Over the last few weeks, I have attended several conferences dealing with the wartime situation in Israel. One of the most effective groups of speakers about the current state of the Israeli economy at war was organized recently by the Israel Democracy Institute – its annual Eli Hurvitz Conference on Economy and Society – in Jerusalem.
IDI president Yohanan Plesner opened the convention, saying that he cannot remember such a threat to Israel’s national resilience in a long time. The general consensus among the economists in attendance was that Israel is suffering from a leadership vacuum. In times of crisis, leadership is measured by the ability to turn challenges into opportunities. Under the direction of Prof. Karnit Flug and Prof. Manuel Tractenberg, an analysis of priories in the budget was presented in order to restore fiscal credibility.
The war in Gaza has already cost NIS 250 billion and raised the national deficit to 7.2%. Now ministers are calling to open another front in the North without an economic plan. In order to finance such a war, painful cuts in public services, and higher taxes will be necessary. Ultimately, it is the public who will bear the brunt of such a war for years to come.
Israel's government lacks a real strategy
Israel is facing wars on seven fronts, but the government has no commensurate strategy. Before October 7, Israeli leadership ignored warning signs, but now the weakest adversary, Hamas, inflicted the strongest blow to Israel’s power of deterrence. After over nine months, 120 hostages are still in Gaza, and the North of Israel is being bombed, burnt, and abandoned.
The number of military casualties is rising daily, as is the number of those suffering from post-trauma. A new study by the Israel Democracy Institute discloses that the new law prolonging the exemption of haredim from military service will add NIS 4.5 billion in annual costs, as it perpetuates the IDF’s dependence on reservists. It will necessitate extending military service of those reservists who are already bearing the brunt of the war.
At the conference, leaders of the business sector and the building industry aired their grievances about the shortage of workers from the Palestinian Authority, who are down to 26,000 from 175,000 allowed into Israel pre-October 7. Apart from the economic losses, the intelligence apparatus is warning that the ban of Finance Minister Bezalel Smotrich on Palestinian workers entering Israel and transfer of funds will cause a collapse of the Palestinian Authority and pose serious security threats to Israel. A long-term solution is urgently needed.
Internationally, Israel is close to being considered a pariah state. On Wikipedia and World Data, it is listed as a pariah state along with Iran, Russia, North Korea, and others. It is facing international isolation and lawsuits from the International Criminal Court in The Hague. Israel was disinvited from the largest weapons exhibition in Paris, Eurosatory 2024. It is time for those in government to realize that a new strategy is needed in the war of worldwide opinion.
In an interview after leaving the government in June, former IDF chief Gadi Eisenkot observed that Prime Minister Benjamin Netanyahu has difficulty making strategic decisions. According to Eisenkot, Netanyahu missed an opportunity in February to free more hostages, delayed entering Rafah, and is prolonging the war against Hamas.
A recent Wall Street Journal article stated that Hamas leader Yahya Sinwar sent a message to his political wing in Qatar that “Israel is exactly where we want it to be.”
Hezbollah leader Hassan Nasrallah’s deputy was quoted as saying he never expected Netanyahu to be so stupid as to be mired in such a protracted war.
Giora Salz, head of the council of Upper Galilee, put it best: “Unfortunately, where there is no strategy, the situation on the ground is dictating policy. This lack of strategy has led to the fiasco of 120 Hamas prisoners freed due to prisons’ overcrowding.”
For months Ronen Bar, the director of the Israeli Security Agency (Shin Bet), has been warning the government of a “ticking time bomb” – overcrowded prisons with 22,000 prisoners instead of the 11,000 capacity. To add insult to injury, one of those freed was the director of Shifa Hospital in Gaza, where hostages were killed. The release was not in exchange for any of our hostages. Gen. Israel Ziv, who on October 7 heroically saved numerous people at the Supernova music festival, says our leadership must have strategic priorities. Had Netanyahu worked on “the day after” strategy for Gaza six months ago, he argues, we would have by now been able to join a coalition with Saudi Arabia and other nations against the biggest threat, Iran.
In a June 19 interview with Channel 13, the IDF’s chief spokesman, Rear Adm. Daniel Hagari, warned that the failure to articulate a vision for a post-war Gaza could squander the gains against Hamas. “If we do not bring something else to Gaza, at the end of the day we will get Hamas,” he said. “The political leadership should decide.”
The choice is between kicking the can down a slippery slope or choosing a bold strategy. This nation of heroes deserves an equally brave leadership.■
Shoshana Tita is a writer, scholar, and international teacher based in the US, Spain, and Israel.