8 October 2025 | 10:44 CAT
2-minute read

Mapping Israel’s Decline

As the world marks two years since the most recent outbreak of Israel’s onslaught on Gaza, global economic pressures on Israel have surged to levels that scholars, economists, and investment firms describe as unprecedented.

Analysts say that Israel has shifted from uneasy ethical scrutiny to widespread financial isolation — with damaging consequences already manifest.

Moulana Moosa traces Israel’s economic decline through two phases: a pre-October 2023 erosion rooted in internal instability and judicial upheaval, followed by a sharp acceleration spurred by Israel’s genocide in Gaza and widespread Boycott, Divestment, and Sanctions (BDS) pressures.

Prior to October 2023, Moulana Moosa notes, Israel was already reeling: high-tech capital was fleeing, judicial reform proposals were creating alarm among economists, credit ratings were downgraded, and investor confidence was waning significantly.

After October 7, 2023, the exodus intensified.  Over US$9 billion was pulled from Israeli equities, and US$4 billion from bonds. Some 80% of Israeli startups have sustained damage, nearly half are said to have less than six months of cash reserves, and tens of thousands of businesses have already closed — among them 46 000 by July 2024.

Large international companies have frozen or scaled back operations; sovereign funds and faith-based organisations have divested; major brands such as Samsung have shut innovation arms; energy corporations like BP and Chevron have downsized their Israeli plans citing security and ethical concerns. The tourism sector, once a staple of Israel’s economy, has collapsed in many regions.

This is more than collateral damage of war: it is economic accountability.

“What BDS has done is ensure that … it becomes financially unviable as well,” Moulana Moosa said. This shift, he says, transforms boycotts from moral protest to powerful economic levers undermining profitability.

He adds that Israel’s internal political developments had already weakened its economic foundations. Moosa describes how criticised judicial reforms and concentration of political power led to investor flight and high-tech registration outside Israel. He warns that these trends point to deeper societal and structural fragility, eroding what was once hailed as a “startup nation.”

“The most Zionist thing you can do right now is to bring money into Israel from foreign investors.” This declaration, Moosa says, reflects desperation — a nation’s need to prop up its economic gears even as legitimacy and moral credibility slip away.

Moosa draws parallels with South Africa in the late 1980s, suggesting that just as international embargos and boycotts once isolated apartheid, today’s economic sanctions and global public opinion are reshaping Israel’s international economic footprint.

He emphasises that those who have not engaged in these economic pressures — be it through purchasing decisions, divestment or consumer boycotts — are complicit in sustaining the status quo. “If we are not moving … we need to … buy locally … support our causes.”

Watch the full episode on Sabaahul Muslim with Moulana Junaid Kharsany.