any smart folks in Israel not blinded by ideology, they’ll do a Ukraine (or more accurately what I am expecting elites in Ukraine to do eventually): take the $$ and get the family blog out of Dodge.
As Michael Hudson said a while back in the video interview posted here, after WW2 what most Jews wanted was to assimilate into society and get about leading happy lives. The creation of that CIA outpost masquerading as a country called Israel over time attracted religious fanatics and right wing nationalists, so much so that now here we are that ideological group in complete control of our CIA outpost, running themselves and those live there into the ground.
Sort of like the Galicia of the Middle East. The main problem is that those religious fanatics refuse to fight because they reckon that they got a waiver from Jehova. By next year Israeli demographics will be an interesting study as this all shakes out.
I find it hard to believe that Washington would allow an Israeli economic collapse – there are many routes for ‘hidden’ US aid, such as deferring payments for weapons or diverting some of that Ukrainian money, or for that matter, paying for phantom Israeli weapons.
One key thing to look at will be the labor market – Israel had a labor shortage before the war, but the call up in reservists plus the loss of guest workers (including of course those from Gaza), must be having a serious impact. This would have a limiting affect on things like service sector investments. A lot depends on ‘hidden’ factors, such as who quick banks/investors will be to call time on insolvent businesses. I suspect they will be willing to turn a blind eye for as long as they can, allowing lots of zombified businesses in sectors like tourism to keep up a facade of being viable, just as occurred during covid. If there is a broad consensus across the banking/financial/ government world to maintain a facade of ‘normality’, for a period of time, they can usually pretend all is well. Up until.. well, reality insists on intruding. But I don’t think we are near that stage yet with Israel, unless the upcoming figures are so bad its impossible to conceal.
The usual trigger for domestic economic discontent – a big surge in youth unemployment – would seem to me to be unlikely to be a big problem if most of those youth are called up in the army. I don’t know enough about internal Israeli politics to know which influential sector would be likely to scream first – maybe small businesses.
The bad news of course is that if an economic crunch looks unavoidable, this gives Bibi every incentive to ramp things up militarily. I think they’ve already settled on throttling Gaza and the West Bank as a long term project, the focus now is in ‘securing’ their border with Lebanon, which for the Israeli hardliners means seizing more land and creating a dead zone well beyond the current border. The problem with Lebanon is geography – unlike with the Golan Heights and the plains to the north in Syria, there is no obvious ‘natural’ border apart possibly the Litani River, which is little more than a dribble these days.
I don’t see how the US can prevent one if things get really bad. If people leave, if you can’t get migrant workers to come and harvest crops and work construction jobs, if businesses shutter, you can’t pump blood into a corpse.
There are limits to what the US can do, militarily, economically, and practically.
We can’t stop the Houthis from strangling Israel’s trade. We can’t stop the super-religious from leaving Israel over conscription if that is what they decide to do.
We could not stop Iran from striking what many experts have called the best-protected space in the world. We can’t beat Russia in Ukraine. We can’t stop Chinese overproduction (even though the Chinese are very efficient, their level of investment and export dependence does translate into “everyone else and eventually China” harming overproduction).
india has essentially a bottomless source of labor, even for a war zone.
And israel only has a non-Arab pop. of <8 million. that is a dtop in the bucket compared to the under-employed in india
https://www.nbcnews.com/news/world/israel-hamas-india-labor-shortage-migrant-workers-rcna135603
"in villages and towns across India, Israel is recruiting — not for its war in Gaza, but for its own economy.
Tens of thousands of workers are filling job centers across the country, spotting opportunity in the acute labor shortage created by Israel’s war with Hamas. But Indian trade unions have called on the government to terminate the labor agreement, arguing that it supports Israeli military actions in the Gaza Strip critics say amount to genocide, allegations that Israel strongly denies.
Applicants are drawn by the chance to earn far higher wages than they could at home, even if it means working in a war zone…."
The Thais had been the preferred ag workers and they do not seem to be coming back. And the Thai government did not oppose the arrangement.
Admittedly per capita GDP higher in Thailand, but one wonders why heretofore the Thais and not Indians were the ag workers of choice.
They are now bringing in contract field laborers from Sri Lanka and Malawi. Plenty of people living in desperate poverty in the world.
Heartbreaking.
The choice between feeding your family while earning $ in a foreign land where you will be a slave and live a life of apartheid. I pray for these people.
I say to myself: Count your blessings from your comfortable arm chair with a cup of hot coffee (and if you’re as fortunate as I), a loving, caring partner a gentle dog and a merciful God.
I wonder if Pakistan could lodge a case at the ICJ arguing that India’s actions constitute support of ‘plausible genocide’.
Thanks for the link, I hadn’t heard about that but it makes sense. This is from precisely the same post-Covid immigration playbook one sees in the ‘Five Eye’ Anglo country’s, who have all seemingly simultaneously adopted the same turbo immigration policy of importing vast numbers of mostly Indians to supply the domestic labour market with lots of cheap hands.
Canada and Australia especially are like mirror images of each other with vastly expanding immigration targets, work visas, ‘temporary’ foreign workers, foreign ‘students’, etc etc, basically whatever category they could jam more people through the door with, leading to the predictable severe and growing housing crisis in both nations. It’s uncanny.
Evidently, ‘our’ elites (ha!) are not a very creative bunch when coming up with new policy ideas.
You can almost not be cynical enough about the way the immigration debate is manipulated in the global north. I used to laughingly tell students that big business fanned the flames of immigrant hate while pacting every generation or so with the bleeding heart crowd–whose suburbs immigrants rarely threaten but only clean–in a rush of bogus sentiment in order to expand the labor market by another 10-20 million new citizens. But really, even what order that might apply is long gone out the window; we live with the heat that anger toward immigrants hazily arouses, and continue to benefit–in all ways but ecologically–from their haphazard continual influx to the worst jobs, jobs that we’d regulate and force companies to pay better for if we had any sense, with no break or breathing period necessary (See strawberries, an absolute misery.)
Oh, I agree there are limits (politically and practically), I’m just speculating that there is still fiscal space for keeping an ailing Israel from undergoing overt collapse for a couple of years, bar some unforeseen circumstances.
A lot depends on the domestic appetite for belt tightening. In times of war, there are plenty of precedents for populations putting up with a lot on the basis of some vague promise of victory and future prosperity.
Their problem is not the unproductive and parasitic ultra-orthodox haredim emigrating, but the secular and educated who are the lifeblood of Israel’s tech economy, can read the demographic tea leaves as well as anyone and are not interested in subsidizing that increasingly politically assertive group that also shirks military service. This would happen even in the absence of war but the conflict seems to have accelerated the exodus.
***that comment*** and the secular-agnostic Jews are fighting, dying in a vastly disproportionate rate than the ultra-orthodox.
Post-war, it’ll either be emigration and/or some very nasty intra-Jew sectarian fights.
~2.5% of Israel’s non-Arab population are dual US-Israeli citizens. Throw in Europeans, and it’s reasonable that 3 to 5% of the population (snowbirds, students, “tech nomads”, etc.) have the option of leaving at any time as long as flight continue.
>>> There’s been remarkably little coverage in the Western press about how well, or not,
Focus on what reasonable inference that the media is not talking about. If things were passable, we would see “Haifa 2024 = 1940 London” articles all over the press.
But Israel is essentially a city-state (population-wise). The US has the resources to maintain appearances for a very long time via throwing money at the problem.
Departure is not difficult for a much larger %.
First, you do not need citizenship, just a long-term visa or permanent residence. Portugal used to have a good deal if you spent enough on real estate. I believe Cyprus is pretty permissive.
Second, some EU countries offer citizenship based on ancestry. Ireland is well known in the US (third generation, as in grandparents) but not all that relevant for Israel. More germane is Bulgaria (third gen or even further back), Hungary (no gen limits if you speak Hungarian and can prove one ancestor), Greece (third gen), Latvia (even fourth gen if they were there before 1940), Italy (third gen, and Italian Jews do exist, I knew one in college). More germane countries listed below:
https://www.schengenvisainfo.com/news/eu-countries-that-offer-citizenship-by-descendant-their-application-rules/
About a million Israeli Jews are from the former USSR and can claim Russian nationality.
Israel has visa free travel arrangements for 171 countries. So they can all leave immediately if they need to and then work under the table if necessary. For younger people, enrolling in a school course would be another way to quickly move out and transition to another country.
https://en.m.wikipedia.org/wiki/Visa_requirements_for_Israeli_citizens
Portugal closed off its golden visa last year but I think they still have digital nomad and retiree schemes, where people can live and work there as long as they can show a stable income at a fairly low threshold.
Romania was a country that had a large Jewish population after WWII, due to not being occupied by Germans but just an ally of circumstances, and not indulging in deportation games.
Ceausescu, for hard cash, has allowed all Jews in Romania willing, to emigrate to Israel. Maybe 500K? So there are quite a few that could easily get Romanian citizenship.
If Wikipedia is to be believed, about 200K
https://en.m.wikipedia.org/wiki/Demographics_of_Israel
Not everyone is dying to fly back to those places, mind you. But Berlin is the number one destination for Jewish people leaving Israel. And Germany, in the latest round of madness, has been willing to stifle free speech quite strenuously to tamp down dissent around Gaza.
Many Romanian Jews have been investing in RE in Romania/Eastern Europe just for the rainy day.
Interesting that you mention Cyprus:
https://thecradle.co/articles/are-israelis-buying-up-northern-cyprus
https://www.trtworld.com/turkiye/silent-occupation-are-zionists-attempting-to-expand-into-cyprus-island-15999042
Lithuania: The cut-off point is WW1. I have ancestors who left before that…. with four citizenships (5 if Scotland gets the right to exist) I don’t really care.
I knew an Israeli who was working on getting Ukrainian citizenship….
Italian Jews claim to have been there long enough that they couldn’t be responsible for killing Christ. They are not Ashkenazi or Sephardic, though their rituals are closer to the latter.
Can anyone address the question of what sort of sanctions, formal or informal, Israelis face if they are seen as “running away in a time of national peril”?
Like Netanyahu’s wastrel son, safely ensconced in Florida?
As long as Israeli politicians ride the tiger of tribal belligerence, Israel will move toward pariah nation status and suicidal armed conflict. Unfortunately, Jewish history is full of miscalculated political action arising from factionalism and religious zealotry. The great peril for the region, and the world, is that Israeli policy failures today could result in the use of nuclear weapons. The myopic and incompetent leadership of the U.S. is allowing the Israeli client state tail to wag the U.S. superpower dog, and this will ultimately damage U.S. interests worldwide.
Just to restate what should be obvious, Gazan economy has been erased.
Oh, it was covered in most of the stories I used. I didn’t include that because my focus was how much economic punishment Israel may still be facing.
But the state of the Gaza economy isn’t going to change the shape of the war. It was already in collapse due to the Israeli siege that’s controlled everyone and everything that went in or out. What was there was entirely dependent on remittances, work permits, and outside aid.
If they gain access to the revenue of their gas fields and could lift the state of siege to trade with the outside world, they can probably recover quite quickly. They have a highly literate population and a fairly well-to-do diaspora that can quickly kick things off.
The Lebanese object strenuously to the Israel offshore gas claims. Apparently Israel has engaged in an unprecedented drawing of the map to assert its claims (I am told it does have the right to some, but not all that much).
The Biden White House offered to adjudicated the offshore gas claims between Lebanon and Israel but there was not much enthusiasm for that in the former country. it would be like having a fight with your wife – and then asking your mother-in-law to adjudicate the dispute.
Syria also objects strenuously to US occupation and siphoning off Syrian hydrocarbons.
Fat lot of good that does.
Probably explains why US troops in Syria are being bombed once more. Same too in Iraq-
https://news.antiwar.com/2024/04/23/us-tells-iraq-to-ensure-the-safety-of-us-troops-threatens-escalation/
It’s hard to know what the hell is really going on given the amount of hocus pocus possible with economics numbers, so I only have an anecdote to share.
Home Depot sells a brand of tools called Ridgid, and the Ridgid line of tool boxes are manufactured for Ridgid by a company called Keter Plastics (apparently now called ‘Keter Group’), in Israel. One of the few Israeli consumer products I’ve ever seen. Anyway, Ridgid was supposed to launch their new Pro Gear 2.0 boxes in ‘late 2023’, and outside of what looked like an initial small shipment at the end of 2023, the new toolboxes were next to impossible to find in stores. Home Depot even took down the listing for a while, which is strange for a new product launch. Only since around March 2024 has supply started to show up in stores, and here in Canada I still haven’t seen them in stock anywhere.
IIRC, the Home Depot CEO is a major supporter of Israel.
It’s amazing that I now know of so many Zionist billionaires but I’m not aware of any actively anti Zionist billionaires.
Is Zionism some kind of secret handshake, so that when you openly admit to being one, they acknowledge that you’re amoral enough to join the big boys’ club?
I would think so, the billionaire oligarchs are sociopaths by definition, so it makes perfect sense that they should support Zionism, imperialism etc.
https://www.psychologytoday.com/us/blog/dangerous-ideas/201910/psychology-s-dark-triad-and-the-billionaire-class
>>>It’s amazing that I now know of so many Zionist billionaires
Your list should include the House of Saud as well….”defender of the Faith” and controlled opposition.
Indeed, all of Home Depots original founders were/are American Jews, save for Ken Langone who is of Italian American Catholic descent. Interestingly, Langone was friends with and a major supporter of Ross Perot, despite Home Depot being one of the vanguards in the outsourcing abroad game. Also a big Trump backer, but I hear he backed ”’Nikki”’ Haley this go around.
Home Depot is one of the supporters of Cop City:
https://afsc.org/newsroom/actions-target-home-depot-ups-and-other-corporations-involved-cop-city
Sodastream is another major Israeli consumer export, as are Teva pharmaceuticals. Key personnel being called up for reserve duty would no doubt disrupt production.
A few years ago, it emerged that Sodastream, a kitchen appliance that makes fizzy drinks, was then owned and manufactured in an illegal settlement area of Israel. It became the subject of a boycott campaign in Britain that waa quite successful. They seemed to disappear off the shelves. Not sure if that is still the case.
Still strong. We blundered into a big buy just before the Hamas kidnappings. Puma, the German co., is reportedly a big backer, and supplies free shoes for soccer programs in the illegal settlements. Saw a photo of a bunch of one-legged Palestinian men who had made a boycott Puma sign on a beach somewhere in Palestine. It’s all fantastically grim.
Israel is a net importer of goods. In 2022 Israel exported $74 bn goods and had a trade defecit of $33 bn. Diamonds dominate Israel’s exports, adding $5 bn net to the economy in 2022. That economy is the principle source of funding for the genocidal apartheid regime. Shareholders of Anglo American, which owns the world’s largest diamond company, De Beers, have been calling on the company to cut supply chain links to the Israeli diamond industry and have challenged the company’s claim that their diamonds are “conflict free”.
The Anglo American AGM takes place in a few days time. It will be interesting to see what answers The Board have when shareholders question The Board again about their supply chain links to the genocide in Gaza and the risk that poses for the company’s brands and shareholders. https://www.amandla.org.za/genocide-in-gaza-funded-by-the-diamond-industry/
Answered wrong question,
Please forgive.
All this assumes relations between Israel and the rest of the world stay the same, in other words the best case scenario (for Israel).
I see no prospect of things getting better even with the west. As for the 150+ countries of the RoW they could get a lot worse.
The article mentions Jordan whose status as a transit country can only get more difficult for the royal family. Turkey has already introduced trade restrictions.
The seemingly inevitable slaughter in Rafah will further inflame world opinion and the only place I see for this to go is towards economic sanctions.
Russia and China are getting more forceful with their rhetoric but the time will come when they have to go further or look like paper tigers.
The US veto in the UNSC can’t hold the non NATO countries forever.
A carefully calibrated response moderating both intensity of attack and sensitivity of targets, indeed, but Iran still probably failed to achieve its objectives (which can only be guessed at). Iran’s attack was not meant to be merely symbolic but also designed cause very real acute destruction to moderately sensitive targets, failing to do so. Because if Iran intended the attack to be exclusively symbolic, Iran would have used older gen, less accurate medium-range ballistic missiles to the exact same effect. But Iran seems to have used a significant portion of the newer Emad missile variants, which debuted in 2022, evidenced by the markings on recovered fuel stages, achieving minimal effect.
Iran is suffering enormous opportunity costs. Yes, Iran proved it could penetrate air-defenses. But Iran also proved it could not sustain a repeat saturation of attack vehicles to the extent Israel’s layered air-defense magazines would exhaust themselves. Iran’s massive volley was the catalyst that got aid packages passed through US Congress, more than enough to top-off Israel’s Arrow system. In fact, Iran’s biggest enemy seems to be their own plant quality control managers. And every missile fired was a missile that could not be sold to Russia.
Let’s shoot this down right now, if Iran’s strike package cost a mere $60 million, than Iran is well on its way to outright purchasing Israel’s defense corporations because Iran would have achieved a level of efficiency that would make it the world’s premiere defense workshop. The pariah bloc in which Iran belongs exists precisely because its defense products cannot compete in Western markets, whether on cost, capabilities, goodwill, none of it.
Yes, Iran proved it was not deterred but neither was Israel’s response. Which according to satellite photos, Israel quietly deconstructed Iran’s S-300 at a most sensitive nuclear site co-located with an airbase, and proceeded to destroy hangars at will. All done from within Iran itself. A low, low-intensity strike on Iran’s most sensitive site gets the point across in an economical way.
Last but not least, Israel will collect roughly $520 million in annual natural gas royalties, alone, now that the security situation is stable and the Tamar fields went back online in November, guarded by the same battle-tested I-ADS systems, Sa’ar 6-class Corvettes. Coming soon: exportable variants!
You need better information sources. The S-300 claim has been debunked, that was a shadow on the satellite image. So Iran did win this encounter.
Iran used mainly cheap drones, or did you miss that?
The purpose of the presumed suicide drones was not just to draw fire, which they did, but ALSO to gather intel about how the Israel air defense system worked. Scott Ritter, whose beat this is, has discussed the Iran attack in gory detail in a couple of videos.
Iran did NOT use its best missiles or even close. That claim has also been debunked.
Iran hit all three targets. It was not supposed to be able to hit any.
Pray tell how will Israel do anything, with Lebanon, as in Hezbollah, contesting the new gas field claims (and Lebanon does have a strong case, Israel on a conventional drawing of offshore claims would get only a pretty small part of the fields). See also:
https://oilprice.com/Latest-Energy-News/World-News/BP-and-ADNOC-Suspend-2-Billion-Israel-Gas-Deal-as-Gaza-War-Continues.html
And the Houthis are still interfering with shipments in and out of Israel.
GBB, your comment comes across like a transposition of the oh so many MSM articles that have tried to puff up the dwindling flame of Ukraine’s prospects, complete with a manic Wunderwaffen finale. Afaict, Israel isn’t as yet circling the drain, but it is quite possible unless they get, instead of Wunderwaffen, a Wunderschrank of new political leaders.
Those four Braunschweig-class corvettes will surely be a gamechanger. Even Israelis get their wunderwaffen from ze Germans.
Lol, Yeah, Braunschweiger Wurst and ScheisseWaffen more like it :-)
The historical ironies never cease.
Iran has achieved a level of efficiency which makes it the world’s premiere asymmetric defence workshop.
The pariah bloc which includes Russia and China is currently eating NATO’s lunch in Ukraine.
Iran achieved its objective. It established that Israel’s vaunted “Iron Dome” failed to intercept a single Iranian ICBM. Iran showed it can precisely hit Israel’s most heavily defended assets without using its most sophisticated missiles. Iran has enough ICBM’s to destroy Israel’s infrastructure. The goal was to sent that message, not inflict destruction. Iran did the same thing when it hit a US base. No one was killed because just as with its launch against Israel, Iran provided ample advanced warning. Iran showed the US that its bases in the region are extremely vulnerable. The US got the message. That is why it didn’t respond. Israel got the message as well. Of course, there is are are also the estimated one hundred to one hundred and fifty thousand missiles controlled by Hezzbolah. Many of them are highly accurate and have the range to target all of Israel. The balance of power has shifted. Israel can no longer act with impunity. In a missile exhange between Israel and Iran, Israel would be the loser.
nice nice nice.
:)
That’s what the Americans are for.
EDIT: admittedly, that is not all that they are for.
With the power of AIPAC and the Israel lobby, the US Congress will vote to bail out Israel from their financial challenges. In other words, the US taxpayer is funding this proxy fight (and yes, it is a proxy war).
No doubt, those who oppose the bailout and who believe that the US should put its own citizens first because of the falling living standards will be labelled as “anti-Semitic” or something similar, so that AIPAC can Primary them. Whether or not this strategy can work in the long run remains to be seen. There’s growing opposition in the American public to these wars. Whether they can overcome the lobby is another matter.
Keep in mind that all of Israel’s victories, like in 1967, the “Six Day” War were short affairs. It’s a small nation with a small population. It’s a citizen army that is not set up for a long fight. The US can financially support Israel and send weapons to Israel, but they cannot grow new Israelis. In some ways, the problems are very similar to those of Ukraine, where the manpower is one of the major defining bottlenecks.
The rumor mill (and I think we should treat these figures with considerable skepticism) is that Hamas reported to Hezbollah that only 15% of their military capability was defeated. If the Israelis are crazy enough to attack Lebanon, Hezbollah will inflict heavy losses on the IDF.
In regards to the short term economic snapshot, we won’t be able to draw any conclusions until the numbers are finally out, but so far early evidence suggests that Israel is trending downwards. That’s based on the departure of the wealthier Israelis, the 20% drop in the last quarter (https://www.nakedcapitalism.com/2024/02/israel-4q-gdp-fell-at-20-rate-downward-trajectory-set-to-continue-as-war-drags-on.html), and the current spending trends. That’s also why the US will be used by the Israel lobby to bail out Israel.
To me, a bigger issue is not any quarterly numbers, but the long-term trend. Part of the reason why Israel wants Palestine is because of the natural gas resources that the Palestinians are sitting under. The attempt to build a tech sector is looking shaky, simply because Israel is not a safe place anymore and worsened by their inability to defeat Iranian missiles.
In regards to the comments about the Iranians being a “glass jaw”, I suspect that if there is a lot of damage to their economy, the Iranians will be rebuilt, as will Lebanon, by Russia and China. Keep in mind that the Chinese and Russians are rising powers with growing industrial power. The US is a declining power and with a declining capacity in terms of industrial power.
I mostly agree with your comment. However, the US gov. simply deficit spends to support Israel, Ukraine and the imperial legions based around the globe etc. Simply blaming The Lobby is short-sighted IMO. It is comforting and convenient to blame these atrocities, abuse of power etc solely on Israel, however, it seems glaringly obvious that the institutional corruption in all three branches of gov is the larger context in which AIPAC operates.
The problem is not with AIPAC per se, it is the open, legal and formalized political bribery. What do we expect? The domestic oligarchy benefits from Israel policy, despite those who want to deny it. It is not either or, it is both and…
Chicken and Egg: If US institutions of power were not so bloody corrupt, the power of The Lobby, MICIMATT, BigOil, BigFinance, MassMediaCartel etc. would not be a fraction of what it is. I find it disappointing that so many have blinders on in this regard. The significant context is simply ignored. It is almost as if the US would be a bastion of democracy and justice, if it were not for bad ol’ AIPAC and their dastardly deeds. I am not denying the thesis of Walt and Mearsheimer, just adding major caveats. There is also the broader geo-strategic logic of empire at work as well that few want to talk about.
Diana Johnstone, for whom I have great respect, wrote a couple of articles posted at Consortium News a few weeks ago claiming that, basically, it is all on The Lobby. She used Michael Hudson’s writing to rebut some of his claims. No doubt she is correct on many points, but I objected in the comments and she wrote another article and used my comments to rebut, but it was not convincing – she just repeated the same points.
It takes two to Tango, AIPAC is PART of US MICIMATT and part of the corruption that will destroy the US empire from within, as most empires. Blaming The Lobby without context is getting lost in the forest for the trees.
https://consortiumnews.com/2024/03/06/the-myth-of-israel-as-us-aircraft-carrier-in-middle-east/
https://consortiumnews.com/2024/03/12/the-debate-over-israel-as-us-aircraft-carrier/
I read Diana Johnstone’s Consortium News pieces and I disagree with your assertion that she puts it “…all on the Lobby.” To the contrary, Johnstone clearly places the blame firmly on the American Neocons and their lunatic fantasy of American global hegemony.
This is why commenters here can make no sense of U.S. policy: it is because it is not rational at all.
How was it possibly in the economic interest of United States capitalism or the American people to dismantle and loot its industrial patrimony? It wasn’t! Clowns such as Wolfowitz, Cheney, Rumsfeld, Blinken, and the Kagans see Amerika über Alles as the end in itself. They are nothing but arrogant racists and xenophobes.
Johnstone correctly asserts that it is this neocon foolishness that allows the fascist government of Israel to be the tail that wags the American dog. She clearly concludes that:
What’s the difference?
Here’s an economic hypothetical: what would be the condition of Israel’s economy if Hamas, Hezbollah, the Houthis, and Iran get their way?
https://www.theatlantic.com/international/archive/2023/10/hamas-covenant-israel-attack-war-genocide/675602/
Just in case you can’t access the full article at The Atlantic, here is a reprint at MSN:
https://www.msn.com/en-us/news/world/hamas-s-ideology-of-genocide/ar-AA1i0jaZ
Looks like an over-used boilerplate list of unsubstantiated claims and outright projection. Israel is the occupying power and Israel is clearly the one committing genocide. Occupied peoples have a legal and moral right to fight back.
The article is an insult to any honest and informed person
“The article is an insult to any honest and informed person.”
Surely so.
I would never expect anything else from a magazine edited by ex-IDF prison guard Jeffrey Goldberg. Its coverage is about as reliable as the NYT.
The private family behind The New York Times:
https://prospect.org/features/trust-private-powerful-family-behind-new-york-times/
Laurene Powell Jobs is the majority owner of The Atlantic.
We have a portfolio company providing specialised cybersecurity to a global critical industry. Their major competitor is an Israeli start-up. Our phone is ringing off the hook because the Israeli company is not seen as safe to deal with (I cannot say if this fear of attack on or by the Israelis, I suspect a bit of both). Third parties who work with both companies confirm this customer shift is not restricted to Muslim countries but throughout the West.
This is a specialised industry – things may be different t for sodastream – but it is in the posterchild sector of the Israeli tech economy, long basking in the reflected glory of Israeli electronic warfare and Mossad / Shin Bet spookery. It’s got to hurt!
My hunch is this is replicated across the industry and any Israeli cybersecurity companies needing VC funding are going to be in deep trouble except with Israeli funds. I would expect to see Israel create a financing vehicle to bridge these companies until their reputation can be laundered.
Very informative, thanks!
Good to get on the ground confirmation! I’m glad to hear that corporations are a little more in the ball than university presidents and congresscritters.
At this point, anybody who hasn’t been living in a Zionist cave for the last 7 months knows Israel’s brand is genocide. And not just anonymous genocide of faceless brown people (not saying this is okay, but we aren’t talking about the horrible genocide happening in the Congo and arguably in Sudan right now, which are longer duration and have a higher body count) but genocide of cute and charismatic kids of ambiguous ethnicity who could easily star in the next Benetton ad campaign.
Why all managers with even an ounce of common sense isn’t running away from this as quickly as possible has actually surprised me. They should all be very afraid that they could be next in line for what befell Google regarding Project Nimbus.
Very interesting and possibly a bit of “good news”. I’m not sure if their reputation can be laundered, but I guess that depends on who we are talking about. I would think that several hardcore Zionist oligarchs (there seem to be quite a few) might organize financing vehicles, but we’ll have to wait and see.
“We have a portfolio company providing specialised cybersecurity…”
There was a security or intelligence failure, for companies that had reputations built on the country’s supposedly exceptional security, that would indeed seem to be difficult to recover from. Alternative companies will be looked to for quite a while.
The biggest tech name that has announced reducing its Israeli footprint that most readers would be familiar with is Samsung Next, the startup investment fund arm of Samsung. They are supposedly shuttering their Tel Aviv offices due to the war, but they “remain committed to investing in the region”, or so their corporate-speak says.
Remarkably, the hitherto staunchly zionist The Guardian that was in the vanguard of attacks on Corbyn, has jut published an opinion piece by Naomi Klein, of Disaster Capitalism fame, denouncing zionism. The times they are a changing.
https://www.theguardian.com/commentisfree/2024/apr/24/zionism-seder-protest-new-york-gaza-israel