Ahmadinejad peace sign 311.
(photo credit: Associated Press)
When there is a negative sentiment in financial markets, a small economic or political hiccup can cause the markets’ decline. Similarly, when regional relations between states are volatile, a minor provocation can escalate into a full-fledged war.
Israel’s leadership is highly aware of the region’s over-sensitivity to military hiccups. For this reason, a possible way to explain Israel’s decision to stop the flotilla to Gaza yesterday was the Israeli government’s readiness to accept the development of a potential war with no other than Teheran.
Israel’s military history is fraught with examples of fragile situations escalating into regional wars. In 1956, Gamal Nasser’s attempt to nationalize the waters of the Suez Canal provoked the Israeli operation in the Sinai, resulting in the Suez Crisis. In 1967, Nasser’s closing of the Tiran Straits instigated Israel’s swift response – destroying the Egyptians’ military airports overnight, which resulted in the Six-Day War. In 2006, the kidnapping of two IDF soldiers triggered a month-long operation against Hizbullah in Southern Lebanon. In all these examples, Israel did not shy away from using political crises as a casus belli, or a cause for war.
To argue that the IDF’s command did not foresee a worst case scenario in which violence erupted on the Gaza convoy, causing the death of pro-Gaza activists, and escalating into a regional crisis with Turkey, Syria and possibly Hizbullah and Iran, is to underestimate its conservatism and strategic foresight. The IDF is no handicap in foreseeing violent eruptions. If anything, it consciously and readily chose to allow this event to develop into a possible war. But why?
MY MENTOR and Professor at Harvard, Niall Ferguson, would argue that many events which we traditionally view as political (the outbreak of World War One, the rise of Nazism, and even the American Revolution) can be equally analyzed and explained through financial lenses.
If we apply such an economic outlook on the case at hand, it is hard to make the argument that Israel currently needs a war for economic reasons. With a rising GDP ($28,700 in the first quarter of 2010, or a GDP growth rate of 3.3%) and declining employment rate (7.2% this quarter compared with 7.3% last year, according to the Bank of Israel), Israel has managed to keep its head above the turbulent financial waters in the past couple of years.
Thanks to stern banking regulation and a less sophisticated derivative market than the US’s, Israel cruised through the global financial meltdown without the need to bail out any major financial institution. It has recently joined the OECD, and its status in the MSCI-Barra index has been upgraded from an emerging market to a developed market, indicating Israel’s economy’s readiness to join the “big guys.” There is thus no real reason for the government to try and “rescue” the economy through war.
Political reasoning does not seem to justify a war either. With solid rates of public approval of the current government, and a relatively stable coalition, there is barely a material reason for Prime Minister Binyamin Netanyahu to try and rally Israelis around the flag. With “peace” becoming an outdated, almost anachronistic notion in the mind of many Israelis, there seems to be a complacent realization that the status quo – or gridlock – with the Palestinians will last for as long as it can be afforded. A war would only challenge this status-quo-oriented mindset and make the situation worse.
A PLAUSIBLE explanation may very well lie in the realm of international relations. If not for economic or political reasons, Israel may very well be meaning to seize this regional crisis as a casus belli to challenge Teheran.
In a world of tightening military networks, Iran has become a natural
ally of the parties involved in Monday’s flotilla. Iran’s involvement
can hardly be separated from regional events such as this one.
Teheran’s financing of Hamas, its alliance with Syria (Turkey’s close
ally) and its supply of arms to Hizbullah are all matters that are
well-known to the Israeli intelligence community. Israel does not need
the Iranians to be physically present on the boats, to link such
activity to whom it perceives as the instigator of the disquiet in the
region – the ayatollahs.
To be sure, Israel can very well use a regional event such as this as a
trigger to target its archenemies in Teheran. The idea that Iran may
well be Israel’s indirect target settles with the Sunday
‘ recent report that Israel has deployed nuclear
submarines off the Iranian coast.
A wide-lens view of the recent crisis in the waters of Gaza can hence
shed light on Israel’s otherwise thoughtless takeover of the pro-Gaza
flotilla. If Israel’s government hasn’t completely lost its mind, it
has probably decided to come nearer to a point of no return with
Teheran.The writer is a Harvard graduate with a degree in Government,
and was a Milken Fellow in 2008-9. She can be reached at