By Jacob Jaffa

Copyright thejc

Israeli Prime Minister Netanyahu has backpeddled on comments he made earlier this week, in which he suggested that country may become completely isolated from international trade, following an economic backlash. Speaking during a conference organised by the Finance Ministry on Monday, Netanyahu said: “Israel is in a sort of isolation. “We will increasingly need to adapt to an economy with autarkic characteristics. “I am a believer in the free market, but we may find ourselves in a situation where our arms industries are blocked. “We will need to develop arms industries here — not only research and development, but also the ability to produce what we need.” Autarky is a system of national independence, whereby a country produces all the goods and services it requires domestically, without relying on international trade. Faced with an “Athens and Sparta” scenario, Israel would be “Athens and super-Sparta”, the premier added, referencing the autarkic outlook of the ancient Greek civilisations. In the wake of the speech, the Tel Aviv Stock Exchange recorded some significant drops of more than one per cent, with major Israeli banks such as Bank Hapoalim and Mizrahi Tefahot Bank recording some of the largest falls in value – though a small number of companies did also see gains on the same day. And Netanyahu’s comments met with condemnation from opposition politicians and business leaders. The Israel Business Forum, which represents over 200 companies, said: “The policy of the government headed by Benjamin Netanyahu is leading the State of Israel to a dangerous and unprecedented economic and diplomatic nadir. “We are not Sparta. This vision, as presented, will make it hard for us to survive in a developing globalised world. “The Israeli economy has shown exceptional strength and resilience in the face of the military and diplomatic challenges, but nothing lasts forever. “The Israeli government must change direction immediately for the good of all the country’s citizens.” And Opposition Leader Yair Lapid tweeted: “Isolation is not fate. It’s a product of a wrongheaded and failed policy by Netanyahu and his government, who have turned Israel into a third-world country, and aren’t even trying to change the situation.” Amid the outcry, Netanyahu appeared to row back on his remarks, telling reporters that he has “full confidence” in the Israeli economy and its ability to withstand global pressure after what he termed a “misunderstanding that supposedly shook the stock market”. He pointed to the strong performance of the Shekel on international exchange markets and the fact that, despite the drop this week, the stock market is still hitting record levels despite the ongoing Gaza War. “It didn’t shake us,” he said on Tuesday, adding: “And the reason it didn’t shake us is one thing: because essentially, the stock market — the markets — understand what I said [about] the strength of Israel’s economy, and the profitability of investing in Israel. And this is very important for ensuring our future.” “There is one area I referred to where indeed there could be restrictions – not economic ones, but political at their core – and that’s what’s happening in the defence industries. “Our defence industries are soaring. They have reached tremendous achievements in exports, both in quantity and quality, but there we have indeed encountered — and could again encounter — political restrictions during the war. “And if there is one lesson we have drawn from this war, it’s that we want to be in a situation where we are not restricted — that Israel defends itself with its own forces and with its own weapons. And that is why we want to achieve security independence.”