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Study: Protective Edge could cost NIS 8.5 billion
By NIV ELIS
10/07/2014
Finance Ministry reports NIS 15 million in rocket damages; study assumes that operation will be similar to 2009's Operation Cast Lead.
 
Operation Protective Edge could cost Israel NIS 8.5 billion, according to a study done by Globes.

The study based its findings on the assumption that the operation will be similar to 2009’s Cast Lead, which was longer than 2012’s Pillar of Defense and also involved a ground invasion.

According to the study, direct damages from rockets could add up to NIS 100 million if the operation continues more than 20 days. The Finance Ministry has received complaints of rocket damage amounting to NIS 15m. so far – NIS 10m. in the week before the operation began, and an additional NIS 5m. in the two days since.

In addition, the operation could cost the IDF an estimated NIS 3.5b.-3.7b., a figure based on the cost of Cast Lead that is adjusted for inflation.

Beyond the direct costs of damage and military spending, the operation will also affect business. According to the study, 2012’s Operation Cast Lead would have caused NIS 450m. in indirect damages in current prices. Then there would be the loss to overall GDP.

“If we assume that the operation lasts 20 days, the loss in GDP will be 0.4%, amounting to about NIS 4 billion. If the operation lasts an additional 10 days, the loss in GDP during these extra days will be 0.1% of GDP, or about an additional NIS 1b.,” the study said, noting that as time dragged on, the reduction in productivity would decrease.

All of figures are, of course, approximations. The ultimate economic cost will be a function of the duration of the operation, level of rocket and missile damage, number of ground troops called and number of Iron Dome interceptors used.

The Finance Ministry does not yet have official estimates of the cost of the war.

On Thursday, the Economy Ministry presented a plan to strengthen the communities around Gaza hardest hit by the rockets. The plan would grant immediate budgetary support to the communities through 2016 to help fund security measures, including protecting day care centers and strengthening infrastructure.

Economy Minister Naftali Bennett said the plan involved an investment of “millions” of shekels, but he did not give a precise figure.

The Histadrut Labor Federation and Israel Manufacturers Association called on the Economy Ministry to expand compensation for employees affected by the conflict to include parents who miss work in order to care for their kids.

Closures of summer camps have put working parents of young children in a bind, having to choose between going in to work or staying at home with their children.

On Thursday evening, Bennett agreed to expand aid both for parents missing work and businesses missing employees who had been called up for reserve duty.
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