As a small but highly productive country, Israel is greatly dependent on the outside world for its economic and financial well-being, both from the standpoint of exports as well as inward investment. Although it is remarkably self-sufficient in food and fuel (with the natural gas discoveries) for a country of its size, it still depends on imports from the outside world for industrial inputs and consumer goods.
As a result, the perception of Israeli security from external threats and from domestic instability is of vital concern to the state. Recent events have the potential to seriously impact this perception.
Internationally, the downing of an Iranian drone which had violated Israeli air space was followed by IAF surgical strikes, during which an Israeli aircraft was downed by Syrian anti-aircraft fire. That, in turn, triggered extensive additional air strikes by the IAF. As more information becomes available it is now obvious that the operation was a great success. Syrian anti-aircraft capabilities were severely degraded and Iranian installations damaged. Despite Syrian and Iranian claims that the aircraft's downing was a "game changer" it in fact served Israel well as a pretext for important strategic gains.
The Israeli strikes were followed by bellicose language from Damascus and Tehran but not much else. Reactions from Moscow were muted and it is likely that PM Netanyahu's recent visit with Putin can be contributed to that. Reaction from the Arab world was limited to mild tut-tutting. The clear winners from this situation are Israel and Russia, whose military advisers mysteriously vanished from the anti-aircraft battery sites prior to the Israeli strikes, according to reports. The US reaction was negligible, as it also was to the Turkish invasion of north-west Syria to attack America's Kurdish allies.
Domestic Israeli developments have not been so positive. The recent demonstrations of religious influence (through the chief rabbinate and the ultra-orthodox political parties) over public policy is disturbing to potential economic partners, who must take that into consideration in their business calculations, and Israel's international reputation is being tested as well by the controversy over the thousands of illegal African immigrants, now threatened with forcible deportation or incarceration.
All in all, the current balance of Israel's very strong economic, financial and commercial situation versus its political and social negatives is positive, and events in the skies over Syria have only enhanced it.
Norman A. Bailey, Ph.D., is Professor of Economics and National Security, The National Security Studies Center, University of Haifa, and Adjunct Professor of Economic Statecraft, The Institute of World Politics, Washington, DC. He was formerly with the US National Security Council and the Office of the Director of National Intelligence.
The views he expresses are his own and do not necessarily reflect those of "Globes."
Published by Globes [online], Israel business news - www.globes-online.com - on February 15, 2018
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