Israel’s Economy Has Problems, but It’s Not Collapsing Yet
In spite of the Gaza genocide, Israel still has plenty of customers for its high-tech exports, especially the weapons it produces. But it is experiencing a debilitating brain drain as secular, highly educated Israelis are emigrating in growing numbers.
Israel is a world leader in the “new military urbanism” — crowd control, border surveillance, and counterterrorism — that has burgeoned since 9/11. For many of its customers, Israel’s role in genocide is a selling point rather than a problem. (Menahem Kahana / AFP via Getty Images)
In the last quarter of 2023, Israel was simultaneously reeling from the shock and trauma of the October 7 Hamas attack on the cities and kibbutzim of the Gaza Envelope and mobilizing for a campaign of revenge and retaliation. Over 200,000 Israelis were evacuated from communities bordering the Gaza Strip and Lebanon, and some 300,000 reservists were mobilized.
In the following months, the Israeli economy was dislocated. Consumer spending, imports, and exports declined dramatically. Ultimately, nearly 50,000 businesses went bankrupt.
Meanwhile, Israel’s global brand is in the trash can. Its genocidal campaign in Gaza put it in bad odor among progressive circles worldwide and across much of the Global South. But the economic disruption that Israel has experienced to date has been manageable for its leaders.
This article is for subscribers only. Please login or subscribe to access our full archives and beautiful print and digital magazine starting at just $3 a month.