Intifada so far has cost economy NIS 35 billion
Moti Bassok
Haaretz, 22 December 2002
Since the intifada broke out on September 29, 2000, two years ago today the Israeli economy has lost NIS 328-35 billion. The cost to gross domestic product (GDP) in 2001 was 2.7 percent, and this year the intifada is expected to cost 3.5 to 5 percent. In addition, defense spending has gone up in the two years of the intifada by NIS 4 billion. To these figures one must add indirect losses such the decline in both local and foreign investments.
The first nine months of 2000, the period before the eruption of the intifada were among the best ever for the Israeli economy, which had become a global success story. The number of Israeli companies listed on the Nasdaq was second only to the number of American companies. In 2000 the Israeli economy grew by an impressive 7.4 percent. Had in not been for the outbreak of the intifada in September, growth would have hit double digits. Gross domestic product in 2000 totaled $116.9 billion and per capita production came close to $18,000.
However, since the final quarter 2000, Israel's economy has been in a decline, the end of which is not in sight. In 2001 Israel registered negative growth of 0.9 percent and its gross domestic product fell to $115.9 billion. It was the first time since the depression of 1953 that Israel experienced negative growth. This year growth is expected to fall to a negative 1.5 percent. The fall in economic growth since the outbreak of the intifada has sent living standards down by 6 percent, an unprecedented decline.
Exports, which in 2000 were up by a staggering 23.9 percent fell 11.7 percent in 2001 and are forecasted to fall another 4.2 percent this year. Imports, which were up 12.2 percent in 2000, fell 4.5 percent in the first year of the intifada and another 0.6 percent in the second. Unemployment, which stood at 8.8 percent on average in 2000, will reach 10.7 percent this year.
It should be noted that the intifada has not been the only factor battering the economy. The global recession - and especially that of the U.S. economy - and the decline of the high tech sector have also had a serious affect. The liberalization and globalization of the Israeli economy in the 90's made it even more dependent on the global economy.
