when the us israelity genocidal war against the gaza strip began, israel thought it could wrap up this aggression within a short period of time. over four months now, going into the fifth month, israel has realized that was just pipe train, and it didn't anticipate the... costs involved and how it's draining its purse? just a couple of the angles we'll be looking at in this edition of economic divide. taking a look at some of the highlights of this program, israel's economic crisis, we'll break it down, there's been a credit downgrade by modies, also the budget deficit and uh the gdp decrease, obviously all negative economic indicators for israel. then we will take a look at uh huge concern and these are the mountain costs that are occurring for israel. "it has to subsidize

salaries of 360,000 reservists who are also workers that contribute to the society, at this point they're not because they're fighting an illegal um genocide, then you have the cost of aggression itself, $59.3 billion for the year, with the daily cost uh to be between either $246 million or $272 million. then these illegal sallement economy, confrontation with hisbollah a mistake, thousands" businesses closed in the north and also $131 million agricultural loss, just some of the angles we'll be looking at in terms of the losses from the settlements and the products there.

more than four months have passed since israel started his brutal genocide on the of gaza strap. the onslot has killed thousands of palestinian people. the israely military has also suffered significant losses, but the economy of the regime has also been negatively impacted by the onslaught. it has rendered israel's crisis at economy even more fragile. from a complete halt in tourism to global shipping challenges, there's not a single sector in the economy that has been sheltered from the shock waves of the genocide. since october, israel has subsidized the... saleries are reported the 36000 mobilized reservists who have been deployed to gaza, many of whom are high-tech industry workers in finance, artificial intelligence, pharmaceuticals and agriculture. in november, the bank of israel put the onslot's gross effects on israel. at $53 of

billion and paired back its estimates for economic growth to 2% per year from 2023 and 2024, down from 2.3% and 2.8%. in december, israel's finance ministry said that the onslot will likely cost israel approximately $13.8 billion this year, if his high intensity phase concludes during the first quarter of 2024. the staggering cost, which could very easily rise, especially if another front develops with hisbollah, leads to the question of how... regime will fund the onslot's effort, the impact on israel's high-tech sector, which is considered the engine of the regime's economy, is significant. according economist, 10% of israeli employees work in the high tech sector, but they are responsible for 50% of the regime's exports. time now to take a look at what's posted online, we begin with a website which has stated that mudy has

lowered israely credit rating, downgrading its outlook from stable to negative. at the same time, uh, the agency has warned public finances are deteriorating, and it has predicted materially higher debt burton amid the, well, they call it war, we call it an onslought in gaza, and it says to have lowered the outlook due to the risk of escalation with hisbollah. now, the israely prime minister has said the rating will go back up the moment we win this war. next up, uh, taking a look at. this post, the gaza war has cost israel more than $60 billion. so far, is anyone telling the cost to american taxpayers of the us armed forces coming to israel's rescue and fighting its behalf throughout the region? it poses that as a question. next, palestinians fear israel's economic chokehold will not end with or without a ceasefire. this post went to say israel is canceling work permits, restricting travel, withholding tax revenues. and west

bank palestinians are saying that these are the types of problems that they're facing, and finally israel promising some relief to hemoraging west bank economy in a covert meet with the pa of... officials all right, those were some of the posts uh, i have to wait and see how uh the economy of the west bank as a whole can recover from this base and restrictions by israel. anyways uh let me bring in our guest for our first q&a, arturo hartman pacheco joins us, he is a researcher in international relations with focus on palestine and israel. he's also member of the international center for arab and islamic studies at the federal university of sirgi. uh, welcome to the program, arturo hartman paceko. uh let's start out with uh what has occurred over here uh when it comes to the economic crisis that israel is facing. i mean, we're looking at so many different negative economic indicators, you have a decreasing gdp, you have costs that are accuring mainly uh because of this uh illegal

us israel genocidal war. the crisis also involves uh so many faces of the economy uh that's hemoraging basically money uh and the question that comes about is how long can israel sustain us and actually how bad is this economic crisis that israel is facing? well when we talk about the the question of the economy in israel so the point i think the first thing we got to say is how is affecting some economic sectors right so what we what we heard and what we can see by by the news that are coming and and the reports that are been made is that is affecting lot in so two sectors that we can take as examples right, the technology sector and the agricultural sector, in in the case of the technology sector, there's a huge workforce that because the workers in the technology sector mainly are reserves in the israeli

army, so lot of them are actually in gaza, and the operations of israeli attacks over gaza, so you have a shortage of workforce in the sector which is... that compos around 18% the israeli economy, and the agricultural sector serves another problem, which is the lack of workforce, so mainly the the the agricultural sector is composed, the workforce is composed of palestinians especially from the west bank, but because of restrictions there israel is imposing and palestinians, you have lack of workforce, so it's impacting the agricultural force, it's it's it's too early. to actually uh realize what kind of impact uh in gdp you're gonna have in israel, but people already talking about two 3% which is huge. all right, thank you for that. let me bring in our next guest mark sloboda uh joints us, mark slabada is a

former senior lecturer and researcher at the faculty of sociology of moscow state university. welcome to the program uh, the economic crisis that uh israel is facing is pretty severe uh when you take a look. at it um, but the one sector that has been affected the probably the most is the technology sector uh, they've been emptieduh out of the workers there, you're looking at also another facet of the technology sector, maybe as a whole where there's a huge decrease in investments, particularly this sector to have experienced 50% uh decrease, uh, what do you think any hopes of a recovery there? yeah, um, so i mean, these are the two big costs, the technology sector, has been uh the biggest sector of the israeli economy amounting for some 18% of the economy total uh and if foreign investment investment is down 50% uh and then you compound that with the loss of of the uh huge portion of the

labor large numbers of these ex-military people these were working in the tech sector uh it is fairly substantial amount of damage um uh as long as this conflict continues and it shows no sign of bating anytime soon, it actually shows sign of expanding. netanyahu uh has been making uh increasingly belligerant uh remarks about expanding the war himself uh in israel uh moving its forces uh north into uh lebanon uh to go after hezballah the us ' uh expanding the conflict uh to include the ar-ansala movement, the hoothis in yemen as well, uh, they're now talking about a protracted campaign there, um, there's no chance of a recovery of the technology sector while the conflict

continues uh, and the cost to it will continue to exponentially a crew over time, even after the conflict ends, it may take years for the israeli technology sector to recover from this. time now for the inf news section of the

program, let's start out with something that's really huge that's happening in the eu, and that is the eu farmers protest. yes, eu has announced compensation to farmers, that's a good news, uh, as protests, however, are flaring up, a blockwide wave of discontent is happening uh over high cost, external competition, and also red tape, and that's just some of them which is happening in the agricultural sector. at this point, spain. has joined in, but there's so many other eu countries uh that have cumulatively now uh voicing the opposition to so many things, it's even hard to talk about it because it's hard to know which part to start from. anyways uh another uh piece of news related to eu and it's the oil sales that uh concerns russia, eu states are actually buying russian energy but on the sly. oil and gas are still reaching the block via third countries, these include the asia pacific region, countries of the global south, and others. next up, tax hike that has occurred in indonesia and is rather alarming, uh,

basically, it has uh brought people out saying there's nothing left, where indonesia's tourism industry is feeling a wipe out under this proposed tax hike. uh, there are plans to introduce between 40 to 75% tax rate for entertainment services and that has prompted fierce backlash from businesses. now, mid this blowback, the government has announced that it would delay the hike pending and evaluation and then finally we take a look at um argentina and its economy, well uh the argentina police are actually uh out on the streets, the they have battled protesters and due to the fact that the protesters are opposing this uh so-called omnibus reform bill uh this bill touches on all areas of public and private life from privatizations to cultural issues uh the penal code even and even divorce and the status of football clubs so the argentinian. president obviously has lot on his hands when it comes to this bill. those were the items we picked for the info new section. if you

have any suggestions from wherever you are, please do send them to us. contact information is coming up. this week on expos a, mainstream media highlights the unprecedented scale of destruction and impact the war on gaza as for reports by the united nations straight body. western broadcast media white washes zionist israeli crimes of destruction in gaza as excuse to hunt down what it called hamas terrorists. while print and digital media surprisingly argue that unless the israeli regime changes course, it could be legally culpable for mass starvation in gaza, and social media users express astonishment at how world leaders cannot see. how unfair the calamity of the palestinian people is. expose, the truth is just a

revelation away. it's time now for the in-depth section of the program. is israel suffering from economic crisis? you bet it is. how much of a crisis though is it suffering from? well, it was enough for mudies to actually downgrade its credit rating, that much we know. in this indept section we're going to take a look at other aspects of israel's economy, which point to this crisis. our first look is a comparison of israel's gross domestic budget deficit between the years 2023 and 2022. now when you take a look at this budget deficit that you see here for 2023, it has come in at 4.2%. that equals uh $20.7 billion dollars. now that is: in the year 2022, it saw a surplus of 0.6%, so it's no surprise that the deficit

jumped by 0.8% in december to the figure 4.2% at the height of the israeli aggression against the gaza strap. now, as we have done in previous programs, israel's aggression spending has been spiraling out of control, but we need to take a look at it. one figure has put that aggression cost uh with the figure being at 59.3 billion. as you see there uh, it put the daily cost at around $269 million daily. some figures actually have put that figure a lot higher, we took this from the times of israel uh... where israel has cited that, next, this is where israel uh is getting into trouble since it is having a hard time keeping up with the costs, especially military ones. now to pay for the military spending, one of the things it had to do was it had to increase it by $18.6 billion dollars, when that is compared to israel's revenues like let's say from taxes, well it's easy to see why israel is falling

short. israely tax revenues for the year 2023 was $30 billion lower than rejected and finally, consumer confidence is really important, at this point israel is suffering from that, and uh, it has fallen quite a bit due to the aggression, and now that the aggression keeps dragging on, it keeps decreasing the consumer confidence. inflation, as a result is now very major concern. israel has put the inflation percentage somewhere in the vicinity of what we see over here, well to have risen to 5.3%, these are some of the other areas where the bank of israel has come into the into play, fiscal discipline is recommending, reduction in spending, and of course taxes to be raised, and finally in terms of the concerns that israel has, well the aggression is going to continue from what we're seeing right now, especially coming out of the defiant israely prime minister benjamin netanyahu, and then we have the red sea shipping crisis, which

adds to the economic worries for israel. all right, let's bring back our guests and find out what they think and what direction is. economy is going to be going uh arturo hartman pacheko rejoins us researcher and international relations with focus on palestine and israel. welcome back to the program. i'd like to get an idea from you when it comes to the uh illegal settlements, but these areas in israel, especially in the northern part where uh there is agricultural uh concentration. in terms of what happens there obviously you have a production that uh takes place there. um, the food basket uh production obviously is a big worry now for. because it's been impacted um so hard uh based on the the genocidal war extensive damage to the sector which has prevented ultimately food production uh what is your outlook on this sector where is it heading to? well there's a lot of things that we can back here the main workforce uh uh laboring in the agricultural sector and and harvesting

and cultivating our palestinians, palestinians from the west bank legally uh between... comas here uh between uh uh between quotes here and and illegally so you already have big impact on the agricultural sector and the problem with agriculture is that you can lose harvests if you don't if you don't work on that so this is the first thing but also we have to look the impact over to the palestinians right so palestine and i'm not talking about gaza okay i'm talking about the westmen. you you're going to have a dilemma because uh because of the occupation, the illegal occupation over the west bank, one of the the tactics, one of the methods is that you link the israeli economy to the palestinian economy, which is illegal on the international humanitarian law and the occupation law, you're going to have a problem of supply to the palestinians for the israeli product that that even if they try to

boycot, they are cheaper and and they offer more supply. but also for the salaries that are not being paid to the palestinians because the either because they are not working in israel or either because israel is holding uh the the revenues of the palestinian authority so the palestinian authority is not paying salaries all right very well uh let's bring mark slaboda back mark slaboda is a former senior lecturer and researcher the faculty of sociology of moscow state university mark sloboda welcome back you know i i want to get an idea from you about israel's economy as a whole uh and really what are we looking at over here? mean in terms of the aggression itself, it's lasted more than four months now, obviously there's costs that are involved there quite high uh some estimates putting it at around $269 million dollars daily, we're looking at uh falling gdp uh we're looking at uh inflation that has crept up uh and all the sorts of negative economic indicators

including the moodies downgrade and um even areas in uh israel that are just empty and businesses either halfway closed or shut down, how bad economic crisis is israel facing? i think that the um drop economic activity, the the costs of the conflict, both military and uh economic uh on the israeli regime are fairly severe and will have to be factored into israeli decision-making of... about the future of the conflict going forward, the washington post has estimated that the war is costing the israeli government about $250 million a day. that may very well be severe underestimate. um, they also project that if the war would carry on for another few months through 2024, that the

grand total cost of the conflict to the israeli economy could be $50 billion dollars uh or more. um, the um, israeli finance ministry has been uh making increasingly, uh pleading and desperate um messages uh to netanyahu uh that that taxes need to be hiked um and the the damage to the israeli economy is across the board across all sectors um and uh those have to do with uh one the large number of uh the israeli um uh high-tech workers uh particular who have been called up for reservis duty, so the government not only has to pay salaries to all of the hundreds of thousands of reserves it's called up, but

their services are being lost, their labor is being uh lost to the economy. one of the sectors of the israely economy that has suffered the most amit the onslot is tourism, which accounted for 2.6% of the gdp before the pandemic in 2019. prior to operation allo flood, visitors to israel numbered above 300,00 each month. in november, that figure reportedly sank to 39,00. construction, which ordinarily relies on palestinian labor from the west bank, has grown to near halt. israel has suspended the work permits of more than 100 thousand palestiny. the war that lasts five to 10 more months could cost israel as much as $50 billion or even more.

the onslot has already taken economic tool in these northern and southern regions of the occupied territories. towns are empty to people, businesses are shuttered, farm fields lay. untended putting production timelines in jeeparty. in short, the double economic shock on supply and demand could become an unprecedented macroeconomic crisis for israel, with some israeli economists estimating the accumulated cost to be 10% of the gdp, if the aggression lasts for year. the economic tol of this violence may cost israel, an estimated $400 million dollars in lost economic activity, over the next decade. for israel, 90% of the economic shock will come from indirect effects. reduced investmentts, slowing productivity growth and labor market disruption. hello and welcome to

the quick take section, i'm matte aposan. israel's economic troubles just got worth with the downgrading of its credit rating by moodi's investor service. the credit rating given by several rating firms throughout the year. is assessment of israel's credibility regarding its financial obligations and debt. this is the first time mudis has lowered israel's credit rating. mudis downggraded israel from a1 to a2 and said the outlook for the regime's economy was negative. mudis concluded that the war and its aftermath will materially raise political risks for israel for the foreseeable future. mudies expects that israel's debt burden will be. materially higher than projected before the conflict. israely prime minister benjamin netanyahu has remained defiant in his response to the rating by the moodies. this type of reaction,

playing down moodi's decision, is another sign of instability within israel. the israeli prime minister said in reaction, the israeli economy is a strong, adding that the rating downgrade is not connected to the economy. it is entirely due to the fact that we are in a war. israel's finance minister had the same type of reaction more or less, dismissing the decision. he said the announcement reflects lack of confidence in israel's security and national strength, and also lack of confidence in the righteousness of israel's path against the enemies. but israel's pm netanyahu and finance minister smotric should be worried. mudi's downgrade could lead other major agencies also to downgrade israel's. look, if other agencies travel down the path, that could impact israel's economy, because it will make it harder for israel to raise money by selling

bonds, so far, israel has amended its annual budget, it exercised a 3% budget cut across the board to try to compensate for the spike in its military operation costs. israel is also mulling over whether it will increase value added tax by 1% in 2025 or not. and that does it for this quick take section. if you have any comments or questions please send them to us. contact information will be coming up on your screens now. i'm mattia posan and i'll see you next. this week: the israely prime minister netanyahu is being defiant and he's also reckless at the same time for pushing ahead with this genocidal war. it's risking not only himself and israel

at the same time, but the entire west asia. region banking on winning a genocidal war that he knows he can win. after all, he has not achieved any of his stated goals from uh releasing the captives or to eliminating hamas. at the same time, israel is bleeding money. that doesn't for this edition of economic divide. thank you so much for being with us, hope you enjoyed it. if you have any comments or questions, contact information is behind me. for me and the tire team here at economic dubai. it's goodbye until the next program.

the headlines nearly dozen people are killed in an israeli air strike on gaza's southern city of rafa where the regime is preparing for a ground assault as well. hezbella warns that if israel keeps crossing the red lines by targeting lebanese. civilians, it will pay the price of its action with blood, and also in our headlines, the people of yemen have held mass rallies in several cities across the country and yet another show of solidarity with the palestinian people.