Israel's economy cracks under the strain of the Occupation

Society Pakistan & World Affairs
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Israel’s recession deepened in 2002 due mainly to a 28-month-old Palestinian uprising against the Israeli occupation of the West Bank and Gaza.
Israel’s economic output, or GDP, declined by 1.1% last year, the Central Bureau of Statistics said.

The figure, worse than analysts had expected, followed a 0.9% output drop in 2001.

The decline came amid a significant drop-off in consumer spending, bureau statistics showed,

Foreign investment plunged to 2.6bn shekels last year, from 4.2bn shekels (£540.1m; $865m) in 2001, separate figures showed, while the global economic downturn has hit the country’s key hi-tech industry.

And, with the Palestinian uprising adding to Israel’s cocktail of woes, analysts have predicted a further economic contraction this year.

Israeli Prime Minister Ariel Sharon is currently trying to hammer out an austerity budget to cut 10-14bn shekels ($2.05bn - $2.8bn) from the budget to meet a budget deficit target of 3% of GDP.

The recession has severely cut tax revenues, while defence spending continues to soar, leaving only about 5% of the budget invested in the economy.

Bank of Israel governor David Klein warned last week the government risked losing control of the economy unless it addressed the budget deficit.

An Israeli delegation is also due to arrive in the US to plead for an extra $12bn in aid and loan guarantees from Washington.

Israel currently receives about $3bn a year from the US.

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It's good to see the Palestinian resistance bringing the Israeli economy to such lows...though I am sure Israel will go begging to the US again for more and more aid. Such large aid has not won Israel the war against the Palestinian resistance, and has left it's economy in tatters.

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Too bad they can still whip any Arab army to shreds, regardless of their economy.

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Or combination of any armies as they proved 35 years ago. Their effectiveness has improved while those of their neighbors....... well, has it? They are a nuclear power with atleast 200 warheads. They are not going to disappear. If the combined nations of Islam rise up against Isreal, Isreal will not disappear into the sea. That is if the U.S. let's Isreal do whatever it wants to do to protect itself.

While it is commendable to say that the Isreali economy is largely affected by the Palestinian resistance........ majority of the Muslims outside Palestine and many parts of Arab have provided support to Isreal. It's just not the U.S. that has a state responsibility to ensure the continued existense of Isreal it's also the Muslims that help provide the financial support to the state of Isreal while we bad-mouth them.