when the us- israely 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 drain, and it didn't anticipate the costs involved in 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 a huge concern, and these are the mountain costs that are occurring for israel, it has to substatize 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 genocide, then you have the cost of aggression itself, 59.3 billion for the year, with the daily cost to be between either $246 million or $272 million dollars. then these illegal selliment economy, confrontation with hisballah a mistake, thousands of businesses closed in the north and also $131 million agricultural loss, just some of the angles will 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 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 onslot. it has rendered israel's crisis city 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 salaries of reportedly 360,00 mobilized reservists who have been deployed to gaza, many of whom are high-tech industry workers. finance, artificial intelligence, pharmaceuticals and agriculture. in november, the bank of israel put the onslot's gross effects on israel at $53 billion dollars and paired back its estimates for economic growth to 2% pre-year from 2023 and 20. 24 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 it's high intensity phase concludes during the first quarter of 2024. these staggering costs, which could very easily rise, especially if another front develops with hesbollah, leads to the question of how the 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 uh which has stated that muodi has lowered israely credit rating, downgrading its outlook from stable to negative, at the same time uh the agency has born public

finances are deteriorating and it has predicted materially higher debt burton amid the well they call it war, we call it an on slot in gaza, and it says to have lowered the outlook due to the risk of escalation with hisbollah. now the israel prime minister has said the rating will go back up the moment we win this war. next up, taking a look at this post, 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

hamaraging west bank economy in a covert meet with the pa officials. all right, those were some of the posts, i have to wait and see how the economy of the west bank as a whole can recover. from the space on the restrictions by israel. anyways, let me bring in our guest for our first q&a, arturo hartman pacheco joints 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 hartmann pacheko. 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 uh 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 uh 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 is 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 being made is that is affecting lot in the so two sectors that we can take as examples right, the technology sector and the agricultural sector - 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 in the operations of israeli attacks

over gaza, so you have a shortage of workforce in the sector, which is that compose around 18% of 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 that 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 realize what kind of impact in gdp you're going to 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, joins us. marx slabera is a former senior lecturer uh and researcher at the faculty of sociology of moscow state university. marx sloboda, 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, the... been emptieduh out of the workers there uh, 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 huge portion of the labor, large numbers of these ex-military people, these were working in the tech sector

uh, it is fairly substantial uh amount of damage um as long as this conflict continues and it shows no sign of abating anytime soon, it actually shows sign of expanding. netanyahu uh has been making uh it 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 hezbalah, the us um uh expanding the conflict uh to include the ansala movement, the huthis 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 accrew over

time. even after the conflict ends, it may take years for the israeli technology sector to recover from this. time now for the info 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 just 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 it's rather alarming uh basically um it has uh brought people out saying there's nothing left where indonesia's tourism industry is fearing 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 valuation 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. 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 infini section, if you have any suggestions..." from wherever you are, please do send them to us, contact information is coming up. in this week's show

we'll be explaining how professor david miller created a legal precedent by making opposition to zionism a protected characteristic. this means that employers can no longer use opposition to zionism as a pretext to discriminate. this or destroy people's careers and now it's established that actually the the are not statements which are out there in any way racist not anti-semitic and these are views which is perfectly legitimate for anti-racists to hold us as we had always maintained. it's a very comprehensive um robust judgement, a judgment that's been made by the most senior judge in that particular uh region um and so yes it is very interesting uh judgement, absolutely.

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 moodies to actually downgrade his credit rating, that much we know. in this in-depth 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 uh 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 while 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 strep. 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, 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, when that is compared to israel's revenues, like let's say from texas, well it's easy to see why israel is falling short, israely tax revenues for the year 2023 was $30 billion lower than projected, and

finally consumer confidence is really important, at this point israel is suffering from that and uh fallen uh quite a bit due to the aggression uh 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 uh 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 red or 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 uh find out what they think and what direction israel's

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

quotes here and and illegally. so you already have a 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 west bank, you you're gonna 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,

they're not being paid to the palestinians because the either because they are not working and... 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, 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, and really what are we looking at over here? i 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 uh about the future of the conflict going forward. the washington post has estimated that the war is caused." 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 hyked 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 in particular who have been called up for reservis duty uh so the government not only has to pay salaries to all of the hundreds of thousands of reservists 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 onslot is tourism, which... counted for 2.6% of the gdp before the pandemic in 2019. prior to operation alaska 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 palestinians. the war that last five to 10 more months could cost israel as much as $50 billion dollars or even more.

the onslot has already taken economic tool in these northern and southern regions of the occupied territories. towns are emptied of people, businesses are shuttered, farm fields lay untended, putting production timelines in jeaperty. 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 and lost economic activity over the next decade. for israel, 90% of the economic shock will come from indirect effects, reduced investment, slowing productivity growth and labour market disruption. hello and welcome to the quicktake section, i'm mattia posan. israel's

economic troubles just got worth with the downgrading of its credit rating by mudy'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 moodies have. 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 is 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 downgade 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 smotrich should be worried moodi's downgrade could lead other major agencies also to downgrade israel's outlook, 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 maling 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 week. the israel 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't win. after all, he has

not achieved any of his stated. from releasing the captives or to eliminating hamas. at the same time, israel is bleeding money. that is 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. the entire team here at economic divide. it's goodbye, until the next program.

headlines at press tv, israel's indiscriminate air and artillery strikes against gaza have claimed the lives of 107 more palestinians during the past day. palestinian representatives slam israel's policy of displacement, subjugation and death as the ic. j ows a historic hearing on israeli crimes in the occupied territories. the general side of war israel has waged on gaza is taking its toll its economy. israeli gdp has contracted by almost 1/5th in the last quarter of 2023.