The Gaza war raging over six months has left a mammoth dent in both the Israeli and Palestinian economies. Gaza has nearly lost all its economic activity, and the ripple effect has severely affected Palestinian businesses in the occupied West Bank as per World Bank’s observation.
During the Jewish festival of Passover, Israel, known as the “start-up nation,” endeavors to sustain its appeal to investors.
Jerusalem’s Old City, famed for its cobbled streets, wears a deserted look. The usual long lines of people waiting to visit its prestigious holy sites are missing, and many of these revered sites are shut.
This time of the year, right in the middle of Easter and Ramadan, and smack dab in the midst of Passover, all the four quarters of the Old City should be witnessing a surge of visitors.
However, a gloomy picture of tourism emerges from Israel’s Central Bureau of Statistics. Only 68,000 tourists made it to Israel in February, a significant drop from 319,100 visitors during the same period the previous year.
It might defy belief that there are still some visitors in Jerusalem amid such stress. However, many of these brave travelers are religious pilgrims from around the world who would have made advance payments for their trips.
During my walk down Christian Quarter Street in the Old City, located in the occupied East Jerusalem, I encountered Zak’s Jerusalem Gifts as one of the few stores that had chosen to open its doors. Zak, a businessman dealing in antiques and biblical coins exclusively online, admits to a slump in sales as he holds on to the hope of a miraculous comeback after the festive holidays. His current predicament is shared by many other merchants, both in the old and new parts of Jerusalem.
The situation appears daunting some 150 miles up north along the tense Israel-Lebanon border, where frequent fire exchanges with Hezbollah have prompted the Israeli army to seal off large parts of the region. The enforced closure has displaced as many as 80,000 locals who have had to move further south for security. Identical circumstances have affected an equivalent number of Lebanese residents whose homes share the same border.
The agricultural sector in this region of Israel is among the hardest hit by the volatility. Here, Ofer Moskovitz, affectionately referred to as ‘Poshko,’ isn’t usually allowed to set foot on his avocado farm in the kibbutz of Misgav Am due to its proximity to the conflict-ridden border. Yet, he sometimes risks it, strolling pensively among his trees— a mute witness to his “hard-earned money falling on the ground”.
Without being able to harvest the avocados, Poshko stands to lose a fortune. “The orchard needs to be picked clean. If not, it affects the yield for the following season”, Poshko admits. He estimates his losses at around 2m shekels (approx. $530,000; £430,000) for this season alone.
While these stories paint a grim picture, they also highlight the resilience of the human spirit. Even in the face of adversity, these individuals remain hopeful and committed to their dreams. As they face the holiday season, they represent the true spirit of endurance and hope.
While agriculture and tourism are necessary for survival, they only make a small dent in both the Israeli and Palestinian economies. S&P Global recently downgraded Israel’s long-term ratings due to increased tensions with Iran and fears of the Gaza conflict spreading. A 5.7% drop in GDP in the last quarter of 2023 further signals declining confidence. Despite this, many Israelis believe their high-tech and start-up sector is more resistant to such dynamics.
The bustling city of Tel Aviv, situated a mere 54km from Jerusalem and less than 70km from Gaza, is quite resilient. Here, life continues against a backdrop of war. Beach-goers enjoy the early summer sun, people dine al fresco at beachside restaurants, and the city carries on growing.
Jon Medved, CEO of the online venture investment platform Our Crowd, embodies this resilience. Despite the ongoing conflict, he claims that nearly $2bn has been invested in Israeli start-ups in the first quarter of this year alone. Medved champions Israel as a continuing haven for start-ups and investors, with 400 multinational corporations operating in the country and none having closed since the war began.
Bar-Ilan University economics professor Elise Brezis echoes Medved’s optimism, acknowledging Israel’s remarkable economic resilience amid troubled times. However, she also warns of an unsettling undercurrent of tension within Israeli society, drawing an analogy between a high-salaried, yet depressed individual, and the current state of Israel.
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In stark contrast to the Israeli situation, the outlook for Palestinians remains dismal. The tourism-dependent Bethlehem saw visitor numbers plummet in response to last October’s Hamas attacks on Israel. The subsequent isolation imposed on the area has had a destructive impact on Palestinian livelihoods.
Dr Samir Hazboun, chairman of Bethlehem’s Chamber of Commerce, draws attention to the plight of the 16,000 to 20,000 Palestinian workers who lost their income overnight due to the closure. The economy is also feeling the pinch with the loss of an annual revenue of 22bn shekels ($5.8bn) from Palestinians working in Israel.
Future prospects look especially bleak for the younger generation, with a significant number of graduates facing unemployment. In Gaza, the economy has suffered greatly due to half a year of war, leaving little hope of things returning to normalcy anytime soon.