Rafi Gozlan, the chief economist at Leader Capital Markets, one of Israel’s top investment banks, is speculating that the threat of boycott and sanctions against Israel, as well as the controversy surrounding Scarlett Johansson’s global ambassadorship for SodaStream, could have contributed to the weakening of the shekel.
There’s no doubt about it, we’re moving to another level of public discourse when Haaretz reports on the dollar reaching the highest rate against shekel in a month with a headline that reads Boycott worries may be undermining Israeli currency, economists say. The article included the above screenshot of SodaStream’s Johansson promotional with the caption: “Indirectly, she’s influencing the shekel, analysts say.”
Haaretz:
The dollar shot up 0.7% to a Bank of Israel rate of 3.521 shekels, setting the month-plus record. In late trading, the U.S. currency was at 3.528 shekels. The euro strengthened against the shekel by 0.2% to 4.75 shekels even as it weakened against the dollar.
….. The central bank was apparently prompted to move when the shekel strengthened to 3.483 shekels on January 24. Since then the dollar has gained about 1% on the Israeli currency. FXCM said that as long as the greenback stays above 3.50, the trend favors the Bank of Israel toward a strengthening of the dollar.
Another factor that may be weighing on the shekel, rather than pushing the dollar higher, is the threat of boycotts and sanctions against the Israeli economy, said Gozlan. He said a spate of announcements of boycott actions by European banks and pension funds, as well as the controversy around Scarlett Johansson’s appearance in an Israeli company’s ad campaign, had drawn attention to the boycott efforts and may have scared off some investors.
“While the market isn’t assigning much importance to it right now, if the boycott issue grows it could easily weaken the shekel,” Gozlan warned.
The shekel weakened against the dollar after Israel’s central bank, the Bank of Israel, along with Israel’s Finance ministry “aggressively” intervened in the market by purchasing a “massive” $500 million last week to halt the appreciation of the shekel “to act to balance the exchange rate so it’s not hurting exports as much.” Israeli exporters have been lobbying for a halt to the climbing shekel, the world’s strongest currency last year, for awhile. Purchasing foreign currency is routine, but some of last months interventions were unexpected, characterized as “surprising” and intervening to a “major extent“. Monday Bloomberg Business Week reported “the shekel’s best days may be over”.
And as we reported last month, some Israeli exporters (settler farmers) in the Palestinian breadbasket of the Jordan Valley are getting nervous. According to Bloomberg Business Week Israel’s exporters are expecting to double job cuts this year.
So are those SodaStream bubbles beginning to look like falling shekels yet?
Last week the Economist, in covering the SodaStream/Johansson fiasco, linked to Omar Barghouti’s excellent op ed in the New York Times explaining “Israel has watched with growing anxiety” as Palestinian activists forced Johansson to make a decision over her loyalties to Oxfam or apartheid SodaStream. It’s another great read.
Israel has deliberately set about to erase the lines between its pre-1967 borders and the settlements, in both physical and economic terms. With the state subsidising housing and economic development in the settlements, Israeli financial institutions have no real way to extricate themselves from the settlement project. Earlier this year that led to the decision by PGGM, a major Dutch pension fund, to cut off its tens of millions of euros’ worth of investments in Israel’s top five banks: it could not reconcile them with its corporate code of ethics. Other large European financial institutions are considering doing the same. Israeli infrastructure companies are equally unable to separate themselves from activities in the territories, and European infrastructure firms have now begun cutting off joint ventures with Israeli counterparts. Like Ms Johansson, they are finally being forced to choose.
…Ms Johansson isn’t the only one in this drama who has tried to have things both ways for as long as possible. Israel has watched with growing anxiety as Palestinian activists have succeeded in forcing Oxfam and Ms Johansson to make a choice. The divestment of European firms, the growing power of liberal Jewish organisations that oppose and denounce the occupation, the intense blitz of visits by John Kerry to force progress in the peace process, the widening cracks in Binyamin Netanyahu’s coalition: all of this points to what Thomas Friedman characterised this week as a turning point in the relationship to the territories. The question of whether Israel has the intention and the willpower to ever pull out is finally going to have to be answered. Last week a top Israeli think tank laid out a new bottom line: if the peace talks with the Palestinians fail, Israel is simply going to have to unilaterally pull out of the 85% of the West Bank it hasn’t directly occupied. The indecision, the deferral, the fantasy of Greater Israel is going to have to end.
P.S. I got raked over the coals by the Jewish News yesterday for reporting that SodaStream stock fell Monday, and an analyst cited the negative effect of possible “sanctions over Jewish Settlements“. I can’t wait for the News to read Haaretz.
(Hat tip Tom Pessah)
So far, this BDS-hurts-Israel talk is just worries by people trained to worry. So far, actual harm has been bupkis — though noticeable.
The fear (and talk like this should encourage the fear as well as encourage that which is feared) is that BDS is just getting started and that the too long (1945-2013) European sympathetic willingness to side with Jews no matter what is losing that “no matter what” part.
The Israeli economists are saying, “Oops! Maybe Zionism’s long get-out-of-jail-free-card ride is over.”
I sure hope so. I hope the EU is listening.
On a strictly legal basis — say “ensuring respect for the Fourth Geneva Convention under all circumstances” — Europe could tighten the screws on Israel without much cost to itself but with major, major consequences for Israel. Kerry/Obama seem to me to be inviting this sort of thing whilst still saying the words AIPAC wants to hear (except on Iran).
Great story. This also highlights why the the boycott must target the decision-maker (Israel), and not the decision (the occupation). BTW, Annie, I hope you’ll do a take down of Matt Duss’s insipid article in the American Prospect (http://prospect.org/article/whats-responsible-progressive-position-israeli-settlements-boycott) on what the proper “progressive” position must be (i.e. a boycott of the settlements, but not a boycott of Israel). A boycott of the settlement products themselves can never be more than a pinprick to Israel, and Israel can afford to absorb that loss (especially given massive US funding). To change the decision-making calculus on any meaningful level (like the value of the shekel, for instance), the boycott needs to target Israel as a whole. No boycott targets just the offending product, it targets the decision maker as a whole.
“… raked over the coals by Jewish News …”
Good for you, Annie!! You wrote a clear, thorough report on some effects of the BDS movement and landed squarely in the sights of the typical, ugly, right wing hyperbolists. An honor by any measure.
You had me at “…easily….” (!!)
From your “raking”:
I had thought that the “land without a people” schtick had been retired as a made-up colonial rationalization. Apparently not. Lots of farmland in Iowa with no one living on it either. Is that free for the taking? Ugh.
So happy you all are making un-ignorable waves, Annie. This sure has the feeling of a tipping point.
“The Economist:”
“Israel has deliberately set about to erase the lines between its pre-1967 borders and the settlements, in both physical and economic terms.”
Shows the inherent inhumanity in zionist ideology that they believe they can erase the borders on matters physical and economic, but not human. Twisted, evil ideology those people have.