Netanyahu’s strategy has backfired badly
The speech about Israel last week by Chuck Schumer, the most senior Democrat in the US Senate, was a clear sign of exactly how far the country has fallen in the eyes of the world since it began its retaliation for the attacks on 7 October.
As well as being the most senior Jewish politician in the US, Schumer has been the longest-standing supporter of Israel in the Democratic Party. Last week, however, he called for Netanyahu’s hardline government to be replaced, accusing him of weakening his country’s “political and moral fabric” and being an “obstacle to peace”.
Netanyahu had been “too willing to tolerate the civilian toll” in Gaza and was “pushing support for Israel worldwide to historic lows”, the Senate majority leader said. “Israel cannot survive if it becomes a pariah.”
This is just the latest criticism from an increasingly frustrated Washington. Last week President Joe Biden described the Israeli government’s plan to attack Rafah – home to as many as one million refugees from the war – as a “red line” that must not be crossed. There was a time when the term “red line” was reserved for murderous autocrats like Siryian President Bashar al-assad.
There are three serious consequences of this. First, the damage to its reputation is geopolitically disastrous for the Jewish state, potentially existentially so. Its actions of the past six months have killed more than 31,300 people, according to Palestinian officials, displaced more than 1.7 million of the 2.3 million inhabitants of Gaza, and caused a humanitarian crisis that has left many in the enclave on the brink of starvation. There can clearly be no return to the status quo before 7 October, ever.
The Abraham Accords, the much-mooted agreements between Israel and Saudi Arabia, are now unthinkable without a two-state solution. In the Global South, particularly in Latin America and Africa, it has become commonplace to accuse Israel of genocide. The mass pro-palestine marches that continue all over the world are a sign of the scale of the shift in global opinion.
Perhaps the most long-lasting impact of the war will be to shatter the narrative, so well propagated in the US and beyond by the pro-israel lobby, that criticism of Israel is equivalent to anti-zionism and, by implication, anti-semitism. Defending Israel is now anathema in many parts of the world.
Second, the economic impact has been brutal. Israel’s economy has suffered one of its worst slumps ever as the war has paralysed businesses, forced people to evacuate their homes and caused the military to call up hundreds of thousands of reservists.
GDP shrank an annualised 19.4% in the final three months of last year, in seasonally adjusted terms, according to preliminary figures released in February. That was worse than every estimate in a Bloomberg survey of analysts, whose median forecast was for a decline of 10.5%. Israel’s government was downgraded for the first time – by Moody’s
Investors Service – as it plans to ramp up bond issuance to fund the conflict.
Though economic activity is expected to stabilise, the long-term impact on the tech sector, which is dependent on foreign direct investment (FDI) and used to be the driving force of the economy, could be permanent. Already damaged by the judicial reform protests of 2023 and a general slowdown in tech investment given higher interest rates, tech FDI was already down 29% in the final quarter of 2023 compared with 2022, according to the Bank of Israel.
“There will be a long-term impact of the ongoing war in Israel, which we anticipate will last at least five years,” says Israeli tech investor Entrée Capital. “Israel is thus facing double the challenges of other global tech hubs.”
Finally, there are the broader-based effects of the war on all Israelis, and indeed Jews. Anti-semitic incidents in the US hit a record in the two months after Hamas’s shock attack, according to the Anti-defamation League. It said it recorded 2,031 incidents between 7 October and 7 December, the highest ever two-month number and a 337% increase over the same period in 2022.
The scale of the surge in anti-semitism in the UK since Hamas’s attack has been even greater, with data showing a 589% increase in the number of incidents between October and February compared with the same period in 2022. The Community Security Trust, which monitors anti-jewish abuse, said the unprecedented increase was a “watershed moment for anti-semitism in the UK”.
Netanyahu and his government believed that the appropriate response to 7 October would be to obliterate Palestinian resistance through unprecedented military aggression and civilian harm. This strategy has been shown to be not only morally wrong, but delusional. It’s effects have been precisely counter-productive to its stated aim: to make Israelis safer.
Similar to 9/11 and the response of the US, many warned that the effect of the Hamas attacks would be to trap Israel into damaging itself more profoundly than Hamas itself ever could. Now, with Israel more isolated than at any point in its history, it is clear that, at least in this sense, Hamas has achieved exactly what it set out to do.