Al-Aqsa Storm: Difference between revisions

The first and most important feature of Al-Aqsa Storm is questioning the Ibrahim Pact and more importantly  Arab-Med Corridor.  Arab-Med Corridor aimed at the interconnected development of the Emirates, Oman, Bahrain, Saudi Arabia, Jordan, and Israel. It could bring a new geo-economic order to China and the North-South Corridor. What made the Arab-Med Corridor more important than the Ibrahim Pact was that Israel could be completely integrated and stabilized in the regional order through this corridor. The connection of this corridor to the Neom region of Saudi Arabia and its proximity to the Niran Strait would give Israel access to the Persian Gulf and geopolitical superiority over Palestine. In addition, this issue, while weakening the geo-economics of Iran, Egypt, Russia, and China, automatically could push the Palestinian issue to the sidelines. Regarding this analysis, perhaps the speculations about the Kremlin's assistance to Hamas can be understandable. Therefore, the most important impact of the Al-Aqsa Storm was questioning the geo-economic order which resulted in the inevitable acceptance of Israel. The relationship between Al-Aqsa Storm and the Arab-Med Corridor is like the relationship between the 33-Day War and the new Middle East plan.

The three fundamental features of Israel's economy since the mid-1990s are based on the knowledge-based sector, accounting for more than 50% of service exports and 35% of government tax collection. The export of goods and services in 2022 was about 166 billion dollars. This characteristic of Israel's economy makes it a part of the Arab-Med Corridor, which became the most common excuse for cooperation and normalization of relations between the countries of the region and Israel. Despite this, Al-Aqsa Storm will act as a very strong catalyst for capital and human capital flight from Israel, which was started earlier with the reforms of the judicial system. Before this operation, investments especially foreign investments have decreased by 90% and 68% of knowledge-based companies have intended to leave occupied Palestine or withdraw their funds. At least 80% of these countries have been registered abroad since the beginning of 2022. So, just like the weakness of human resources against the Al-Aqsa storm, the migration of specialized forces will be a fundamental threat to Israel's economy.

The day after this operation, the Tel Aviv Stock Exchange experienced a sharp fall in the banking, insurance, and real estate sectors. In addition, the depreciation of the shekel against the dollar prompted the Central Bank of Israel to intervene in the market for the first time in three decades by injecting $30 billion. Although the central bank relying on $200 billion reserves, increasing interest rates, and conducting swap transactions can partially control the effects of this depreciation, the weakening of the credit rating in the S&P rating agency will be the biggest problem of the regime. The gradual decrease in the credit rating, which started with the reform of the judicial system, led to a decrease in foreign investment, an increase in foreign debt, and a decrease in the balance of the government's treasury. Until now, Israel's foreign debt to its GDP was estimated at 60%, which will undoubtedly increase.

Economic recession is the future of Israel's economy in the short and long term, which is also accompanied by inflation. According to the estimate of the Central Bank of Israel, every 1 percent decrease in the value of the shekel means an increase of 0.1 to 0.2 percent in inflation, and as a result, a decrease in the level of income, people's purchasing power, and finally stagnation.