the gates without damage here, such was the impact to the store. but it's not that this may people in acapulco angry. what's made them angry is the lack of an immediate government response is a lack of food, water, electricity, so far off the school. if you come here, you can see that like this one have been run side had been looted by people that had been searching the basic products just to survive. and it's not just here that's happened often down the city. now minutes comprised it in under the is manuel lopez over adult, a wednesday unveiled a more than $3000000000.00. a rescue package for the city will have to say is always in mexico. how much of that gets down to people that really need it, but it's not just the big hotels hit people with shultz, restaurants, homes, very small businesses. they own lost out,

and that will take years to recover if it does it. so don't home and i'll just say that i can pull us about the war and goes west thousands of expectant mothers. a parent to give birth, in the midst of a conflict said to need a report trust with innocent souls inside of us. the was as a 7 months pregnant women and because of describing her experience, including israel's unrelenting, since there were $50000.00 women, like i'm $5500.00 of them, are expected to give us this month. i'm a general books of, i'm instructional. they ask me if there is capacity in the hospital for them, but i have to say no, we are overcrowded because it's right, it keeps attack and hospital. a lot of hospitals and goals are already on the brink of collapse, is few on medical supplies, run outs, forcing some women to have c, section deliveries in the dark and without anesthesia. those are the women able to

give, but they're facing an untenable choice risk. whatever delivery comes in the place where they reside and risk bombardment, or try to make it to one of the reasonably functioning health facilities where it is overcrowded on hygenic, with due dates rapidly approaching a no sign of israel's will and gauze easing. thousands of pregnant mothers preparing to get the bus and it was i on so it's and of what the future home and lucky, basic health care. judy vega, i'll just 0. my colleague dire enjoy hearing off now we more coverage, multiple doesn't counting, the cost is next. so many politicians want to be the republican party's candidate

for the any stand, a chance it gets donald trump, if our planet is burning and we're running out of time, why aren't we doing more to deal with climate change? our american politics just getting to the whole life, intuit screen for most americans. for quizzical look us part of the bottom line. the hello is good to have you with us. i'm serial then. yeah, you're watching counting the cost on alpha 0. that's your weekly. look at the world of business and economics. this week is really reservists have left their offices. many businesses have ground to a halt. israel's government moves to stabilize its economy, hit by the war on guns. also this week, hotels emptied in flights cancel. we look at the costs of the tourism industry in israel and palestine and the whole middle east. and the global economy is at

a dangerous juncture. the world bank warns of the serious economic impact of geopolitical tensions. the are known as the nations of startups. israel's almost $500000000000.00 economy is one of the most developed in the middle east, in spite of its decades long conflict with the palestinians. the country has low debt, a current account surplus, and high foreign exchange reserves. now, as israel's military offensive escalates the war on guns, it is hitting the economy hard and putting its resilience to the test. here is how the economy has been effected so far. the currency as last value against the dollar almost every day hitting an 8 year. lo and bonds tumbled economic sectors such as construction and agriculture are at a standstill. a record call up as military reserve. it says left. the business is

short staffed the tech industry which accounts for 18 percent of israel g d, p, and half of all exports is particularly hard hit. consumer spending is way down, is really suspending much less except on food and tax revenues are following operations at several is really ports close to guys that have been disrupted and production at a major offshore gas field has stopped us. oil giant chevron estimates that the to more field provide 70 percent of israel's energy needs for power generation. and the bank of israel says that even if the war remains contains the gaza economic growth, which was forecast to hit 3 percent this year, will slow to to point 3 percent in 2023. now the central bank has held interest rates at 4.75 percent for the 3rd straight time in order to support a weakening currency. it has previously said that it would sell up to $30000000000.00 of reserves to show up the shuttle. the governor says that the bank's policy is focused on stabilizing markets and reducing uncertainty. let's

talk about all of this. i'm joined now from london by danielle, a be yankee danielly. you are associate professor of finance at queen mary university of london. thank you for your time. today how bad is this for the is really economy thanks for having me. just yesterday to find a spanish ser. uh, put up some some estimates of that cost of the war so far and the estimates are roughly $250.00 medium today. these are just the costs that i saw, all sorts of and direct costs that come up from, from the colorado preserves obviously. how bad do you expect it might get? because we were just making the point that consumers aren't spending right now except for food consumption on food is up. but consumption is half of these really economy domestic consumption. do you think a recession might happen? that somebody would point 5, consumption has bought a house on the economic, a dvd, and it all depends on how long it lasts. and what is going to be the repercussions

for households and firms. it's, it's complicated to give a precise estimate. i'm not expecting on a session, but it all depends with how long would last. what are the major indicators that you're watching as well separately, labor supply, exchange rates of interest rates. all of those things are going to leading, provided that the conflict remains confined to, you know, he's a guideline doesn't mind spread to other regions more to the story. patty story proper. right. and that's a big is what's the risk to the 2nd lee is really currency. while we've seen is to set a large depreciation of the check out that basically spells inflation, which is one of the reasons why interest rates have kept costs. and is it, is, it is a small open economies, right? and so it's entirely dependent for how the shackled fluctuates fees of the prices, the us dollar of the euro. so it could be probably a month to keep the,

if the check that keeps, keeps the appreciating and kinda coming days and weeks and months. do you expect of the central bank is going to have to sell more reserves to show up the currency? i wouldn't be surprised again, it depends on how long it lasts a. so if the, if the complaint drops for 4 months, hopefully not, not tiers, then we should, we should probably expect something to mention in terms of selling reserves. if they, if they weren't to keep the exchange rates under control about government intervention, danielly, i want to ask you about that. the government is rolling out a massive war time stimulus program to support people and businesses in israel. that includes grants, state bank loans to companies and financial assistance for workers, banks and credit card companies are allowing repayment referrals. but all this extra spending is going to increase the budget deficit and ultimately public debt. a 3 credit rating agencies warrant that israel's credit worthiness could be

downgraded. okay, then yearly back to you. perhaps since the, since we just mentioned that the, the downgrading of the, of the, of israel's credit worthiness. a standard and poors. uh, downgraded israel. now the finance minister says that's alarmist and he has blown this off. how significant do you think that it should is real care about that? well, he's ready isn't. it is an elaborate to be healthy situation when it comes to the depth to d p. they show which sense is roughly 60 percent, but it's about the problem is i'm going to set, i need to stop the depth about how, how the finances we with the dates coming for moving for one. so, i mean, it all depends on how wide spread wide spread is the complex. and it's, it's hard to say what is going to be. the effect in the budget into short term is significant, but in the long term could be more significant. hence, the, the downgrade of the outlook from right from the agencies and the government stimulus package, which, by the way, is estimated to be bigger,

more important than what the government has to do during the pandemic, to show up the economy. do you think that's enough to mitigate the dangers to the economy? well, they certainly up psychological, a fact on household some firms uh which cups spending very simply the uh for the tv effect due to uh, calling not preservice. so there is lots of things that are going to link. it's hard to say to stimulus is enough, but obviously they have to do something to kind of calm down uh, come down houses and farms and markets, but it's august safe is going to be a now again, it all depends on how wide spread the conflict would be if i need in the, in the coming months, hopefully, hopefully not. it's a told us about the scenarios for israel's economy. israel has said that there is no limit to how much it is going to spend, you know, on the war effort. but what does that mean? obviously, obviously the answers are going to differ on how long this all last. absolutely. uh

well, i mean, there is always a need to know how much you could spend. and as a said, uh, god forbid. but suppose that the contract wide spread to the rest of the strategy territory, then there is going to be in effect, the need to structure. people mean, you know, there is going to be 7 other fact several layers of effect depending on how bad the situation with the boat as a side, hopefully not. but it's ok to say, if the stimulus would be enough, it all depends on the trajectory that is going to take the call play. the field remains like circles grape to the to these are guys uh, setting them you might, you might be enough, but it's hard to say and the moment and, and what if it doesn't remain in gaza as you just as you just said, what is the worst case to other parts of them, at least then what? well, with being with being this things brought out. they use that you'd be looking back into the seventy's. there's been a huge supply shock in terms of oil, and that creates inflation. is very inflation back into seventy's was like,

you know, about 100 percent. so certainly if the conflict wide spread to major odd suppliers such as your own persons, uh, that could be really problematic. not just for ease, for anybody. in fact, the global economy at large or danielle, it'd be on key associate professor of finance at queen mary university of london. thank you so much for joining us today. so now at this stage, we do want to note that the economic situation for palestinians in gaza and the occupied west bank is much worse. a gauze is running out of food, water, medicine, and fuel due to a total blockade by israel hospitals are struggling to keep generators running and power life saving medical equipment. small aid convoys have started delivering supplies from egypt, excluding fuel. but the u. s. relief agency is quoting for a massive increase and assistance to gaza. israel's military offensive has destroyed entire neighborhoods in the enclave and displaced around half of gaza, more than 2000000 palestinians. to know more about this,

do watch our previous edition of counting the costs where we detailed the crippling costs of the war for garza and it's residents earlier this month, landmarks in jerusalem and bethlehem as well as beaches in tel aviv were bustling with taurus. so was the unesco heritage sites in jericho, a city in the occupied west bank. but ever since the fighting between israel and homos started government scramble to get their citizens back home and issued travel warnings to the affected areas, new visitors, and now reconsidering their plans. here's a round up on tourism and how that's affecting the region. many companies have cancelled towards the israel and the palestinian territories until the end of the year. cruise ships avoided israel's shores, and major airlines have stopped flying to and from israel. hotels across israel have either shut down or their housing is released. we left their homes near the gaza strip. while those in the occupied westbank suffered from

a sharp drop in occupancy rates. many historic sites national parks, nature reserves, restaurants are closed, and aviation experts warn that the war on gaza could affect travel and other middle eastern countries, including egypt and jordan, swiss international airlines and germany's lufthansa have already suspended flights to 11 on meanwhile, living on national airline has do it's flights by hoss as tensions along the border with is real, intensify. b radian back to his bowl arm and a group has exchanged fire with the is really army, since the wall and gaza started the middle east. airlines decision came after insurance companies reduce the war risk coverage. okay, i am join now in our studio here in the bye alex, i'm a chair with alex or an aviation analyst and you're a consultant. let's start there with this issue of insurance because you were just explaining to me moments ago that you know that that's the top of the pyramid and everything trickles down from there. exactly. so what we're seeing is just like

when conflict helps up anywhere on the eviction, ensure is tend to cool the shots. so they are currently forbidding. most airlines from operating either to is rout egypt, jordan and syria, but also to other parts of the region in light of the escalations and what is and what is happening when airlines are in a position that they are ultimately unable to go to those destinations. because that will be no insurance cover. what we then see is mass exodus of the carriers and we saw this with that kind of stone. we start with through down, we start in ukraine and we are seeing it. now. the airlines simply in a position where even if they were able to determine an outline their own risk and make their own assessments as to how long they would be on the ground. perhaps they would go with the same crew there and back if there was no insurance cover, that's a journey they kind of make. how big do you think the damage could be to tour it to israel's tourism industry? and then i'll ask you the same question to the tourism industry in the occupied west bank, but let's start with this real show. so of course is relies heavily on tourism much

like most areas of that region and travel is plummeting. we have new stats released over night that show that on the whole the entire region is suffering. when you zoom into that region, you have countries that are not specifically at the hot investigations like jordan, for example, and 11 on 11 on seeing a 70 percent full in travel demand. over this periods, georgia and 50 percent. and these are typically areas across including with tel aviv, another key destination is that in winter, that was specifically benefit from those high tourism numbers because they benefit from the warmer weather that they can offer to europeans and other travelers. what about the occupied with bank? it's the same, the same di, situation, ultimately the middle east, and this particular air of them, at least, is now suffering in, not fully into mont as a whole. these areas rely on at travel. would you bring in tourists to bring in those that are visiting friends and relatives and so on and without at travel as it is we just mentioned with insurance being pulled. it's going to have

a knock on effect immediately and that's what we're seeing now. there is no stakeholder in the whole travel ecosystem that he's able to have confidence in what is going on on a vacation is inherently exposed to just about everything of this level of uncertainty is just too much for, for business as usual. how quickly can things pick up? because right now we have a tendency to be prisoners at the moment. and right now, you know, our viewers will. everybody can intuitively understand why flights are down airports or shot people are obviously not going on. holiday 2 destinations that are in or near a war zone. how quickly could it pick back up? the whole last thing, cuz the damage be what the, the unfortunate part is that and we see this with other areas of conflict around the world. it takes a while, we really have to have a period of stability that continues on for much longer than perhaps people imagine before that confidence resumes. when you have ad lines, for example, global care is the passengers of booked with to then be possible into hotels. we're ready stating that they would not be operating to the region for

a minimum of 6 months. we know that unfortunately this part of turbulence for this area of the middle east, in terms of the financial stability for travel navigation, is here for the, the mid to long whole alex the terrace. thank you very much for all that insight. thank you. and the war on gaza is not just threatening the areas where it is unfolding rich countries and the international monetary fund. and the world bank warren, that a prolonged war could compound the full allows from the war and ukraine. and there are real risks to the global economy. the middle east is an important energy supplier plus a vital shipping route for goods. among the major concerns is oil prices, which are sensitive to geo political tensions. a look at the oil prices, the price of the global benchmark. that is brent crude. oil rose above $90.00 a barrel in the past 2 weeks, it has ease somewhat since then. after a diplomatic push to contain the war, a price the price hit more than a $120.00

a barrel in march last year, after rushes invasion of ukraine. it fell back down to just above $70.00 a barrel in may, but then rose steadily because major producers cut the output at the time. observe and say that if other countries like iran, for instance, are directly involved in the war, then that could drive up the price of oil to a $150.00 a barrel. or at joining us from brussels is positively mackey. i'm i, you're the director of the european center for international political economy. thank you for joining us. talk to us about the volatility here because we just don't really know where this is going in terms of oil prices and oil supplies. while indeed the truth is, you're really pointing to the, the real issue here, which is actually about the oil prices rather than the, the impact of the conflict itself. because the israel is actually, are very,

to be more part of the global. i'm the even the regional economy. and so the actually the 1st order implication of the war is quite muted. and it is very easy to draw a recollection on the 973 war quadruple the ord prizes. we still have the ukraine crisis isn't fresh in mind. but so far there is no embargo that'd be soaring. 1973 . and the fact is that the political incentive so pick looks very, very different now than it did back. yeah. 50 years ago. so what we have seen is basically energy reprises having a really sword with relatively modest increase is about 5 percent since their conflict began. and actually the bigger driver on the price is actually seem to be the poor economic out look in europe with the press demand for oil so, so far so good. yeah. so far so good. what are the scenarios that you're looking at? what are the possible realistic scenarios,

the realistic scenarios as are tend to be quite on realistic when he comes in this region. and uh, or at least quite so real. and you would look at implications that involved, for example, i major produce a larger room. and in order to see those effects that we have in and we'd be hurting the introduction around the increase of $250.00 or $250.00. and even under the circumstances it'd be have to remember i, the, the, the, the impact on global matter will be much less on the, on the today than even 19 seventies. simply because of the fact that the, the global dependency of, or the has actually have in the last 50 years. and also the, the, the cartel opec and over at plus is actually quite split in terms of how you are responding to this crisis. and if you, for example, like a car that has tate really taking that up and the opened up the tops since the war began in ukraine and the guy. and now we are also hearing from the united states

that the my actually opened up. it's strategic to reserves, so diversification over the last 5 decades seem to have actually done a little bit of the trick, at least. and we are you how and looking at a very different scenario. if you're looking at potentially living on them and even the wrong getting involved. and uh, there are a lot of conversations going on by laterally uh, between the different parties that don't seem very united at the moment. okay, how's the, how's the cold on? because i need to give our view as a quick reminder of why we talk about the oil prices so much. why they so important? because when the price of oil goes up, the cost of almost everything, transport consumer goods, food not to mention energy bills, the price of all those things goes up. for the past 18 months, central banks have been trying to rein in inflation and keep prices contained in the us. federal reserve has been leading that efforts and its latest report on financial stability. the fed said escalation of these conflicts or worsening in

other geo political pensions could reduce economic activity and boost inflation worldwide. particularly in the event of prolonged disruptions to supply chains and interruptions in production. the us fed has recently paused interest rate hikes as inflation was showing signs of cooling. major central bank so worried that high rates could significantly slow economic activity in tip economy into a recession. the i m f warned of weak global growth at 3 percent in 2023, and the slightly less than 2024. that is well below the historical average. and the world trade organization says that a whitening more would have a big impact on fragile global commercial flows. how is that back to you? there's a massive question here around the installation. global prices cost of living. you know, it's something we've been covering a lot of course, kind of the cost of living, which,

which rose sharply uh after the war and ukraine started. and a lot of our viewers will be listening to this conversation and thinking, well, could we see something like that happen again as a, as a ripple effect of the gaza or? well that's, that's my point to be. um, the importance of oil has as, as a part of it with global energy supply, it has actually hives. and given the diversity of other sources that has come up since 19 seventy's. yes indeed, we already in the recession. but the real stuff in the end of trade, israel is actually quite remote call it of the global economy system. and there are quite a few supply chain to the only few, the supply chain dependencies that we are looking at when it comes to israel. and the for example, things like dime. and there's some, some assembly conductors in these rail as well. but this mostly designed rather than fabrication kind of the supply chain makes is actually quite limited. and this

comes back to the point that unless you see a regionalization of this conflict with the other players getting involved, this is economically contain level problems. we don't have a dependency, for example, for food production that we have, for example, in the case of ukraine that supply that lot of the well food program rooms are also a major export of grace and the iron o r. and therefore, we are exclusively looking at the disruption on the supplies of, um, uh, oil um, 1st and foremost and are here uh, come back to the point that the opec has been actually trying to unilaterally suppress production. and i have an agreement to actually reduce the production of up to $1000000.00 barrel per year per day. and the simply because of the fact that we, the price is actually know the increase in the amount these would like to be. and then i remind also the viewers that opened in the open conformation. there's also around the configuration that being jobs more play years, for example, like russia,

which is called open plus, was being rather unsatisfied with the prize and the global prizes over the last 12 months. and whereas actually agreed to unionize for the suppressed a suppressed production or the in the summer. so what we're seeing now is actually the minor corrections or movements in the prizes. it is indeed true that the 2024 is going to be a very, very difficult year. and in not least that you've given to us elections coming up. and we have a, we have is, let's say a sensitivity around the increasing prices. but so far, especially the competitive the ukraine crisis would be, it has been something that can be kept on track and hasn't actually spilled over and to the other parts of the regions. and how much does all of that analysis change if then the conflict does escalate as well, then we are looking at a completely different game altogether, of course. and that's um, that's um,

that's something that i guess those are longer people uh, looking into whether he's belie, i shouldn't have any sense if to get involved. and if they do, uh does it, you're right. i actually have the incentive to continue the code to the extent that they do with are actually time for with the oil. and now i remind everyone that uh you ryan in the us and a missile negotiation for releasing hostages against frozen funds that the around that has in south korea and as a form of government negotiate to myself. i mean, i, i tend to think that to keep talking about some kind of a trade off like cost is just on the funds. has the best date escalation effect on any kind of rule. and the fact that people actually negotiating bilaterally on an, even in the company to enter unrelated areas, makes a completely different image. right? so a completely different picture in terms of what we're looking to, i don't know on the final point here that we need to look at very,

for one of the biggest areas actually china. and that basically means that a lot of these flows may actually continue either in the case, so there would be an embargo against the rest. so there is a price the bill is ation effect. if that you to trade it between the goal and china actually continues to happen. how exactly mackey? i'm a director of the european center for international political economy. thank you so much for joining us on the program today. thank you. and that is our show for this week to get in touch with us on the x, formerly known as twitter at benya several is my handle. do use the hash tag a see to see when you do or drop us an email. counting the cost at alpha 0 dot net, that's the email address that there's more for you online at alpha 0 dot com slash ctc. that will take you straight to our page, which has individual reports, links and entire episodes for you to catch up on the asset for this edition of counting the cost. i'm several venue from the whole team here in doha. thank you

for joining us. the news on alpha 0 is next the as the war on guns that escalate to 0 is correspondence on the ground. they have to make a decision between patients who to save and who to nash. this damage was caused by one of the rockets, 5 phone guys up there on us all the houses google. so it'd be 9 policy and hospitals with them bonded by the usability of the patient forces. this is just the beginning. stay with us for the latest developments on out to 0. 543, across takes on the big issue. this isn't a one off. he's talking about a systemic issue here. black lives don't really matter. in the police were unflinching questions. there's war with lawanda, imminent rigorous debate. people are dying because of lots of medical treatments,

challenging conventional with the fact that people are starting to get angry about this is in itself a sign of progress. join me more for me on hills upfront one out 0. the is already reduced to rubble. israel target's gauze as largest refugee council the 2nd day. the un says it could be a walk right in the hello. i'm down in jordan. this is out as they are a licensed a whole set coming out of to being trapped in the streets the 25 days. the rough at crossing with egypt is open but only to foreign possible colors. wanting to leave. israel is ami inches close at the ministry says the ground operation that has its forces of.