The Israeli economy is celebrating the pullout. The stock market jumped 5 percent, the shekel has gained leverage, the shopping malls and stores are packed and billion-dollar deals are in the making. A wave of economic optimism is sweeping the nation.
The images from the Gaza evacuation surprised many people: The conveyed the power of the state and an awe-inspiring ability to enforce law and order in the service of democracy.
The pullout, which could have lasted several weeks, was almost completed in full after only 100 hours. The implementation was swift, efficient, well-coordinated, cheap in resources and almost entirely devoid of violence – this is precisely what the business community in Israel and abroad admires.
Israel carried out a “global model of evacuation,” a foreigner investor who had poured hundreds of millions of dollars to the Israel market this past week told me – and he has already turned a profit.
Since the day Prime Minister Ariel Sharon announced his intention to evacuate the Gaza Strip settlements, the market has been growing at an annual rate of 5-6 percent – marking one of the highest growth rates the country has ever known.
The average standard of living is 7 percent higher than it was on the eve of the intifada, imports have gone up 33 percent, and the gross domestic product per capita has jumped by 5-6 percent and may cross the USD 20,000 mark within a year.
Former Finance Minister Binyamin Netanyahu’s economic reforms,
sane budget policy and tax reductions have contributed to the trend, and so has the relatively calm security situation.
However, Netanyahu is wrong when he says, “I have not met anyone who decided to invest in Israel due to the disengagement.”
Surprising the prime minister
In fact, many people decided to invest in the country for this reason, as the pullout has significantly altered Israel’s image in the eyes of foreigners, as well as in the eyes of its own citizens.
The current enthusiasm is understood, but the market’s continued recovery and growth may be jeopardized by a number of factors: The high cost of compensations allocated to the evacuees, the rise in oil prices, the frailty of the coalition, the unresolved issues of the American economy as well as the social tensions that may erupt imminently.
No one can assure us that Netanyahu’s warnings regarding the renewal of Gaza and West Bank terror following the pullout will not materialize.
However, economists and analysts that follow the Israeli economy share the belief that without the diplomatic prospects created by the disengagement foreigners would not have invested in the local high-tech industry, the business sector would not have poured its own money into the market, and foreign currency would not have flooded the stock exchange.
Salaried employees, whose net wages have increased only marginally, would not have been able to afford to purchase, consume, cut savings and celebrate.
It seems the general public agreement with the withdrawal is much more extensive than previously thought. This wide-scale compliance may have even surprised the prime minister himself.
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