Why the Shekel is Declining: Israel's Economic Crisis Explained

Amidst Israel's focus on a possible Gaza invasion, the economy shows strain. The shekel hits a 7-year low, and war-related uncertainty stalls the domestic economy. This video explores Israel's economic challenges and the potential impact of the conflict.

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0:00 Intro
1:02 Israel’s Economic history
5:18 How will the war affect Israel’s economy?
7:58 Sponsor

[HK]

Independence from who? They literally took the land from Palestinians and expelled them in 1948. The people in Gaza today are from 1948 north area that were not allowed to return to their lands. Others ended up in Lebanon and Syria as refugees.

[wilhelmheinzerling]

You forgot to mention during the 80s, the US literally doubled their aid and support for Israel, a long with buying a ton of if not all of their debt.

[user]

A Social Democratic economy is also a Capitalist economy. The only difference is a Social Democracy places a heavier emphasis on social welfare programs. The way you contrast it with its capitalist period is making it seem as if it isn't capitalist as well.

[P.rivate]

War and currency devaluation go alongside eachother, usually. I'm actually doing a college assignment about this exact topic: The Devaluation of Currencies and War. What i've found is that in 20 months, Both Russia and Ukraine have had their currencies devalued in relation to the US Dollar (USD), Euro (EUR) and Pound (GBP). Israel, although only 18 days into war, has had the new shekel (ILS) devalued by more than 4% in relation to USD, EUR and GBP. Ukraine has suffered the most damage compared to Russia and Israel, on the long term. Russia had the biggest currency devaluation spike in the start of the conflict, but has had the ruble regain its value a lot, just to lose it all again now.

[theconqueringram]

This doesn't surprise me. Internal disability and war tends to do this to an economy.

[tooeasyy]

You can't call up 300, 000 able bodied working men and NOT experience an economic crisis.

[goofer]

Very good video, as usual. But, I will mention that currently most Israelis believe the horrible populist/religious government will fall after the war, probably replaced with a centrist sane government. And if not - Israel will indeed be in a worse situation.

[TheOnceAndFutureDoug]

The demographics part is a bit misleading. For a start, Muslim births are currently outpacing Jewish births (no distinction for sect) and have been for some time. This is why the percentage of Israel's population that is Jewish is slowly declining over time. This is one of the reasons cited as why it's important to give Palestinians a state: They're going to get one eventually one way or the other, it's just a question whether or not it's their own or they just become the majority of Israelis.

It's important to keep in mind that a lot of Israel's own reporting on demographics explicitly does not count occupied territories and has a history of under-counting non-Jewish citizens. Almost like an apartheid state. Go figure.

[MuslimDraco]

Israel has received $315 billion USD from America since 1948. Pretty important fact. Source: US agency for international development.

[wizzzer]

Bezalel Smotrich is easily the worst minister of finance Israel ever had and one of the worst minister of finance in the world right now.
Netanyahu has created the worst government in Israel's history, and this last coalition will be his legacy.

[twry]

Most of the video is good but here are a few points I think you should have added

1- Israel has the highest investment in R&D as a percentage of GDP. - this is greatly because it’s a big part of the “defence” spending is actually a really good economic stimulus.

2- Netanyahu’s coalition popularity is so poor it trends at 33%. 85% of the public blames the war on the right.

A poll from yesterday shows 59% think Netanyahu cares about himself more than the country.

You can be sure israel is about to start a new era.

[BrandonConrady]

Israel was left wing at its beginning as long as you ignore the apartheid and ethnic cleansing

[_Bjornfot]

"socialism is when the government does stuff" - TLDR news, apparenly

[AB-zlnh]

It was a mistake to let Hamas defeat Fatah in 2007 & takeover Gaza. It was a mistake not to apply sanctions on Israel for repeatedly refusing to implement the Oslo Accords & UN resolutions. Decades of inaction has allowed the extremist in Gaza/Israel/Palestine to recruit with each new generation. The UN should have been more tougher & fairer.

[MultiSciGeek]

7:30 - The "ultra orthodox" Haredim are VERY VERY different from the right-wing people like Ben-Gvir. They're Orthodox strictly in religious matters, not nationalistic ones. In fact some of the Haredim are anti-Israel, anti-Zionism, and pro-Palestine. Not very "right wing" in the political sense of the word. Basically there's a conflict between the Nationalists and Haredim... for various reasons.

[socialistrepublicofvietnam]

I mean, if Ukraine could stay afloat with US & NATO aid, I'm sure Israel which was in a way better position before the war, hasn't had their single largest export by a long shot get blockaded and basically cut off, and hasn't suffered nearly as much infrastructure damage, can survive even a war with Iran

[cgt]

Social Democracy still uses capitalism, just a more restricted version. Thats also the shtick here in Europe.

[Alepfi]

Social democracy is still capitalism though, just not as ruthless.

[gp-]

Terrible government and a war tends to do that

[markdowding]

Would really like a video analyzing how the rise of the Haredi population in Israel will impact its economics in the future, especially considering this group tends to be much less educated and ideologically conservative than the more secular Jews that created the modern state of Israel