Business leaders call for keeping Israeli economy open amid Iran war

Some business leaders in Israel are concerned about the potential economic fallout amid the ongoing war with the Islamic Republic of Iran. Shachar Turjeman, the president of the Federation of Israeli Chambers of Commerce, addressed on Monday these concerns in an urgent letter addressed to Israel’s Economy and Industry Minister Nir Barkat. 

Turjeman urged the Israeli government to ease the restrictions on the Israeli economy as a result from the current state of emergency following Israeli air strikes in Iran. 

“As long as there is enough shelter space per the state’s instructions where people can evacuate to it easily, businesses can be opened,” Turjeman assessed. He emphasized the need to keep the Jewish state’s economy open. 

“Allowing for economic activity in the market, including commerce, is necessary for the citizens, the workers, and the economy, as every day like this costs the economy a fortune and harms the business sector,” he argued.

The senior business official warned the current situation could potentially lead to firings or employees placed on unpaid leave. 

Turjeman argued that the Israeli economy is robust but needs nevertheless backing from the government amid the ongoing challenging times. 

“The economy is strong but needs certainty, backup, and conditions that will allow it to continue to function even in an emergency.” He further urged the government to address the need for financial compensation to businesses that have been negatively affected by the ongoing war. He further urged the minister to embrace “efficient use of human resources along with minimizing the costs to the state in an emergency.”

“Don’t wait for the last minute to create a plan,” Turjeman urged. 

Barkat who previously served as the mayor of Jerusalem, confirmed on Sunday that he had met Turjeman and other Israeli business leaders. Barkat revealed that “together we are creating an array of joint solutions” which are expected to be unveiled in the near future. 

The Israeli “Rising Lion Operation” against Iran and its nuclear and military assets has so far been considered very successful military campaign. However, it comes at a high price. Brig. Gen. (res.) Re’em Aminach, a former Israeli defense official estimated that the current war with the Iranian regime costs the Israeli economy almost one billion dollars per day to finance both offensive and defensive measures. 

“These are direct costs only,” Aminach said. 

“The indirect costs – including impact on gross domestic product – cannot be measured at this stage,” he continued. 

The estimated war expenses exclude the costs for repairing physical damage caused by the Iranian ballistic missiles. 

Last June, the Bank of Israel Governor Amir Yaron estimated that the Gaza war would cost the Israeli economy around 67 billion dollars. However, this estimate was made before the intensive military offensive against Hezbollah in 2024 and the current unprecedented military offensive against the Islamic Republic of Iran. While Israel is noting many military successes against the Iranian-led axis, time will tell how the war will affect the Israeli economy in the long-term.