Why 'Israel's' Ultimate Defeat Will Come from Economic Isolation

By Janna Kadri

Source: Al Mayadeen English

With each divestment campaign, each institutional withdrawal of support, "Israel's" economic network weakens.

For years, "Israel's" existence as a regional power has depended on a military-industrial complex backed by imperial structures, most notably the United States and its allies. Yet, while "Israel" has thrived under the guise of military invincibility, its true Achilles heel is economic dependence.

"Israel's" supposed "security" apparatus, upheld through the normalization of violence and the suppression of autonomy, is now facing an erosion from within. This erosion isn't from rockets or resistance alone, but from the global forces of divestment, boycott, and sanction—a systematic refusal to sustain a regime that thrives on the subjugation of others.

Imperial Structures and the Illusion of Military Dominance

The "State of Israel" is more than a military force; it is an imperial project intertwined with global capital and Western hegemonic control over the Middle East. Framed as a "security" state, its economy functions on a global stage, deeply reliant on the technologies, investments, and political cover provided by Western allies.

Yet, as the West's own crises deepen and its imperial order faces mounting resistance, the very architecture sustaining "Israel's" economy is unraveling. This unraveling reveals a simple truth: military might, for all its immediate effects, is unsustainable without a robust economic foundation.

"Israel's" power is not inherent but conditional—contingent on foreign capital, diplomatic shields, and market access. Divestment movements, sanctions, and boycotts erode this foundation, challenging "Israel" not through traditional warfare but through the denial of participation in global economic circuits.

Each divestment decision, each company withdrawing from "Israel's" economy, symbolizes an imperial fissure, exposing the cracks beneath "Israel's" polished armor.

Gaza as the Imperial Cautionary Tale

The devastation inflicted upon Gaza isn't just an isolated "security" incident—it is an overt demonstration of imperial violence meant to serve as a warning, primarily to Iran and other autonomous actors in the region.

The horror in Gaza represents not only an attack on Palestine but a signal to all who resist Western capital's dominance: the cost of autonomy is unbearable devastation. This perpetual targeting is deliberate, a reminder that defiance against imperialism will be met not with negotiation but with overwhelming violence.

Yet, Gaza's suffering also catalyzes a global consciousness. The atrocities committed under the pretense of "security" have sparked outrage, leading to organized resistance beyond the Middle East.

Boycotts and divestments are the tools of this resistance, rejecting the economic systems that sustain oppression. Just as "Israel's" actions serve as a threat to those seeking sovereignty, the world's divestment movements serve as an indictment of imperial control and a pushback against the entrenched violence used to uphold it.

The Soft Underbelly of Economic Dependence

"Israel's" economy is intricately tied to global markets, reliant on foreign investment and exports to maintain its growth. The tech and defense industries, symbols of "Israel's" supposed independence, are deeply dependent on foreign capital and international partnerships.

But with each divestment campaign, each institutional withdrawal of support, this economic network weakens. Foreign investment in Israeli equities has declined to its lowest point in a decade, and tech companies like Samsung Next have closed their Israeli-based operations, amplifying the regime's economic isolation.

This economic shift has had real consequences: in the second quarter of 2024, "Israel's" GDP growth was revised down to an annualized 0.3%, a stark indicator of the economic impact of these global shifts and the ongoing war on Gaza.

As the divestment movement spreads, "Israel's" economy faces a structural vulnerability. The budget deficit has widened to 8.5% of GDP, exceeding its 2024 target of 6.6%, forcing austerity measures including a proposed increase in the value-added tax to 18% by 2025.

Credit rating downgrades have led to higher borrowing costs, and the debt-to-GDP ratio has climbed to 67%.

Without the financial infrastructure to support military spending and technological advancements, "Israel's" military edge is beginning to appear hollow; economic strain reveals that power maintained through force alone cannot be sustained without a foundation of global economic support.

Strategic Escalation and Economic Consequences

To maintain its grip, "Israel" has turned to targeted aggression, attempting to dismantle anti-imperial forces in Palestine, Lebanon, and beyond. The systematic elimination of Palestinian and Lebanese Resistance leaders signals that "Israel" and its allies have moved beyond even the pretense of diplomacy.

This strategy of escalation, with all its human costs, serves as an attempt to subjugate resistance through force and intimidation. However, it also exposes "Israel's" desperation. These aggressive maneuvers fuel further condemnation, mobilizing global civil society and amplifying the divestment movement.

Despite "Israel's" efforts to dominate through direct violence, Iran's approach has been marked by strategic restraint. Even as it faces relentless sanctions and sabotage, Iran has often pursued diplomacy and sought stability through agreements like the JCPOA.

Yet, Western provocations intensify, pushing Iran into a position where restraint risks looking like passivity. "Israel's" attacks on Iran's allies and its relentless assault on Gaza are provocations meant to elicit an overreaction, providing a pretext for escalation.

Economic Resistance as the Path to Transformation

"Israel's" most significant challenge may ultimately come from the global community, bound not by military force but by economic solidarity. The divestment wave is intensifying, and with each boycott, sanction, and withdrawal of investment, "Israel" faces the growing reality of economic isolation. Unlike military confrontations, which can be contained or even spun as victories, economic resistance is decentralized and enduring—a global movement grounded in shared values and a commitment to human rights.

This analysis is not meant to diminish the vital role of Resistance movements fighting for Gaza’s liberation. Rather, it demonstrates how the global boycott movement accelerates their efforts, creating a multifaceted front against imperial domination. In the end, "Israel’s" downfall will not come from the loss of a battle but from the steady erosion of its economy, as the world withdraws its financial support in a call for justice.

The empire sustaining "Israel’s" economy and military strength is increasingly brittle, undermined by both internal contradictions and external resistance. Ultimately, "Israel’s" undoing will be a quiet, steady collapse of its economic infrastructure as global society rejects complicity in a system built on subjugation. Each boycott and sanction reinforces a refusal to enable this imperial project, turning economic withdrawal into a declaration against oppression.

The dismantling of "Israel’s" economy, accelerated by divestment and boycott, will stand as a powerful symbol of collective resistance—a testament to the enduring power of solidarity over force and a reminder that true strength lies not in domination, but in justice and shared humanity.