Built on shaky ground, Israel's economic boom cannot last

If Israel becomes an isolated apartheid state because it won't change course, its prosperity is doomed to end

- Natale Labia

Here is a grim reality: if you had invested in the Israeli stock index on 7 October 2023, the day of Hamas' deadly attack on Israel, you would now be enjoying the best financial return of any major equity market in the world.

Since then, Israel has systematically flattened Gaza in a devastating campaign in which tens of thousands of civilians have been killed and millions displaced. While Israel has openly been committing gross human rights violations in the process, the Tel Aviv Stock Exchange has soared. By July the index was up almost 80% in dollar terms, buoyed by both domestic retail investors, but also foreign capital.

Yet this is not an anomaly - it is a feature of the system. As UN Special Rapporteur Francesca Albanese outlines in her report, "From Economy of Occupation to Economy of Genocide", Israel's economy is not just surviving amid conflict, it is thriving because of it.

The rampage that Prime Minister Benjamin Netanyahu's government has unleashed has been good for business in Israel. The occupation of Palestinian territory is deeply interwoven with corporate interests.

Illegal settlements fuel a real estate boom. Military technologies developed through decades of occupation and surveillance are exported globally. Profits are being made from the devastation of Gaza. Those same ruins now promise lucrative reconstruction contracts once the forced removal of Palestinians is complete.

Meanwhile, little appears in the mainstream financial media that is critical of this brutal military-tech-industrial complex. Instead, commentators like Ruchir Sharma in the Financial Times marvel at its "economic miracle" and firmly state that Israel is "winning", while pointing out the scale of its spending on research and development and its rate of productivity growth.