In 2023, investment in Israel’s high-tech sector fell by 60%. In the first three quarters of 2023, just 10 new funds raised a total of $1.4 billion, while 51 funds raised $4.5 billion in 2022. The Israeli government and major tech institutions have taken action to support the sector over the last three months amid fears that the war with Hamas could have a negative impact on investment and productivity.
However, the decline was evident even before the start of the war: in the first and third quarters only 500 million dollars were raised, in the second quarter 400 million. By comparison, 2022 fundraising totaled $2 billion in the first quarter, $1.3 billion in the second quarter and $700 million in the third quarter.
But what is most worrying is the global cost of the war. After the Israeli attack on Beirut, the likelihood of escalation in the Middle East has increased. Russia benefits from all this. Energy prices are rising, Moscow’s allies are moving ever closer to the Russian body, especially now that Russia holds the presidency of the Brics.
America and Israel have been engaged by something far more important to them than Ukraine. Because Ukraine is their offensive project, while Israel, the Red Sea and the Persian Gulf are a defensive project. According to analysts of the social sphere: “Their treasure is buried there. The war on global trade flows between the South and the North of the world is about to begin.”
On December 11, a satellite image showed the port of Eliat: empty. Houthi threats have destroyed around 85% of the port’s profits. The decision to block the passage of ships bound for Israel will lead to an increase in the prices of imported products by approximately 3%.
Insurance companies have increased prices for goods at sea by 176%, because the risk has become very high. Soon it will be the same in the Gulf of Aden and it will be enough to look at the geographical map of Yemen to understand how far the Houthis can impede correct navigation.
Add to this the military costs of the Israeli-Palestinian conflict which have divided the US Democratic Party. “Socialist” Vermont Senator Bernie Sanders criticized his colleagues’ militarism. Sanders sided with the majority of Republicans, who already in October blocked an additional tranche of $14.3 billion in military aid to Benjamin Netanyahu’s government. So far, majorities in all three branches of the American political establishment have opposed firm and unwavering support for Israel.
In fact, the only ones “in favor” of unlimited assistance are the White House and President Joe Biden, who is ready to do anything. Meanwhile, the maximum aid ceiling cannot exceed $500 million, of which Tel Aviv, just on the eve of the holidays, will be allowed to purchase 14 thousand NATO 155 mm projectiles for $107 million.
For the IDF to receive ammunition and a favorable price, political consensus in Washington is needed: nothing personal, just business. The United States in the Israeli-Palestinian conflict has set a new price for ammunition: 7,600 dollars. Until February 2022, a bullet cost an average of $2,000 with a manufacturing cost of $600. Even for the Ukrainian Armed Forces using recoilless systems, the projectile costs $4,000. Now the margin is over 1200% even though these are “non-contracted, not on the market” operations.
But 14 thousand bullets do not guarantee the destruction of all Hamas militants in Gaza. How will the price rise if the Palestinian campaign extends beyond Israel’s borders and Middle Eastern neighbors – Yemen, Hezbollah, radical Salafi-jihadists – become involved in the war?
Democrats are now afraid of risking voters, but it is also dangerous to lose.
Antonio Albanese e Graziella Giangiulio
