“By enabling the worst of Israeli atrocities and excesses, self-proclaimed Zionist Joe Biden may have unintentionally helped to galvanize a force that could actually destroy the Israeli state.”
Israel acting with impunity (or maybe not)
Krystal: Israel’s assault on Gaza continues endlessly, seemingly no end in sight. The U.S. limply looks on, makes some meaningless disgruntled noises from time to time, some superpower we are. The ICJ ordered Israel to stop its genocidal attacks, to no avail. The ICC has threatened arrest warrants, well they have failed to materialize as of yet, and we all wait with bated breath to see if Iran’s retaliation in response to Israel’s provocation will plunge the whole region into an even bigger and much more deadly war.
It often feels like the Israeli state can just act with impunity, raining terror down on a trapped population with no one and nothing able or willing to stop them. But just below the surface, a doom spiral for the Israeli state may already have been set into motion. A mounting economic calamity that threatens to collapse the state entirely. The BDS movement in their wildest dreams could never have imagined the economic toll that the Israeli state is basically inflicting on itself right now as we speak.
Israeli economy looking dire
So here are the details. Mondoweiss compiled what data is available on the Israeli economy and the picture is really quite dire. Quote, over 46,000 businesses have gone bankrupt, tourism has stopped, Israel’s credit rating was lowered, Israeli bonds are sold at the prices of almost jump bond levels, and the foreign investments that have already dropped by 60% in the first quarter of 2023 as a result of the policies of Israel’s far-right government before October 7th show no prospects of recovery. The majority of the money invested in Israeli investment funds was diverted to investments abroad because Israelis do not want their own pension funds and insurance funds or their own savings to be tied to the fate of the state of Israel. [Ed: My italics]
Now those business closures, they may actually just be the beginning. An estimate cited by the Times of Israel found that up to 60,000 businesses might close before 2024 is over. This is a greater impact than the COVID pandemic shutdown and would only be exacerbated by an expanded war with Hezbollah and with Iran, the impacts of which frankly would be unfathomable. Just think about the realities right now though for the Israeli economy. Israeli workers have been called up to participate in the Gaza annihilation undercutting the country’s much celebrated tech sector. Another key sector, tourism, has completely dried up.
Construction is at a standstill because the Palestinians that Israel relies on as cheap labor force have been banned from coming to work outside of the occupied territories. Israeli attempts to import foreign workers as a new source of cheap labor have been largely unsuccessful. Turkey has announced a ban on exports to Israel, further crippling the construction industry. And efforts to import from other nations are hampered by the efforts of the Houthis to block shipping into Israeli ports.
Capitalists avoiding risk
250,000 Israelis continue to be internally displaced as a result of the tit-for-tat war with Hezbollah and panic is set in as Iran threatens a large response to the assassination of Ismail Haniyeh that occurred on their soil. Now perhaps the biggest body blow however was Intel pulling out of a planned 25 billion dollar investment in the state of Israel, an indication that capital is engaged in their own self-interested BDS weighing the ever-risking risks, ever-rising risks of operating in Israel to be greater than the benefits.
Even more trouble though could be ahead. Here again is Mondoweiss. Israel’s power grid, which has largely switched to natural gas, still depends on coal to supply demand. The biggest supplier of coal to Israel is Colombia, which announced that it would suspend coal shipments to Israel as long as the genocide was ongoing. After Colombia, the next two biggest suppliers are South Africa and Russia.
Without reliable and continuous electricity, Israel will no longer be able to pretend to be a developed economy. So while the US will apparently never cut Israel off of literally anything, including the 2,000 pound bombs that they use to drop on schools where displaced children are sheltering, the rest of the world apparently not so keen to continue doing business with this terrorist regime. There’s another dynamic that’s a little harder to quantify here, though.
It came up in our recent interview with an Israeli-Zionist analyst, Shael Ben-Efraim, who we brought in to discuss the right-wing riots that broke out in Israel to protect the right of Israeli soldiers to rape and torture Palestinian detainees. I asked Shael what this trend meant for the future of Israel if they continue to drift towards lawlessness and a state governed overtly by Jewish supremacy. I was frankly a little bit shocked by his response.
Israel may lose their best people
Shael: I think there’s going to be a lot of people in Israel who if this continues to be the kind of government that they have in the long term, will leave. And those will be the most productive members of society. Those will be the high-tech leaders. Those will be the professors. Those will be the literati and so on and so forth, which is something that I think the extreme right in Israel wants, because that will help them run the country better and there’s an attempt to dismantle the Israeli judicial system because that’s the one check and balance the Israeli system has against this kind of power.
So right now Israel, similar to a lot of other countries in the West, the United States as an example, is having a battle for its soul and I think if the liberal democratic forces in Israel lose, Israel will be lost. It’s not going to be able to survive if it doesn’t have allies in the world and it’s going to be sanctioned by everyone, treated like a pariah state, that liberal part of the country is what kept Israel as part of the international community and what kept it allied with the United States and what kept it as a big trade partner for the EU. And if Israel loses that, it’s not going to be able to survive.
The extreme right fringe and the fundamentalists aren’t going to be able to support the Israeli economy, aren’t going to be able to support Israeli society, not in the long term. Many don’t serve in the army. It’s a disaster for Israel. If these people take over, and this is a step toward taking over, like make no mistake, hindering the functioning of the state, if they completely take over, the state of Israel will not exist in the long term. And I don’t think, I think that’s quite a possible outcome.
More war fronts will force exodus
Krystal: So Shael alludes there to the fact that the most conservative ultra-orthodox members of Israeli society are increasingly represented in terms of governing ideology, but don’t actually contribute too much to society. They tend to have large families, rely on government welfare, and receive a religious exemption from military service.
The numbers supporting this dynamic were already getting kind of dicey because this group has much higher birth rates than more secular Israeli Jews. If you see a significant brain drain due to unending war and overt fascism (according to Shael) “the state of Israel will not exist in the long term.” Bolstering this point Mondoweiss quoted an Israeli economist professor Dan Ben-David as saying that the Israeli economy is held together by 300,000 people the senior staff and universities tech companies and hospitals once a significant portion of those people leaves he says we won’t become a third world country, we just won’t be anymore.
Has this exodus already begun? Difficult to say and frankly some of the data is really conflicting, but according to the Times of Israel, Israelis have already begun leaving the country prior to October 7th due to the Netanyahu government’s extremism and attacks on the judiciary which had led to a large protest movement for more secular elements of society. That outflow accelerated after October 7th, leading to about 42,000 permanent departures from November through March of 2024.
And one can only imagine what an all-out war with Hezbollah and or Iran could do to those numbers in a country where a significant minority of the population hold multiple passports. By enabling the worst of Israeli atrocities and excesses, self-proclaimed Zionist Joe Biden may have unintentionally helped to galvanize a force that could actually destroy the Israeli state. We may be watching in real time as Israel collapses under the weight of its own internal divides, capital’s aversion to risk, and the world’s revulsion to apartheid and genocide.
Transcript via AI
Narrator Krystal Ball
@krystalball
From HalalFlow | Original source
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