How conflicts in Israel affect E-commerce?
Any kind of conflict in Israel has the potential or power to affect the world’s economy, especially of the United States of America – the superpower of the world. The rationale behind this lies in the progress of Israel as a tech giant. Moreover, Israel is among the world’s top countries having the most advanced technology, economy and is also the biggest producer of technology-related equipment. According to Human Development Index, Israel lies at the 19th number in the world having an exceptionally very high development rate. The whole world, especially the USA has a co-dependency on Israel and shares mutual benefits in this globalized world but with benefits, there are also many drawbacks because of conflicts in Israel, especially due to Middle–East conflict.
It’s obvious from the above-mentioned facts and many others that, Israel is among the most important countries in the world. The estimated revenue of the Israel E-commerce market in the year 2020 is billions of dollars which are contributing to the prosperity and growth of Israel and the world. Just like that, any conflict in the world disrupts the growth pattern of Israel and the world, especially the USA. In this article, I will discuss the present and post effects of conflicts in Israel. Following factors such as, effects of conflicts, especially of the Middle East conflict on E-commerce, how this conflict affect oil prices which in turn causes inflation in the USA, its effects on the industries and their products, companies, and effects on trade.
Effects of Conflicts on E-commerce:
Israel is a giant in the field of technology and technology-related equipment. Checkpoint software is the biggest software company in Israel while Wix is the second largest company concerning market up. These two companies along with many others allow the user to buy and sell online. The livings of millions of people depend on online selling because Israel is the biggest E-commerce market. Wix manages businesses and makes their development plans so that small and large business owners can earn profit through this. When there is any conflict in Israel, it completely affects the E-commerce market of Israel which has a very direct impact on the overall economy of Israel. E-commerce and the economy of Israel are highly impacted by any kind of conflict in Israel, especially due to the Middle – conflict. The problems caused by the conflicts and their effects on the E-commerce market and other businesses are;
Instability and Uncertainty:
Whenever there is a conflict in Israel, a situation of instability and uncertainty arises which leads to a decrease in FDI (Foreign Direct Investment). A high recession was faced by Israel’s economy in the early 2000s due to violent acts such as Second Intifada and by the destruction of the high-tech bubble.
Boycotts, Sanctions, and Disinvestments:
About the Middle–East conflict, Israel faced broad boycotts by the Palestinian peoples, the Muslim community, and the International community. The clear and obvious pictures of these boycotts were seen in 2005 when different sanctions and boycotts were imposed on Israel by the International community. These sanctions and boycotts lead to huge disinvestments and the boycotts of Israelis products. Israel didn’t face a huge impact from these sanctions because the USA always sided with Israel but its economic effects were observed over the E-commerce market as most of the people were boycotting the products made by Israel.
Effects of Conflicts on Trade:
Israel is paying exponentially high prices due to the conflicts in Israel in terms of economic development, growth, and prosperity but still, it’s economically evolving at a high rate. If Israeli would not have been involved in these issues, the economic progress of Israel can increase at an exponential rate. Many opportunity costs have been paid by Israel due to the conflicts especially the conflict between Israel and Palestine. Due to conflicts, Israel fact the issues of instability which leads to high disinvestments which in turn disrupts the trade patterns of Israel and growth rates. The potential effects on Trade are due to the following reasons;
Middle East Conflict and Oil Prices:
The Middle–East conflict has immensely increased the prices of Oil throughout the region. The rationale behind such a staunch increase in the prices of oil is the fear of spreading the conflict throughout the region as ignited by Palestine. The oil prices went up to 92$ per barrel from 2$ per barrel in 2012 when Israel killed 10 people through rocket launchers at the Gaza strip and the same thing that the oil prices could go up to 80$ per barrel was expected in 2018 upon the starting of conflict and according to recent updates, the price of oil increased at an exponential rate during the 11-day war which is still rising.
Both Israel and Palestine are not the strong producers of oil but it’s because of general tension in the region which gave a perspective that this conflict can endanger the whole region. Many analysts analyzed that, oil prices are increasing at an exponential rate because of the tension between Israel and Palestine. These prices were hiked by Arab Oil producing companies especially Iran oil-producing companies throughout the region.
The cost of oil prices has a direct influence on the transportation industry. An increase in oil prices leads to an increase in the prices of transportation while a decrease in oil prices leads to a decrease in the prices of transportation because it would squeeze the margins of truck operators. Moreover, the increase in oil prices not only gives a hike to the prices of transportation in the region but the shipper and his source of profit are also highly affected by this.
Impact of Increase in Oil
Prices on the US:
The USA is famous for exporting weapons and heavy industry to the rest of the world. Most of these products are made with heavy petroleum which in turn affects the manufacturing and production costs. Whenever the cost of producing and manufacturing products increases, it disrupts the market and the whole process of the market supply chain gets disturbed. Heavy transportation such as trucks, that are used to transport manufactured products and the planes works on ignition of petroleum so whenever there is an increase in oil prices, their prices also increase.
The increase in oil prices increases rates which in turn reduces the growth of the U.S economy. Inflation in the US economy is observed whenever there is an increase in oil prices because the increase in oil prices almost affects all the pillars of the country which sustains its economy.
The USA selling weapons to Israel:
The United States is the biggest exporter of military and armed weapons to Israel. The Democratic legislators have been introducing policies and criticizing Biden’s administration regarding the transferring of armed weapons worth $375 million to Israel by saying that Biden’s administration should not do “rubber-stamping” as Israel is killing innocent people of Palestine. The following companies would affect is Biden Administration agrees to this demands of US citizens and democratic legislators,
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