Israel is a powerful country, but that doesn't mean it can profit from war. According to a report by Standard & Poor's, an international credit rating agency, the Israeli-Palestinian conflict has led to rising geopolitical and security risks, and the Israeli economy is expected to shrink by 5% in the fourth quarter of this year. This data is worrying, as Israel's economy is weak and it is difficult to withstand such a shock. However, this is just the tip of the iceberg.
The Israeli economy is expected to face a severe contraction in the quarter. This means that the outbreak of war has brought immediate damage to Israel's economy, without giving any chance of buffering. While a 5% contraction may not seem like much, it is a huge reversal compared to Israel's GDP growth over the past year. Israel's GDP growth rate in 2022 was 65 per cent, compared to the projected shrinkage rate of 5 per cent. This means that Israel will lose 11A 5% economic growth, based on Israel's GDP of $500 billion, represents a loss of $57.5 billion in economic output. Even though this is only a quarter's worth of data, it is important to know that a conflict cannot last only one quarter.
In addition, Israel's fiscal deficit will also show a sharp upward trend. According to the Standard & Poor's report, Israel's fiscal deficit is expected to increase from 2 before the war3% to 53%。This means that the fiscal deficit will be 53%。Based on Israel's GDP of about $500 billion, the estimated cost of the war is about $150 billion. However, this is only a superficial cost, and in reality the cost of the war can be much more than that. Israel's finance minister said that the direct cost of the war is currently as high as 2$4.6 billion. This figure is only the direct cost of the war, not including a series of indirect costs such as personnel** and logistical support. Thus, the cost of the war per day could reach 7$3.8 billion, that's $22 billion a month. In addition, there are a lot of hidden costs, such as buildings and infrastructure that have been blown up, which need to be rebuilt. The question Israel is currently facing is how long the war will last. In the face of such enormous economic pressures, it is difficult for Israel to profit from the war as much as the United States does.
Some wonder why Israel can't profit from the war like the United StatesThere are three main reasons for this.
When the United States fights a war, it usually chooses those resource-rich areas as the battlefield, and plunders resources while fighting. In past wars, such as the Middle East War, the United States has frequently plundered oil. The area of conflict between Israel and Palestine is the Gaza Strip, and there are few economic resources to be exploited other than a pile of buildings for Israel to spend money to bomb. As a result, Israel faces costs in the war, and no corresponding revenues**.
Israel is a small country with limited national strength, with a population of just over 9 million. Although Israel excels in combat, only about 4 million people are actually able to fight, including the elderly and children. The war called up more than 300,000 reservists, more than 10 percent of the country's young and middle-aged people, which led to severe shortages in major companies and factories. In stark contrast, the United States has a large economy that can separate the battlefield from the factories in the rear. The U.S. economic model of war has penetrated deep into the use of factories as a tool to support the war effort, making the war part of economic development. However, due to its small size and long-term threat of war, Israel has not been able to form a perfect economic development model like the United States, whether it is building factories or worrying about damage from bombing.
Israel's economic structure is such that it cannot profit from the war in the same way that the United States does. Israel has historically relied on R&D, patents, and project sales as the backbone of its economy. Due to the small size of the country, Israel lacks the conditions to build factories on a large scale, and does not dare to build a large number of factories, because if they are blown up, it will bring huge economic losses. Therefore, Israel's economic development model is based on a large number of research and development technologies, and the process of transformation is not easy. Israel's dilemma is that it simply does not have the time and resources to transform its economy due to the long-term threat of war and the destruction of infrastructure. Therefore, Israel lost in the war and did not even wear pants.
This article focuses on the damage caused by the Palestinian-Israeli conflict to Israel's economy and the reasons why Israel cannot profit from the war like the United States. According to a report by Standard & Poor's, an international credit rating agency, Israel's economy is expected to shrink by 5% in the fourth quarter of this year, with a fiscal deficit of 5.5 percent of GDP3%。This means that Israel will face a huge economic cost. In contrast, the United States was able to profit from the war with the help of resource plunder and economic development models.
However, this article only answers the question of why Israel cannot profit from the war like the United States, and does not discuss in depth the justice and impact of the war itself. The harm caused by war is not only economic, but more importantly humanitarian and the safety of people's lives. Therefore, war is not a way to gain benefits that should be encouraged and admired.