Economy Takes a Pounding during War

The statistics are grim and continue to mount: 10,000 businesses are on the brink of collapse, unemployment in the north is nearly 14 percent, workers haven’t been paid in weeks, and farmers are looking at devastated crops and distraught livestock.

From hotels and tourist attractions to farms and vineyards, businesses that slowed down or shut down completely because of the war are expected to have a ripple effect on the economy.

Property taxes have already been hiked 3 percent to support the military action and thousands of reservists were forced to leave their jobs, leaving employers in the lurch.

The Defense Ministry estimates that the conflict has cost the government 7 billion shekels ($1.5 billion). The Ministry of Industry, Trade and Labor has set up a task force to deal with the damages and repercussions of the war.

Restaurants and Shops

The most visible impact is on the closed restaurants and shops throughout the northern cities and towns. At some hotels and restaurants, the only patrons are foreign reporters who moved north when residents fled south or underground. From small convenience stores to pubs and restaurants, business hours were reduced and along with it, the clientele.

“I have 46 employees,” Moshe Taylor, a restaurant owner in Haifa, told Israel Today. “I have to pay them. How do you pay them?”
 
Haifa Mayor Yonah Yahav said the city’s “losses are desperate.” “We have the largest number of malls in Israel and they are empty,” he told us. “I have a friend who owns a shoe factory. But who feels like buying shoes right now? Sometimes owners opened up their stores because they wanted to be tough, but the clients didn’t show up.”

Municipalities are also grasping with new challenges. Haifa’s Deputy Mayor Tsvika Dahari said the city’s regular functions must carry on under fire like garbage collection and social services. But now they are saddled with new tasks as well.

“After a rocket falls, we must immediately repair the street,” he said. “We bring inspectors from the government to assess the damage. We also bring residents whose homes were hit to hotels so no one is ever sleeping on the street.”

Farms

Farmers say their livestock have been terrified by the continual blasts and gunfire from the border. Hens are laying eggs with an extremely brittle shell and cows are giving less milk. Many foreign workers fled south leaving fruit rotting on the trees. 

Fires sparked by rockets have burned thousands of acres of grazing land for the region’s 30,000 cattle. “The damage is severe,” said Haim Dayan, director general of the cattle-raisers union. He said cows miscarried at a significantly higher rate this season because farmers could not reach the herd regularly to provide the necessary care. 

Wine

Also hit hard by the war was Israel’s $150 million wine industry—a booming business with hundreds of wineries ranging from small enterprises to large ones which produce 10 million bottles a year. 

Moshe Haviv, CEO of Dalton Winery, is one example. He estimates a loss of 1 million shekels (more than $220,000) in one month and possibly the entire harvest. Haviv said a bumper crop was expected this year, but with the grapes ripening, workers were unable to tend the vines because of falling rockets, let alone bring in the harvest. A rocket landed in one of Dalton’s fields, burning two acres of vines. 

“Half my workers left with their families in fear of the Katyushas,” Haviv said, “and some of the others have been called up to reserve duty.”