How much does blood really cost?
Zionist Union Knesset Member Ayelet Nahmias-Verbin has been researching the economic impact caused as a result of the recent wave of terror, and what can be done to counteract it.God only knows why Ms Nahmias -Verbin thinks that her personal research beats that of the Bank of Israel with their 67 Phd and 89 MA and 72 MBA researches but hey..... she probably thinks .... haven't been in the news for a why .... let me say something catchy and then blame it on Binyamin Netanyahu instead of Rabin's Oslo II
How much has the Israeli economy been affected by the wave of terror which has been crashing over Israel for the past six months? Has the Israeli consumer been buying less in light of the attacks? Which sectors of the economy have been hit hardest?
These questions and more were asked by Ayelet Nahmias-Verbin (Zionist Union) to the Knesset Research and Information Center a month and a half ago. The Knesset Research and Information Center provides Knesset members with access to dozens of researchers in various subjects, and enables lawmakers to create legislation based on the most accurate and up to date data.
What was brought to light that while there has been some affect to some sectors of the economy, there is evidence that recovery has been occurring. This doesn't take into account the recent Sarona Market attacks.
In November and December 2015, when the wave of terror was cresting, the revenue index dropped by a percent and a half. It rose a little in the months of January and February 2016, but not enough to close the gap.
How much has the Israeli economy been hurt by the current wave of terror? (Photo: Israel Police)
The revenue index is reported by the Central Bureau of Statistics every month, and is based on state revenue from Value Added Taxes (VAT) and is used as a marker of revenue.
One of the sectors hit hard by the terror wave is tourism. There were 219,167 tourists who entered Israel in November 2014, and 203,449 in December 2014. That number dropped to 197,230 just a year later. This drop in tourist numbers represents a $30 million loss to the Israeli economy.
Israelis also bought fewer electronics and cars during the wave of terror. Israelis were spending NIS 1,742 per capita on electronics in the last quarter of 2014, a figure which dropped to NIS 1,607 per capita the same quarter a year later.
Nahmias-Verbin isn't surprised by the results.
"The correlation between terror and the economy isn’t new," she said. "It seems that we are living in a reality whereby the meaning of 'economic terror' has become more relevant than ever before."
"There are three principal reasons (for this downward trend); the fact that this is an continuing issue over the course of several months and not just a singular event, the type of terror which turns all of Israel into a target, and the overall lack of certainty amongst Israelis."
"As elected public officials, we have (a responsibility) to constantly monitor how the security situation affects the economy, and to promote growth and development. If this downward trend continues, the relevant bodies must help to facilitate business through (changes to) taxes and levies. As a member of the Economic Council, I will make sure that this issue is brought to the forefront."
Ayelet Nahmias-Verbin (Hebrew: איילת נחמיאס-ורבין, born 19 June 1970) is an Israeli lawyer and politician.She was born and raised in Tel Aviv. She studied law at the Hebrew University of Jerusalem. In 1991 she joined the Labor Party, and later became assistant legal advisor to Prime Minister Yitzhak Rabin. After Rabin was assassinated in 1995 she became a director for two years of Tavlit, an irrigation company. She has described herself often as a stay at home homemaker . Only nepotism ( and her personal friendship with Tzipi Livni placed her 22nd on the Zionist Union list (an alliance of Labor and Hatnuah) for the 2015 Knesset elections,and was elected to the Knesset as the alliance won 24 seats.Nahmias-Verbin lives in Jaffa and is married with three children. Her father-in-law is a former mayor of Ramat HaSharon. The probability of Tzipi Livni 's Hatnuah holding elections is slightly less than JC and Mohammed on the stage of Tel Aviv's Gay Parade with Playgirl Centerfolds on each of their arms.
The Bank of Israel has research this subject and recently released the press release on The Impact of "Terrorism, Israel's Image, and Economic Variables on Different Types of Incoming Tourism"
The security situation has a significant impact on tourist arrivals in Israel, but to different degrees depending on the purpose of the visit: tourists coming on a pilgrimage, vacation or for touring are affected to a great extent by the level of terrorism, while those coming on business and to visit relatives are minimally affected.
Tourists with an attachment to Israel—whether as Jews or as tourists who have visited the country previously—are less affected by the level of terrorism, in each purpose of the visit.
The impact of economic variables on tourist arrivals is secondary: The economic variables, including the exchange rate, have more of an impact when the security situation is calm.
In 2012 the tourism industry employed about 110,000 people. This is a labor-intensive industry in which a relatively large percentage of employees are drawn from the periphery, and, conspicuously, the proportion of employees with no academic degree is high. These characteristics of the composition of tourism employees indicates that the industry is more important to Israel than its relative share of GDP—by virtue of its ability to provide work for people with a low level of education, whose rate of employment in recent years has been lower than those with higher education. The tourism industry in Israel relies mainly on overseas tourists, whose visits provide higher added value to the economy than Israeli tourists.
The demand from tourists to visit Israel is largely dependent on the security situation. Figure 1 shows that incoming tourism reacts immediately and severely to a deterioration in the security situation in the country and the region. A salient example of this was the period of the second intifada, during which the number of incoming tourists fell drastically.
Tourists, however, are not a single entity, and their visits have different purposes (pilgrimage, vacation, business, etc.). Some of them are Jews and others Christians; some arrive in an organized framework, others independently; for some this is their first visit to Israel, others have visited the country previously. Likewise, the impact of the security situation on tourism demand is heterogeneous. This article therefore analyzes the impact on each type of tourist separately.
An econometric analysis estimating the impact of the security situation on each type of tourist, found that incoming tourism is clearly affected by the security situation. The impact, however, differs according to the purpose of the visit: tourists coming on pilgrimages, vacation or for touring are affected to a large extent by the level of terrorism, while those coming on business and to visit family are minimally affected. Tourists who have an attachment to Israel, whether as Jews or as tourists who have visited Israel previously, are less affected by the level of terrorism, in each purpose of the visit.
The study uses a new database assessing Israel’s image through the number and type of articles about Israel in world media. Data on the number of media articles about Israel dealing with wars and unrest did not make a significant contribution to explaining the changes in the number of tourists, beyond the variable of direct mention of the number of people killed in terrorist attacks. As a rule, the security situation has a dominant effect on the number of tourists coming to Israel, and articles about lifestyle in Israel, a subject unconnected with the security situation, were not found to have an impact on the number of incoming tourists. However, data on the number of articles dealing with economic issues did contribute to explaining the number of tourist entries for business purposes.
The security situation also overshadows tourists’ economic considerations. Due to the marked impact of the security situation on the volume and composition of incoming tourism, the impact of economic variables, and the exchange rate in particular, on tourist arrivals is secondary: Appreciation of the real exchange rate (strengthening of the shekel) reduces on average, but only minimally, the number of incoming tourists, but at times when there are few negative articles about Israel, in other words the security situation is calm, changes in the exchange rate have more of an impact.
Tourists with an attachment to Israel—whether as Jews or as tourists who have visited the country previously—are less affected by the level of terrorism, in each purpose of the visit.
The impact of economic variables on tourist arrivals is secondary: The economic variables, including the exchange rate, have more of an impact when the security situation is calm.
In 2012 the tourism industry employed about 110,000 people. This is a labor-intensive industry in which a relatively large percentage of employees are drawn from the periphery, and, conspicuously, the proportion of employees with no academic degree is high. These characteristics of the composition of tourism employees indicates that the industry is more important to Israel than its relative share of GDP—by virtue of its ability to provide work for people with a low level of education, whose rate of employment in recent years has been lower than those with higher education. The tourism industry in Israel relies mainly on overseas tourists, whose visits provide higher added value to the economy than Israeli tourists.
The demand from tourists to visit Israel is largely dependent on the security situation. Figure 1 shows that incoming tourism reacts immediately and severely to a deterioration in the security situation in the country and the region. A salient example of this was the period of the second intifada, during which the number of incoming tourists fell drastically.
Tourists, however, are not a single entity, and their visits have different purposes (pilgrimage, vacation, business, etc.). Some of them are Jews and others Christians; some arrive in an organized framework, others independently; for some this is their first visit to Israel, others have visited the country previously. Likewise, the impact of the security situation on tourism demand is heterogeneous. This article therefore analyzes the impact on each type of tourist separately.
An econometric analysis estimating the impact of the security situation on each type of tourist, found that incoming tourism is clearly affected by the security situation. The impact, however, differs according to the purpose of the visit: tourists coming on pilgrimages, vacation or for touring are affected to a large extent by the level of terrorism, while those coming on business and to visit family are minimally affected. Tourists who have an attachment to Israel, whether as Jews or as tourists who have visited Israel previously, are less affected by the level of terrorism, in each purpose of the visit.
The study uses a new database assessing Israel’s image through the number and type of articles about Israel in world media. Data on the number of media articles about Israel dealing with wars and unrest did not make a significant contribution to explaining the changes in the number of tourists, beyond the variable of direct mention of the number of people killed in terrorist attacks. As a rule, the security situation has a dominant effect on the number of tourists coming to Israel, and articles about lifestyle in Israel, a subject unconnected with the security situation, were not found to have an impact on the number of incoming tourists. However, data on the number of articles dealing with economic issues did contribute to explaining the number of tourist entries for business purposes.
The security situation also overshadows tourists’ economic considerations. Due to the marked impact of the security situation on the volume and composition of incoming tourism, the impact of economic variables, and the exchange rate in particular, on tourist arrivals is secondary: Appreciation of the real exchange rate (strengthening of the shekel) reduces on average, but only minimally, the number of incoming tourists, but at times when there are few negative articles about Israel, in other words the security situation is calm, changes in the exchange rate have more of an impact.
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