Surveys released this week show that nearly 50 percent of Palestinians in the West Bank and Gaza Strip face dire poverty, while an increasing number of Israelis have also slipped below the poverty line. The definitions of poverty and reasons for the decline are different in the two studies.
The two surveys - one by the World Bank, the other by Israel's National Insurance Institute - show an alarming trend of growing poverty. The World Bank survey found that, after a slight recovery in 2003, the Palestinian economy has again stagnated and that nearly half of Palestinians in the West Bank and Gaza live on less than $2 a day.
World Bank representative Nigel Roberts says there is an additional growing category of what he calls "deep poverty." "You now have a level of what we call subsistence poverty, deep poverty of around 16 percent of the Palestinian population," said Nigel Roberts. "Here we're talking about people who cannot subsist without constant infusions of welfare assistance."
Palestinian economic activity has dropped dramatically, while unemployment and poverty have risen during the past four years of violence. Despite a slowdown in fighting this year, the Palestinian economy remains crippled. The World Bank report cites the restrictions Israel imposes on Palestinians to move about freely and to work in Israel as the main reasons for the worsening situation. Israeli officials say Palestinian violence is to blame.
World Bank representative Nigel Roberts says the only remedy lies in action by both sides. "A new kind of commitment to reform from the Palestinian Authority and real evidence on the part of Israel that it is prepared to dismantle the closure regime," he said.
There is also growing poverty among Israelis. In its report Israel's National Insurance Institute says 1.4 million Israelis - or 22 percent of the population - lived below the poverty line in 2003.
The government measures those living in poverty as a person living on less than $13 a day. Although the Israeli economy has been hurt by the ongoing violence, officials say the rise in poverty is mainly because of government policies to cut social spending and welfare payments.
Former Labor Party Finance Minister Avraham Shohat says the past social welfare system may have been too generous, offering few incentives for people to go out and work. Mr. Shohat singles out the orthodox Jewish and the Arab segments of the population for draining the government coffers and for what he calls a lack of work ethic.
Overall, the orthodox Jewish and Arab populations tend to have larger families and higher unemployment. According to the study, Israel's Arab minority remains among the most economically vulnerable segments of society, with close to 50 percent of Arab households living in poverty.