Although the most prominent Jewish news feature of the last few days has been the Palestinian boycott on Israeli goods, other economists see a greater problem in Israel’s future. Some large companies are reluctant to do business in Israel due to regional instability. They cite the most recent flare up of violence between the IDF and Hamas as an example.
Some companies in Europe and elsewhere have quietly stopped or slowed business in Israel, either for political reasons or because of instability. Although the number of such companies is small, the instability that continues to plague the region could have greater economic ramifications. Large Israeli corporations have quietly voiced their concerns. In an increasingly global and competitive world, a company perceived to be in a global “trouble spot” can be passed over for a multimillion dollar contract. It is a known fact that Israel’s tourism industry suffers whenever violence in the area makes Jewish news headlines.
There is no quick answer to this question, but some in Israel want the government to address the issues before it starts being reflected in Israel’s GDP. Others feel that until the political impasse with the Palestinians is overcome, no real progress can be made.