Israeli Finance Minister Bezalel Smotrich proposed developing real estate in the Gaza Strip as a potential method to finance the ongoing war and fund the reconstruction of northern Israeli communities. Speaking at the Urban Renewal Conference on Wednesday, Smotrich stated he had initiated discussions with American officials regarding the concept, which he described as a potential "real estate bonanza."
The comments were made at an event hosted by Madlan and the Real Estate Center, coinciding with the European Union's announcement of its intention to impose personal sanctions against the minister. Smotrich also addressed Israel's economic performance, the construction sector's labor challenges, and government plans for rehabilitating evacuated areas.
Key Takeaways
- Finance Minister Bezalel Smotrich suggested that real estate development in Gaza could be an economically viable way to cover war-related expenses.
- He claimed to have started negotiations with American officials regarding the resettlement and development of land in the Gaza Strip.
- Smotrich dismissed concerns about the Israeli economy, pointing to a strong shekel and stable markets despite criticism.
- He described the absence of Palestinian labor as a catalyst for modernizing Israel's construction industry.
- The minister faced criticism from the audience regarding the government's handling of the hostage situation in Gaza.
A Proposal for Gaza Development
During the conference, Smotrich detailed his vision for funding the war's significant costs. He presented the idea of real estate development in Gaza not just as a concept but as a tangible plan he is actively pursuing.
"There’s a business plan, prepared by the most professional people, that’s sitting on President Trump’s desk," Smotrich said. "There’s a real estate bonanza there. This is how it pays for itself."
He emphasized that his discussions with U.S. officials were serious. "I’ve started negotiations with the Americans. I’m not joking. I had a serious conversation with them," he stated. The minister framed the proposal as a practical matter of dividing land percentages after what he termed the "demolition phase."
Smotrich suggested that after paying a high price for the war, Israel must now consider how to leverage the situation for economic benefit. "We paid a huge amount for this war. Now we need to determine how to divide the percentages of the land. We’ve completed the demolition phase. Now it’s time to build," he added.
EU Sanctions Loom
Smotrich's controversial statements were made as the European Union confirmed its plans to impose personal sanctions against him. The specific reasons for the sanctions were not detailed in the conference context but add another layer of international pressure on the finance minister and the Israeli government.
Economic Performance and Market Stability
When questioned about Prime Minister Benjamin Netanyahu's recent speech comparing Israel to the ancient militaristic state of Sparta, Smotrich downplayed the political controversy. He urged observers to focus on economic data rather than political rhetoric.
"I suggest we all pay less attention to people with an agenda and instead look at the numbers," Smotrich advised. He argued that the behavior of investors on the stock exchange is the most reliable indicator of economic health. "If they’re investing, the data speaks for itself."
The minister maintained that key economic indicators remain strong, including the value of the shekel and the stability of the high-tech and job markets. "Let’s take politics out of the economy," he said. "The economy can stand apart from this."
Despite his confidence, Smotrich did express disagreement with the Prime Minister's Sparta comparison. "I really didn’t like the comparison to Sparta," he said, adding, "We will have to strengthen our military power, to be even stronger."
Shift in the Construction Industry
Smotrich addressed the significant changes in the construction sector following the October 7 restrictions that barred most Palestinian laborers from working in Israel. He characterized this shift as a necessary and ultimately positive evolution for the industry.
"The Palestinians were like a drug. We knew it was bad for us, and we couldn’t quit," Smotrich said, quoting developers he had spoken with. "This will force us to adopt more innovative methods."
Interviewer Nimrod Bousso presented data indicating challenges in the real estate market, including a 35% decline in contractor home sales, a 12% drop in housing starts, and a 6% rise in construction costs. Smotrich remained unfazed by these figures.
Real Estate Market Indicators (as of July 25)
- Contractor Home Sales: Down 35%
- Housing Starts: Down 12%
- Construction Costs: Up 6%
"I’m not afraid of a market that shifts from sellers to buyers," he responded, despite shouts of "Disconnected!" from some audience members. He argued that the slowdown is beneficial for Israeli citizens and that the government is addressing labor shortages by tripling the number of foreign workers.
Rehabilitation Efforts in Northern Israel
A significant portion of the discussion focused on the government's commitment to rehabilitating evacuated communities in northern Israel, such as Kiryat Shmona. Smotrich insisted that developing these areas is a national priority.
When an audience member questioned who would live in these areas without jobs, Smotrich countered that infrastructure development would create its own demand. "All the housing units will be snapped up like hotcakes," he predicted.
However, Bousso challenged him on the delivery of promised funds, stating, "The money you committed still hasn’t arrived." Smotrich acknowledged delays but assured the audience that the funds were allocated and would be released once residents returned and infrastructure projects were ready. He mentioned a NIS 550 million agreement with Sderot as a model for similar development plans in the north.
Audience Confrontation Over Hostages
As the session concluded, the focus shifted abruptly when audience members began shouting questions about the hostages held in Gaza. The atmosphere became tense as attendees accused the minister of being disconnected from the issue.
"What have you done for the hostages? You’re disconnected!" one person shouted. Another yelled, "Recruit the haredim!" referring to the ultra-Orthodox community's exemption from military service.
Smotrich initially tried to steer the conversation back to real estate but was unsuccessful. He eventually addressed the hostage issue directly, stating his position on the matter as the event came to a heated close.
