Abstract
Since it was established Israel has consistently faced a number of direct
inter-state security risks from
within the region. The disputes concern
deep-seated ideological issues, many of which centre on Israel’s
very existence. However, at present the majority of these threats are
rhetorical and the inter-state security
risk to Israel is relatively low,
at least with regards to Israel being the victim of inter-state conflict. This
is
largely due to the capability of the Israeli military and the support
that Israel enjoys from the US.
Non-state groups resident in other
countries such as Lebanon also target Israeli forces with regular
violence. Hamas remains a threat to the stability of the region (including
neighbouring Egypt), and we
would expect US President Barack Obama to
support any Israeli efforts to forcibly remove the group. He
supported the
Israeli campaign against Hizbullah in 2006. The President’s website
states of that conflict:
‘Obama is an original co-sponsor of the
Senate resolution expressing support for Israel, condemning the
[Hizbullah] attacks.’
Tension over Israel' s occupation of
the Palestinian Territories is now shifting from the conflict itself to
disagreements between the new coalition government of Israeli Prime Minister
Benjamin Netanyahu and
the Obama administration over settlements.
Netanyahu travelled to Washington for his first meeting with Obama on May 18,
2009, when the
president made repeated calls for a two-state solution and
demanded a freeze on settlement expansion on
the Occupied West Bank.
Netanyahu did not refer to two states and said that settlements should be
allowed to expand to accommodate ‘natural growth’. The US position
was reiterated by Secretary of State
Hillary Clinton who said on May 28,
2009, that President Obama wanted ‘to see a stop to settlements
–
not some settlements, not outposts, not “natural
growth” exceptions’. A final peace settlement between
Israel
and the Palestinian Authority (PA) still seems highly unlikely.
Israel’s defence industry benefits from large amounts of support from
the government in the form of
contracts, and it has become the leading
sector in the country’s economy. There are an estimated 150
defence
firms in Israel, with approximately 20,000 employees working in the industry.
There is, however,
an ongoing debate amongst the state’s leaders as
to whether defence spending should be curbed,
maintained or increased.
Growth in the economy will slow dramatically in 2009 due to falling demand for
Israeli exports, sluggish
consumer spending and negative investor
sentiment. Increased government spending should spare the
economy from
recession, however, with annual growth expected to come in at 1.3%.
Our
forcast for Israel' s economic growth in 2009 has been greatly reduced. We are
now forecasting real
GDP growth of just 1.3% for the coming year, rising
to 1.9% in 2010 and 2.1% in 2011. Even when
external conditions improve,
we believe that the days of 5+% annual growth, enjoyed since 2004, are
over and Israel' s growth patterns will in future resemble those of developed
states such as the US or
Western Europe. In the short to medium term, the
risks to our forecasts are weighted to the downside.
Globally, the bad
news just keeps on coming and a deeper or longer than expected downturn in the
US
would have a knock-on effect on the Israeli export sector and on
foreign direct investment.
This quarter, we have introduced a significant
new aspect to BMI' s Defence Reports, which is the City
Terrorism Rating
(CTR). This assesses the risk of a terrorist attack. The CTR takes into
account the
overall BMI Terrorism Rating for the country in question. It
also incorporates the ' prevalence' of
terrorism, which recognises the
frequency of attacks, and whether the city is a target for terrorists. The
CTR also recognises the ' threat' of terrorism in terms of the likely numbers
of victims and the ability of
groups to launch sustained campaigns. In
Israel, we assess the CTR for Tel Aviv at 17.5 while Jerusalem
rates 32.5.
These are among the lowest (worst) rated cities in the region, better than
Bagdad (0) but
comparable with Beirut (22.5). The state and prelevance
components for both cities are 10 and 40,
respectively, indicating a low
(bad) overall terrorism rating, yet lower prevalance due to effective
security. The difference between the ratings stems from Tel Aviv' s lower
(worse) risk rating of 10 against
Jerusalem' s 20.
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