Mon 21 October 2024:

The Israeli occupation army has for the first time turned to private companies to repair its armoured military vehicles, which were damaged in the Gaza Strip, Israeli media reported.

The move marks a significant shift in the army’s operational procedures, as it previously relied solely on internal resources for such repairs.

The Israeli news website Ynet reported yesterday that the occupation army “for the first time in its history, will outsource the repair and maintenance of its various armoured vehicles including tanks and APCs to companies in the Israeli defence industry due to the urgent need seen in the year-long war against Hezbollah and Hamas. The repairs were previously carried out exclusively by the IDF’s Technology and Maintenance Corps.”

Additionally, a decision has been made to employ retired professionals to participate in the maintenance process.

The occupation army’s procurement administration is set to release a tender soon. Eligible participants include companies engaged in heavy industries, specifically those specialising in metalworking and welding, as stated on the website.

Due to the extensive number of Merkava tanks and Tiger and Eitan armoured combat vehicles that were damaged during the Israeli aggression on the Gaza Strip, there has been a severe depletion in the army’s armoured combat vehicles.

Israel’s economy is paying a high price for its widening war

In late September, as Israel’s nearly year-long war widened and its credit rating was downgraded yet again, the country’s finance minister, Bezalel Smotrich, said that, while Israel’s economy was under strain, it was resilient.

“If recent escalations turn into a longer and more intense war, this will take a heavier toll on economic activity and growth (in Israel),” Karnit Flug, a former governor of Israel’s central bank, told CNN on October 1.

Israel’s economy could shrink even more than that, based on a worst-case estimate by the Institute for National Security Studies at Tel Aviv University.

Even in a more benign scenario, its researchers also see Israel’s gross domestic product per head — which in recent years overtook the United Kingdom’s — falling this year, as Israel’s population grows faster than the economy and living standards decline.

Before the October 7 attack and ensuing Israel-Hamas war, the International Monetary Fund forecast that Israel’s economy would grow by an enviable 3.4% this year. Now, economists’ projections range from 1% to 1.9%. Growth next year is also expected to be weaker than earlier forecasts.

Yet Israel’s central bank is not in a position to cut interest rates to breathe life into the economy because inflation is accelerating, propelled by rising wages and soaring government spending to fund the war.

‘Long-term’ economic damage

The Bank of Israel estimated in May that costs arising from the war would total 250 billion shekels ($66 billion) through the end of next year, including military outlays and civilian expenses, such as on housing for thousands of Israelis forced to flee their homes in the north and south. That is equivalent to roughly 12% of Israel’s GDP.

Even a withdrawal from Gaza and calm on the border with Lebanon would leave Israel’s economy in a weaker position than before the war, they said in a report in August. “Israel is expected to suffer long-term economic damage regardless of the outcome,” they wrote.

“The anticipated decline in growth rates in all scenarios compared to pre-war economic forecasts and the increase in defense expenditures could exacerbate the risk of a recession reminiscent of the lost decade following the Yom Kippur War.”

Other sectors of Israel’s economy, while less important than tech, have been hit much harder. The agriculture and construction sectors have struggled to fill gaps left by Palestinians whose work permits have been suspended since October last year, pushing up prices for fresh vegetables and leading to a steep decline in housebuilding.

Tourism has also taken a knock, with arrivals down sharply this year. Israel’s tourism ministry has estimated that the drop in foreign tourists has translated into 18.7 billion shekels ($4.9 billion) in lost revenue since the start of the war.

The Norman, a boutique hotel in Tel Aviv, has had to lay off some staff and cut its prices by up to 25%, partly because some of its facilities — including its Japanese rooftop restaurant — remain closed to save on costs.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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