HAMAS' brutal attack on Israel on October 7, 2023, shocked the world. With young people at a music festival shot in cold blood, members of kibbutzim - many of whom had been working for peace - burned in their homes, and hostages taken into Gaza, including the very elderly, Israel engendered widespread sympathy and international support for destroying HAMAS and ending its rule in Gaza.Subsequently, however, Israel has lost much of the support expressed at the time of the HAMAS incursion. Countless countries have heavily criticized its response to the attack which has destroyed 80% of Gaza's infrastructure and killed more than 41,000 Palestinians, the vast majority of whom are innocent civilians who have nothing to do with HAMAS' brutal policies.
HAMAS' ease in crossing the border into Israel exposed a colossal intelligence failure. Prime Minister Benjamin Netanyahu, it was revealed, had ignored warnings from the military of a possible attack in July 2023 while on vacation. Despite HAMAS' creation of a mock-up of an Israeli village next to its border with Israel, where fighters had been training for over a year and a half prior to the attack, the Israeli intelligence community didn't believe the terrorist organization posed a threat.
Following the attack, it was also revealed that Netanyahu had been funneling millions of dollars in aid, donated by Qatar, to the HAMAS terrorists. His goal was to weaken the Palestinian National Authority by propping up HAMAS and thwart the establishment of an independent Palestinian state. ‘Buying Quiet’: Inside the Israeli Plan That Propped Up Hamas
At first, it seemed that Israel's overwhelming air and fire power would quickly destroy HAMAS. However, as many analysts warned, Israel was being drawn into a trap. Their predictions have come true. The Gaza War is now a year old. Israel has significantly degraded HAMAS as a military force, but has not been able to definitively defeat it. Despite sharp criticism, Netanyahu has refused to articulate a "day after" proposal for ending the Gaza War.
What does the year long Gaza War imply for Israel's future? In this post I make several arguments. First, Israel has lost a significant amount of legitimacy in the international community. Its ferocious bombing of Gaza has undermined a number perceptions of Israel as a result of its bombing campaign in Gaza. Second, the policies Benjamin Netanyahu has pursued in the fight against HAMAS have deepened political and cultural divides in Israeli society.
Third, fighting a lengthy two front war, both in Gaza and against Hizballah in Lebanon, while sending security forces to protect settlers who are seizing Palestinian land in the West Bank, has placed a serious strain on the Israeli economy. Fourth, the war has damaged Israel's psyche. Finally, Israel has isolated itself from the Arab world, making it more vulnerable to Iranian attacks.
The end of the David vs. Goliath myth As the Israeli Defense Forces (IDF) have engaged in a ferocious bombing campaign in Gaza, and more recently in Lebanon, it is clear that Israel possesses a vast superiority in air power, intelligence, military technology, and ground forces compared to its adversaries. Thus, the traditional view of Israel as a small state surrounded by powerful enemies - a view that was already undermined by its decisive victories in the 1967 and 1973 Arab-Israeli wars - has been shattered once and for all.
The end of the idea of Israel as the sole democracy in the Middle East Before the October 2023 HAMAS attack, Israel's democracy was under severe threat as Prime Minister Benjamin Netanyahu, in an effort to please the extremist far right parties in his coalition on which his government depends, sought to eliminate the power of Israel's Supreme Court.
Because the court is the only institution which can check the power of the Knesset, Israel's unicameral legislature, hundreds of thousands of Israelis mounted demonstration's for 33 weeks to protest these efforts. It was only a national general strike, which shut down the Israeli economy, which forced Netanyahu to put his attack on the Supreme Court on hold.
Efforts by the Netanyahu government to curb foreign press coverage of the Gaza War, its failure to curb violent attacks by West Bank settlers against Palestinians, which have resulted in over 600 deaths since the October 7th HAMAS attack, and the destruction of their homes and crops, demonstrates an absence of the rule of law. The loss of employment by Palestinian Israelis who have either expressed sympathy for civilian deaths in Gaza or criticized Netanyahu's war policies underscore still further the curtailing of free speech by Israeli citizens.
Undermining the Israeli economy. What has largely slipped under radar in media reporting on the Gaza War's damage to Israel's economy. The year long war with HAMAS, which has now extended to Hizballah in Lebanon and the West Bank, has has had a serious negative financial impact. In 2019, for example, tourism accounted for $8.5bn in national revenue. That revenue has now largely dried up. Since the war began, tourism has dropped by 75% War in Gaza has plunged Israel’s tourism industry into a crisis it will struggle to recover from
Much more damaging is the cost to the Israel's economy resulting from the large numbers of its citizens being called up for military duty. Maintaining a small standing army, Israel instead depends on reservists who train regularly. At least 350,000 reservists have been called for duty since the Gaza War began. With hundreds of thousands of Israelis leaving their jobs to fight on in a three front war, many businesses have been hard pressed to function. Israel-Gaza War: As war widens and costs mount, Israel’s economy is in ‘serious danger’
The overall economic impact While Israel possesses military superiority, the one area in which it is deficient is in its small population. Add to this the large number of male religious Jews, the Haredim - who study Torah and are exempt from military duty , and the scope oif the problem is clear.
According to the Bank of Israel, Israel's military operations are costing the Israeli economy $600M a week due to work absences, according to the Bank of Israel, about 6% of the weekly GDP. The bank's estimate don't reflect the total damage to the economy or damages caused by the absence of Palestinian and foreign workers. Israel's treasury minister indicated that the Gaza war's daily cost is about $246 million per day. Over 100,000 Palestinian workers are no longer employed by Israeli companies.
After the war began, it was estimated that if fighting continued for eight to twelve months, the cost of the war to the Israeli economy would be more than $50bn, or close to 10% of GDP, according to Calcalist, the daily Israeli business and economics newspaper.
Citing early Ministry of Finance figures, Calcalist's estimates assumed the war would be limited to Gaza. It did not account for further escalation, such as with Hizballah and West Bank Palestinians, especially youth, who have responded to settlement attacks. It also assumed that the 350,000 reservists called up for military duty would soon return to work.
In 2015, the RAND Corporation conducted a study to determine the long term impact if Israel became involved in a protracted war. It argued that 90 percent of the economic shock for Israel would be indirect effects: reduced investment, a disrupted labor market, and slowed productivity growth. From the Ashes of Hamas-Israel War, Can Economics Drive Peace? Agriculture and the construction sectors One of the areas hit hardest in the Israeli economy are the agricultural and construction sectors. Palestinian workers from the West Bank, and to a lesser degree from Gaza, played a central role in planting and harvesting crops. In Israel, these workers have been central to the construction industry, including, ironically, building new settlements on the West Bank on land seized from Palestinians.
Despite attempts to recruit Indian and Sri Lankan workers, its remains unclear how Israel will be able to sustain its agricultural production and construction projects. After the HAMAS attack, Thai, Nepali and Tanzanian workers returned home. As it stands now, much of Israel's agricultural production will be lost due to the lack of labor to harvest it. As Agriculture Minister Oren Lavi noted, Israel is facing the greatest agricultural crisis since it was founded in 1948. War plunges Israeli agriculture into the greatest crisis in its history
Another negative impact of the Gaza War has been the attacks by Yemen's Houthis rebels on ships passing through the Bab al-Mandab as they enter the Red Sea. The Houthis claim they are preventing ships headed for Israel using the Red Sea in expressing solidarity with Palestinians being bombarded in Gaza.
Despite an international military coalition led by the United States, and attacks by Israel's air force on Houthi bases, the shelling and drone attacks on Red Sea shipping continue. The dramatic reduction in shipping led the Israel Port Authority in Eliat to declare bankruptcy. Port of Eilat declares bankruptcy
Although Israel has killed Hasan Nasrallah and decimated the top leadership of Hizballah, the only way to end its launching of rockets into Israel is for the IDF to invade southern Lebanon. However, as the Israeli occupation of south Lebanon between 1982 and 2000, and the 2006 Israel-Hizballah War has shown, an incursion into Lebanon will be extremely costly in terms of human losses on both sides. Can Israel’s economy survive an all-out war with Hizbullah
The Israeli psyche is hurting An unquantifiable impact of the Gaza War on Israel is the toll it is taking on the country's psyche. A number of Israelis who disagree with the war have left Israel. Large numbers of Israelis have continued to organzine large ongoing demonstrations. Angry with Benjamin Netanyahu, they have demanded that he implement an immediate ceasefire in Gaza so the remaining Israeli hostages who are still alive can return home.
Other Israelis who have been forced to leave from area along the northern border with Lebanon due to the rocket fire from Hizballah criticize the Netanyahu government for not clearing south Lebanon of Hizballah forces so they can return to their homes. Complaints have also been expressed by large number of Israelis who see the cost of living on the rise.
Yet the majority of Israelis have failed to confront the traditional response to the ongoing conflict with the Palestinians and their surrounding Arab neighbors. Responding to his participation the June 1967 Arab Israeli War, in which he lost a many friends, Israeli filmmaker, Ilan Ziv, directed and produced a powerful film, Abraham and Isaac (Icarus Films, 1977).
The film's purpose was to challenge the notion of 'ayn briera ("there is no choice"). In other words, Israel was condemned to a perpetual armed struggle with the Arab world which sought to destroy it. For Ziv, the "no choice" mentality, namely to engage in armed conflict with the Arab world was self-defeating. His film's prediction that continuous conflict would severely damage Israel in the future has come to pass.
Abraham and Isaac's theme was the core of a recent commentary by the distinguished Haaretz newspaper commentator, Gideon Levy. He calls again into question of whether Israel can survive if it continues to embrace the notion of 'ayn breira. Leyy poses the critical question: Do Israelis want to become a country that lives on Blood?
In his column, Levy argues that: "The daily crimes of the occupation are already less relevant. Over the past year, a new reality of mass killings and crimes of an entirely different scale has emerged. We are in a genocidal reality, the blood of tens of thousands of people has flowed." The question remains: Will Israel continue to be embroiled in a "Forever War"? Israels Must Ask Themselves if They're Willing to Live in a Country That Lives on Blood.
The danger the Netanyahu government poses to Israel Fully cognizant that it was HAMAS' terrorist attack which started the war in Gaza, countless experts have argued that Netanyahu could have pursued the war without the massive destruction of Gaza, the 41,000 deaths, and hundreds of thousands wounded.
But Netanyahu realizes that it was his failure which allowed HAMAS to attack Israel in the first place. He also heads a government of far right ultranationalist theocrats whose policies the majority of Israelis do not support, e.g., the transfer of funds by Finance Minister Bezalel Smotrich from their legally designated uses to illegal settlements in the occupied West Bank.
These far right cabinet members, Itamar Ben Gvir, Minister of National Security, and Belazel Smotrich, Minister of Finance in particular, refuse to continuance any ceasefire with HAMAS. If Netanyahu agrees to a ceasefire, they threaten to bring down the government. They don't care about the fate of the remaining Israeli hostages.
Without continuing the Gaza War, Netanyahu fears that his far right extremists s will withdraw their support and he will lose his prime ministership. Under indictment for corruption charges since 2019, Netanyahu fears that once he is no longer prime minister, he will be subject to trail again and possibly sent to jail.
The challenge of the Haredim. Israel's Supreme Court recently decided that the Haredim are no longer exempt from military duty. This resulted in sharp rebukes from rabbis that thre decision was unjust. Because the Haredim will constitute a majority of Israel's population by 2050, how can the military function if a large number of male Israelis refuse to serve in the military?
Israel's secular-religious divide is becoming ever more sharply defined. Secular Israelis, who provide the bulk of the country's tax revenues (because the Haredim don't work) and serve in the IDF, where they put themselves in harms way, are highly resentful of a "two tier" system of citizenship. Some citizens, namely the Haredim, receive benefits such as the government's subsidies who neither pay taxes nor serve in the armed forces.
The future of Israel Israel faces three threats in the future. First, continued conflict will have a negative impact on foreign direct investment. Despite Israel's reputation as a "startup country," foreign firms will not find a conflict zone to be an appealing investment venue.
Given the charges against Prime Minister Netanyahu for engaging in genocide by the International Criminal Court, the first sanctions by the US on West Bank settlers who have attacked and killed Palestinian residents, and the rising crescendo of criticism throughout the world at the devastation being wreaked on Palestinian civilians in Gaza and the West Bank, and now Lebanon, will further disincentive foreign firms to invest in Israel.
Arab states which would find cooperating with Israel in financial initiatives and military purchases are unable or unwilling to participate in such ventures for fear of the Arab street. This barrier to rapprochement with powerful Arab states such as Saudi Arabia and the United Arab Emirates is yet another ares where the Israeli economy will be hurt.
The solution If Israel had pushed for the establishment of a Palestinian state after the the 1993 Oslo Accords, and before Yitzhak Rabin's assassination by a far right Israeli terrorist, I would not be writing this post today. Palestinians have legitimate rights to self determination as voted on by the United Nations in 1947 through resolution 183 which created two states in Palestine- one Arab and one Jewish.
Attachment to the notion of 'ayn breira cannot bring a powerful end toi the Israel-Palestine dispute. As long as the extremist far right, which seeks to transform Israel into a theocracy, remains in power, conflict will continue. Israel may win thecurrent battle with HAMAS and Hizballah, but lose the war in the process.
By failing to pursue a peace with moderate Palestinians, who already agreed in 1993 at Oslo to recognize Israel and live side by side with the Jewish state, Israel may be signing its own death warrant. Beyond Historical Amnesia, Revenge and the Good-Evil Binary: Solving the Israeli-Palestinian Dispute Once and For All