Self-destructive path: How Israel's actions lead to economic damage

RECENTLY, Malaysia recorded a 3.3 per cent growth in Gross Domestic Product (GDP) for the third quarter of 2023, compared to 2.9 per cent in the second quarter of the same year.

This growth is supported by resilient domestic demand, an improving labor market and heightened activities in tourism and construction.

Despite the 3.3 per cent growth exceeding the market's expectation of 3.0 per cent, it is essential to examine the monthly economic performance.

The original growth, which surged by 4.2 per cent in July, moderated to 3.2 per cent in August and further to 2.5 per cent in September.

Several factors contribute to this, including the country's sluggish exports due to prolonged external demand weakness, decreased manufacturing output resulting from weak demand for electrical and electronic (E&E) products, and lower production of refined petroleum products.

As we are aware, the recent Gaza bloodshed began on Oct 7. To assess the impact of this conflict on the country's economy, the GDP for the fourth quarter of 2023 and beyond will provide a clearer picture of how the war affects national economic growth.

The colonisation that have plagued Palestine has broader repercussions on the global economy.

Besides disrupting supply chains worldwide, this conflict has the potential to destabilise financial markets and increase commodity prices.

Certainly, this inhuman act significantly affects the economies of the involved nations.

In other words, the consequences of this occupation is beginning to damage Israel's economy itself.

According to a recent research report from the Bank of Israel, the prolonged absence of thousands of workers from their jobs due to the ongoing war has cost the Israeli economy around $600 million per week, approximately six per cent of the weekly GDP.

Credit rating agency S&P recently projected a five per cent contraction in Israel's economy in the fourth quarter of this year, citing lower business activities, low consumer demand, and a highly uncertain investment environment.

Israel's persistent war against Palestine not only impacts the global economy but is, in fact, beginning to harm Israel's economy and lead to worse conditions in the coming months, with significant costs incurred due to the ongoing war, driven by Israel's arrogance and pride.

In reality, the Middle East is a fortunate region that serves as a crucial energy supplier globally.

The Middle East is a significant contributor to the global oil supply.

Israel, in its current actions, aspires to conquer the entire Gaza Strip with what it is currently implementing.

Israel's greed is fueled by its ambition to expand its rule in the Middle East and subsequently broaden its economic dominance.

However, Israel's actions are essentially self-destructive, leading them towards economic damage, ultimately ensnaring themselves due to their continuous arrogance in oppressing the Palestinian population.

So, who ultimately suffers the defeat? Those who are defeated.

*Dr. Anuar Shah Bali Mahomed is an Associate Professor at the School of Business and Economics, Universiti Putra Malaysia.