( Middle East Monitor ) – The Israeli port of Eilat officially declared its bankruptcy, after eight months of complete paralysis of commercial activity and its cessation of receiving ships and containers, especially coming from the Asian countries’ markets, carrying with them the needs of the economy and its industrial sector. This includes raw materials, intermediate goods, production inputs, machinery and equipment, crude oil and fuel, wheat, food, cars and other market needs.
The reason for this was the successive attacks launched by the Yemeni Houthi group on Israeli ships in the Red Sea and the Arabian Sea, as well as the targeting of ships from countries supporting the the genocidal war it is waging against the people of Gaza, most notably American and British ships.
According to the World Cargo website that reports global shipping news, the port of Eilat has officially declared bankruptcy due to the lack of commercial activity. According to data provided by the port’s CEO, Gideon Gilbert, the port has not witnessed any activity or revenues during the past eight months, and attacks by Yemeni forces in the Red Sea caused a decline in shipping traffic by 85 per cent. This sharp decline led to heavy losses for the port, which forced it to request financial aid from the Israeli government to cover its expenses and avoid permanent closure.
Major ports and economic and financial facilities are expected to declare bankruptcy in Israel during the coming period, given the almost complete paralysis that has affected economic activities, including vital sectors such as technology, information technology, direct investment, building and construction, real estate, industries, agriculture, domestic tourism and aviation. The bankruptcy may even extend to the financial and banking sector in light of the wave of flight of money and huge deposits from Israel’s markets and banks, the flight of foreign investors, the increase in the rates of bad loans and those that are unlikely to be repaid, and the decline of the shekel, foreign reserves, and the state’s public revenues, especially from taxes.
The danger of the bankruptcy of the Port of Eilat lies in the fact that the port is considered one of the most important Israeli ports. It is actually the only Israeli port overlooking the Red Sea. It represents a main gateway and a vital lung for Israel’s foreign trade with Asia, Africa and some Gulf countries. Its paralysis has disrupted supply chains and burdened the Israeli economy, causing it huge trading losses.
The announcement of the bankruptcy of the port of Eilat is only a drop in the ocean of the huge economic and financial losses that Israel has suffered since the start of the war on Gaza. It also reveals the severe damage that the Houthi attacks have inflicted on the Israeli economy, especially its trade with China, India, South Korea, Singapore, and other Asian and Gulf countries. Were it not for the logistical and commercial support that Israel receives from some countries in the region that supply Israel’s markets with its needs through Gulf ports in Dubai and Bahrain, the impact would have been greater and more painful, and Israel’s economy and markets would have witnessed collapses in vital activities, and unprecedented jumps in the markets, especially in the prices of food commodities and living.
Of course, continuing the Gaza war does not serve the interest of the Israeli economy, the activities of which have been disrupted and which has suffered heavy losses and massive damage. Some of its sectors have even been completely paralysed. According to figures from the Bank of Israel and the Israeli Ministry of Finance, the cost of the war from 7 October until the end of March 2024 reached over 70 billion shekels ($73 billion).
This is just the cost of the war. What about the cost of evacuating about 250,000 Israelis from their homes in the “Gaza Envelope” settlements, the Western Negev and the Lebanese border, and the cost of paying the salaries of the approximately 360,000 reservists who were called up from their civilian jobs? They disrupted the work of schools, universities and economic facilities, including tourism, restaurants, cafes and entertainment venues. What about the other repercussions of the war on the Israeli economy, such as the rise in inflation rates, the intensification of the general budget deficit and the increase in government debts? What about the cost of losses to economic facilities, commercial interests, and small and medium businesses in Israel, which witnessed a severe recession due to all government resources and budgets being allocated and utilised for the war?
Middle East Monitor is a not-for-profit press monitoring organization, founded on 1 July 2009, and based in London. Journalists who have written for it include Amelia Smith, Diana Alghoul, Ben White, Jehan Alfarra and Jessica Purkiss. The editorial line straddles the British left and the British Muslim religious Right.
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