Prime Minister Benjamin Netanyahu acknowledged on Monday that Israel is increasingly cut off economically amid the ongoing war in Gaza, warning that the country may be forced to embrace greater self-sufficiency if defense and trade ties continue to erode.
Speaking at a Finance Ministry conference in Jerusalem, Netanyahu said Israel may have no choice but to build an economy with “autarkic characteristics,” a reference to economic systems that function without foreign trade.
“Israel is in a form of isolation, we will increasingly need to adapt to an economy where we produce what we require at home.
“I don’t like that word, I have always supported the free market, but if arms industries abroad are blocked, we must strengthen and expand our ability to manufacture here.” The prime minister stated.
Netanyahu, however, expressed optimism that Israel could eventually overcome the isolation, while attributing the trend to shifting European politics.
He argued that mass Muslim migration to the continent had pushed governments there toward positions hostile to Israel, leading to the cancellation of defense contracts and other agreements.
The remarks quickly drew fire from the opposition leader, Yair Lapid, who blasted Netanyahu’s comments as proof of a failed foreign and economic strategy.
“Isolation is not fate, it is the result of Netanyahu’s misguided policies,” Lapid said.
“He is driving Israel into the status of a third-world economy while refusing to change course.”
The warning from Netanyahu comes as Israel faces mounting international pressure, strained diplomatic ties, and growing economic fallout linked to the war in Gaza.
