Event: The Consequences of Operation Protective Edge
Date: 10th of Av and upcoming years
Ostensibly, but only ostensibly, several economic episodes that occurred this year can be considered the 'economic event' in the news.
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For example, the farce of the zero-VAT law from Lapid's family, the problematic but successful appointment of the first female governor in Israel, Dr. Karnit Flug, and several other events - are important and interesting, but they are nothing compared to the real thing: the cost of Operation Protective Edge and its critical impact on the 2014 budget, and also, to our great regret, on the budgets of the coming years.
That's how it is. While Hamas's rockets were being fired and intercepted - mostly successfully - over our heads, the coffers in our Treasury Department were greatly depleted. Here are the numbers: 41 days of fighting cost Israel more than 9 billion shekels. If you ask the Treasury Department, they will insist that it was only 6.5 billion, but why belittle the Defense Ministry? In any case, even before Operation Protective Edge began, the military system demanded an additional budget of about 5 billion shekels to its 2015 budget, and it is likely that it will not give it up just like that.
In order to gain perspective on the extent to which Protective Edge disrupted Israel's ability to manage a relatively balanced economic budget, in the context of an already unstable global market, it is worth presenting the cost of previous operations: 'Pillar of Cloud', for example, which lasted only eight days, cost the state about 3 billion shekels, if you include "civilian" costs. 'Cast Lead', which was several times longer, took 3.8 billion shekels from the government budget.
These are not amounts that are easy to digest in any situation, but still, in the last operation, Hamas dropped a bomb on Israel that could not be intercepted by any combat system - and it exploded right in the face of the Ministry of Finance and all of us, basically.
You don't need to have an economist's degree to understand that over the coming years this economic event will become a burden that we - the taxpayers - will have to shoulder in various and painful ways - across-the-board cuts to essential budgets of other government ministries such as the Ministry of Welfare, the Ministry of Health and the Ministry of Education, raising taxes, using the State of Israel's reserve funds, borrowing from abroad, and more.
It's hard to end things on an optimistic note. Ultimately, despite the sacrifices in life and money, the security situation has not changed - the negotiations are stalled, Hamas is frustrated, there is no political solution in sight, and at any moment the conflict with the Gaza Strip could flare up again, and then we will once again be forced to internalize that 'in our neighborhood' (as military commentators like to express it) what matters is security, not the economy.
As always, budgetary considerations will have to be postponed due to the winds of war.
So it's true that we don't have the privilege to say 'we don't have money for wars,' but we need to have enough sense to understand that we don't have money for unnecessary wars, and just before embarking on another operation of no choice (really?!) to give an opportunity for serious political negotiations and, first of all, to save lives and also to maintain a good standard of living for all citizens of Israel. We deserve it!
Sagit Festman is a former Calcalist and Maariv-Economics reporter.
