The whole world has been living through events on the Israel border for several days now. The open conflict can have a colossal impact on the markets, especially since it's not the first problem these markets have faced in recent years.
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Hamas's attack on Israel and Tel Aviv's bloody response have shifted the world's attention - at least for the moment - from Ukraine and the Pacific to the Middle East region.
The other side of the conflict
War, regardless of its reasons and parties involved, is always a great humanitarian disaster. As one might imagine, there's another side to the coin. It's, of course, the impact the conflict has on the economy, markets, and industry.
In the case of Israel, the technological sector could suffer the most, which, when taken as a whole, accounts for up to 14 percent of all jobs and contributes to a fifth of the country's GDP.
Digging a bit deeper, the medical technology market, one of Israel's hallmarks, might face challenging times. Its development is generously supported and financed by the government, but in the face of full-scale armed conflict, even it could find itself in a very difficult position.
Threats to supply chains
Currently, there are no disruptions reported in supply chains, as per the Israeli Manufacturers Association. Factories are operating normally, and goods are flowing as usual, but the situation can change virtually overnight.
"All companies will, to the best of their ability, continue their operations despite difficult emergency conditions, rocket attacks, and the resulting labor shortages” - said the association's chairman, Ron Tomer.
For now, Israel is engaged on one front, but there's growing talk of other countries like Iran, Saudi Arabia, or Lebanon entering the game. If that were to happen, the situation could change drastically - not only in terms of the flow of goods across borders but also in terms of conscripting tens of thousands of citizens into the military, potentially significantly reducing the industrial workforce.
"Thanks to Israel's production independence, even in extraordinary situations, Israeli citizens won't lack anything” - Tomer added.
The world is watching
The mentioned medical innovations mean that everyone is closely watching what's happening in Israel. Many modern solutions in this sector come from this country. So, if Tel Aviv continues to face prolonged issues and the conflict escalates, it will undoubtedly have an international impact.
Everything depends on the course of this bloody clash and whether other nations join in. If the worst-case scenario unfolds, then the issue of closing borders for medical innovations may turn out to be the least of the world's problems.
