Foreign direct investment (FDI) in Israel dropped by almost 50% last year in comparison to the year before as the country continues to feel the effects of last summer’s Gaza conflict, a new UN report has revealed.

The report, published by the United Nations Conference on Trade and Development (UNCTAD), shows that only €5.7bn was invested into the country in 2014 in comparison with €10.5bn in 2013, a decrease of €4.8bn, or 46%.

Israel’s FDI in other countries also decreased by 15%, from €4.2bn in 2013 to €3.5bn last year.
Dr Ronny Manos, one of the report’s authors and a researcher in the department of Management and Economics at the Open University of Israel, said that the decline was primarily caused by the fallout from the Israel Defence Forces (IDF) Operation Protective Edge and international boycotts against the country for alleged violations of international law.

International pressure on companies to refrain from investing in the Israeli economy has heightened with the rise of the Boycott, Divestment and Sanctions (BDS) movement. Last October, drinks company Sodastream International closed one of its West Bank factories in a victory for the movement.

Despite the specific reasons given for the decline in FDI in Israel, the report also notes that FDI fell globally, from €1.3tn in 2013 to €1.1tn in 2014, a drop of 16%.

This global decline was caused by a number of geopolitical factors, such as instability in the Middle East and tensions between the West and Russia over Ukraine.