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Israel’s Vital Tech Sector to Gain From Return of Army Reservists
Employees of StoreDot, an Israeli company that has developed extreme fast charging electric vehicle batteries, work in a laboratory in Herzliya, Israel, Oct. 2, 2023. Photo: REUTERS/Amir Cohen
Israel‘s wartime economy will get a much-awaited boost as the military gradually releases reservists fighting in the Gaza Strip so they can return to their jobs and jump-start softening growth.
Since the Oct. 7 attacks by the Palestinian terrorist group Hamas, more than 300,000 Israelis were drafted to reserve duty — many coming from the globally-important high-tech sector — leading to labor shortages and a gloomy national mood that hurt consumer spending and is expected to dent economic growth.
After nearly three months of intense air bombardment and a massive ground incursion, Israeli leaders have hinted that the war is entering a new phase, with a shift towards more targeted operations aimed at eliminating the Islamist group that rules Gaza and rescuing Israeli hostages.
The military accordingly is adjusting deployment plans for its forces in Gaza and other hot spots, first and foremost by starting to send reservists home — at least for a while.
It declined to share specifics about its number of forces, but said the move will “significantly alleviate economic burdens and enable them to gather strength for upcoming activities in the next year, as the fighting will persist, and their services will still be needed.”
Prior to the war, Israel was headed for solid economic growth of 3.4 percent in 2023 and 3 percent in 2024, according to the central bank. Now, the economy is headed for a fourth-quarter contraction and the Bank of Israel sees 2 percent growth this year and next, or zero growth per capita given Israel‘s fast-growing population.
Erel Margalit, who heads one of Israel‘s most active venture capital firms, Jerusalem Venture Partners (JVP), said the military made a calculated decision.
“They understand you need to go release people to go back to work because going back to work makes Israel stronger,” Margalit said. “Israel is not only strong militarily.”
START-UPS
With inflation easing, the Bank of Israel cut short-term borrowing rates by 25 basis points to 4.5 percent on Monday, its first reduction in nearly four years. The central bank’s policy makers are keeping an eye on the military’s strategy.
The release of reservists will benefit consumer spending, said deputy central bank chief Andrew Abir, which accounts for more than 50 percent of total economic activity.
“People were called up with no warning. In the first month, there was a real mess, because they were in the middle of projects,” Abir told Reuters, referring mainly to high-tech firms.
Spouses who may have been caring for their families alone since October will also be able to return fully to their employment, he said. This is good news for the high-tech sector, which accounts for 12 percent of employment, more than half of Israel‘s exports, 25 percent of income taxes, and nearly a fifth of its overall economic output.
Other signs of economic recovery in real-time data are emerging. Credit card purchases have returned to pre-war levels, Abir said, in “a sign the economy is functioning again.”
Foreign investment, while it has slowed, has not dried up. Startups raised $1.5 billion in the final three months of 2023 in 75 deals, according to data published last week. In 2023, funding fell to $7 billion from $16 billion in 2022.
Geopolitical risks may be off-putting, but they also offer a bigger potential upside, said JVP’s Margalit.
“There are some very good deals to be had,” he said.
Larger, well-funded tech firms have mostly weathered the war, and some have even thrived. Smaller companies, especially those that were hoping to close early financing rounds when the war broke out, have had a harder time.
In some cases, Margalit said, JVP and partner investors have had to inject more funds into these firms in order to “extend the runway.”
STATE SUPPORT
Pini Yakuel, CEO of marketing data firm Optimove, said they saw strong growth in the fourth-quarter despite having 41 of 240 workers in Tel Aviv drafted for reserve duty.
“We’ve adapted. It’s a new reality,” he said. “We just kind of, like, pressed on. Focused on what’s most important. Some things were paused, some things were delayed, but you continue to execute.”
His company put non-critical projects on hold and relied on offices abroad to help cover the load. And things will get easier as the absent employees slowly return.
“I notice in the office: ‘Oh hey, you’re back.’ ‘Yeah, I’m back.’ ‘Is it for good?’ ‘No, for the next month. Then they’re gonna tell us if we need to go back [to the reserves] or not’.”
The government took steps to protect the sector. State-funded Israel Innovation Authority set up a $100 million fund to help early stage startups.
In its recent survey, half of young companies only had sufficient funding for six months, said Dror Bin, the authority’s CEO. His fund has invested about $41 million so far.
“We all got our act together,” Bin said. “CEOs and employees realized that if they want to sustain the company’s success and their jobs they needed to refocus themselves on work.
“Despite all the empathy we get from the tech industry globally, at the end of the day when customers abroad need to get deliveries they can’t say that they didn’t get the deliveries because of the war in Israel,” he said.
($1 = 3.6437 shekels)
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Trump Insists US Will ‘Take’ Gaza, Jordan’s King Stays Mum on Palestinian Relocation During White House Visit
US President Donald Trump meets with Jordan’s King Abdullah at the White House in Washington, DC, Feb. 11, 2025. Photo: REUTERS/Kevin Lamarque
US President Donald Trump insisted that America will “take” Gaza and that other countries in the Middle East will absorb the Palestinians currently residing in the enclave while meeting with King Abdullah II of Jordan in the White House on Tuesday.
“There’s nothing to buy. We will have Gaza. No reason to buy. There is nothing to buy,” Trump said.
The president suggested that the damage incurred by the ongoing Israel-Hamas war has corroded Gaza’s value and that the United States will simply seize the enclave. However, he did not detail how he plans to facilitate or finance the reconstruction of Gaza.
“It’s Gaza. It’s a war-torn area. We’re going to take it. We’re going to hold it. We’re going to cherish it,” Trump added.
Nonetheless, the president vowed that the US will energize Gaza’s economy and turn the territory into a “diamond” and “tremendous asset” for the Middle East. Trump maintained that Gaza possesses the potential to become a “great economic development” for the region, touting its scenic location on the coast of the Mediterranean Sea.
However, the president lamented that seemingly “every 10 years” Gaza erupts into explosive warfare, resulting in “death and destruction” for its civilians.
Trump added that he believes “99 percent” that the United States could strike an agreement with Egypt to relocate the residents of Gaza, where the Palestinian terrorist group Hamas ruled before the war and remains the strongest faction.
When asked what he thought of Trump’s ambitions to transfer Palestinian civilians to Egypt, Abdullah revealed that Egypt and other Arab countries are planning to meet in Saudi Arabia to discuss the future of Gaza. Abdullah refused to speak extensively about Trump’s stated goal of removing Palestinians from Gaza, advising reporters to “not get ahead of ourselves” and wait for Arab countries to deliberate about the matter.
“It’s hard to make this work in a way that’s good for everybody,” Abdullah said.
Though the Jordanian king would not commit to taking in large numbers of Palestinians, he said Jordan would be willing to “take 2,000 children that are cancer children or are in [a] very ill state” while Arab countries “wait for the Egyptians to present their plan on how we can work with the president to work on Gaza challenges.”
During Israeli Prime Minister Benjamin Netanyahu’s visit to the White House last week, Trump called on Egypt, Jordan, and other Arab states in the region to take in Palestinians from Gaza after nearly 16 months of war between Israel and the Hamas. Arab leaders have adamantly rejected Trump’s proposal.
Last week, the US president expressed similar sentiments as he did on Tuesday, saying that the US would “take over” the Gaza Strip to build the war-torn Palestinian enclave back up. However, many members of the US Congress across both parties pushed back on Trump’s declaration, accusing him of endangering American troops, destabilizing the Middle East, and floating an ethnic cleansing campaign in Gaza. Trump has also stated that Palestinians would not have the “right to return” to Gaza after being relocated and said no US troops would be needed for his plan without elaborating.
Following his meeting with Trump, Abdullah took to social media to call for a permanent end to the war in Gaza and the creation of a Palestinian state.
“This is the unified Arab position. Rebuilding Gaza without displacing the Palestinians and addressing the dire humanitarian situation should be the priority for all,” he wrote on X/Twitter.
“Achieving just peace on the basis of the two-state solution is the way to ensure regional stability. This requires US leadership. President Trump is a man of peace. He was instrumental in securing the Gaza ceasefire. We look to US and all stakeholders in ensuring it holds,” the Jordanian king added.
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Bowdoin College Clears ‘Gaza Encampment’
Anti-Zionist Bowdoin College students storming the Smith Union administrative building on the evening of Feb. 6, 2025, to occupy it in protest of what they said are the college’s links to Israel. Photo: Screenshot
Bowdoin College in Maine has negotiated an end to an anti-Zionist group’s occupation of an administrative building without acceding to any of its demands for a boycott of Israel, The Bowdoin Orient reported on Monday.
The group Students for Justice in Palestine (SJP)had installed an encampment inside Smith Union on Thursday night in response to US President Donald Trump’s proposing that the US “take over” the Gaza Strip and transform it into a hub for tourism and economic dynamism. The roughly 50 students who resided inside the building vowed not to leave until the Bowdoin officials agree to adopt the boycott, divestment, and sanctions (BDS) movement against Israel.
Following the action, Bowdoin officials promptly moved to deescalate the situation by counseling the students to mind the “gravity of situation” in which they placed themselves, with senior associate dean Katie Toro-Ferrari warning that their behavior “could put them on the path where they are jeopardizing their ability to remain as Bowdoin students.” No sooner had it sent this communication than it began issuing temporary suspensions to students who rejected appeals to leave Smith Union and return to normal student life.
“You will be placed on temporary suspension, effective immediately, pending a college disciplinary process,” Bowdoin vice president Jim Hoppe wrote to the protesters in a letter, copies of which were sent to their parents. “During your immediate suspension, you may not attend your Spring 2025 courses … Your family will receive a copy of this letter. This temporary status will continue until further notice.”
Facing threats of severer sanctions, SJP agreed to vacate Smith Union on Monday and shared that they had issued a plea for mercy in discussions with college officials which called for them to “understand a context of good faith for the students who have engaged in this action.” By that time, several students had already left the building, according to the Orient.
Republicans in Washington, DC have said that disruptive and extremist political activity on college campuses “will no longer be tolerated in the Trump administration.” Meanwhile, the new US president has enacted a slew of policies aimed at reining in disruptive and discriminatory behavior.
Continuing work started during his first administration — when Trump issued Executive Order 13899 to ensure that civil rights law apply equally Jews — Trump’s recent “Additional Measures to Combat Antisemitism” calls for “using all appropriate legal tools to prosecute, remove, or otherwise … hold to account perpetrators of unlawful antisemitic harassment and violence.” The order also requires each government agency to write a report explaining how it can be of help in carrying out its enforcement. Another major provision of the order calls for the deportation of extremist “alien” student activists, whose support for terrorist organizations, intellectual and material, such as Hamas contributed to fostering antisemitism, violence, and property destruction.
Follow Dion J. Pierre @DionJPierre.
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Hamas Rebuffs Trump’s ‘Worthless’ Call for Israel to Resume War if Terror Group Refuses to Release Hostages
Then-US President-elect Donald Trump makes remarks at Mar-a-Lago in Palm Beach, Florida, US, Jan. 7, 2025. Photo: REUTERS/Carlos Barria
Hamas has rebuffed US President Donald Trump’s warning that he’ll “let hell break out” if the Palestinian terrorist group does not release all the Israeli hostages still being held in Gaza, saying that the American leader’s threats are “worthless and only complicate matters.”
“Trump must remember that there is an agreement that must be respected by both parties, and this is the only way to get the prisoners back,” Hamas official Sami Abu Zuhr told multiple press agencies, referring to the Gaza ceasefire and hostage-release deal between the terrorist group and Israel. “The language of threats is worthless and only complicates matters.”
On Monday, Trump advised Israel to cancel the ceasefire and said he would “let hell break out” if Hamas refused to release the remaining hostages. Trump’s comments echoed statements made by his national security adviser, Mike Waltz, last month that the White House would support Israel resuming the war in Gaza if Hamas violated the ceasefire agreement.
“As far as I’m concerned, if all of the hostages aren’t returned by Saturday at 12 o’clock … I would say, cancel it [the hostage deal] and all bets are off and let hell break out,” Trump told reporters on Monday. “I’d say they ought to be returned by 12 o’clock on Saturday, and if they’re not returned — all of them — not in dribs and drabs, not two and one and three and four and two — Saturday at 12 o’clock. And after that, I would say, all hell is going to break out.”
Trump cautioned that Israel might want to override him on the issue and said he might speak to Israeli Prime Minister Benjamin Netanyahu.
Trump’s comments came after Hamas announced on Monday that it would stop releasing Israeli hostages until further notice over alleged violations of the ceasefire deal. Hamas spokesperson Abu Obeida claimed that Israel has prevented Palestinians from returning to northern Gaza, conducted strikes throughout the Gaza Strip, and impeded the delivery of humanitarian goods.
“The resistance leadership has closely monitored the enemy’s violations and its failure to uphold the terms of the agreement,” Obeida said.
The Israel Defense Forces has insisted that its strikes were conducted for defensive purposes, saying that its soldiers have “operated to distance suspects who posed a threat to them in different areas of the Gaza Strip.”
“The IDF is committed to fully implementing the conditions of the agreement for the return of the hostages,” the military wrote in a statement, adding that their forces are “prepared for any scenario and will continue to take any necessary actions to thwart immediate threat to IDF soldiers.”
Meanwhile, Israel said last week that 12,600 trucks of aid had arrived in Gaza since the beginning of the deal on Jan. 19.
Hamas-led Palestinian terrorists started the war in Gaza when they murdered 1,200 people and kidnapped 251 hostages during their invasion of southern Israel on Oct. 7, 2023. Israel responded with a military campaign aimed at freeing the hostages and dismantling Hamas’s military and governing capabilities in the neighboring enclave. The conflict raged for nearly 16 months until both sides agreed to last month’s ceasefire and hostage-release deal, the first phase of which is set to last six weeks.
Under phase one, Hamas agreed to free a total of 33 Israeli hostages, eight of whom are deceased, and in exchange, Israel would release over 1,900 Palestinian prisoners, many of whom are serving multiple life sentences for terrorist activity. Meanwhile, fighting in Gaza will stop as negotiators work on agreeing to a second phase of the agreement, which is expected to include Hamas releasing all remaining hostages held in Gaza and the complete withdrawal of Israeli forces from the enclave.
So far, 16 of the 33 hostages in Gaza have been released within the first phase of the ceasefire.
The three latest hostages were released on Saturday. Their strikingly thin and emaciated bodies sparked international outrage about Hamas’s treatment of the hostages, with Trump comparing the captives to Holocaust survivors.
The details of the second phase of the ceasefire are still being negotiated. However, Israel has reportedly presented the White House with a plan to advance the truce with Hamas.
The post Hamas Rebuffs Trump’s ‘Worthless’ Call for Israel to Resume War if Terror Group Refuses to Release Hostages first appeared on Algemeiner.com.
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