Israel undergoing profound transformation

At the start of October 2023, Israel could look forward in coming years to a growth rate most high-income economies would be more than happy with, as the IMF projected annual rates in excess of 3% for 2024-27.

There were certainly areas of concern, the Israeli government’s populist agenda and divisive judicial overhaul had sparked fears of capital, companies and talent being driven abroad. But then came a much bigger shock, with the attacks by Hamas — labeled a terrorist group by the EU and US — on Israel, and Tel Aviv’s subsequent invasion of Gaza.

Israel has now undergone a profound transformation, temporarily putting aside its focus on startups and wealth in favor of fostering a wartime culture built on patriotism and unity.

Immediately following the massacre, hundreds of thousands of soldiers were sent to the fronts, leaving jobs unfilled and companies unproductive.

GDP in the fourth quarter of 2023 is estimated to have plummeted by 19%. JPMorgan economists cut their tally for growth last year to 2.7% from 3.3% on the eve of the October 07, 2023 attacks, and for 2024 to 2% from 2.7%.

While almost half of Israel’s deployed reservists have returned home in the past several weeks — allowing companies to reboot and helping the vital technology sector to rebound — other parts of the labor force face more severe challenges.

Hospitality and tourism remain devastated. Nearly half of construction sites are still shut as tens of thousands of Palestinian workers haven’t been permitted to return to Israel to work.

The Bank of Israel forecasts that the conflict will cost about 10% of the country’s estimated GDP of US$530 billion this year, and that Israel’s revenue will decline by 2% as a result of fewer taxes and licensing fees.

Eylon Penchas, who runs a private equity firm near Tel Aviv, is among those adjusting plans. Penchas was due to acquire an industrial company in the southern city of Sderot before it was among those attacked on October 07. Sderot was evacuated. The acquisition was cancelled.

At the same time, Erez Shachar, a managing partner at Qumra Capital, says the business community has been galvanized by what it sees as a new sense of purpose. “There’s a very clear understanding in our industry that we are an essential part of the security of Israel,” he says.

Among the questions about Israel’s economy going forward is whether it will be as internationally connected, as the country rethinks its relationship to the outside world.

The perception that the US universities and global media outlets are Hamas apologists willing to promote anti-Semitism is now so widespread that it has become a recurring punchline on Israel’s Saturday Night Live-like Eretz Nehederet.

Courtesy: Bloomberg

Indian workers flock to Israeli jobs

When Israeli and Indian officials ran six days of skill tests for workers in the state of Haryana earlier this month, thousands lined up for interviews and a chance to demonstrate their abilities as carpenters, iron benders and plaster masons, hoping to win jobs in the Middle Eastern state. Fears of the ongoing war between Israel and Hamas, it seemed, were trumped by more practical considerations, like how to support families.

"It took me seven hours by train to reach here. I have been coming to the venue for two days, and I'm hoping today I get the slot for the screening test," Gaurav Seni, a 27-year-old high school graduate, told Nikkei Asia as he waited on a university lawn with a crowd of other men.

Seni said he has a debt of 500,000 rupees (US$6,000). "If I get this job, I can take my family out of the debt ... within a few months," he said, pointing to the promised monthly salary of 137,000 rupees.

So far, Haryana and the state of Uttar Pradesh have advertised for skilled workers to interview and test for jobs in Israel, which has turned to countries such as India and Sri Lanka to fill labor shortages in sectors like construction and farming. An initial 10,000 workers were due to be hired from India.

The program is not without controversy, over both risks and ethics. Critics have slammed India's arrangement with Israel for potentially endangering workers by sending them to a conflict zone, and for indirectly helping Israel strip jobs from Palestinian workers.

Roughly 90,000 Palestinians were reportedly employed in Israel's construction sector. But due to the conflict, which started when Hamas militants stormed into Israeli communities and killed around 1,200 people in October, Israel has canceled the work permits of thousands of such workers. Meanwhile, over 25,000 people have been killed in Israel's campaign against Hamas in the Gaza Strip, according to authorities in the besieged Palestinian enclave.

The Centre of Indian Trade Unions (CITU), a group of industry organizations, denounced the recruitment and urged Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) government to terminate the arrangement with Israel.

"CITU appeals to the Indian workers not to fall prey to the abetment of the BJP-led government ... and states for going for jobs in Israel, which is itself a conflict-torn area and its [government] is rendering thousands of Palestinians working in Israel jobless while carrying out genocidal attacks on Palestine," Tapan Sen, CITU's general secretary, said in a statement.

Israel has strongly denied accusations of genocide leveled at the United Nations, insisting its war is in self-defense.

The Indian government, which has forged closer ties with Israel in recent years, has defended the hiring drive.

"We have mobility partnerships with several countries across the world. And we now have an agreement with Israel as well. The agreement started long before the conflict erupted," External Affairs Ministry spokesperson Randhir Jaiswal told reporters last Thursday. Stressing there is no basis for concern, he added, "Let me tell you that labor laws in Israel are robust and strict and provide protection of labor rights and migrant rights."

Before the war, such protections had been called into question by rights groups, highlighting alleged cases of mistreatment of Thai workers -- another key source of labor for the small country of about 9 million people.

But Jaiswal stressed, "We are conscious of our responsibility to provide safety and security to our people who are abroad. When the conflict erupted in Israel, we launched Operation Ajay for all those people who wanted to come back," referring to repatriation flights. "Having said that, we remain committed to safe migration of our people."

For workers like Seni, the decision is simple.

"Risks are everywhere, and we need to take them. I can't just sit at home and starve my family," he said. He was also confident that he would not end up working near Israel's tense borders. "Why would the government send us to some unsafe place?"

The enthusiasm for the jobs also highlights India's own challenge of finding enough work for its population -- now the world's largest at over 1.4 billion. The overall unemployment rate stood at 8.65% in December 2023, according to the Centre for Monitoring Indian Economy. For the age 20-24 bracket, it was reported as high as 44%.

Kamal Kishore, a 24-year-old arts graduate from Uttar Pradesh, said he had faced multiple rejections for jobs in India. That, he said, was why he had been "shivering in the cold since 5 am." to try out for carpentry work in Israel.

"We have huge unemployment rates in India. Even though I have the required qualifications, I faced challenges in securing a job," he said. "I belong to a poor family, and earning to support my family is important despite the potential risks."

His reasoning was similar to Seni's. "What do we have to do with the war?" he said. "Death can come anywhere, but at least I can earn better in Israel and support my family."

Courtesy: Nikkei Asia

 

 

Israel: Twenty four soldiers killed in a day

According to Reuters, twenty-four Israeli soldiers were killed in Israel's worst day of losses in Gaza on Tuesday, as its forces encircled southern Gaza's main city, trapping Palestinian residents trying to flee.

Israel said the aims of its war against the Hamas movement that runs Gaza were unchanged and that efforts were being made to bring about the release of more than 100 Israeli hostages.

Military spokesman Rear Admiral Daniel Hagari said 21 soldiers were killed when two buildings they had mined for demolition exploded after militants fired at a nearby tank. Three soldiers were reported killed in a separate attack.

"Yesterday we experienced one of our most difficult days since the war erupted," Prime Minister Benjamin Netanyahu said. "In the name of our heroes, for the sake of our lives, we will not stop fighting until absolute victory."

Asked about media reports that a ceasefire deal was being discussed, after Qatar said mediation efforts were ongoing, Israeli government spokesperson Eylon Levy said the war's goals were unchanged.

"The destruction of Hamas' governing and military capabilities in the Gaza Strip and the return of all the hostages," he said. "There will be no ceasefire that leaves the hostages in Gaza and Hamas in power."

Levy declined to elaborate on efforts to free the hostages, who were taken to Gaza following the October 07 rampage in which Hamas and other militants killed some 1,200 Israelis - the trigger for the war. Levy said lives were in the balance.

The soldiers' deaths came the day the Israeli Defence Forces (IDF) launched their biggest operation in a month, to seize remaining parts of Khan Younis, Gaza's main southern city, which is sheltering hundreds of thousands of displaced Palestinians.

"Over the past day, IDF troops carried out an extensive operation during which they encircled Khan Younis," the military said, adding that they had "eliminated" dozens of fighters.

Israeli tanks, advancing west towards the Mediterranean, shut the road out towards the coast on Tuesday, blocking the escape route for civilians trying to reach Rafah, the last town on Gaza's southern edge - now crammed with more than half the enclave's 2.3 million people.

At least 195 Palestinians were killed in the space of 24 hours, raising the documented toll to 25,490, according to Palestinian health officials, who say thousands more dead are feared lost in the rubble.

Iranian foreign minister to visit Pakistan

Iranian Foreign Minister Hossein Amir Abdollahian is expected to pay an official visit to Pakistan next week.

On Monday, the Iranian foreign minister and his Pakistani counterpart, Jalil Abbas Jilani, released a joint statement following a phone call.

Amir Abdollahian will travel to Pakistan on January 29, 2024, according to the statement, on the invitation of the foreign minister of Pakistan.

The senior diplomats from Pakistan and Iran also concurred that their respective nations’ ambassadors will resume their posts by January 26.

Iranian warship providing security in Red Sea

Iranian Navy Commander Rear Admiral Shahram Irani says sending the Alborz destroyer to the Red Sea aligns with Iran’s ongoing plans, such as escorting the country’s oil tankers..

During an interview with Iranian media, Irani discussed the Alborz destroyer's presence in the Red Sea, emphasizing its role in safeguarding Iran's oil tankers and ensuring maritime security in the Gulf of Aden and the Red Sea.

He shared that 96th Naval Group was recently deployed, and 97th Naval Group will soon be on a mission.

The commander highlighted the purpose of deploying the naval group, emphasizing the promotion of peace, expressing readiness for interactions with various nations, reinforcing defense, and revitalizing naval capabilities.

Talking about the seizure of a US oil tanker by Iran on January 11, the commander stated that the tanker's contents rightfully belong to Iran, and despite unjust actions, the country assertively reclaim what is theirs.

Irani underscored that any infringement on Iranian people's rights will be robustly responded to, in accordance with international norms and laws.

He spoke about the presence of the Pakistani naval group in the country, emphasizing that it represents a vital mission for the Iranian Navy, encompassing defensive strategy and maritime diplomatic defense.

“Planned interactions with regional countries, including joint maritime exercises, are part of the ongoing efforts to achieve common goals, particularly in ensuring regional economic security,” he stated.

Discussing the role of drones in defense, the Iranian commander highlighted that unmanned aerial vehicles play a significant role, both generally and specifically in the aviation sector of the Navy. 

Iran’s Navy has in recent years achieved self-sufficiency in manufacturing surface and sub-surface vessels. It has also increased its presence in international waters to protect naval routes and provide security for merchant vessels and tankers.

 

Iran: Peace in its neighborhood

On the sidelines of the World Economic Forum’s Annual Meeting, Iranian Foreign Minister Hossein Amir Abdollahian held talks with several high-ranking officials from around the world, to discuss various regional and international issues.

During a meeting with Armenian President Vahagn Khachaturyan, Amir Abdollahian stated that Tehran is an advocate of peace in the Caucasus region. 

Referring to his recent trip to Yerevan and his meetings and discussions with the Armenian foreign minister and the secretary of the country’s National Security Council, the Iranian foreign minister said, “Armenia has a significant place in Iran’s neighborhood policy.”

Amir Abdollahian pointed out that the ties between the two countries are strong, saying the bilateral ties are advancing. He said boosting the ties would serve the interests of both nations.

The Iranian foreign minister highlighted the importance of preserving the security and stability in the Caucasus region and said Iran has always supported the peace talks between the Republic of Azerbaijan and Armenia.

Amir Abdollahian held an extensive meeting with his Georgian counterpart Ilia Darchiashvili.

Expressing his satisfaction with the meeting, the Iranian foreign minister hailed the old and strong relations between the officials and people of both countries.

Amir Abdollahian said the promotion of ties with Georgia is one of Iran’s priorities and further stated that Tehran cares about the security in the Caucasus and Georgia.

He sounded upbeat that the relations between the two countries would be developed without any restrictions.

The Iranian foreign minister underlined the necessity to rely on regional solutions for the problems in the region, explaining that the security issues of the region are tied and related to each other.

Another person the Iranian diplomat convened with was Saudi Arabia’s foreign minister Faisal bin Farhan.

In the meeting, Amir Abdollahian and bin Farhan exchanged views over bilateral issues such as economic and trade cooperation.

The two top diplomats also discussed other issues of mutual interest such as Palestine’s developments and the latest state of the war in Gaza.

The Iranian foreign minister outlined the developments in Gaza and the crimes of the Zionist regime with US support, stressing Iran's support for efforts to prevent the expansion of the war and for the restoration of stability and peace in the region.

Amir Abdollahian also referred to Iran's efforts to dispel some concerns in the region and the world, including Iran's efforts to put in place mechanisms to ensure energy security.

 

Eroding US hegemony in the Middle East

Over the past century, United States established itself as an imperialist power of the world's seas and international waters. A major element of the US hegemony in West Asia is built on its global maritime presence and naval bases. 

Experts believe that the longer the massacres against Palestinian civilians in the enclave continue, the ripple effect will be felt by the US hegemony in the region, particularly in the Red Sea.

It has the world's most formidable aircraft carrier fleet, which, at times, can be found sailing in the South China Sea, the Persian Gulf, the Red Sea and many other places far beyond the US borders. 

When the US warships were targeted by Yemen's Ansarullah in the Red Sea, it was viewed as an embarrassment, perhaps more so than its humiliating withdrawal from Afghanistan. 

When Ansarullah began its military operations against Israeli and Israeli-linked ships in the Red Sea in support of Gaza, which has now expanded to include US ships in the waterway, the movement sent a message to the US that it was not the masters of these seas. 

On the morning of January 12, US warships launched 150 bombing assaults on Yemen in addition to a follow-up attack on a radar facility 24 hours later. 

Since then, Ansarullah has fired a missile at a US navy destroyer, while targeting and damaging more Israeli and US vessels with missiles and drones in the Red and Arabian seas. 

Just like the Israeli army recklessly rushed into the war on Gaza and now finds itself stuck in the enclave, the US (backed by Britain) also made a rash decision to attack Yemen and now finds itself bogged down in a battle with Ansarullah. 

The initial bombardment of Yemen, despite Washington claiming it was a one-off attack, has proven to be serious threat.  

To protect its image, the US Central Command has announced more strikes on Ansarullah positions as standing back, holding fire, and doing nothing would be a major embarrassment for President Joe Biden. 

The question, that everybody has been asking, is whether the US can afford to sustain its bombing campaigns on Yemen. 

The evidence shows that it can attack Yemen but will fail to restrain Ansarullah from launching more military operations against Israeli and now US vessels in the Red Sea or the Sea of Aden. 

Washington had the easier choice of informing the Israeli regime to cease its indiscriminate airstrikes on Gaza but failed to do so. 

It now finds itself in a battle with Ansarullah. Pentagon spokesman Patrick Ryder has been vague over the level of damage his department believes it has inflicted on the Sanaa government's capacity to launch missiles and drones. 

It is important to point out that Ansarullah survived (and effectively triumphed) eight years of war led by the US which began in March 2015. 

The vast majority of bombs dropped on Ansarullah during this period were US-made munitions. Throughout this time, Ansarullah staged its own attacks against Saudi targets, bypassing US-made defense systems. 

The popular movement and government in Sana'a, which controls most of Yemen, has also upgraded its military technology, capacities, and tactics. It can launch missiles at Israeli and US ships from the back of modified trucks. 

These modified vehicles are very easy to move around and have left experts questioning if US warships stationed in the Red Sea will start going after trucks in Yemen. 

The US can continue bombing Yemen and Ansarullah positions for a long time, but history suggests that Ansarullah can also retain its ability to close the Red and Arabian seas to Israeli and the US shipping for a very long time as well. 

Ansarullah didn't become so popular if it had not been for the vast support its government receives back at home in Yemen.

On Thursday the movement’s leader, Abdul-Malik al-Houthi, called on the Yemeni people to go out on Friday in their millions to rally in support of Palestine, and participate in the funeral of the "martyrs of the American-British aggression". 

He also said it was a great honor to be in direct support of the Palestinians in Gaza and in confrontation with the Israelis, Americans and the British. 

Others pointed out, "The United States' classification (relisting Ansarullah as a terrorist organization) targeting the Yemeni people and serving the interests of the Zionist entity will not affect Yemen's position towards Palestine." 

The question for the US and President Biden, in particular, is how far is he willing to go against a defiant Ansarullah. Is he enthusiastic to open a new front in the Israeli war on Gaza and escalate already high tensions in the region? 

Analysts have also speculated whether Ansarullah will expand its operations against regional US naval bases or if Biden will tell Prime Minister Benjamin Netanyahu to end Israel’s massacres against Palestinian women and children in Gaza, allowing the Red Sea to return to its normal business.