The economic beneficiaries of the Israel-Hamas war

After US Secretary of State Anthony Blinken called for "a humanitarian pause," Israel intensified air strikes on hospitals, ambulances, refugee camps, UN schools, turning the Gaza Strip into a graveyard for children. Yet, Blinken has rejected the push from Arab states for a ceasefire on the grounds that Hamas could still attack Israel, which essentially means Netanyahu's government isn't currently under substantial pressure to stop the ceaseless bombings or ground invasion. The death toll of Palestinian civilians has crossed 10,000 civilians according to the Gaza Health Ministry. 

According to a rare and recent investigation by the New York Times, speaking to six foreign diplomats, Israel has quietly pushed for Egypt to admit large number of Gazans, framing it as a humanitarian initiative for civilians to temporarily escape what they call "the perils of Gaza" for refugee camps in the Sinai desert. This lends itself to Palestinians' claim that the Israeli government, with US assistance, is intentionally pursuing a "second Nakba" — the mass displacement of Palestinian people from in 1948 — to claim the entirety of the Gaza Strip for themselves. When criticising the Israeli military's unstoppable onslaught in Gaza, and the US for backing it, underlying economic motives are rarely assessed in the fog of political and moral debates. But economic benefits are ingrained in the politics of greed, pushing Israel's systematic eliminationist campaigns and assaults.

The coastal strip of Gaza and Israeli Occupied Palestinian sit above sizable reservoirs of oil and natural gas, which offer an opportunity to distribute and share $524 billion among different parties in the region, according to a study by the United Nations Conference on Trade and Development (UNCTAD). The UNCTAD report also stated, "what could be a source of wealth and opportunities could prove disastrous if these common resources are exploited individually and exclusively, without due regard for international law and norms." 

The historical context here is key to understanding how Israel economically and politically benefits from the persecution and extermination of Palestinian civilians. 

In the Oslo II Accord, the 1995 Israeli-Palestinian Interim Agreement on the West Bank and Gaza Strip, the Palestinian Authority was given maritime jurisdiction. They signed a deal with the British Gas Group (BGG) and uncovered a large gas field, Gaza Marine. The British contractor withdrew in 2007, but interestingly, prior to Israel's invasion of Gaza in 2008, the Israeli government urgently regonitiated the deal when the military operation was in its advanced planning stage. 

Since the invasion in 2008, while Palestinians were subjected to restriction of goods, living on a diet just above starvation and below the poverty line, the Israeli government established a de facto control over Gaza's offshore reserves and the British contractor continued dealing with Israel, depriving the Palestinians their fair share of revenues. The opportunity costs of Israeli occupation—with ongoing restrictions on mobility, access and trade—exclusively in the area of oil and natural gas have accumulated tens, if not hundreds, of billion dollars. UNCTAD also estimated that Palestinians, under occupation in the 2007-17 period, have lost $47.7 billion in revenues leaked to Israel. 

Israel has exclusively explored drilling new oil and gas fields in the Eastern Mediterranean, from the Leviathan field, and signed billion dollar deals with Jordan and Egypt, while Arab citizens protested with their rejection of energy "stolen from occupied Palestine." In the current geopolitical context, natural gas and LNG have served as tools to deepen political relationships and economic dependence. It's at the heart of Israel's normalisation ties with Arab states, ignoring the Palestinian cause. 

In Israel's current war-mongering policy, killing and expelling Palestinians from the Gaza Strip and creating a buffer zone would give Israel open access to drill the reserves of gas and recoverable oil. It also serves the long-term US-Israel energy cooperation agreement, which stipulates that the development of natural resources by Israel are in the "strategic interest" of the US. Israel's emergence as one of the biggest energy players in the Middle East aligns with the US' need to tighten its loosening grip in the region, as it locks horns with China. 

The blood of innocent Palestinian civilians—the children, the infants—is in the hands of a global capitalist system that systematically profits from genocide. 

A lot has also been said about the pro-Israeli lobby driving the Biden administration's moral hypocrisy in arming up Israel's powerful military. But to be more specific, a part of the problem is the Pentagon's increased reliance on the private weapons sector, which booms during war; their sales products are weapons and bombs that kill people. When war drags on, and more people are killed, it these companies in the military-industrial complex that benefits from the bloodshed. 

A study by the Watson Institute in Brown University in 2021 revealed that one-third of all Pentagon contracts in recent years have gone to just five major weapons contractors: Lockheed Martin, Boeing, General Dynamics, Raytheon and Northrop Grumman. Unsurprisingly, stocks of these companies also surged 7 percent since the Hamas attacks and Israel's invasion of Gaza. The outsized influence of the private sector contractors is manifested in the lion's share of Pentagon's receipts in post 9/11 US wars. As civilians in Afghanistan and Iraq were killed, these companies bagged in profits from reconstruction work in the war zones. 

While people around the world watch Israel blowing whole families to bits, transcripts of an off-camera press briefing by the Deputy Pentagon Press Secretary on October 30, shows that US is not putting any limitations on how Israel uses weapons that are provided, while reiterating that Israel must uphold the law of armed conflict and humanitarian laws. One wonders how a month-long military operation that has dropped over 25,000 tonnes of explosives on civilian areas, dropped banned white phosphorous, cut off fuel, supply and medicine to civilians, could still somehow uphold any laws that exist in a civilised world order. 

At the same time, big Wall Street institutions, such as TD Bank and Morgan Stanley, have approached the humanitarian disaster in Gaza with an eye towards big profits for their clients in the weapons and aerospace industrial complex, as revealed by transcripts of third-quarter earnings calls this month. An analyst in TD Cowen, blatantly asked the CFO of General Dynamics, about the incremental acceleration of demand of their products resulting from the Israel-Hamas war. The CFO responded, "we're working ahead of schedule to accelerate the production capacity upto 85,000, even as high as 100,000 rounds per month and the Israel situation is going to put upward pressure on that demand…the biggest one to highlight is on the artillery side." 

It's also important to note that the continuation of the Ukraine war has benefited US-based defense contractors, whose values have surged since the beginning of the war. Take for example, Lockheed Martin whose value stood at $98 billion in 2022, and reached its highest records at the end of the year, at $127 billion, currently standing at a market capitalisation of $112.2 billion. Prolonging the conflict has raked in revenues for the weapons sector. In the maths of billions, prolonging Israel's war on Gaza, avoiding a ceasefire, will shore up profits for the military-industrial complex that enjoys the spoils of warfare—the indiscriminate killing of real human beings. 

Ramisa Rob is a journalist at The Daily Star. 

We welcome your contributions and analysis of global events. To submit articles to our new page, Geopolitical Insights, please send us an email at [email protected] or [email protected] 

Follow The Daily Star Opinion on Facebook for the latest opinions, commentaries and analyses by experts and professionals. To contribute your article or letter to The Daily Star Opinion, see our guidelines for submission.