Israel: The Economic Cost of War

Violence has ended the rapid growth of the '90s, scaring off investors and eroding the hard-won gains of economic reform

These days, a conversation in Benny Gaon's Tel Aviv office about the situation in the Middle East calls for a bracing glass of wine, even if it's only 10 a.m. "We are back to square minus one. We are back to 1948," says the former CEO of conglomerate Koor Industries Ltd., who now runs his own $1 billion investment company, B. Gaon Holdings. A close associate of the late Prime Minister Yitzhak Rabin, Gaon was in the vanguard of Israeli executives who sought to use business to build peace between Israel and the Arabs.

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