They are turning Israel into a third-world country and are not trying to change the situation —Lapid

Prime Minister Benjamin Netanyahu acknowledged that Israel is experiencing growing economic isolation due to the ongoing Gaza conflict, emphasizing the need for greater self-reliance.

According to a report by The Times of Israel on September 15, 2025, speaking at a Finance Ministry conference in Jerusalem, he stated that Israel is increasingly isolated and may need to develop an economy with autarkic characteristics, relying less on foreign trade.

He expressed his reluctance, saying he strongly dislikes the concept of autarky, as he supports a free market.

However, he stressed that Israel might face restrictions on its arms industries, necessitating domestic production capabilities beyond just research and development.

Netanyahu asserted that Israel must build its own arms industries to produce essential supplies locally.

He attributed this isolation partly to mass migration of Muslims to Europe, claiming it has influenced European governments to adopt anti-Israel policies, including canceling defense contracts with Israel.

Despite these challenges, Netanyahu expressed confidence that Israel could overcome this isolation through strategic adaptations.

Opposition Leader Yair Lapid sharply criticized Netanyahu’s remarks, calling them reckless and misguided.

Lapid argued that economic isolation is not an inevitable outcome but a direct result of Netanyahu’s flawed and ineffective policies.

He accused the government of pushing Israel toward third-world status by failing to address the situation proactively.

Lapid emphasized that the government’s inaction is exacerbating the country’s challenges rather than seeking solutions to reverse the trend of isolation.

In his words, “They are turning Israel into a third-world country and are not even trying to change the situation.”

The ongoing war in Gaza has strained Israel’s international relations, particularly with trading partners, prompting concerns about economic stability.

Netanyahu’s push for self-sufficiency reflects a strategic pivot to mitigate risks from disrupted global supply chains and canceled agreements.