Boycott could cost Israel NIS 40bn per year

Israel’s economy could lose up to NIS 40 billion ($10.5 billion) per year and thousands of people could lose their jobs if the country is subject to a full international boycott, according to a Finance Ministry report unveiled last week after a two-year battle.

The six-page report, completed in mid-2013, warns damage from an international boycott could range from approximately half a billion shekels ($130 million) per year and up to 500 people losing their jobs, to NIS 40 billion and 36,500 firings, depending on the scope of the boycott and its rate of adoption around the world, The Times of Israel‎ reported on Tuesday.

The report, drafted by staff at the Finance Ministry during Yesh Atid leader Yair Lapid’s stint as finance minister in the last government, had been kept under wraps until now.

The state agreed to make it public following an appeal by the Movement for Freedom of Information, an Israeli NGO. The ministry initially refused to release the report, citing its potential to cause strategic harm to the Israeli economy.

A report by the Rand Corporation released last month showed Israel could lose $9 billion annually in the absence of a peace deal and $50 billion over 10 years.

The release of the report comes as Israeli officials have expressed increasing alarm over efforts to push an Israel boycott by pro-Palestinian activists. Ministers have vowed to fight boycott attempts via legislative and legal means as the Boycott Divestment Sanctions campaign has appeared to gain ground.

According to a report in Hebrew-language business paper Calcalist on Tuesday, Finance Ministry economists presented five different scenarios for an international boycott, and examine the potential effect of each of the scenarios on Israel’s economy, its exports and the number of workers in the market.

If the diplomatic boycott of Israel sees moderate growth — leading to voluntary boycotts by European countries, chain stores or consumer organizations of goods produced in West Bank settlements — the damage to the market could reach some half a billion shekels per year, and approximately 430 people could subsequently lose their jobs.

In an extreme scenario, where the EU boycotts all Israeli products and stops foreign investments in the country – sanctions similar to those imposed on Apartheid South Africa – 36,500 people would be jobless and Israel would lose NIS 40 billion in revenue annually.