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Israeli firms suffer $369 million in damages from Gaza conflict

Most of the losses caused by a decrease in output, due to the fact that employees did not come to work, country’s main industrial lobby says

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Rockets are launched from the Gaza Strip towards Israel, May 10, 2021. (AP Photo/Khalil Hamra)
Rockets are launched from the Gaza Strip towards Israel, May 10, 2021. (AP Photo/Khalil Hamra)

The 11-day conflict between Israel and Hamas led businesses to incur an estimated NIS 1.2 billion ($369 million) in damages, according to the Manufacturers Association of Israel. The group is calling on the government to compensate businesses that have been hit in a “fast and efficient” manner.

Most of the damage was caused by a decrease in output, due to the fact that people did not come to work, the association said. Israel and Hamas agreed to a ceasefire that went into effect on Friday morning, ending 11 days of fighting that saw Hamas and other Gaza terror groups launch over 4,000 projectiles at Israel since May 10 and Israel in response carry out an extensive bombing campaign in the Strip.

During the operation, some 35 percent of the workers in the southern region of Israel — which was targeted with the most rockets — and about 10% of workers in the center of the country missed work due to the threat of missiles, the association said. This caused a “significant decrease” in the output of industries and a decrease in sales and a direct hit to revenues, according to a statement released by the association.

In the statement, Manufacturers Association president Ron Tomer said that the Israeli government “must ensure a regular compensation framework for businesses affected by the fighting,” something that does not exist currently.

“It is not possible that in every round of fighting, the issue of business compensation is reopened,” Tomer said, adding that it creates “chaos and uncertainty.”

The association said that it received requests for assistance from some 1,500 manufacturers who sought support as a result of the fighting.

The association has called for a special discussion on the matter in the Finance Committee of the Knesset to be held on Tuesday, with the aim of setting up a compensation mechanism for indirect damages such as decreased income and productivity, reduced sales during conflicts, and compensation for workers’ wages.

The compensation framework should be “fixed, fast and efficient,” Tomer said. “This is not the time for bureaucracy and procrastination.”

Tomer added that companies also suffered indirect damages that were not included in the estimate, such as damage to reputation with foreign customers as orders or deliveries and transactions were cancelled or delayed.

Some 50 industrial complexes were directly damaged by missile shrapnel, the association said.

The Israeli government has not yet published its estimate for the damages from Operation Guardian of the Walls.

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