The modern boycott of Israel and its people has evolved over time. It arguably began in the mid-20th century, when Arab elites enacted discriminatory and exclusionary policies against 900,000 Jews indigenous to the Middle East and North Africa, culminating in their mass dispossession and forced migration. The boycott then developed into an Arab intergovernmental effort to target the young country to which most of these Jews fled—the state of Israel—through political, cultural, and economic isolation aimed at uprooting them and their European Jewish brethren from the area.

This second incarnation began to wane as some Arab states reached mutually beneficial accommodations with Israel, over the period between the signing of the Camp David accords in 1979 and peace between Israel and Jordan in 1994. But other elements in the region—both governmental and non-governmental—arose to supplant it: The third iteration of the boycott was a ban on all forms of civil engagement with Israelis, even and especially in countries where a peace between governments was flourishing.

This boycott, too, has since begun to fade, as a rising tide of Arab youth seek to engage their Israeli neighbors. But now a fourth iteration of the boycott has emerged, this time driven largely by foreigners. The Boycott, Divestment, and Sanctions (BDS) movement brings together Islamist, far-left, and hardline Palestinian elites—primarily in Europe and the Americas—in a campaign to drive a cultural and economic wedge between Israelis and their global partners.

The history of boycotts against Israel is marked by several consistent patterns. First, boycotts have not only failed to defeat Israel and its people; they have actually spurred innovation, invigorating Israeli economy and society. At the same time, boycotts have harmed Arab societies and economies, and the techniques used in these boycotts have spread to other conflicts within Arab societies, hardening sectarian attitudes and increasing intra-communal divisions, thereby contributed to the disintegration of fractured nation-states including Yemen, Iraq, Libya, and Syria. Furthermore, the boycotts have effectively isolated Palestinians within the West Bank and Gaza from the region: While hardline “resistance” factions have enjoyed support from numerous external powers, the Palestinians working to build institutions for a future state could hardly find Arab partners. Nor could they work hand in hand with Israelis in engaging the region—a role which would have empowered them economically. 

To rebuild and revitalize the region, we must break with this tragic history: We must overcome the boycott, for the benefit of all, moving from a mindset of segregation to a policy of integration. The following study traces the impact of all four phases of the boycott on Israelis and on Arabs. It then outlines a project to transition to a “post-boycott region,” in which the benefits of partnership overcome the folly of exclusion.

Phase One: Disgorging a Piece of Our Collective Soul

The disappearance of 900,000 Jews indigenous to Arab countries occurred over 25 years, from 1947 to 1972—in an historical blink of an eye. Some of the reasons these Jews left stemmed from discriminatory practices dating back centuries, while others were a product of the 20th century: the local embrace of anti-Jewish ideologies from the West and the desire to collectively punish Jews for the birth of Israel. The Arab world effectively disgorged a piece of its soul: its oldest community, a professional class, an intellectual juggernaut, a force for civil society and progress. And what the Arab world lost, Israel gained: nearly a million talented and resourceful people who, together with their offspring, now make up the majority of the country’s Jewish population.

While Arabic-speaking Jews eventually rebuilt their lives in Israel, the impact of the exodus on these Arab countries was dramatic, calamitous, and long-lasting. These Jews had made inestimable contributions to the economy, culture, and civic ethos of their Arab homelands. Egyptian Jews, for example, were disproportionately represented in the country’s banks, professional guilds, and particularly education and medicine. Before World War II the population of Baghdad was 40 percent Jewish—and included, for example, the first and most successful Finance Minister of the Iraqi state, and nearly all of the players in Iraq’s national orchestra. Somewhat similar stories could be told  about Jewish communities in, for example, Aleppo, Damascus, Beirut, Tunis, Algiers, and Tripoli.

After Arab elites expelled this valuable human capital, rapid population increases in nearly every Arab country demanded a surge in medical and educational services to keep up. Instead, the loss of so many teachers and professionals put many Arab countries at a severe disadvantage. Economies gradually weakened. Civil society deteriorated. Poorer Arab states lacked the resources to train new teachers fast enough to meet rising demand. Standards and achievement levels continued to decline just as globalization was opening labor markets among economies. This left these countries falling behind in an increasingly competitive and more affluent world, which only further widened the income gap between them and, for example, the emerging economies of East Asia.

Phase Two: Boycotts Led by Governments

After the dust of the first Arab-Israeli war settled in late 1949, Arab states commenced their policy of boycotting Israel politically, culturally, and economically in hopes of uprooting it from the region. They established a Boycott Office under the auspices of the Arab League in 1951, with its headquarters in Cairo. 

The boycott was augmented by an aggressive and widespread campaign of demonizing Israel, its people, and Jews generally, through all public platforms of education, exhortation, and entertainment. Within Israel, where the incendiary rhetoric was widely heard, it stoked a well-founded sense of siege and peril, only confirming the need for a strong national homeland capable of defending itself. Meanwhile, the same rhetoric, consumed by Arabs en masse, acculturated Arab populations to a dark, conspiracy-laden view of the world. Rather than equip them with the tools to build a vibrant, cohesive society, it introduced tools of division and incitement which would later be trained on new targets.

As noted in phase one, the period of state-led boycotting coincided with the sharp deterioration of Arab economies and civil society. Eventually, the boycott itself collapsed as a unified pan-Arab phenomenon. Two Arab states signed peace treaties with Israel—Egypt in 1979 and Jordan in 1994—and their success at recovering territory and gaining security and other benefits came not from boycotting Israel but rather from engaging it. These relationships, for all their enduring challenges and limits, have stood the test of significant time. Meanwhile, several other Arab states have built informal relations with Israel, a trend that began in earnest for most with the September 1991 Madrid Summit and that grows more pronounced every year. Here too, achievements and benefits have been scored through engagement, not boycott.

Economically, the magnitude of the original boycott’s failure to damage Israel is, if anything, even more striking. The Israeli economy has grown around the Arab boycott. Israel’s GDP has grown at a rate exceeding that of all Arab countries, save for a few of the oil-rich nations.

Phase Three: Boycotts Led by Non-State Actors

The governmental manifestation of the Arab boycott dimmed over time, and was dealt a blow by the direct engagement first of Egypt, then of Jordan and the PLO. But the growth of Islamist cultural influence over the period of 1978-1994 in effect transferred the mantle of the Arab boycott from Arab governments to civil society. This migration took place not just in Arab countries lacking formal diplomatic contact with Israel but also—and even more actively so—in Egyptian, Jordanian, and Palestinian societies.

These civic manifestations of the boycott managed to dash hopes all around, especially in Israel, that peace treaties with Egypt and Jordan would in time translate into a peace between peoples, rather than merely signaling relations among governments and a handful of elites.

Led by the Muslim Brotherhood in Egypt, the Islamic Action Front in Jordan, and Hamas in the Palestinian territories, the boycott of Israel gathered new momentum—albeit not many new accomplishments. By forswearing the opportunity to engage in civil relations with Israel, the two Arab countries that now recognized it were deprived of the benefits of engagement with an economic and technological powerhouse. Israel might have found ways to partner with Egypt and Jordan in the field of cybernetics, but instead it was forced to look farther afield for partners. Major prospective infrastructure investments, too, such as a Red Sea-Dead Sea or Red Sea-Mediterranean canal, never attracted the necessary international funding, in part because of the pall cast over Israel by the Arabs’ shunning of it. Given Israel’s subsequent success at engaging with partners outside the region, the greater loss of boycotts by far has been to Arab economies.

Macroeconomic data reflect this process at work. As of 2016, trade with Europe accounts for roughly one third of total Israeli exports. The U.S. market accounts for nearly 24 percent, and China and other East Asian nations account for 21 percent. By contrast, no Arab nation accounts for more than 0.5 percent of Israeli exports; Jordan and Egypt, despite their peace treaties, combined account for no more than 0.31 percent of total Israeli commerce. 

The meager levels of Arab-Israeli commerce inspired Jordanian writer Ibrahim Gharabieh to quip that the current level of trade between Israel and Jordan amounted to “less than the compensation package of one senior director at Google.” Similarly, when assessing the state of the Arab League Boycott, the U.S. Congressional Research Service concluded in 2017 that, “since intra-regional trade is small, and the secondary and tertiary boycotts are not aggressively enforced, the boycott may not currently have an extensive effect on the Israeli economy.”

Meanwhile, while the societal boycott exacted non-trivial economic costs from the Arab states, its political costs proved in some respects even greater. This is because the original boycott of Israel became the template for a program of exclusion and marginalization that has since spread to many conflicts within the Arab world, and even within individual Arab countries. This phenomenon exacerbated inter-communal divisions, hardened sectarian attitudes, and generally undermined the social fabric.  

In Bahrain, for example, the conflict beginning in 2011 between the monarchy and Shi‘a Islamist parties moved inexorably from the political realm into the social and economic spheres. One of the first tool partisans turned to was a boycott. Ali Fakhro, a former Education Minister who sought to construct a national dialogue between the government and elements of the opposition, observed the effects as early as 2013: “People started boycotting restaurants … School children are not getting along. For the first time, they identify themselves as Shi‘a or Sunni.” As Fakhro noted, the effects reached both sides of the sectarian divide, with both Sunni and Shi‘a businesses hurt by the internecine economic warfare, forcing many stores and restaurants to close.

Nor has the damage been contained within the strictly economic realm. Indeed, the culture of boycotts has spread to the religious realm as well. In one example, Libya’s most prominent cleric, Grand Mufti Sadiq al-Ghariani, called upon all Muslims to boycott the hajj due to his staunch opposition to Saudi-backed LNA commander Khalifa Haftar. In taking such an audacious step, Ghariani proclaimed that any Muslim who went on additional hajj beyond the mandatory first, or on the optional Umrah pilgrimage, would be committing “an act of sin rather than a good deed.” He declared that any money paid to Saudi Arabia in order to go on either pilgrimage would “help Saudi Arabian rulers to carry out crimes against our fellow Muslims.”

Sadly, this was not the first time an advocate of boycott culture attempted to reduce the hajj to a pawn in the political arena. In 2018, furious over the conflict between Qatar and most of the GCC, Qatar-backed Brotherhood leader Yusuf al-Qaradawi issued a fatwa banning the pilgrimage outright. He stated that  “Allah has no need for the hajj,” and that “seeing Muslims feeding the hungry, treating the sick, and sheltering the homeless are better viewed by Allah than spending money on the hajj.”

In Egypt, coexistence between majority Sunni Muslims and minority Copts has often been marred by strife. Lately the boycott mentality has only made things worse. Pro-Muslim Brotherhood activist Ayat Oraby made headlines by explicitly calling for Muslims to boycott the Christians of Egypt over their support for Abdel Fatah El-Sisi. 

Some observers might suppose these episodes to be no more than the fits of a passing moment, mere sectarian impulses attributable to the extraordinary circumstances of the so-called Arab Spring and its aftermath. But even before the outbreak of the Arab Spring, clear signs of a metastasizing boycott culture poised to exploit and worsen sectarian cleavages already existed in Egypt. For example, in 2010, Salafi activists began an intensive campaign calling for economic boycott of Coptic Christians, claiming improbably that “the state has become a lackey of the Church in all things, and the Church has embarked on a plan to convert Muslim Egypt by applying the ‘Spanish model’ during the war on Islam in Andalusia.” The following year, this campaign spread from the internet to the street. In the Upper Egyptian city of Qena, Salafi groups distributed pamphlets outside the al-Nour and al-Wihdah mosques calling on Egyptian Muslims to boycott Coptic doctors and Coptic-owned businesses. 

In a similar vein, the rising current of Salafi jihadism, which has afflicted most Arab countries to one extent or another and many majority-Muslim societies beyond, has grown increasingly bold in inciting its followers to employ economic boycotts against any who do not share their interpretation of religion. As one fatwa put it, “If it is known that this money or part of it will be paid to the Shi‘a, they must be boycotted,” and “we must all boycott these institutions, companies, and factories, and if any of us know of a factory that supports even partially the war on Islam, we must boycott it, whether it is Christian, Shi‘i, Hindu or anything else.”

Phase IV: Boycotts Led by Foreigners

One might think that given such a track record compiled over more than half a century, the illogic of boycotting Israel would have become clear. Not so. While a rising tide of Arab elites and youth have come to reject the boycott and call for direct civil relations with Israel, a new, predominantly foreign coalition of far-left activists, Islamists, and hardline Palestinian factions have consolidated the Boycott, Divestment, and Sanction (BDS) movement.

The original boycott did not actively seek the support of governments or organizations outside the Arab and Muslim worlds, and before the 1980s international social democratic sentiment lay strongly with Israel. The BDS movement, unable to marshal unified Arab state support for its programs, has put a premium on trying to attract international governmental and NGO support, predominantly from leftwing quarters. The original boycott was explicit about its aim of extirpating Israel as a Jewish state; the BDS movement on the whole maintains the same aim, but obscures it by referring only to the “right of return” for Palestinian refugees, apparently in order to appeal more effectively to global audiences. 

The BDS movement invests most of its energy on cultural endeavors, avidly seeking academic and entertainment industry endorsement. It does so because an economic emphasis, despite BDS rhetoric, is essentially not feasible. BDS organizers may sometimes manage to persuade private sector figures to make statements that do not involve an actual cost, but getting corporations to divest valuable equities for non-economic reasons is something else altogether.

And indeed, while the BDS campaign has indeed won some symbolic victories in the aforementioned cultural zone, the economic damage inflicted on Israel by the BDS movement has been negligible. The thrust of the BDS economic effort has been to migrate the waning Arab economic boycott to the West. This goal has not succeeded, largely because of the specific nature of Israeli-Western economic exchanges. Unlike many of its Arab neighbors, whose economies are dominated by commodities that can be easily substituted from alternate suppliers, nearly 60 percent of Israeli exports are what economists classify as “differentiated goods,” meaning they cannot easily be substituted for by consumers. This is particularly the case in the technology sector. As one report by the Brookings Institution noted, “View a video of a BDS rally, and there’s a fair chance the footage was taken on a device that utilizes Israeli technology: The boycott is broken before it begins.”

Moreover, according to the same report, roughly 40 percent of Israeli exports are intermediate goods, meaning they are used in the production process of other goods produced elsewhere. In other words, Israeli products are deeply embedded in global value and supply chains, rendering them difficult to target in boycotts. And although boycott activists are fond of citing South Africa as a precedent, the Israeli economy of 2019 is structurally much less vulnerable than its South African counterpart of the 1980s. South African exports in the 1980s and 1990s were “high substitutable, unlike Israel’s today,” with more than 60 percent of South Africa’s export basket consisting of such commoditized goods as minerals and metals, as opposed to roughly 40 percent of Israeli exports. 

While the BDS effort has had but negligible economic effects on Israel, it has inflicted substantial costs on the Arab world—particularly on those who can least afford it. Advocates of perpetuating the boycott among its Palestinian organizers and their leftwing, mostly European, allies often make exaggerated claims about its damage to the Israeli economy. But they rarely if ever tally the costs it imposes on the Arab world generally, and the Palestinians in particular. That price is paid in the form of opportunity cost in trade barred from realization, projects blocked from completion, and trade routes warped out of alignment. 

It is difficult to calculate any individual nation’s BDS tote sheet, but several examples offer clues as to the scale of the ongoing loss. For instance, after Morocco legalized tourism from Israel, it began to receive an annual influx of 50,000 tourists, generating millions in additional revenue. In gross terms, the BDS boycott costs Arab states on balance at least $4 billion annually in terms of forfeited oil exports and tourism revenue. 

Additionally, several major commercial and industrial projects have been left unrealized or capped at well beneath their economic potential by the lingering influence of the boycott, and the reluctance of some Arab states to defy it. One such example is the Peace Pipeline initiative. That initiative, which is projected to carry oil from Port Said to Gaza, Tel Aviv, and Beirut, is estimated to be worth some $1-2 billion per year to Egypt alone. But due to the lingering shadow of the boycott, it may never come to fruition.

In the fraught case of SodaStream, an Israeli company targeted by BDS activists was forced to shutter a factory in the West Bank, costing more than 500 Palestinians their jobs. As one Palestinian employee commented, ‎”the global BDS campaign has done the Palestinians more harm ‎than good … Thousands of people were harmed because the ‎factory in Ma’alei Adumim was shut down.”

Though relatively minor compared to trade with Western and Far Eastern markets, some Arab-Israeli commerce has been underway for years. For example, Israeli exports to the GCC have been estimated at nearly $1 billion per year. All of this trade is indirect, however, carried out through third-party countries—primarily through European Union member states, and to a lesser extent via Jordan and Turkey. Its size is masked in official statistics as exports to their intermediate destinations as opposed to their final port of call. Regional integration, more likely in the absence of the boycott mentality, would minimize the need for and costs of these wasteful side-transactions. That is a goal that the BDS movement is doing everything it can to prevent.

One particularly perverse consequence of the BDS campaign has been to inhibit trade between Palestinians and Arab nations. From 2000 to 2010, trade with Arab nations accounted for less than 10 percent of total Palestinian trade. According to one study, increased access to GCC markets that would accompany an end of the boycott has the potential to increase Palestinian exports to those markets by over 50 percent. 

As suggested earlier, economic harm to the Palestinians by the BDS movement is but a recent addition to a decades-long historical trajectory. For decades, while Palestinian terrorists found steadfast support from various wealthy regional actors, the much larger number of Palestinians who yearned to build their own institutions of civil society — that is, the foundations of a future state — have been as isolated from the region as their Israeli neighbors, if not more so. 

A Campaign to Roll Back the Damage

In sum, for too long, too many Arabs—and more recently non-Arabs—have pursued an antiquated boycott policy and looked away as its failures have continued to mount. Let us agree that the boycott concept has done enough damage already. It has prevented Arab countries from gaining the benefits of partnership with Israelis. It has impeded Arab civil society from exercising a positive influence on Israelis and Palestinians alike by way of friendship. It has inspired new intra-Arab boycotts—such as mutual boycotts between rival sects inhabiting the same urban space—which exacerbated cleavages within Arab societies. The practice of marginalizing “the Other” has spread into Arab national and communal homes, weakening the social fabric at just the moment in history when we could least afford it.

The cause of rebuilding and revitalizing the region demands a break with this tragic history. We must work to overcome the boycott, moving from a mindset of segregation to a policy of integration. 

With an eye to some solutions, let us begin with an operationally-minded distillation of the problem, by reviewing the boycott’s depth and expanse, the means of its spread, and the state of efforts to roll it back. With respect to the depth and expanse, a movement launched long ago by Arab elites proceeded to take root in Arab societies, then spread beyond our region to the broader Islamic and developing world and ultimately the West. With respect to the mechanics of the movement’s spread, it has been largely an exercise in mass communication and political pressure, implemented by a shifting coalition of Arab establishments followed by non-state actors. Regarding the state of current efforts to challenge the boycott, it appears that on the one hand, opponents of the boycott have managed to block specific initiatives, and Israel has thoroughly circumvented the boycott’s impositions. On the other hand, hardly any work has been done to challenge the discourse of the boycott in Arab societies. The culture of the boycott remains powerful in Arab lands—and neither Western nor Arab publics are adequately aware of its damage to Arab interests.

These observations invite the following operational conclusions:

• Since the boycott developed through mass communication and political pressure, first in Arabic and then in other languages, it must also be confronted through a campaign of corrective communications and public outreach—in all of the same languages, beginning with Arabic. 
• Since the culture of the boycott swelled from the Arab region to much of the world, the Arab response must be similarly global.
• Even as Islamists, the far left, and hardline Palestinian factions have congealed into a coalition, Arabs for integration can build our own coalition from constituencies that are larger and potentially stronger: Arab and Muslim proponents of tolerance and coexistence, mainstream political voices in the West, and Palestinians who favor both a two-state solution and a mindset of institution-building in their territory. 
• Given that present-day efforts to challenge the boycott lack the capacity to reach Arab societies and are all but silent about the boycott’s toll on Arabs, we must fill these gaps.

The premises would serve to inform a new campaign for a post-boycott region. By engaging allies and volunteers in Arab and non-Arab capitals, the campaign would undertake the following:

• Conduct Arab media outreach: Within the Middle East and North Africa, launch a communications campaign involving TV documentaries, panels, and publications that explain the human and economic toll of the boycott on Arabs generally. A vibrant digital platform will meanwhile build on this attention to directly engage a growing following.
• Conduct Western media outreach: At the same time, convey a special message to international audiences: While BDS activists strive to move the region backward toward segregation, a rising tide of progressive Arab youth want to move forward toward integration. Inform these publics that the struggle against the boycott is an Arab cause first and foremost—and its success is a necessary condition for Arab human development.
• Model a post-boycott region: Drawing inspiration from the peaceful civil rights campaigns against segregation in the mid-twentieth century American South, organize public activities that actually breach the boycott. These would include, for example, Arab and Israeli academic exchange in their respective universities’ conferences; cultural collaborations, such as joint Arab-Israeli film productions; and bold new private sector partnerships, occurring in the light of day.
• Challenge segregationist laws: In several Arab countries, draconian legislation prescribes years in prison for merely meeting an Israeli citizen, and countless professional guilds maintain bylaws to ostracize any members who do the same. Meanwhile, in some Western countries, BDS elements have attempted to use the democratic process to force governments and businesses to comply with the boycott, in some cases as a matter of criminal law as well. In response, organize a multi-pronged project of testimony and advocacy for integration—in Arab and Western legislatures, professional guilds, and the halls of decision-making, sector by sector.
• Pursue teachable moments at public assemblies: Though BDS demonstrators advocate an agenda harmful to Arab interests, the presence of some Arabs among them creates the false impression that it is a “pro-Arab” movement. We must challenge this distortion by making our own voices heard, and expressing the simple and obvious truth that Arabs are the boycott’s first—and only—victims.