A Third Intifada Will Cost Israel Much More Than the First Two

As it looks like it's going to happen, the form of the next intifada bears thinking about. Short missile wars is one thing. Can the Israeli economy cope with years of unrest?

Olivier Fitoussi

Mohannad Halibi, the 19-year-old Palestinian who stabbed two Israelis outside the Old City last week, proclaimed on his Facebook page sometime beforehand that “The third intifada has begun.” He’s not alone is that sentiment. 

We’ve been warned for years that another intifada is just on the horizon. It never came and it may not this time either, but the threat looks more real than before.

Muslim and Jewish provocateurs are turning the Temple Mount into a flashpoint. The economy of the West Bank is in a funk, and Palestinian Authority President Mahmoud Abbas, who had been discouraging violence, is losing control. It’s been a decade since the second intifada ended, and there is a whole generation of young Palestinians – the ones who will be the cannon fodder for the next round of unrest – for whom the death and destruction it wrought is a faint memory, if it’s a memory at all.

It’s anyone’s guess what intifada III will look like, but under the circumstances, it might be a good idea to give some thought to it.

Define 'intifada'

The problem is that using the word “intifada” implies that what we and, for that matter, the Palestinians will be enduring is like what we went through the first two times. In fact, the second intifada didn’t much resemble the First and there’s no reason that the Third should resemble either of them, except in being characterized by mass unrest.

The first intifada was relatively non-violent. The Palestinians had few weapons and fought mainly with stones. While Israel’s economy slid into recession in 1989, it was due to internal economic developments, not the intifada. Six years of violence resulted in just 160 Israeli deaths, two-thirds of them civilian, a disproportionate number of whom were settlers. An estimated 2,000 Palestinians were killed, but a third of those were murdered by fellow Palestinians as supposed collaborators.

The second intifada was far more lethal. By then, the Palestinians had weapons and Israel reacted with much more force.  More than 1,000 Israelis were killed, three-quarters of them civilians in a wave of suicide bombings and shootings inside Israel’s cities. As many as 3,300 Palestinians were killed, nearly all by Israel.

Israel’s economy suffered its deepest recession yet – the economy shrank for two straight years – although a good part of that was due to the global dot-com bubble, which burst just as the second intifada was getting under way.

Rami Chelouche

The danger to Israel

Odds are the third intifada will be violent like the Second because the Palestinians have weapons, but it is likely to be confined to the West Bank. Even if it’s not complete, the separation barrier will make it hard for Palestinians to stage attacks inside Israel.

For now, the world is distracted by Syria. That may give the army more political latitude to operate as it sees fit. It may not wait, as it did during the second intifada, to strike hard in Palestinian-controlled areas.

Hezbollah won’t be rushing to join the fray in the West Bank. It has its hands full in Syria, unless Russian President Vladimir Putin enjoys remarkable success in shoring up the Assad government.

The danger for Israel is political. The Israel-Palestine conflict will return to the spotlight, animating the boycott movement and straining relations with the U.S. and European Union. Exacerbating the painful images of Palestinians facing off against Israeli troops and mounting Palestinian casualties will be a government with people like Tzipi Hotovely (“[The West Bank] is not a bargaining chip. It does not depend on the Palestinians’ goodwill. It’s the land of our forefathers”) and Uri Ariel (“On the one hand [we should] use an iron fist against terrorism, and on the other hand, issue a proper Zionist response by declaring an end to the construction moratorium and build in Jerusalem and Judea and Samaria"). They offer no solutions, only an iron fist.

Their hard line is music to the ears of a tone-deaf far right, which seems to think that all of Israel’s image problems can be solved by stating an uncompromising position forthrightly to the world. Hey, it worked for Putin, who took over Crimea and bits of Ukraine, right?

The media/economic trajectory isn’t favorable to Israel. In 1987, people were getting their news from newspapers and television, which relayed to their living rooms disturbing images of Palestinians with rocks facing down Israelis with tanks. CNN was there but most people in America got their TV news once or twice a day and the impact was more restrained. In the second intifada, the Internet was bringing events to viewers’ screens with an intensity and immediacy never experienced before.

Emil Salman

If the third intifada breaks out, the media element will be exponentially more powerful than it was in the Second. Smartphones produce myriad images that go flying across the media and social media in an instant. It’s doubtful that more than a tiny percentage can or will show Israel in a favorable light.

Meanwhile, each intifada has seen Israel more and more reliant on the global economy for trade and investment. When the First broke out in 1987, Israel was trade-dependent, but inflows of foreign direct investment were tiny – in the hundreds of millions of dollars. By the time the Second exploded in 2000, FDI was more than $8 billion.

Now with the Third perhaps on its way, FDI reached $8 billion in the first half of this year alone. Foreign trade is worth two-thirds of gross domestic product, and tourism is a major employer.

The economy has proven it can cope with the short missile wars it has endured over the past decade with Hamas and Hezbollah. Can it withstand several years of unrest, even if most of the violence is on the other side of the separation barrier?

That has yet to be tested. Tourism will dry up, perhaps for years. The tech sector is supposedly impervious to political upheaval, but month after month of images and stories documenting raw violence and Israeli human-rights violations will have to take a toll. Even Chinese investors are likely to get cold feet. For the first time, the economy may end up paying the cost of Israel’s failure to come to an accommodation with the Palestinians.