Analysis from Israel

Yesterday, Jonathan Marks dissected the lie of the BDS movement’s alleged commitment to nonviolence–a lie underscored by the South African chapter’s launch of a “fundraising tour” starring Palestinian airline hijacker Leila Khaled. But another lie about the boycott, divestment, and sanctions movement was also exploded this week: the lie that it is having an increasing impact on Israel. The truth, according to a new study released yesterday by the Knesset Research and Information Center, is exactly the opposite: Not only has BDS not dented Israel’s economy overall, but Israeli exports have surged even in places where the movement is most active, like Europe.

Overall, the study reports, Israeli exports rose by 80 percent from 2000 to 2013, with exports to Europe rising even more sharply, by 99 percent. But the bulk of this increase has taken place since 2005–i.e., in the years when BDS was most active. From 2005-2013, despite a sharp drop during the global financial crisis of 2009, annual exports to Europe averaged $15.6 billion. That’s almost double the preceding decade’s annual average of $7.8 billion.

Foreign direct investment in Israel has also risen steeply, posting an increase of 58 percent over the last four years alone–precisely the years when BDS was supposedly having its biggest impact.

Most surprisingly, exports from the West Bank and the Golan Heights, which are the primary focus of boycott efforts, rose even faster than exports overall. Consequently, they constituted 3.1 percent of total exports in 2013, up from 0.5 percent in 2000–and the overwhelming majority of that increase also stemmed from exports to Europe. A handful of industries, like Jordan Valley date farmers, have taken a hit, but the impact on Israel as a whole has been negligible.

As the report acknowledged, this is largely because “A major portion of Israeli exports are intermediate products, like electronic components, that sit inside the final products of well-known global companies.” That makes them hard to boycott: How do you boycott the insides of your computer or cellphone?

But it’s also worth noting that even in Europe, where BDS has gained most traction, the movement’s strongholds are found among academics, trade unionists, and unelected EU bureaucrats–i.e., people with no responsibility for the performance of national economies. In contrast, BDS has few champions among elected politicians in national governments, because these politicians are responsible for delivering economic growth to their constituents and view Israel’s innovative tech sector as a potential contributor to this effort.

Consequently, while BDS was making noise in the press, European governments were quietly working to deepen economic ties with Israel. A particularly notable example is the British Embassy Tech Hub, brainchild of British Ambassador to Israel Matthew Gould. Founded in 2011, the Hub essentially functions as a matchmaking service between British and Israeli firms, giving the former access to Israeli high-tech and the latter access to partners who can help them grow their businesses and enter new markets. It’s been so successful that other ambassadors in Israel are now consulting Gould on how to replicate his model at their own embassies.

The bottom line is that for all the hype about BDS, its efforts to strangle Israel have been a total failure. BDS may be thriving in the media and on college campuses, but out in the real world, what’s thriving is Israel’s economy.

Originally published in Commentary 

One Response to BDS Hasn’t Hurt Israel’s Economy, New Report Shows

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to Evelyn’s Mailing List

How the Embassy Move Signals Big Changes to the Iran Deal

When Israeli Prime Minister Benjamin Netanyahu met with President Donald Trump last week, he had two main items on his agenda: thanking Trump for his decision to move the U.S. Embassy to Jerusalem and urging U.S. action on Iran. At first glance, these items seem unrelated. In fact, they’re closely intertwined. The decision to relocate the U.S. embassy has turned out to be a strategic building block in Trump’s effort to renegotiate the nuclear deal with Iran.

To understand why, consider the dilemma facing his administration when it first took office. Without a serious American threat to scrap the nuclear deal, there was no chance that even America’s European allies–much less Russia, China and Iran–would agree to negotiate a fix for some of the deal’s biggest flaws. Yet conventional wisdom held that the administration would never dare flout the whole rest of the world, along with virtually the entire U.S. policy community, by withdrawing from the deal. So how was it possible to make the threat seem credible short of actually walking away from the deal?

Enter the embassy issue. Here, too, conventional wisdom held that the administration would never dare flout the whole rest of the world, along with virtually the entire U.S. policy community, by moving the embassy. Moreover, the embassy issue shared an important structural similarity with the Iran deal: Just as the president must sign periodic waivers to keep the Iran deal alive, he must sign periodic waivers to keep the embassy in Tel Aviv.

Consequently, this turned out to be the perfect issue to show that Trump really would defy the world and nix the Iran deal if it isn’t revised to his satisfaction. In fact, the process he followed with the embassy almost perfectly mimics the process he has so far followed on the Iran deal.

Read more