A synthetic emergency? Israel divided over boycott ‘threat’

By Anshel Pfeffer, February 7, 2014

Is Israel facing a debilitating wave of economic boycotts or is the sudden rise in reports on financial organisations planning to divest and threats of impending catastrophe just a storm in a teacup that will blow over the moment the media finds something else to interest it? It depends very much who you ask.

Intelligence and Strategic Affairs Minister Yuval Steinitz has been claiming for a year now that Israel faces a massive “delegitimisation” campaign and is demanding a NIS 100 million (£17 million) budget to counter the threat.

Mr Steinitz already has a detailed plan, including an advocacy campaign to be carried out in co-operation with Jewish organisations around the world and a covert, intelligence-based effort.

On the other side stand the professionals of the Foreign Ministry who have been on the frontline of anti-Israel activity for years.

They are convinced that the current panic is overblown and mainly a result of a few cases that reached the headlines in recent months, such as the controversy surrounding the decision by actress Scarlett Johansson to ditch her role as Oxfam ambassador in favour of advertising West Bank -manufactured SodaStream.

In the view of the Foreign Ministry, the actual damage has been minimal: the Israeli economy continues to flourish, exports are up and international investors are queueing up. The biggest mistake, they say, is for Israel to make a big fuss which will only attract more attention to what is normally a minor nuisance but no real threat, certainly not while talks with the Palestinians are going on.

While Prime Minister Benjamin Netanyahu has tasked Mr Steinitz to deal with boycott issues, he has no staff or budget to do so and all the resources are still within the Foreign Ministry.

Meanwhile, without a unified government policy, every minister is pursuing his or her own agenda.

The centrist elements in government, mainly Justice Minister Tzipi Livni and Finance Minister Yair Lapid have built up the spectre of boycotts and economic isolation. They reason that by creating sense of emergency, the hardliners will be prevented from persuading Mr Netanyahu to say no to the US “framework” agreement expected in a couple of weeks. The cabinet’s leading right-winger, Economics Minister Naftali Bennett, is trying to belittle the threat.

The Americans and Europeans, sensing a moment of panic, have also been briefing Israeli journalists that while they oppose boycotts, it will be very difficult for them to shield Israel from them should the talks break down.

US State Secretary John Kerry added his own voice at a conference in Munich on Saturday. He said that “the risks are very high for Israel” and that boycotts “will intensify in the case of failure”, eliciting angry responses from Jerusalem.

Was Mr Kerry bluffing? Will Washington abandon Israel to the boycotters if the government says no to his proposal? Is the threat of boycott real? Mr Netanyahu believes that Israel’s economy is strong and attractive enough to withstand the pressure, but is he willing to take the risk?

Last updated: 8:45am, February 7 2014