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Economic Effects of Middle East Events

The world?s attention was once again brought to the Middle East, back from Northeast Asia and North Korean missiles, and when you?re talking about Lebanon and Hizbullah, you?re inevitably also talking, whether you know it or not, about Syria and Iran. Syria is a nation that frequently acts as the distributor to Hizbullah of various weapons and monies supplied to the Lebanese terrorist group by the Islamic Republic of Iran. Iran is a major oil supplier to Europe, and this has led many nations to treat the state-sponsor of Muslim terrorism with kid gloves.

Given that oil prices have risen as tensions with Iran have risen, what will be the economic effects of what many are already calling a two-front war in the wake of missile attacks and kidnappings committed on Wednesday by Hizbullah against the Jewish state? Israel had in recent years seen an increase in tourism, and the outbreak of major hostilities, including between Israel and arch-enemy Syria, could have the adverse effect of causing a drop in tourism to the Holy Land. Iran, already committed publicly to Israel?s destruction, might be cheering on recent events in that respect.

However, even as Israeli troops entered southern Lebanon in search of two kidnapped soldiers, Japanese Prime Minister Junichiro Koizumi was in Jerusalem for talks with Israeli Prime Minister Ehud Olmert about Middle East peace efforts and increased trade and cultural ties between the State of Israel and the State of Japan. As of July 11, 2006, one Israeli shekel exchanged for 26 Japanese yen, and one Japanese yen exchanged for 0.04 Israeli shekels.