The outbreak of a full-scale war between Israel and Hamas, which is fighting from its Gaza position, seems to be a matter of time. If this happens, according to recent studies and reports, supply chains will suffer quite severely.
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Many industries are closely following the event from the Israel-Gaza border, anxiously anticipating the next moves. What is known is that Tel Aviv can now count on massive international support and is already in full combat readiness to launch a ground operation. This, in turn, will amount to open warfare and could lead to unrest in the region on an unprecedented scale.
This is only the tip of the iceberg, however, as Hezbollah terrorists are also sharpening their teeth at Israel's stumbles, as well as Lebanon and Iran, for whom the current time of chaos is opening rather unexpected wickets. Not surprisingly, Tel Aviv has given a precautionary warning to all those who would like to gain something in this game.
- If Hezbollah decides to open a front in the north, Iran and Lebanon "will be wiped off the face of the earth". - said Nie Barkat, Israel's economy minister, quoted by Reuters.
This is just the beginning
The ongoing conflict is taken under the microscope in the report 'Ports, electronics and healthcare: the impact of the conflict in Israel on the supply chain'. It addresses several extremely important aspects that will be crucial to the sustainability of an already strained supply chain.
The document shows that:
- Sectors that are Israel's strongest points, namely exports of electronics, military components and pharmaceuticals, could be severely disrupted by the war.'
- Counting the period up to July 2023, Israeli suppliers accounted for as much as 14 per cent of computer processor imports into the European Union. The main destination for these components was Ireland, where the production facilities of Intel Corp. and Tower Semicondutor Ltd. are located.
- In the past year alone, Israel managed to export key equipment for telecommunications networks worth more than US$2.6 billion.
- In the corresponding period, Tel Aviv also exported a batch of aerospace equipment worth as much as $3.15 billion.
- No less profitable was the pharmaceutical industry, whose exports closed at $2.17 billion.
A threatened sector
And interestingly, according to a report by professionals who follow the subject all the time, it is the supply chains associated with the pharmaceutical industry that are the most vulnerable to any kind of turbulence today.
Indeed, it is now said that Israel's importance in the context of the global pharmaceutical supply chain has fallen by 1.1 per cent in relation to imports into the United States and 0.8 per cent in the context of imports into the European Union zone.
S&P Global Market Intelligence reports that Israel's imminent incursion into Gaza - which appears to be a foregone conclusion - will lead to massive paralysis in the region. The closure of airports and ports, or the very severe curtailment of their operations, will lead to turmoil on a similar or even greater scale than after the outbreak of war in Ukraine.
It is worth remembering, in turn, that this is not all, as increasing tensions are also occurring in the Pacific between China and the USA. So, as is not too hard to guess, a time of uncertainty is now sweeping the world - region by region.
