Israel’s Economy Is Thriving. Most Israelis Are Not. ...Middle East

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A vendor rolls a rug outside his shop at the Jaffa flea market in Tel Aviv, Israel, on May 15, 2026, during a temporary ceasefire in the conflict involving Iran, the United States, and Israel. —Simon Beni-Middle East Images-AFP via Getty Images

In June, a missile hit a vineyard near Bat Shlomo in the hills of northern Israel. The army had calculated it would fall on open ground, where nothing strategically vital would be lost. Israel’s finite, expensive interceptors were assigned elsewhere. The loss fell almost entirely on the family that farms it. The burned vines, the ruined harvest, years of growth erased by a single crater. The standard damage assessment by the government covered only a fraction of the losses. The grower is paying to test the scorched soil for contamination himself. The cold arithmetic of defense dictated that it was collateral damage worth accepting.

The International Monetary Fund projects economic growth for Israel in 2026 outpacing every G7 economy, all of it achieved through military reserve call-ups, mass displacement, rising security costs, and a war on multiple fronts. Investor confidence on this scale, sustained through years of fighting, is a rare achievement, and the acclaim it receives is deserved.

The high-tech sector driving the headline numbers is small. It employs only about one in nine Israeli workers, pays them close to three times the average wage in the rest of the economy, and earns most of its revenue from customers abroad, who keep paying when the sirens sound. The other eight out of nine Israeli workers make their living in shops, farms, and one-person businesses that depend on local customers, the ones who stay home and lose a day's income every time the fighting flares up. Those Israelis have borne much of the toll of the war.

Consider Adi Degani, a small business owner, who taught kite surfing at Poleg Beach and on the Sea of Galilee. A reservist, he left his business and answered the call for active military duty during the war, serving for over 400 days, and leaving his business in debt. He took a bank loan to stay afloat and now works in construction. Israel gained enormously from his service, and he carries much of the burden alone.

The toll is not only financial. The State Comptroller of Israel estimates three million out of 10 million Israelis suffer from symptoms of trauma, anxiety, or depression. For a second straight year, the Central Bureau of Statistics reports that more Israelis have left the country than have come home—a quiet outflow seldom counted among the war’s costs. No one chose this the way a commander chooses which missile to intercept. The losses simply settle on whoever stands beneath them, privately, one household at a time.

The limits of self help

Since Oct. 7, 2023, Israel’s civil society has answered on its own terms, and often led the way. What began in Nov. 2023 as a single question posted online became the Forum for Reservists’ Wives, now comprising some 20,000 women speaking for roughly 100,000 families. Its chief executive, Miriam Amedi, came to the cause through her own husband, the singer and Fauda actor Idan Amedi, who was severely wounded in Gaza. 

The grower will plant again next season, because that is what Israelis do, and the hope in that is stubborn. The harder work ahead is quieter and less photogenic. The self-employed reservist, the shuttered business, and the family one mortgage payment from selling the house cannot be left standing on open ground alone.

 

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