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http://www3.haaretz.co.il/eng/scripts/article.asp?mador=14&datee=05/28/00&id=79661

Report: West Bank, Gaza among poorest areas in the world

By Amira Hass 05/28/2000 Ha'aretz Palestinian Affairs Correspondent

The level of poverty in the West Bank and Gaza Strip is among the highest in the Middle East and North Africa. Poverty in the Palestinian self-rule areas places them among some of the lowest income countries in the world, on a par with states such as Nicaragua, Ghana and Vietnam.

The World Bank and the Palestinian National Poverty Commission are currently involved in compiling a report on the level of poverty in the PA areas; the World Bank last week published a "Poverty Note" ahead of the completion of the final document.

The two organizations did not only use the level of economic development in the territories, namely the GNP and GDP, to measure income per capita, but also the PPP - Purchasing Power Parity. The territories have a relatively high income per head when compared to other countries in the region, but because their economy is so closely tied to the Israeli economy as well as the fact that their price index is on a par with Israel's, the poverty rate in the territories is higher than in Jordan, Tunisia, Algeria and Morocco.

Out of the six countries the PA areas were compared with, only Egypt and Yemen have a higher poverty rate than the territories: The reason for Egypt's poverty lies in the unequal distribution of wealth, while Yemen consistently suffers low income per capita.

In 1998, 20.3 percent of Palestinians residing in the territories lived below the poverty line. According to the Palestinian Central Bureau of Statistics, this was something of an improvement compared with 1996 (23.6 percent) and 1997 (22.5 percent). The 1998 figure is nonetheless higher than Algeria's for the corresponding year, 15.1 percent (Algeria has a income per capita similar to that of the territories), Tunisia with 13 percent, and Jordan and Morocco with 7.5 percent respectively.

The Gaza Strip is twice as poor as the West Bank, with poverty rates of 33 percent and 14.5 percent respectively. The same is also true in absolute terms - the number of poor people living in the Gaza Strip is double that living in the West Bank since Gaza has twice the population the West Bank has.

The report in progress adopts the Palestinian National Poverty Commission's definition of poverty in its 1998 report, which defines a poor person as someone who cannot purchase a basket of basic food goods, clothing and housing as well as other basic needs such as medical attention, transportation and education. A household comprising two adults and four children was defined as poor if its basic consumption in 1998 was lower than $4,600, or $765 per head annually - almost $2 a day per head.

The report's authors note that Middle East and North African states traditionally have low poverty rates because of certain informal "safety nets" such as a relatively high standard of education, a close knit family that offers support and that lives together as an extended unit. Therefore, the high poverty rate in the PA areas is all the more shocking and warrants the conclusion that the rate of economic growth is actually much lower than is usually believed.

The report gives as much attention to absolute poverty as it does to "the perception of relative poverty" i.e. the number of people living for less than that which is considered adequate, given the level of average incomes. The relative poverty is probably higher in the West Bank and Gaza, states the report, than in most other countries, due to these territories' degree of integration with a high income country, Israel. Prices in Israel are lower that in the United States by 10 percent; in other Middle East and North African states, prices are lower by half those in the United States. The report does stress that the high poverty rate in the territories is not a result of or even influenced by the second cause of poverty, namely an unequal division of wealth.


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