Valdai Club

On March 25, Israel’s legislature, the Knesset, approved the country’s budget for the current year, preventing the collapse of Benjamin Netanyahu's government. At the same time, the ratio of military to civilian spending, the attraction of funds from the Israeli Citizens Fund and a number of accompanying factors have turned the document not only into the main financial plan, but also a kind of political plan for the future.

Еhe ideas voiced by Donald Trump after his first meeting with Benjamin Netanyahu may indicate the intention of the American administration to base the regional strategy on the principles of economic peace, extending this mechanism not only to the Palestinian-Israeli conflict, but also to the Arab-Israeli conflict.

Two incidents involving the detonation of communication devices, the liquidation of the Hezbollah Secretary General, and the IDF's operation Northern Arrows most aptly reflect the situation on the Lebanese-Israeli border over a period of just over a month. Against this background, the "historic" agreement on the demarcation of the maritime border, signed two years ago and designed to pave the way for reconciliation between the two warring states, has remained in the shadows.

For political and economic reasons, both the format of Israel’s economic relations with the PNA and the specific tax collection system need to be transformed, which, at least in some of the Palestinian territories, is entirely possible to implement during the post-war reconstruction of the Gaza Strip, taking into account previously developed proposals, Elizaveta Yakimova writes.

If the situation does not improve in the short term, then measures of economic influence, in contrast to the verbal critical rhetoric that the President of Turkey most often used previously, could cause significant damage to bilateral relations, disrupting direct non-political contacts, which previously made it possible to continue interacting in times of crisis, writes Elizaveta Yakimova.

In recent years, sanctions have become an extremely common tool of Washington’s foreign policy, which has more or less left Israel untouched, as it remains the main Middle Eastern ally of the United States. Since the beginning of this year, there has been a change in both this trend and the nature of American restrictions, whose ultimate goals have been revealed in a new way.

The issue of Israel joining BRICS is irrelevant, both from a procedural point of view and in the context of the interests of each of the parties, Elizaveta Yakimova writes. However, the expansion of the association to the Middle East and attempts to develop a consolidated position on the problems of the region play the role of altering the positioning of BRICS in Israel’s foreign policy coordinates.

Despite the periodic political controversy in the United States surrounding the provision of military aid to Israel, it is quite easy for American politicians to lobby for it on economic grounds, given that the money actually stays in the country, strengthening its defence industry. In Israel, circumstances are the opposite, since local companies not only risk being limited in their production capabilities and, as a result, hiring of personnel, but are also deprived of the opportunity to make a truly significant contribution to ensuring the defence capability of the state and its positioning in the international arena, Elizaveta Yakimova wirtes.

By the end of the second quarter of 2023, protest activity and the delayed consequences of the pandemic had revealed a number of problems that could be layered on top of the typical difficulties for the Israeli economy during the escalation periods in the Middle East conflict. However, there are also what could be called “anchors of stability”, that enable the state to cope with current challenges, albeit not without losses

The increased likelihood of a large-scale escalation of the Middle East conflict, which is also associated with the latest transit of power in Israel, worries not only the international community and peace mediators, but also foreign investors, forcing them to reconsider their strategy of maintaining a presence in the country. Of concern is Benjamin Netanyahu’s failure to deter potentially risky activities from far-right members of his cabinet, writes Elizaveta Yakimova, Research fellow at the Department of Israel and Jewish Communities, RAS Institute of Oriental Studies.