Geopolitics

Israeli And Palestinian Stock Markets React Very Differently To Peace Talk Collapse

Palestine Exchange (bottom left) and Tel Aviv Stock Exchange (right)
Palestine Exchange (bottom left) and Tel Aviv Stock Exchange (right)
Alex Zabzinski

TEL AVIV The collapse of Middle East peace talks is making headlines around the world and, of course, here in Israel as well. It is possible that the renewed negotations that began a few months ago are now taking a temporary break, or might even halt completely for an undetermined period of time.

And yet, if you look at the stock market screens in Israel, you won’t be able to see any real signs of the failure on the diplomatic front. Tel Aviv share prices are mainly influenced by performances of other trading worldwide, as is also the case with the Israeli bond market. Meanwhile, the shekel is still one of the strongest currencies in the world.

However, not everybody’s market is so prosperous, and one need only look at the situation of the Palestinians’ trading. Since mid-March, when the crisis in the negotiations started to appear, the stock market in Ramallah went down by 8% when its neighbor in Tel Aviv went up by 2%.

It is important to note that this downturn linked to the collapse of talks came after the Palestinian stock market rose by 5% more than its counterpart in Tel Aviv.

Indeed, the consequences of the peace talks could have a much larger impact on the Palestinian Authority than on Israel. The Palestinian economy is faltering. The IMF estimates that in 2013 the Palestinian economy grew by only 1.5% while unemployment exceeded 25%. The Palestinian government continues to accumulate debt and the budget deficit grows ever larger.

In purely financial terms, the prospect of success of the peace talks with Israel would guarantee foreign support for the Palestinians. Various international bodies, notably the United States and the European Union, send nearly $1 billion to the Palestinian Authority’s treasury.

In Gaza, the situation is even more critical. The survival of 4 out of 5 citizens in Gaza is dependent on foreign aid. Indeed in 2012 when the Authority got only 80% of the promised aid, the economy slid immediately into its first recession in a decade.

From Ukraine to Tel Aviv

Whether the Palestinians are willing to admit or not, the motivation of international entities to send financial aid depends on the existence of peace talks with Israel. If the talks fail, and especially if the Palestinians are held responsible for its failure, the aid will could drop drastically, which could undermine the entire Palestinian economy.

Meanwhile, Israel has an ever stronger and more independent economy. Nevertheless, it is still hard to understand the complete indifference of the market to the failure in peace talks. It is hard to understand how the events in Ukraine aroused much more attention among investors in Tel Aviv than the events surrounding the peace talks.

Even though the times when the stock market used to react to every announcement of a possibility of negotiations has passed, and that all the wars of the last decade did not have much effect on the market, the current complete apathy is puzzling.

Israel is now facing a number of scenarios, including some it has never seen. Perhaps, like in the past, nothing will really change, and the failures will stay reserved for the nightly newscasts, and never reach the stock market.

But is important to note that several unpredictable scenarios are also possible. The Palestinians could go to the UN with the status of a country and possibly to the International Court of Justice in The Hague, and request support from Europe to put in place sanctions against Israel. Then some serious damage could come to the Israeli economy, and its stock market.

There is evidently no need to panic. But complete apathy isn't the answer either. We know the range of political opinions, both inside and outside Israel. But often, the whims of politics are hardly noticed by investors, who follow a very different logic.

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Paying tribute to the victims of the attack in Kongsberg

Terje Bendiksby/NTB Scanpix/ZUMA
Carl-Johan Karlsson

The bow-and-arrow murder of five people in the small Norwegian city of Kongsberg this week was particularly chilling for the primitive choice of weapon. And police are now saying the attack Wednesday night is likely to be labeled an act of terrorism.

Still, even though the suspect is a Danish-born convert to Islam, police are still determining the motive. Espen Andersen Bråthen, a 37-year-old Danish national, is previously known to the police, both for reports of radicalization, as well as erratic behavior unrelated to religion.

Indeed, it remains unclear whether religious beliefs were behind the killings. In an interview with Swedish daily Dagens Nyheter, police attorney Ann Iren Svane Mathiassens said Bråthen has already confessed to the crimes, giving a detailed account of the events during a three-hour interrogation on Thursday, but motives are yet to be determined.

Investigated as terrorism 

Regardless, the murders are likely to be labeled an act of terror – mainly as the victims appear to have been randomly chosen, and were killed both in public places and inside their homes.

Mathiassens also said Bråthen will undergo a comprehensive forensic psychiatric examination, which is also a central aspect of the ongoing investigation, according to a police press conference on Friday afternoon. Bråthen will be held in custody for at least four weeks, two of which will be in isolation, and will according to a police spokesperson be moved to a psychiatric unit as soon as possible.

Witnesses have since described him as unstable and a loner.

Police received reports last year concerning potential radicalization. In 2017, Bråthen published two videos on Youtube, one in English and one in Norwegian, announcing that he's now a Muslim and describing himself as a "messenger." The year prior, he made several visits to the city's only mosque, where he said he'd received a message from above that he wished to share with the world.

Previous criminal history 

In 2012, he was convicted of aggravated theft and drug offenses, and in May last year, a restraining order was issued after Bråthen entered his parents house with a revolver, threatening to kill his father.

The mosque's chairman Oussama Tlili remembers Bråthen's first visit well, as it's rare to meet Scandinavian converts. Still, he didn't believe there was any danger and saw no reason to notify the police. Tlili's impression was rather that the man was unwell mentally, and needed help.

According to a former neighbor, Bråthen often acted erratically. During the two years she lived in the house next to him — only 50 meters from the grocery store where the attacks began — the man several times barked at her like a dog, threw trash in the streets to then pick it up, and spouted racist comments to her friend. Several other witnesses have since described him as unstable and a loner.

The man used a bow and arrow to carry the attack

Haykon Mosvold Larsen/NTB Scanpix/ZUMA

Police criticized

Norway, with one of the world's lowest crime rates, is still shaken from the attack — and also questioning what allowed the killer to hunt down and kill even after police were on the scene.

The first reports came around 6 p.m. on Wednesday that a man armed with bow and arrow was shooting inside a grocery store. Only minutes after, the police spotted the suspect; he fired several times against the patrol and then disappeared while reinforcements arrived.

The attack has also fueled a long-existing debate over whether Norwegian police should carry firearms

In the more than 30 minutes that followed before the arrest, four women and one man were killed by arrows and two other weapons — though police have yet to disclose the other arms, daily Aftenposten reports. The sleepy city's 27,000 inhabitants are left wondering how the man managed to evade a full 22 police patrols, and why reports of his radicalization weren't taken more seriously.

With five people killed and three more injured, Wednesday's killing spree is the worst attack in Norway since far-right extremist Anders Breivik massacred 77 people on the island of Utøya a decade ago.

Unarmed cops

As questions mount over the police response to the attack, with reports suggesting all five people died after law enforcement made first contact with the suspect, local police have said it's willing to submit the information needed to the Bureau of Investigation to start a probe into their conduct. Police confirmed they had fired warning shots in connection to the arrest which, under Norwegian law, often already provides a basis for an assessment.

Wednesday's bloodbath has also fueled a long-existing debate over whether Norwegian police should carry firearms — the small country being one of only 19 globally where law enforcement officers are typically unarmed, though may have access to guns and rifles in certain circumstances.

Magnus Ranstorp, a terrorism expert and professor at the Swedish Defence University, noted that police in similar neighboring countries like Sweden and Denmark carry firearms. "I struggle to understand why Norwegian police are not armed all the time," Ranstorp told Norwegian daily VG. "The lesson from Utøya is that the police must react quickly and directly respond to a perpetrator during a life-threatening incident."

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