Israel is committed to winning the war in Gaza and eliminating Hamas regardless of the economic toll on the country, Economy and Industry Minister Nir Barkat said on Monday.
Israel’s $500-billion economy has taken a hit during the more than four-month-old war against the Palestinian militant group in Gaza, during which thousands of people have left the Israeli workforce and gone to serve in the military.
But Barkat, who is widely seen a potential candidate to succeed Prime Minister Benjamin Netanyahu, made clear that national security was not only paramount but also vital for Israel’s economy.
Asked what the risk of a bigger trade deficit and another ratings downgrade might mean for Israel, Barkat told Reuters: “Look, we’re committed to win the war. We’re going to win the war regardless of anything.”
“I think when people look at the economy of Israel, they want to make sure, first of all, we’re a secure … country,” he said during a visit to the United Arab Emirates for a ministerial conference of the World Trade Organization.
Barkat said Israel would borrow in the near-term. This borrowing, compounded with the economic impact of the war, would increase the debt to gross domestic product ratio – a measure of Israel’s ability to repay its debt – from 62% to 70%, he said.
But Barkat, a member of Netanyahu’s Likud party, said that did not concern him. He predicted the post-war economy would grow, gaining from an innovation boom in Israel’s high-tech sector, a major contributor to the economy.
Bank of Israel Governor Amir Yaron also underlined the economy’s resilience on Monday after the bank kept interest rates steady following a quarter-point cut in January.
He said that while there was uncertainty over the expected severity and duration of the war, Israel’s economy “rests on solid and resilient foundations”, and typically recovers after military conflicts and “returns rapidly to prosperity”.
‘COLLABORATION WITH PEACEFUL COUNTRIES’
Barkat said foreigners would continue to fill the jobs held by Palestinians from the occupied West Bank and Gaza before Hamas attacked Israel on Oct. 7, triggering the Gaza war and leading to them being collectively banned for security reasons.
He said Palestinian workers would be able to return only when the Palestinian Authority, which has limited rule over parts of the West Bank, enacts reforms including ceasing to pay stipends to families of militants killed or imprisoned by Israeli authorities.
Barkat said he was due to meet several UAE ministers this week and briefly met his Saudi counterpart earlier on Monday. Saudi Arabia, which does not have ties with Israel, has not commented on the meeting.
“The future is more and more collaboration with peaceful countries around the world against the regimes of Iran and Hezbollah and Hamas,” he said.
Barkat said he had confidence in Netanyahu as prime minister but declined to say whether he intended to challenge him for the leadership of the Likud party.
Israel began its offensive in Hamas-ruled Gaza after gunmen form the militant Islamist group killed some 1,200 people and took 253 hostages during the Oct. 7 attack on southern Israel, according to Israeli tallies.
Israel’s retaliatory assault on Gaza has killed around 30,000 Palestinians in the coastal enclave, according to Gaza health officials.
