State report: Boycott could cost Israel NIS 40 billion per year
search

State report: Boycott could cost Israel NIS 40 billion per year

Finance Ministry economists outline range of scenarios from boycott by European stores to broad EU sanctions

Illustrative: A Palestinian man walks by a graffiti sign calling to boycott Israel seen in the West Bank city of Bethlehem, February 11, 2015 (Miriam Alster/Flash90)
Illustrative: A Palestinian man walks by a graffiti sign calling to boycott Israel seen in the West Bank city of Bethlehem, February 11, 2015 (Miriam Alster/Flash90)

Israel’s economy could lose up to NIS 40 billion ($10.5 billion) per year and thousands of people could lose their jobs if the country is subject to a full international boycott, according to a Finance Ministry report unveiled last week after a two-year battle.

The six-page report, completed in mid-2013, warns damage from an international boycott could range from approximately half a billion shekels ($130 million) per year and up to 500 people losing their jobs, to NIS 40 billion and 36,500 firings, depending on the scope of the boycott and its rate of adoption around the world.

The report, drafted by staff at the Finance Ministry during Yesh Atid leader Yair Lapid’s stint as finance minister in the last government, had been kept under wraps until now.

The state agreed to make it public following an appeal by the Movement for Freedom of Information, an Israeli NGO. The ministry initially refused to release the report, citing its potential to cause strategic harm to the Israeli economy.

A report by the Rand Corporation released last month showed Israel could lose $9 billion annually in the absence of a peace deal and $50 billion over 10 years.

The release of the report comes as Israeli officials have expressed increasing alarm over efforts to push an Israel boycott by pro-Palestinian activists. Ministers have vowed to fight boycott attempts via legislative and legal means as the Boycott Divestment Sanctions campaign has appeared to gain ground.

According to a report in Hebrew-language business paper Calcalist on Tuesday, Finance Ministry economists presented five different scenarios for an international boycott, and examine the potential effect of each of the scenarios on Israel’s economy, its exports and the number of workers in the market.

If the diplomatic boycott of Israel sees moderate growth — leading to voluntary boycotts by European countries, chain stores or consumer organizations of goods produced in West Bank settlements — the damage to the market could reach some half a billion shekels per year, and approximately 430 people could subsequently lose their jobs.

On the other hand, a stronger boycott of all West Bank products by all EU states could also affect products made inside the Green Line. This could, the report says, lead to a boycott of about 1 percent of Israeli products, and hurt the market to the tune of NIS 2 billion and 1,800 job losses.

Illustrative: A Palestinian activist places a sign to boycott Israeli products at a supermarket in Bethlehem, West Bank,  February 11, 2015 (Mahmoud Illean/AP)
Illustrative: A Palestinian activist places a sign to boycott Israeli products at a supermarket in Bethlehem, West Bank, February 11, 2015 (Mahmoud Illean/AP)

In an extreme scenario, where the EU boycotts all Israeli products and stops foreign investments in the country – sanctions similar to those imposed on Apartheid South Africa – 36,500 people would be jobless and Israel would lose NIS 40 billion in revenue annually.

Finance Ministry economists define the last scenario as the most extreme, but warn extreme scenarios have often arisen due to hard-to-predict developments, and local and limited boycott initiatives could quickly escalate to far-reaching, official sanctions.

The state was told by Jerusalem District Court to publish the report, while redacting passages that could pose a genuine threat to the functioning of the state. The state then asked twice to delay the release, before finally publishing the entire report without any censorship.

read more:
comments