August 28, 2024
By Nasser Kandil
The occupying entity is not Lebanon, Syria, or Russia, where downgrades by credit rating agencies can be dismissed as politically motivated where labelling a country a risky environment for capital aims to drive away investors and thereby cause economic isolation and financial pressure.
The only power capable of influencing these agencies is Washington, which has been heavily supporting the entity to help it endure the war’s consequences. If Washington intervened – and it almost certainly did – it delayed the issuance of the entity’s low rating and softened the portrayal of its investment environment.
Following Fitch, Moody’s has also issued a low rating for the entity, deeming it an unsuitable environment for investment. For any discerning investor, this indicates that the rating does not truly reflect the entity’s actual economic situation and investment potential. Washington’s political interference has postponed the recognition of the economic collapse affecting the entity, which masks the severity of the crisis with polished warning terms that hint at decline without labelling it as a full-blown risk. Yet, investors can read between the lines.
The eleven-month war has deeply affected the entity’s economic core. Trade has plummeted by 50%, according to its own statistics, and Yemen has played a significant role in the commercial blockade. Tourism and industry are concentrated in the north, agriculture is split between the south and north, and all these areas are now war zones. The allure of the high-tech industry has eroded, resulting in a $70 billion loss, and the stock market has seen major investors pull out. The entity can no longer offer the prosperity and security it once did as an investment haven. These issues are irreparable, even if the war ends, as top economic experts writing in the entity’s newspapers and appearing on its television channels assert.
The war of attrition waged by the resistance, which foiled the entity’s plans for a swift, decisive victory backed by the U.S. and the West, has extended to the front that most worries the entity’s leaders: the global Jewish communities. These communities once viewed the entity through the dual lens of emotional religious attachment and investment appeal, coupled with the promise of security and a life of luxury. Now, the entity has lost all of this. Given the psychological profile of these communities, the pursuit of security and prosperity takes precedence over ideological loyalty. Only those with unwavering ideological commitment to the entity remain, but they cannot restore its status as a technologically advanced, financially superior hub capable of attracting global capital and companies.
The significant economic decline is structural and irreparable because the loss of security, confidence in strength, and deterrence cannot be restored. This reality has been growing since the ‘Flood’ and signals an inevitable downfall, marked by the reverse migration that reflects the decline of the once grand economic project designed for the entity.
