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Israeli Experts: Attacking Iran Will Ravage Israeli Economy

Posted: 08/23/2012 11:38 pm

A couple of years before Binyamin Netanyahu was elected prime minister of Israel in 2009, I participated in a small meeting with him as a staffer for Israel Policy Forum, an organization that lobbied for the "two-state" solution.

Netanyahu was ebullient. He seemed certain that he would soon be prime minister and was bursting with plans he had developed for his return to the job he had in the late 1990s. All of those plans were about the economy (standard Milton Friedman boilerplate).

In those heady days before the worldwide economic crash of 2008, Netanyahu said he was looking forward to sustained economic growth of 8 percent, a very impressive figure. He said that Israel would soon be in the same economic category as the so-called Asian Tiger economies of South Korea, Taiwan, Hong Kong and Singapore.

Netanyahu spoke for 10 minutes and devoted not a single word to security issues. It was all economics without even a reference to the Palestinians, Iranians or effects of the occupation.

When he opened up for questions, the leader of our delegation asked if his sunny view of the future allowed for the possibility of war or another intifada. He shrugged at that, merely noting that obviously security developments would have an effect. But he didn't foresee any problems that would alter his forecast.

Netanyahu seemed utterly sincere. He clearly believed that Israel's security situation was fine, that there were no obvious threats looming. As for Iran, a standard component of Netanyahu speeches then as now, he didn't even bother with his usual gloom and doom in this intimate setting with people he knew well. He talked about the economy because that is what he was focused on. He wanted to dismantle the remnants of the Labor Party-created welfare state and let business run the show.

That is, in fact, what he has done as prime minister (which is one reason why Israel is now, for the first time, the scene of mass protests against growing economic inequality).

Given his focus on the economy, it is odd that Netanyahu seems oblivious to the likely economic effects of an attack on Iran.

According to an August 20 report issued by BDI, the largest business information consulting group in Israel, the cost to the Israeli economy would be $41.75 billion, a fifth of its total GDP. BDI extrapolates that estimate from the cost of the 2006 Lebanon war, which cost Israel 1.8 percent of GDP.

The Israeli business newspaper Globes describes the BDI findings:

In the event of a war on the same scale, with the same duration and damage, then it is possible to expect NIS 16 billion in damage [$3.98 billion]," estimates BDI. "However, most of the damage in the Second Lebanon War occurred in the north, which produces only 20 percent of Israel's GDP. It is reasonable to assume that in the event of a war, it will also include the center of the country, which produces about 70 percent of Israel's GDP. In 2011, GDP totaled NIS 870 billion [$217 billion], and the cost of such a war is estimated at three times the cost of the last war, or NIS 47 billion [$11.8 billion].

"This amount is not the final figure," BDI warns, because it only covers the direct cost to the economy of a war. "There is damage which is difficult to estimate, such as the loss of foreign customers and the collapse of businesses (especially small businesses), which could be permanent. A conservative estimate of the collapse of 10 percent of small businesses (an average turnover of NIS 20 million [$4.98 million]) as the result of a war (due to the slowdown, lack of financial depth, drop in demand), we estimate the loss of GDP at NIS 24 billion [$5.98 billion] a year for 3-5 years, in addition to the direct damage.

Incredible, isn't it? Is it any wonder that opposition to an attack within Israel's own security establishment has dramatically grown as Netanyahu and his Defense Minister Ehud Barak continue to beat the drums of war ever louder and louder. Even President Shimon Peres, constitutionally prevented from direct involvement in political decision, is openly opposed and making no secret of it.

Israel simply afford to go to war. It would be one thing if every possible alternative to war had been explored and Israel was forced to choose between war or extinction. Given that choice, Israel would actually have none; it would have to fight.

But the opposite is the case. Israel has convinced the United States and our European allies that Iran must either accept Netanyahu's position (zero enrichment of uranium) or face attack. As far as incrementally lifting sanctions in exchange for Iranian concessions (like keeping enrichment well-below weapons grade levels), Netanyahu is absolutely opposed which means that the Obama administration must fall in line (and, with us, the Europeans). In other words, the United States and our allies are demanding that Iran meet 100 percent of Israel's demands while offering Iran nothing in return. (Meanwhile Israel's uninspected nuclear arsenal goes mentioned).

Simply put, the idea of Israel bombing Iran, rather than permitting the United States to initiate unconditional and comprehensive negotiations with Iran is insane. What kind of leadership would risk one-fifth of its GDP (not to mention its people) rather than negotiate? That is especially true when there is absolutely no consensus in Israel favoring war.

It is time for the United State to act like Israel's ally, rather than Netanyahu's, and prevent any attack on Iran. In fact, I believe that is precisely what Obama is quietly doing. He just needs to make sure that Netanyahu gets the message: the light is red, not green and not amber. Red. If Obama cares about the security of Israel more than pleasing a few hawkish (on Israel) donors, that is the message he must deliver.

 

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A couple of years before Binyamin Netanyahu was elected prime minister of Israel in 2009, I participated in a small meeting with him as a staffer for Israel Policy Forum, an organization that lobbied ...
A couple of years before Binyamin Netanyahu was elected prime minister of Israel in 2009, I participated in a small meeting with him as a staffer for Israel Policy Forum, an organization that lobbied ...
 
 
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11:49 PM on 09/05/2012
Very interesting points from Joeconvex, just wanted to say that as you make these points they carry zero relevance with the topic at hand. The topic being Israel's economic impact on going to war with Iran. Now I am not saying that I agree or disagree with Iran, it's policies, or their culture but I am saying that if Israel wants to become a viable competitor in today's world market that spending a fifth of their GDP on a war that is not necessarily their only option is a bit foolish. Diplomacy should be the route they seek instead of making demands trying to rally up the globe against a country that doesn't have as much military strength as Israel or it's allies. Israel should just focus on economic growth and with that in turn could process more money which would increase military spending which would ultimately stop the paranoia of Iran acting on it's numerous empty threats.
10:58 AM on 09/06/2012
I see you are taking the same line as MJ Rosenberg - mustn't criticize Iran, even though their leaders repeatedly threaten to annhilate an entire country.

Should Israel just sit and wait for Iran to complete its nuclear weapons program, and then hope that Ahmadinejad and Khamanei are only "joking"?
See, for example:
http://worldnews.nbcnews.com/_news/2012/08/18/13345717-iran-condemned-after-over-claim-cancerous-tumor-israel-has-no-place-in-mideast?lite
"U.N. Secretary-General Ban Ki-moon has sharply criticized Iran's supreme leader and president, describing their latest verbal attacks on Israel as "offensive and inflammatory."

Many thousands of Iranians shouted "Death to America, death to Israel" during state-organized protests ...."

Ahmadinejad frequently calls for Israel's annihilation. Do you think he's "joking"?
Just a couple of the many examples:

"Ahmadinejad on Al Quds Day: Annihilate Israel"
"TEHRAN: Iranian President Mahmoud Ahmadinejad called on the Palestinians Friday to adhere to the goal of annihilating Israel …" Daily Star, Lebanon, August 27, 2011
http://www.dailystar.com.lb/News/Middle-East/2011/Aug-27/Ahmadinejad-on-Al-Quds-Day-Annihilate-Israel.ashx#axzz1mpx6wtJD

Ahmadinejad is happy to have himself filmed chanting "Death to Israel". See http://www.youtube.com/watch?v=FckLO8HcNyo
He doesn’t try to hide his genocidal ambitions.
11:37 AM on 09/05/2012
M J Rosenberg - Iran's champion and defender! His oft-repeated theme is "Hands off Iran!"

Yet again, an article about Iran, but not ONE WORD of criticism of Iran.
No mention of Iran's oft-repeated threats to destroy Israel - even Ban ki-Moon ripped into the Iranian leadership for doing this. See http://www.youtube.com/watch?v=rdOV4HF4ESs
No mention of Iran's leaders' nazi-esque comments about Jews.
See, for example, this recent bizarre rant:
http://www.examiner.com/article/analysis-iran-accuses-israelis-of-promoting-homosexuality-4
No mention of Iran's abysmal human rights record, including its treatment of women and gays [such as hanging them]
No mention of Iran's repeated refusal to comply with its false promises regarding inspections.
And no mention of Iran's refusal to comply with IAEA and UN Security Council resolutions.

Why not MJ ?? Why are you sooooo easy on this medieval, menacing regime?
You do have to wonder .........
08:07 PM on 08/31/2012
should israel attack, success will follow as certain as is the law of gravity. however, the success will have its usual problem: fear and hatred from humanity. anti-semitic talk will increase. it is the history of the jewish people
06:59 PM on 08/26/2012
America and it's allies currently has forces in iraq, syria, afghanistan,lybia, UAE and other places, looks like Iran is pretty surrounded to me. It's just a matter of time IMO.
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02:10 AM on 08/29/2012
Afganistan never made much sense....as far as destroying a small group of
bad guys....why invade a very large, very remote land when not necessary ?
If any of that....the Story....made any sense either ?

But....as a base to threaten not only IRAN....but even Russia and allies....western China....
etc...it does make a little sense....even if way too expensive for the small " gain "....
01:59 PM on 08/26/2012
Hello. Iran does not intend to start a new war. Ahmadinejad's words are only a way of expressing objection towards Israel occupying Palestine, and a way of expressing sympathy with Palestinians. With great respect, please read and sign the 2 petitions below, if you agree:
http://www.thepetitionsite.com/252/753/022/please-stop-israel-from-talking-of-attack-on-iran-nuclear-sites/
http://www.ipetitions.com/petition/please-stop-israel-from-talking-of-attack-on-iran
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01:49 AM on 08/28/2012
Ahmadinejad and the ayatollahs couldn't give less of a damn for the Palestinians. The rest of the Muslim world has no use for Palestinians, except to wish they didn't exist. Look at the record-- thrown out of Jordan in 1970; out of Lebanon in 1982; Kuwait, 1991; Iraq, 2003. No one wants them. The Arab League created the Palestinian refugees to keep the Arab-Israeli conflict on a low burner and keep their own populations under control, but "Palestinian resistance" has grown into a monster they can no longer control.

Even the "great leader" and icon of "Palestinian resistance" wasn't a "Palestinian"; Yasser Arafat was born, eaised and educated in Cairo, Egypt and was sent by the thyen Egyptian president, Nasser, to control the PLO for Egypt's purposes.
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02:13 AM on 08/29/2012
probably some truth there....but even Israeli politicians refer to PA !
so they do exist....and the 67 War was not necessary....so
the West Bank
Christians and Muslim Arabs deserve their own homeland !

National Geo mag....June 2009....Christian's lose their land
to Israeli radical settler's....
03:07 AM on 08/29/2012
Hello again. Yes, no one may want to help poor Palestinians, and Iran does not intend to do so by demolishing Israel, either. I haven't read much about the history of Palestine. The point is that Iran never wishes to start a new war in the region. I confirm that Ahmadinejad is doing wrong and in an exaggerated manner to call Israel "an insult to humanity", yet it is not meant.
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HUFFPOST SUPER USER
BcemXAHA
אני כלום בלעדיהם
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Chris Khoury
09:12 PM on 08/25/2012
Anyone else feel that the US defense budget has clearly pointed to the intent of spending nearl $700 billion annually just to keep Israel safe?
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02:15 AM on 08/29/2012
well, more than just that....but the military industrial complex
Ike, a Republican no less, warned about.....seems almost
unbeatable.....I guess we have to pray for a miracle...
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NorthernBorder
06:00 PM on 08/25/2012
I have like most Israelis become totally confused by our beloved leader and gracious PM BB. The only question I have is if Iran, with all its foreign plans and having spent trillions building their Nuclear facilities will consent to stop going ahead building their bomb under any conditions whatsoever. I doubt it. We have been trapped and I blame our govt and the US govt for not waking up a decade ago at least!
We are soon going to have 200,000,000 ( two hundred thousand )missiles falling on us either way. Hope we have a secret plan!
Forget negotiations - you can simply let the translaters chat instead.
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austinreid
Cheers, Prost, Campai, L'chayim
12:21 PM on 08/26/2012
Well as I understand it Israel has always been talking about the danger of Iran I distinctly remember President Clinton having to speak with Israeli ambassadors about it the problem is it is only recently the world has begun to listen to Israel.
01:32 AM on 08/28/2012
Why would Iran initiate self destruction? They don't love the Palestinians that much, it's to keep the sunnis off their back.
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NorthernBorder
06:31 AM on 08/28/2012
Dont quite understand your question - but getting rid of the installations wouldnt destroy Iran - maybe revolution against the Mullahs. I dont quite understand how the sunis are on their back but I do see the potential wealth Iran could get if it gets hold of the Sunni oil countries and also a high control of the US economy. From a religous point of view they have the idea of the umma wherein Jews certainly dont fit - or Christians for that matter.
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04:54 AM on 08/25/2012
I invite some here, sadly laughing at the neocon push for another Mid East War....

to look at Efume's article on hp....8/24/12.....
desperately trying to smear anyone critical of
greedy Sheldon Adelson and his clear attempt
to BUY the US election with over $ 100 million !

Like the mob of old....who would give to various groups to
show ' how good they actually were ! '.....so to this very biased
writer tells of of his money thrown at causes.....but very narrow
one's indeed....not just for a reasonable sort of Israel and
Zionism....but the most aggressive, radical, and dangerous form !
[ and of course, the Saudi's extremely conservative form of Islam
is also off the charts...]

He forgets to mention the video of Adelson....saying he
REGRETS being an American ! !?!?!
So why is this guy living here.....?
Tell Sheldon Adelson....get the Heck out of OUR election !

And let's hope calmer minds in Israel, DC, Iran, etc. win out
and fix this Mid East ME$$ before we have another conflict
we can not afford....or even WW 3 ! $$$$$$$
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Json
Cynical dreamer, sarcastic idealist...
04:50 PM on 08/27/2012
I read the article. You have clearly missed the point of it.
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03:58 AM on 08/28/2012
I'm listening ...?
02:43 AM on 08/25/2012
I can't blame Iran for wanting nuclear weapons.
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NorthernBorder
06:07 PM on 08/25/2012
so they can want - I also can want! we cant always GET what we want
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austinreid
Cheers, Prost, Campai, L'chayim
12:22 PM on 08/26/2012
The problem is they agreed to a treaty saying they would not pursue a nuclear weapons program.
02:44 AM on 08/28/2012
so far, there is absolutely no evidence to show that they ARE trying to start a nuclear weapons program. Not s single US intelligence Agency believes it.

Israel refused to sign the same treaty, and poses HUNDREDS of weapons. all the while running the worlds only violently enforced colonial settler movement.

Currently, I view Israels war mongering as a much greater threat to the US than Iran could EVER be if left to their own devices.
10:47 PM on 08/24/2012
Hello Screeners, can you speed things up a bit?
10:18 PM on 08/24/2012
Iran will welcome an attack. The people there are not free, they are very poor from sanctions and not aware of the outside world. An attack by anyone will unit them for a cause like what happened to us with 911. They are just like North Korea with a large military and waiting to use it.
If Iran gets attacked by Israel, Iran will send several missles to U.S. bases in the area as well as Israel. The reaction of our military will be a major blow to Iran and the 1M Iranian soldiers won't have equipment to use anymore. I hope they run like Sadams forces did. I do regret that this is a very real possibility and it looks like it can happen any day now.
10:15 PM on 08/24/2012
Ding! Ding! Ding! You hit the nail on the head when you mentioned that Israel's nuclear arsenal goes uninspected. Before we let Israel drag us into a war with Iran, President Obama should be telling Netanyahu that Israel's nuclear arsenal should undergo the same IAEA inspection regime that Israel wants to subject Iranian facilities to. I propose making a Grand Deal which, amongst other things, would require Israel to subject its facilities to IAEA inspectors and dismantle a token 5% of its nuclear arsenal. Israel should also freeze the settlements. In return, Iran and the U.S. would make contributions to an international escrow account intended to compensate Palestinians to give up their Right of Return. And Iran would have to agree in principle to recognize Israel's right to exist once the Palestinians do. For more details on my proposal see:

http://themessinglink.com/Grand_Bargain_With_Iran
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NorthernBorder
06:11 PM on 08/25/2012
Yes - and also throw Iran out the UN for not accepting the existance or calling for the destruction of a fellow member - statute!
somehow forgotten
07:40 PM on 08/26/2012
Israel refuses to declare borders. This fact makes it difficult to recognize a nation.
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NorthernBorder
06:16 PM on 08/25/2012
Lots right lots wrong
But your biggest error is the relationship between Iran and the Palestinians
There arent any. For one Pals are sunni - Iran shihite
Not intersted in Pal Nationalism - but Umma, initially mid east then the world ( same ideology as Hamas, al kahida and others) - READ. you have got google
08:11 PM on 08/26/2012
NorthernBorder--I never said there was a relationship--except the Iranians want to be seen as saviors of the underdogs and downtrodden--Especially the Palestinians.  If the Iranians turn down the plan then we are no worse off then we would be had we not made the offer-- and this would just drive a bigger wedge between Iran and the Palestinians.  It would make the Palestinians pissed at Iran if the Iranians blocked a deal that could benefit the Palestinians.  This is not a bad thing.
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NorthernBorder
06:21 PM on 08/24/2012
This is probably true.
In every war I have attended there has always been a secret systen or one that I imagined there would be. In every war I attended they either didnt work or broke (73) or my dreams didnt get across to those who count.
Everynight before sleeping with the use of med against anxiety, I work out a new system for another problem and even invent new specialized equipment
Boy I am I worried. Not only that they are not listening to my plans but even they the did it poberly would break or the would be a decision not to built them
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04:24 PM on 08/24/2012
If Netanyahu were so ill-advised as to unilaterally attack Iran and to cause hundreds or thousands of civilian deaths in both Iran and in his own cities by so doing, then the EU would likely cut its bi-lateral trading links leaving Israel's economy, which depends on European trade, in tatters.

Netanyahu and Barak are both anachronistic Zionist settler soldiers who knew how to kill the enemy but little else. As Martin Luther King said, "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity".

If there is anything more dangerous it is Israeli politicians who are willing to start a nuclear war in the Middle East that could easily spread to Europe and cause severe damage to European economies by causing oil to treble in price and transport costs to rise proportionately leading to widespread unemployment, a steep rise in commodity prices and a collapse in share indices.

Netanyahu must be stopped from attacking another UN member state and made to come to the negotiating table whilst concurrently closing down all illegal settlements in the West Bank and Jerusalem and repatriating all illegal settlers back to Israel. Only then can there be peace and an autonomous Palestinian state in accordance with the UN Charter.