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LETTER | Is boycotting Israeli products effective?

LETTER | In Malaysia, brands associated with Israel, including McDonald’s, Burger King, Starbucks, Grab, Milo, Nescafe, and others, have faced boycotts from local consumers due to the Israeli-Palestinian conflict.

The question arises as to whether these boycotts are effective, and whether they have had an economic impact on Israel. Let’s delve into this collective social behaviour of “boycotting Israeli products”.

Historical background of boycotting Israel

Since its establishment, Israel has faced economic boycotts from Arab countries that do not recognise its existence, including bans on importing goods and the boycott of international companies with trade relations with Israel.

However, in the 1990s, the Oslo Accords and peace agreements with Egypt and Jordan seemed to have alleviated the impact of these boycotts.

The origins of the global non-violent protest movement can be traced back to 2004 when over 170 international organizations, representing political parties, trade unions, NGOs, youth, and women’s groups, began calling for boycotts and sanctions against Israel. They aimed to address the escalating issue of Palestinian isolation and occupation.

This gradually led to the formation of the “Boycott, Divestment, and Sanctions” (BDS) social movement. In recent years, it has gained momentum in Muslim-majority and certain Western countries.

The Ideology of BDS

Inspired by the South African anti-apartheid movement, BDS seeks to pressure Israel to comply with international law and advocates for freedom, peace, and justice for all, especially for Palestinians.

BDS is not an institutionalised movement and is mainly promoted by organisations such as the International Solidarity Movement and international human rights organisations in certain countries.

However, a Pew survey published in May 2022 found that 84 percent of Americans had little to no awareness of the BDS movement, with only five percent of respondents having heard of BDS.

The boycott of Israeli products in Malaysia and other countries can be considered a part of BDS, but the vast majority of people are unfamiliar with BDS and its ideology, leading to participation based on blind adherence.

Nonetheless, the global boycott movement reflects the unity of Muslim communities and conveys their concerns regarding Israel’s policies in Palestinian territories.

Positive effects of boycotting

The massive numbers of people and organisations participating in global boycotts can potentially influence Israeli businesses and government policies. These boycotts, whether or not they align with the BDS ideology, can raise awareness and promote discussions and debates about the conflict, thereby exerting pressure on international organisations.

In 2015, a report by the global policy think tank Rand Corporation estimated that BDS and other related financial and trade sanctions resulted in a cumulative reduction of around US$15 billion in Israel’s GDP over 10 years.

This represents about three percent of Israel's current annual GDP, which is over US$500 billion, with a per capita GDP decrease of 3.4 percent.

Negative effects of boycotting

In Palestine, as mentioned in the Rand report, BDS led to increased trade and transaction costs and a reduction in Palestinians working in Israel. This, in turn, caused a US$2.4 billion decrease in Palestine’s GDP, with a per capita GDP decrease of 12 percent which is 3.5 times greater than the decrease experienced by Israel.

This implies that the boycott movement has reduced economic opportunities in Palestine and inflicted more harm on the people than help.

Internationally, in countries like Malaysia, the boycott movement, aside from affecting the income of some individuals, does not contribute to significant improvements in the situation. For instance, the boycott of McDonald’s in Malaysia, which is owned by the Malaysian company Gerbang Alaf Restaurants Sdn Bhd, affects the livelihood of most of its 21,000 mostly Muslim employees.

Furthermore, Israel, with advanced technology in fields such as pharmaceuticals, semiconductors, electronics, and defence, ranks third in per capita GDP in Asia.

Malaysia’s economic influence is far smaller than that of Israel. Attempting to change the situation in Israel and Palestine by boycotting Israeli products seems more like a self-indulgent attitude than an effective strategy.

A report in January 2017 from the Strategic Assessment provides data on Israel’s foreign investments, GDP growth rates from 2005 to 2015, and export growth rates to the European Union. It suggests that the economic losses suffered by Israel due to BDS are minimal.

For data beyond 2015, one can refer to the German statistical database Statista, which contains various data from government and commercial organizations related to GDP and foreign investments.

Without a doubt, we condemn the loss of innocent lives during conflicts in any country, including those that have occurred in Palestine and Israel. However, we must exercise caution when considering protests as a means of effecting change.

Engaging in such boycotts and demonstrations, while well-intentioned, may carry a higher likelihood of being ineffective and detrimental to the welfare of our Malaysian citizens and, on a broader scale, our nation’s economy.

The abovementioned reports and research data reveal that boycotting Israeli business brands and products is akin to injuring oneself before injuring the opponent. Boycotting products from any country follows a similar principle: it inflicts self-harm without causing significant harm to the target.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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