7th, however, and the situation just got worse with the operation also flood, the value dropping from 17 billion dollars to seven and a half billion dollars when it comes to investments. Political instability also is something that uh plagued israels economy before october 7th. Then the israel reservists uh what happened they uh had 300 thousand that went to the battlefield, therefore they were taken out of the workforce. Many were recalled back to contribute to the society, economically and in other respects, but has it helped israels economy . Israels economy is in crisis mode, israels genocidal war in palestinians in the gaza strip. Has proven more expensive than expected, between october and december, israels economy shrank by fifth at annualized rate, compared with the previous three months, was more than twice the contraction predicted by the bank of israel. In the same period, over 750,00 people or a six of the labor force were away from work, of many of them evacuees or reservists. Moodies, Rating Agency downgraded the regimes Credit Rating for the first time ever. The tech sector has been hit hard, many have moved operations abroad. In 2023, the value of israeli tech exits, including mnas and ipo slumped 56 to 7. 5 billion from 16. 9 billion a year earlier. 2022 was already tough year for israels Tech Industry as the uncertain specter of rising interest rates, global stock market fall and tech layoffs led to a sharp. Down investments. Israel attracts most of his tech investments from abroad. About 80 of Venture Capital investments in local hightech startups were generated from foreign funds. Time now to take a look at some of the social media posts on this. Uh first off we took a look at the topic of boycott. This entry said boycott makes a change. Israels economy is falling to its knees. Then we uh looked at this entry where we thought its important the warm. Cost them a lot of money that will be paid back from the usa, uk and the eu, because they will support israel unconditionally, but the major hit is boycotting that will hurt them, if not now, later, and the hit will be so hard. Okay, so a couple topics there on boycott. Next, the us could literally do that, the majority of their economy is funded by the usa. The usa, cutting support would be catastrophic for israels economy. The us has the power. Just too incompetent to wield it the right way. Then how the war in gaza has hurt israels economy, the fight against hamas will cost 46 billion pounds by the end of next year while leaving farming, tech and hospitality short of thousands of workers. And finally, israels economy plumits off a cliff emid the gaza war, what we call the onslot, the bureau attributed the drop in part to the fact that some 30000 reservists were called up to man the war effort, leaving their day jobs vacant and the civilian economy. Losing out a big chunk of both producer activity and Consumer Spending. Our of guess for our first q a, let me introduce some jocatron joins us uh palestine solidarity activist and its important to note that he lived in gaza from the years 2011 through 2014. Joe control, welcome to economic divide, so were looking at obviously key sectors uh of israels economy to have suffered as a result of this onslot and at the top of the list, construction tourism and agriculture. Uh, do you think. These sectors can see any signs of improvements given the fact that this on is of continuing, well i think that the resistance of course led by the. Palestinian resistance, but also including forces within the exact axis of resistance fighting from lebanon, yemen and iraq, have done a really masterful job in isolating israel, as well as militarily. At this point, its hard to see how its economy could hope to function in any normal way, as long as this onslot. Between the ongoing bombardment in its north, which is preventing the return of settlers and the complete closure of its shipping lane in the red sea as well of course as the ongoing fight resistance it faces from palestinians in gaza. Israel is is in a war that it cant hope to continue while maintaining any sort of normal economy. All right, that was jotron there. Thank you joketrone. Let me introduce our next guest here, john phoenix, joins us now. John phoenix is the founder and editor and chief at showa. Org. Uk. John phoenix, welcome to economic divide. Um, you know, uh, the different sectors thats been affected by uh this onslot, the tech sector is the one that stands out the most, and uh, its something thats been repeated. It was not doing. Well before the onslot however and of course weve seen how uh theyre now doing much worse, Investor Confidence is lost in that industry, how can this sector hope for any recuperation, how can they uh begin even think that they can uh attract investments uh when this onslot has not even not only ended but that it may continue on the political side to impact the sector, the the record show show us that the main product on technology was actually promoted in the europe and parts of middle east is their markava, the the their tank which is proven failing on the fronting gaza, this obviously without going through the Technical Details the tank was actually supposed to be an advanced best tank on the world, turkey ordered 400 of those, which is if that deal with. Through, they will have obviously revenue of millions of dollars year, but failing on on the ground shows that is not worse to invest in such technology. The reason im giving that example, because this was one of their best obviously marketing for the technology. Other factor is due to the crimes and the genocide of gaza, some companies actually, drop dealing with the Israeli Technology due to the obviously claim to be ethical issues, such technology been used to slaughter palestinians in gaza, so thats two factors together affect their ability to advance any growth on the last obviously clearly from the till about now. And time now for the inf news section of the program. First off were going to take a look at the us oil sales to china, something thats not going to happen. And its interesting that uh this is actually something that uh the us may have done, but the us uh basically has come out and said it could underline could band state oil sales to china from, and this is the interesting part from the sbr. Whats the sbr . Well thats an emergency stock file that was created following the west. Oil embargo of 1973, this sounds like theres a security related issue regarding trade where the us has come out making this type of a statement, so its a story that we need to look a little bit further. To the eu, our next entry and the food prices there, the prices of major food staples have spiked up by lot, 50 , i think thats a lot, for example, all of oil costs across the block have been on the rise since mid2023, and thats according to euro that the eu is still grappling with a food uh crisis in terms of the inflation uh and food and to add that to that, the former protest, you can see that uh that situation is somewhat volatile. Now we go to very contentious topic and this is the green energy uh and in particular in the us that has promoted this, the transition aspect of it. What slowing down americas Clean Energy Transition is what caught our attention and uh this had. Red, its not the cost, it said new report has found Renewable Energy is facing organized opposition, thats right, and grid connectivity issues, so the transformation obviously is not going to be that. Uh simple nor easy uh now our take on this is the only issue is the speed of the transition in the last two years high inflation and supply chain issues led to temporary price increases um and the reason why we mentioned that is because green transition is supposed to somewhat lower prices also but thats not going to be the case based on uh the way that we view it now uh this piece of news is important its may not sound uh economic and flavor but uh the israeli ambassador uh to italy has been rejected by italy, italy has rejected this uh um person who was a former settlement mayor uh for the ambassadorial position. Now rome did not want an ambassador who was mayor of a west Bank Settlement and that also headed the yesha council, thats the main political arm the settlement movement. Why do we think thats important and related to the economy . Because this may be a trend if you have a country thats rejecting a appointment by israel uh of their ambassador, this may spill over into uh the trade aspect of it where it may impact trade um overall, so we have to wait and see whether this is going to have a contagion effect or not. Those were the news items we picked for new section, of course your uh choice is more important, if you have any to send them to us, Contact Information is coming up. This week on expos a, we touch upon the western narrative of the parliamentary elections in the Islamic Republic of iran as it centered around made up tales about iranians abstaining from voting in protest against the government. In the meantime, most Opinion Pieces published by wellknown Mainstream Media rejected the idea that iran is a democratic country essentially recycling tired stories and narratives with no fresh perspective. Also this week we cover social media reacts to the famon brought on by the ongoing zinus israeli genocide in gaza as well as the air drop shared of aid and expired food on gaza residence. Right here on expos a, the truth is just the revelation away. Of the program israels over 5 months. Of aggression is taking a toll its economy. Now weve established that. In this indepth section we will look at some of the key areas which has drained israels budget from its funds. First of all, lets take a look at uh how israel actually got a reality check when it realized that it had suffered what uh was very steep drop in its gdp uh for the last quarter of 2023 minus 19. 4 , and that is lot by any standards. It highlights the fallout of the ongoing onslot against the aza strip, gaza strip and the impact that it had on different sectors. Now based on the chart we see over here, you can see Consumer Spending, productivity, you have investment and also trade, theyre all down, so a result of those negative factors has contributed to the negative 19. 4 . Next, the large gdp drop was due to the fact that and weve mentioned this before i know, but it needs to be highlighted. Again you have some uh 300,00 reservers that left their jobs uh that contributed uh to about 8 of the workforce as you see over here that was taken out of the economic uh cycle and now the knockon effects is how you see this chart how its panned out so 8 of the workforce out of the Economic Cycle producer activity als obviously is being affected Consumer Spending has been affected and then when you branch those out you have consumption and israel spending, the two that we picked, where consumption has uh dropped by uh 27 , and then you have the spending by israel itself, which has gone up 88 . So you can see obviously how israels economy is going to suffer, is suffering as a result of this aggression. Now were going to take a look at the uh labor force disruption in terms of the evacuees, and i know again this is something weve mentioned, but 120,00 is the latest figures that we have, again these are. Contributing to the large gdp drop taken out the workforce and then the palestinian workers uh we have 170,00 of them uh taken out of the workforce thats a drop obviously in also the palestinian uh economy that gets impact impacted uh Construction Projects is mainly what were looking at uh being one of the top uh sectors uh that has been impacted by this next up uh this concerns trade uh obviously imports and exports is at the top the list, you have imports to have been negatively affected and thats a big uh drop of minus 42 and exports at this point uh minus 18 . Again you seeing a big chunk of the uh israeli economy to be impacted and then you have the yemani army thats uh targeting us, uk and israel ships in the red sea and the arabian sea, and that disruption has also led to drop in israels gdp and its economy as a whole. And then finally, this is very important, the downgrade that happened, and it happened few weeks back, where it affected israels Credit Rating from a1 to a2. And uh the organization responsible for that is a big uh Ratings Agency by the name of muuties. Now when this happens the ability to repay debt is what is put under the spotlight in terms of israel and obviously uh the sovereign debt outlook has now been uh downgraded to negative so when you have this happening it makes it very hard for israel to borrow money in short uh money that is needed for them if they want to continue with their onslot the finance min. Has said this did not include serious economic claims, but many economists actually disagree with the stance that he has had, somewhat similar to what the the stance of the israel Prime Minister has been. All right, lets bring back our guest for this segment of the program, we have joe katron whos rejoining us, hes the from the palestine, hes a palestine solidarity activist and he lived in gaza from 2011 through 2014. Welcome back economic divide, this decision. To bring back the reservis from uh the um, guess the battle lines, it was seen as a positive move uh by israel because they say that theyre going to contribute to israels economy, but since most of them are in the tech sector, which is doing that badly, how much can this move actually help israels economy, do you think . Well, i think a lack of tech workers is the least of israels problems right now, the far bigger problem its cases is first of all its military challenge from the resistance on every front from gaza and the west bank to lebanon, yemen and syria, as well as the increasing Political Economic and diplomatic isolation faces a global scale as the direct result of its ongoing atrocities in gaza, none of its problems will be fixed by shuffling people around, that is no longer an option for it, and in fact im not sure they can be fixed at all, because so much of what israel had built up, the appearance it had tried to maintain of power, and was based upon a myth that was shattered on october 7th, we all saw how easily it could be challenged and defeated, theyre still complaining, theyre still. About this five months later, the scale of their defeat, theyre no closer to overcoming, nothing that theyve attempted in the meantime has reversed any of the gains the resistance made, so i dont see any possible solution for them even to regain some level of modest prosperity which they built up, short of ending their genocide. Org. Uk. John phoenix, welcome back, the way thats economy is suffering, one of the solutions that israel has thought of is to. Bring back some of these reservists uh which uh comprises of 8 of its uh economy, the contribution that they make and their presence in the workforce, do you think thats going to help its economy at all, especially when it comes to the the fact that they work in the tech sector mainly . Well, i mean, if you if you look at the the picture in general, you know, the 300 thousand of reserved force being recruit to fight the war, obviously uh. That keep lot of the vacuum within the economy, such running the airports, security, hospitals, industry, agriculture, so they trying to release some of this reserved in order to do the civil obviously duty, teachers been recruited obviously, doctors, technicians, so the only way to try to recover part of the. Economy is to try to reserve, to try to sorry to to release some of the reserve in order to go for civil duty, and its doing that is not even improving yet, you know . Now they are calling on the religious sector to join in, if you if you heard of the last report about the hard, you know, they wanted to give them some military work which is could be not as such as fighting, maybe running prisons, running security centers, so they are desperate in order to run the same time running a war and running the society and i said early, the only way this people to recover and survive is to stop the war, otherwise they will be in receipt of american aid till the american give up and then uh we will have no recovery in the economy, so this is cash 22 to be honest with you. The rest of the economy in israel is in trouble, construction is a standstill, forms have lost more than half of their workforce. In addition, Companies Involved in tourism are suffering. In january, 77 fewer tourists visited guts than year ago. Israels labor market is already tight. Bringing in Foreign Workers is slow and expensive, farms, factories and Building Sites lack workers. After october 7th, the regime spent 30 billion dollars in foreign reserves propping up the shekel. And has another 170 billion dollars if the currency needs more cushioning. Analysts believe financial crisis is unlikely, but that does not mean pain will be avoided. Will just come in different forms. There are talks of further spending cuts that are required to guarantee stability. Israels welfare apparatus will take the hit. The. Welfare ministry, which is also responsible for caring for evacues and returned captives, will have to take an 8 cut, value added taxes will rise by one percentage point to 18 . The health tax and incomes will go up by 0. 15 percentage points. Policy makers worried that raising corporate taxes would cause the tex sector, which is highly mobile and already struggling to find workers to flee the regime. Hello and welcome to the quicktake section. Im mattia posian. When it comes to israels debt, news has surfaced that the occupation entity is gearing towards raising money to keep pace with the required on aslot spending. The Israeli Regime is seeking to raise 60 billion dollars in debt this year alone. Obviously, its running short on funds and in order to save as much money as possible. It will also freeze hiring and raise taxes because it has almost doubled its aggression spending. We have already mentioned this before, but the need to go out and raise money is a result of the economic and labor force disruptions due to the reservists, settlers and palestinian laborers. But what is not covered or discussed much is how many reservists have been pulled from the battlefield . Israel has announced that there are around 60 reservists who were still carrying out acts of genocide in gaza, that means 240,00 reservists were back into the Economic Cycle, so why is that not improving the economy . On borrowing, this is not the first time the Israeli Regime had to go out and borrow, and as long as the aggression continues, it wont be its last time either, in the beginning of the Israeli Regimes a slot on gaza, tel aviv borrowed. 22 billion dollars, which sort the debt to gdp ratio up to 62 , the highest for the entity eight years. Its also worth looking at how israel plans to increase military spending overall, and what that figure was before the honot began. Israel is planning increasing military spending by 15 billion dollars, marking an 85 increase in military spending from 13 . Per of the military budget before their on slaughter against gaza to 20 in 2024. Okay, that brings us to the end of this quick take segment. Dont forget to send us your comments or questions. We do really appreciate that. Im and ill see you next week. The economy of the west bank and the gaza strip are unable to recover at the time being due to the continued aggression. Israels need for loans indicates that it is unable to meet the cost of not only the. Aggression, but also of its own needs. Theres no surprise there since the aggression was not supposed to last this long, and since theres no end in sight, at this time, the speculations that israels major eyelight like the us will come to his rescue. That does for this edition of the program. Thanks for being with us, it was great to have you, but we would appreciate it more if you send us some comments, suggestions, critiques. Contact information is behind me, from the entire team here at economic device, its goodbye until the next program. Information about palestine abounds on social networks, many times without context. They do not allow us to go deeper and understand all the dimensions of a catastrophe that is dragging on for centuries. Daniel hadway, chilean mayor of palestinian origin, opens a window to palestine to understand in depth the present cause of the palestinian people, exploring its history and future prospects. Do not miss a window to palestine. That minds israely Prime Ministers approved plans to invade this city of rafah in the gas trip reacting rather rejecting new c5 proposal by hamas. Yemen says that its. Its operations against israel linked vessels and support of the people of palestine and also in our headlines russians head to the pulling stations across the country in a threeday president ial election