Zineb Riboua
Discussions of the United States–Israel relationship tend to focus on security assistance, as though the partnership were primarily an exercise in strategic patronage. However, this framing overlooks that Israel is a significant economic and innovation power whose deep integration into the American industrial, technological, and capital ecosystems bolsters the US economy. Further, Israel’s capacity for innovation is indispensable to building and maintaining America’s military and economic advantages.
After October 7, 2023, credit agencies, foreign investors, and geopolitical commentators assumed that Israel’s economic resilience would buckle under the weight of a prolonged, multifront war. One agency, Moody’s, downgraded Israel’s credit rating in 2024. Capital outflows, a spike in defense expenditures, and the mobilization of hundreds of thousands of reservists from the civilian workforce gave credence to the view that the so-called start-up nation had pushed its small economy to the brink. Some observers concluded that isolation, war fatigue, and fiscal strain would erode the foundations of Israeli economic power. Others went further, pointing to perceived fragility and casting doubt on the strategic logic behind the US-Israel partnership.
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