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What is the true economic cost of terror?

What's the true economic cost of terror?

Zionist Union Knesset Member Ayelet Nahmias-Verbin has been researching the economic impact caused as a result of the recent wave of terror, and what can be done to counteract it.

How much has the Israeli economy been affected by the wave of terror which has been crashing over Israel for the past six months? Has the Israeli consumer been buying less in light of the attacks? Which sectors of the economy have been hit hardest?

 

 

These questions and more were asked by Ayelet Nahmias-Verbin (Zionist Union) to the Knesset Research and Information Center a month and a half ago. The Knesset Research and Information Center provides Knesset members with access to dozens of researchers in various subjects, and enables lawmakers to create legislation based on the most accurate and up to date data.

 

What was brought to light that while there has been some affect to some sectors of the economy, there is evidence that recovery has been occurring. This doesn't take into account the recent Sarona Market attacks.

 

In November and December 2015, when the wave of terror was cresting, the revenue index dropped by a percent and a half. It rose a little in the months of January and February 2016, but not enough to close the gap.

 

How much has the Israeli economy been hurt by the current wave of terror? (Photo: Israel Police)
How much has the Israeli economy been hurt by the current wave of terror? (Photo: Israel Police)

 

The revenue index is reported by the Central Bureau of Statistics every month, and is based on state revenue from Value Added Taxes (VAT) and is used as a marker of revenue.

 

One of the sectors hit hard by the terror wave is tourism. There were 219,167 tourists who entered Israel in November 2014, and 203,449 in December 2014. That number dropped to 197,230 just a year later. This drop in tourist numbers represents a $30 million loss to the Israeli economy.

 

Israelis also bought fewer electronics and cars during the wave of terror. Israelis were spending NIS 1,742 per capita on electronics in the last quarter of 2014, a figure which dropped to NIS 1,607 per capita the same quarter a year later.

 

Nahmias-Verbin isn't surprised by the results.

 

"The correlation between terror and the economy isn’t new," she said. "It seems that we are living in a reality whereby the meaning of 'economic terror' has become more relevant than ever before."

 

"There are three principal reasons (for this downward trend); the fact that this is an continuing issue over the course of several months and not just a singular event, the type of terror which turns all of Israel into a target, and the overall lack of certainty amongst Israelis."

 

"As elected public officials, we have (a responsibility) to constantly monitor how the security situation affects the economy, and to promote growth and development. If this downward trend continues, the relevant bodies must help to facilitate business through (changes to) taxes and levies. As a member of the Economic Council, I will make sure that this issue is brought to the forefront."

 

 


פרסום ראשון: 06.17.16, 14:16
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