Does boycotting have an impact on Israel’s economy?

Malaysians have been actively boycotting big-brand companies such as McDonald’s, Starbucks and, recently, Grab in order to support Palestinians. The boycott campaign has also been going on worldwide in order to avoid supporting israel’s related businesses. Malaysians, especially Gen Z, are actively supporting the campaign across the online platform.

If anyone is ever wondering if the boycott could have an impact on israeli’s economy, it actually does.

Boycott, Divestment, Sanctions (BDS), a Palestinian-led movement for their freedom, justice and equality, is behind the drop in foreign direct investment into Israel in 2014. This is according to the authors of a UN report on the imports from Israel to boycott. The drop is a massive 46%, in addition to the 24% drop attributed by the World Bank.

The Israeli government itself predicted that BDS would cost the Israeli economy billions of dollars. Despite the fact that the impact on economic damage is only 0.0004% from the Globes calculation since 2010 to 2018, it has raised huge awareness among people around the world.

According to Globes, during 2018, about 0.75% of Israeli businesses were able to claim that the boycotts had negatively impacted them. Each of them suffered damage at a rate of less than 10% of turnover. It was mostly during Operation Protective Edge, a military operation launched by Israel on 8 July 2014. However, they suffered no harm in other years.

Poster from the BDS movement to end Palestinian’s never-ending suffering (Palestinian BDS National Committee (BNC))

For israel’s present economy, it was predicted that it may shrink 11% on an annualized basis in the last three months of the year, JPMorgan Chase & Co. said. Recently, israel’s Atlas Hotels sent a plea for donations to its loyal customers because the company needed to be saved from collapse, according to the FT.

Despite the effect on many businesses, israel’s shekel has started to show signs of recovery. The government will compensate the companies under new provisions. Still, experts say it may not be enough.

Adda provides a list to boycott israel products (Sumit Arora/Adda 247)

BDS updated the list of israel’s products to be boycotted (BDS Movement)

According to WION, experts warned that the boycott campaign could have a negative impact on the Malaysian economy. Also, Sabah Deputy Chief Minister Jeffrey Kitingan said the campaign could weaken the ties between Malaysia and Western countries.

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