Arab League Boycott of Israel - Organized Boycott of Israel - Economic Effects

Economic Effects

Although it cannot be estimated to what extent the boycott hurt Israel's economy, the boycott cannot be said to have affected it to the extent the Arabs intended. Israel's economy has performed relatively well since 1948, achieving a higher GDP per capita than that of all Arab countries except for the oil-rich gulf states of Bahrain, Kuwait, United Arab Emirates and Qatar. The boycott nevertheless has undoubtedly harmed Israel to some extent. The Israeli Chamber of Commerce estimates that with the boycott Israeli exports are 10 percent less than they would be without the boycott and investment in Israel likewise 10 percent lower.

Arab states suffer economically from the boycott as well. In its report on the cost of conflict in the Middle East, Strategic Foresight Group estimates that Arab states lost an opportunity to export $10 billion worth of goods to Israel between 2000-2010. Moreover, the Arab states of the Persian Gulf and Iran together stand to lose $30 billion as the opportunity cost of not exporting oil to Israel in the second half of the decade.

Because of the boycott, certain products which were ubiquitous elsewhere in the world, such as Pepsi, McDonald's and most Japanese cars were not to be found in Israel until the boycott began waning in the late 1980s. A similar situation existed in the Arab world which boycotted the products of companies that were selling in Israel as in the case of Coca-Cola.

Despite the boycott, Israeli goods often do make it to Arab markets in boycott countries. Typically, the Israeli goods are sent to a third country and then reshipped to an Arab state. Cyprus is the greatest transshipment point. In 2001, Cyprus imported $164 million in Israeli goods, but only exported $ 27.5 million to Israel. It is probable that the bulk of that enormous Israeli trade surplus ends up in the Arab world. Naturally, Israeli products are not heavily boycotted in the Palestinian territories and often make it into the larger Arab world through the Palestinians.

Read more about this topic:  Arab League Boycott Of Israel, Organized Boycott of Israel

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