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The Impact On Investment With The Reelection Of Netanyahu In Israel

download (65)Elections have consequences and the reelection of Israeli Prime Minster Netanyahu will be no different. This stunning electoral upset will have an impact on investment, that will reach far beyond the borders of Israel. There were various factors that lead to a landslide victory for an unprecedented nonconsecutive 4th term for Netanyahu, who has been Prime Minster since 2009. It had become a referendum on his policies. The last minute turn around, was most likely due to a sharp turn to the right by Netanyahu, who knew his election chances would be better by bringing the more conservative and nationalist parties on board.

Israelis And Palestinian Peace Process

Israelis And Palestinian Peace Process

The Prime Minister (PM) has now reneged on an earlier promise to seek peace with the Palestinians, living in the West Bank. He has now openly stated that he will not permit a new state to arise from this territory, as long as he is in office. This will have repercussions in Europe and the United States who have made the eventuality of a Palestinian homeland, a cornerstone of their foreign policies in the Middle East. Whether that was ever really possible is open to debate, but that door even if it was an illusion, is now closed for the time being.

There will now be politicians in the Western Europe and the United States that will be calling for punitive measures, against the Israeli government. Many of these individuals were never really in favor of the historical and continuing close ties, between their respective governments and Israel. This now provides an opportunity to loosen these links.

Anti Semitic Graffiti On A Synagogue

Anti Semitic Graffiti On A Synagogue

There will also be Western companies and universities as well as a number of government institutions who will either boycott investment and trade with Israel, or at least move to decrease it. It will become much more acceptable to no longer foster increased association, with the already beleaguered country, clinging to the coast of the eastern Mediterranean.

Israel in response will feel increasingly isolated in the very dangerous neighborhood of the Middle East. They will be more tempted to go it alone, when dealing with issues of national security. For the Israelis some of these questions are more than a matter of security, they deal with the very survival of the country. The challenge of the government of Iran acquiring nuclear capability, when they already have the capacity to fire short range missiles, is a case in point.

Protests Against Jews In Russia

Protests Against Jews In Russia

A wider war is most likely inevitable in the Middle East. A government more to the left and open to comprise in Israel, would merely forestall the inevitable. There will eventually be a nuclear armed Iran, that will threaten to destroy Israel and this time it will not be mere rhetoric. Again, all Israel can probably do is to delay that point in history, by a preemptive attack.

A wider war given what is already occurring in the Middle East, where one nation after another succumbs to civil war and chaos is likely to further threaten and destabilize the oil rich Gulf Monarchies. Any disruption to the flow of oil, would send a shock wave around the globe. Futures for crude and natural gas would skyrocket. It would throw the already weak economies in Europe into recession. Economic growth almost everywhere, would suffer as significantly higher energy prices made their way through the system.

220px-Operation_Desert_Storm_22The strides that a number of nations in the Middle East had made in development and trade would be severely damaged, as international investors abandon the region in droves. Many prosperous companies and industries in the Persian Gulf are particularly at risk. Wealthy Arabs would be looking for ways to transfer personal holdings outside the war zone. Government leaders of some of the richest but weakest countries, would also be looking for a way to shelter the wealth of their nations from conflict and devastation.

The United States and the the other member nations of the United Nations Security Council plus Germany are working to somehow constrain Iran, from becoming a full fledged nuclear power. A historical comparison could be made with the disarmament talks that occurred in the 1920’s and 1930’s.

Nuclear Power In Iran

Nuclear Power In Iran

These interwar years were also a time,when it was thought that negotiations alone, would somehow prevent conflict. That the nations of France, China, Russia,and the United Kingdom in addition to the aforementioned Germany and the United States, were also involved in the catastrophe of World War II is most poignant.

The resounding election victory of Netanyahu is setting Israel and the United States on a collision course over the next few months. The personal animosity between the P.M. Netanyahu and President Obama of the United States is well known and likely to worsen, now that Netanyahu has won a decisive political contest in his own country.

War In The Suez

War In The Suez

That the president of the United States let it be known that he might no longer shield Israel in the United Nations Security Council, reverses one of the fundamentals of American foreign policy. This guarantee to Israel has been in place since the country was founded in the late 1940’s. Resolutions could now be passed that might permit international sanctions against Israel and even the recognition of a Palestinian state.

Despite the rhetoric, given American politics and security needs in the region, it is unlikely that there will be any real change in the intelligence and military cooperation between the two countries.

The nuclear deal that President Obama was planning to sign has become much more problematic now that Netanyahu has not only won reelection, but by a decisive margin. It is no secret that President Obama was hoping and working for a different result. The results in Israel also plays well with the political opposition, to the American president in the United States Congress. There is no doubt it weakens the President’s hands in any negotiations with Iran.

Iranian Nuclear Facility

Iranian Nuclear Facility

Although President Obama would greatly desire an agreement with Iran, the position of P.M. Netanyahu is that no deal is better than a bad one. It is a statement that is being repeated by many officials and pundits on the political right in the United States and elsewhere.

Time is running out for President Obama with just 22 months left in office. It leaves precious little time to deal with the Middle Eastern issues like the Palestinians, the Iranian nuclear issue, Syria, Iraq, ISIS (Islamic State of Iraq and Syria), the Taliban, Afghanistan, Libya, and now most recently,Yemen.

Terrorist Attack In Israel

Terrorist Attack In Israel

It does not help that the stretch of Iranian influence is expanding. Iran is already supporting the regime of President Assad in Syria. Iranian help was vital in keeping him in power when that nation descended into civil war. Through Hezbollah, Iran largely controls political events in Lebanon. That President Obama removed them and Iran from the American terrorist watch list, does not change the reality on the ground.

220px-BrennendeOelquellenKuwait1991Yemen recently fell to insurgents of Al-Qaeda, another terrorist group sponsored by Iran. That the previous Yemenis government was a key ally to the United States in the region, complicates American foreign policy to the utmost. The same can be said for the the spread of terrorist groups across North and West Africa. That Iranian commanders are directing Iraqis troops in retaking territory back from ISIS, is not lost on the Israelis government. Israel is understandably feeling that it is becoming encircled.220px-Multiple_F-15E_parked_during_Operation_Desert_Shield

As events continue to spiral out of control, the stability that is needed for economic development and expansion is disappearing. The remaining islands of relative peace like Israel, Jordan, Egypt,Turkey, Saudi Arabia, United Arab Emirates and the leftover smaller Gulf States, are becoming increasingly precarious as the violence and disorder marches across the Middle East. This will profoundly effect the global economy in trade and growth.

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