Israel's Gaza War: The Economic Fallout

Factory shutdowns near the Gaza Strip are indications of how a prolonged conflict could tip Israel's slumping economy into a serious tailspin
An Israeli soldier fires tear gas toward Palestinian protestors on Dec. 29, 2008 during a demonstration against the Israeli bombardment of the Gaza Strip. Abbas Momani/AFP/Getty Images

Located in the kibbutz of Kfar Aza, just a kilometer from the border with the Gaza Strip, chemical company Kafrit Industries (KAFR) operates one of the dozens of factories ordered to shut down until further notice by the Israeli government, just after its air force carried out massive air strikes on the Hamas-controlled territory. Even before the latest escalation of violence began on Dec. 27, the producer of additives used in the plastics industry had to deal with intermittent Palestinian rocket fire. But lately Kafrit Industries—like most Israeli companies—has been more concerned about the impact of the global recession.

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