Rafah, Netanyahu’s excuse to stay afloat as the Israeli economy begins to sink

The prime minister has promised the Israelis a “total victory” against Hamas and a ground offensive in the last city in southern Gaza, but, according to analysts – it is a distraction manoeuvre by a leader obsessed with his political survival.

Why is all the attention on a major Israeli offensive on Rafah, when there are few signs of it happening in the coming days? asks journalist Anshel Pfeffer in an analysis published in the Israeli newspaper Haaretz. “Because Netanyahu has been talking about it,” he says. According to Pfeffer, “the sudden flurry of Rafah-related threats has little to do with the reality on the ground and a lot to do with Netanyahu’s attempt to reinforce his latest series of messages to the Israelis.”

The writer, author of one of the latest biographies about the longest-serving prime minister in Israel’s 75-year history (The Turbulent Life and Times of Benjamin Netanyahu), maintains that the Likud leader is seeking to run for office. Israeli public opinion as the only politician capable of ending Hamas in the face of his two most direct political rivals – and members of the current war cabinet formed by Netanyahu –: the former Minister of Defense, Benny Gantz, and the former Chief of the General Staff, Gadi. Eisenkot, both from the centre-right National Unity party.

The latest polls give this formation an advantage of almost 20 seats over the Likud, if the elections in Israel are held today. In that context, Netanyahu would see in the announcement of a final offensive against Rafah a way of showing that his adversaries are “too hesitant, too defeatist, too focused on a ‘weak’ hostage agreement to continue the war until achieving that ‘total victory’. ‘” writes Pfeffer.

But Gantz has also played the Rafah card and, last Sunday announced that the Army is willing to enter the city if, when the holy month of Ramadan begins in about two weeks, Hamas has not yet released the around 130 kidnapped people. They remain in the hands of the militias in the Strip. The military man thus returned to Netanyahu his rudeness of last week, when the prime minister did not even consult the members of the war cabinet before withdrawing from the last indirect negotiations to reach a new agreement for the release of the hostages in exchange for some 1,500 Palestinian prisoners, as requested by Hamas – in addition to a complete ceasefire and the departure of Israeli troops from Gaza. 

Lack of trust in Netanyahu, according to polls

Netanyahu has defined these demands as “delusional” and has promised a “total victory” in Gaza, as the most extremist members of his government demand. “Polls show that this is what Israelis want,” says Anshel Pfeffer, but “they also show that they don’t trust Netanyahu to achieve it. “Four months into this war, that still hasn’t changed.” “There are no signs that the Israelis will find this any more convincing, but Netanyahu will persist with Rafah’s rhetoric until he finds a new spin on his narrative,” he concludes. 

A survey published this Wednesday by the Israel Democracy Institute indicates that few citizens are optimistic about the possibility of achieving “an absolute victory”: just over half of the Jews surveyed and 77.5% of the Arabs They stated that there are low probabilities.

The statements made by the Chief of the Army Staff, Herzi Halevi, support the columnist’s hypothesis, since Rafah does not seem to be the priority of the military leaders. In a meeting with reservist commanders on the northern front, on the border with Lebanon, he assured that the work of the Israel Defense Forces (IDF) is to “think about preparation for war.” “Now we are concentrating on preparing for war in the north,” where the army is exchanging fire daily with fighters from the Shiite group Hezbollah.

In Tel Aviv, thousands of people defied a police ban on organizing anti-government demonstrations by taking to Kaplan Street where, despite the repression, such numbers had not been seen since hundreds of thousands of Israelis protested each week last year, during months, against the controversial judicial reform promoted by the most right-wing government in the history of Israel. 

“During your years as prime minister you neglected the periphery and the towns on the border (with Gaza) while supporting Hamas. On October 7, you abandoned us to our fate,” shouted Ron Besin, a resident of Kibbutz Zikim, one of the communities attacked by Hamas militants that day, in protests last Saturday in Jerusalem, according to Haaretz . 

“Netanyahu has taken us to the edge, a place we should not be. He should take responsibility for what happened and make decisions. I would resign if I were him,” said Arnon Bar-David, president of the Histadrut union federation  – which brings together the most important unions in Israel – from Haifa. “It would be a mistake to hold elections now, when the war continues,” he continued, “but the country cannot continue like this, the State of Israel needs a reset. “Everyone wants new people to enter politics,” remarked the trade unionist, warning that the federation he leads could join the protests against the Government that are sprouting throughout the territory.

Moody’s and the scolding of the government’s economic management 

However, with a conflict still ongoing in Gaza, another brewing on the northern border and with growing discontent in a society marked by years of colonialist and neoliberal policies, the economic front does not seem to be the one that worries Netanyahu the most, as despite the latest blow from the risk rating agency Moody’s. 

The North American agency lowered – for the first time since it began evaluating the country’s economy in 1998 – Israel’s rating from A1 to A2, with a “negative” outlook due to the instability generated by the war in Gaza and fears of an escalation. of the conflict with Hezbollah in Lebanon, according to the version of the news most reproduced in the Israeli media. Such an announcement could lead to a rise in interest rates or the weakening of the shekel, the national currency. 

However, both Netanyahu and his finance minister, the extremist Bezalel Smotrich, were quick to downplay and attack Moody’s announcement . “The downgrade has nothing to do with the economy. It’s just because we’re at war. It will go up again as soon as we win it. And we will win it,” the prime minister said. Smotrich went further, stating that the downgrade “reflects a lack of confidence in Israel’s national security and strength, and also a lack of confidence in the righteousness of Israel’s path against its enemies.”

“There is no doubt that the war imposes a heavy economic burden on the country, but anyone who has read the report thoroughly will have noticed that Moody’s itself says that the return of the rating to its previous level does not depend only on the end of the war, but of the government’s economic policy,” says Erez Shahar, director of the Israeli venture capital fund Qumra Capital, which focuses on the relaunch of technology companies.

For this graduate in mathematics and computing, Israel cannot afford to have a weak economy. “Our military resilience depends on economic resilience. Netanyahu and his government are betting on an economy based on the political interests of their coalition and just as they neglected the Israelis on October 7, today they also neglect them financially,” says Shahar in statements to ElDiario.es, which defines economic policy. current as “wasteful”. 

In that sense, Moody’s, which also points out in its report the historical strengths of the Israeli economy (diversified, with liquidity, or with a central bank capable of quickly stabilizing financial markets), expects that Israel’s defense spending will, by the end of this year, almost double that in 2022 and that it will continue to increase by at least 0.5% of GDP in the following years. 

According to data published this Monday by the Israeli Central Bureau of Statistics, the Israeli gross domestic product in the last three months of 2023 plummeted by 19.4% compared to the previous quarter. In addition, private consumption fell by 26.9% since October 7 and fixed investment by companies by 67%. However, the country’s economy grew by 2% in 2023, compared to 6.5% in 2022.

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