Introduction

More than three years of Intifada and closures have plunged the Palestinian economy into deep crisis, causing dramatic declines in living standards. Real per capita income and consumption are believed to have dropped severely between 1999 and 2003, approximately by a third. Employment has also fallen significantly,. this is reflected in unemployment rates, which rose from 10%before the Intifada to 26% in 2003. The dependency ratio, measured by the number of people economically supported by one single Job, grew from 5.0to 6.2 in the same period.

This report - and indeed much of the attention of the donor community - focuses on the situation of the poorest of the poor. We have chosen this focus because the resources available for poverty reduction are insufficient to meet the needs of all individuals below the official poverty line. In this context, donors and policy makers are naturally concerned that the resources reach those who are most dependant on emergency assistance. This concern is reinforced by two perceptions amongst donors and policy makers.

That the poorest have exhausted and are increasingly vulnerable to malnutrition and permanent poverty traps should they face further economic shocks, and The poorest will be unable to benefit from economic recovery because they tend to be unskilled or unable to work. Throughout the report we use a subsistence definition of poverty, which includes individuals whose expenditures are less than 205 NIS per person per month. Using this definition of poverty, we find that 16 % of the Palestinian population in the West Bank and Gaza cannot afford the minimum caloric intake established by WHO and FAO.

 

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