Former Turkish Banker speaks on possible economic consequences of Israel-Hamas conflict

The tension between Israel and Palestine has already started to turn into a global war, leaving the religious and ethnic framework. Around the world, all discussions are focused on the ongoing conflict. Brutal torture and death resulted in heavy losses for both sides.

Currently, the ongoing armed conflict has begun to worry the countries of the world. Even a number of think tanks, approaching the conflict from an economic point of view, note that if the tension continues, in addition to the increase in the humanitarian crisis, black holes may appear in the world economy.

Azernews learned the opinion of Ünsal Sözbir, the MUSIAD board member and former banker, on the issue. The expert noted that it will be necessary to observe for a while to analyze the consequences and impact of the ongoing war between Israel and Palestine, two sides that are disproportionate to each other in terms of economic and technological development.

“Because this war, which seemed regional between the two countries, soon had supporters all over the world. While Western countries support Israel, but countries such as China, Iran, UAE and Qatar have taken a stand in favor of Palestine, and countries such as Turkiye, Azerbaijan and Egypt have called for moderation on the parties. In such times when tensions between countries rise, we, as analysts, prefer to look at commercial commodity prices and some indices, which are short-term indicators. In this sense, according to the graphs of the recent course of gold and oil prices, the two most important commercial goods, these conflicts have not yet had an extraordinary reflection. Although there were partial movements in indices such as VIX, which are thought to indicate fluctuations in financial markets, there was no extraordinary reflection. Finance and capital markets are content to follow the developments for now,” Ünsal Sözbir said.

He pointed out that the negative economic impact of this war is felt most clearly in Palestine. Access to even basic needs is becoming increasingly impossible. The former banker said that it is also seen that prolonging the process will cause very serious problems. On the other hand, we hear statements that travel to the conflict zone has been greatly reduced due to risk factors and that many airline companies have stopped or reduced their flights to the region. Ünsal Sözbir noted that this is perceived as the first signs that certain sectors, especially tourism and logistics, will be negatively affected in geographies close to Israel and the Palestinian region.

“What needs to be monitored here is whether the conflict area will expand or not. The parties' stance on how they will approach the issue will be of great importance. The aircraft carriers sent to the region and the harsh statements made can be considered as indicators that the tension will not decrease in a short time. The statements made mean that the already existing armament expenditures of the countries in the region will increase even more. We are concerned that the arms race, called the "War Economy" and which feeds many companies around the world, will further increase and reach dangerous levels,” the former banker noted.

Ünsal Sözbir touched on the India-Saudi Arabia-Israel-Europe trade route project and noted that these conflicts will be an obstacle to the trade route project, which has been on the agenda recently. Because this project is an idea developed against the growing Chinese influence and China's stance in favor of Palestine, it even seems possible to think that it may accelerate further.