GAZA: The war in the Gaza Strip, which has lasted for more than eight months, has begun to drive foreign investors away from Israel.
Israel's economy is paying a high price due to the prolonged warfare, not only in the Gaza Strip but also at the Lebanese border.
The images of conflict have shaken investor confidence, leading to foreign direct investment barely surpassing the US$1 billion mark, compared with an average of US$4.8 billion annually over the previous four years.
The Al-Qus news portal, citing 'The Jerusalem Times', reported that this situation arose because, in the last three months of 2023, Israel's FDI had already declined by 50 per cent, according to data from the Israeli statistics office last Tuesday.
"This data is more concerning because it involves long-term establishment operations of foreign companies, such as developing subsidiaries and acquiring companies in Israel.
"These investments do not only move capital, but also offer access to new technologies that promote innovation and productivity, as well as management methods," said a Finance Ministry official.
The reluctance of 80 per cent of investors in the high-tech industry further worsens the situation, which is a significant focus of Israel's economy.
This sector provides half of Israel's exports.
American company Intel is among those suspending the expansion of its microprocessor plant in Israel.
The company represents the most significant foreign investment in the country.
Additionally, companies from the United States began seeking quieter locations, which further strained Israel's economy.
Their direct investments abroad surged in the first quarter of this year to US$3.6 billion, three times the number of foreign operations in Israel.
The economic daily 'Calcalist' said these actions were against the economic policies of Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich.
The Bank of Israel said the budget deficit to finance the war could reach US$67 billion by 2025.
Israeli billionaires were also under pressure because, in recent decades, Israel no longer appeared on the list of the 10 most attractive countries for foreign investors.
This was based on an analysis by British firm Henley & Partners, which specialises in "the most sought-after migration and investment programmes in the world".
The analysis said the war not only tarnished Israel's image as a haven for foreign investors but also posed a threat to the country's economy.