Prolonged crisis in the occupied Palestinian territory: recent socio-economic impacts on refugees and non-refugees

The economic deterioration, rising unemployment and soaring poverty rates resulting from political instability in Palestine since 2000 have been foremost in the concerns of international humanitarian groups. The 2006 election of the Hamas-led Palestinian Authority, ensuing conflict with Israel and de-facto economic sanctions have prompted this impact evaluation report. The findings of the report point towards a rapid deterioration in the humanitarian situation in Gaza and the West Bank.

The study presents comparative data sets in three main areas that are thought to affect living conditions in Palestine - demography, labour force and household poverty. The study clearly marks out the differential impact of the deterioration in living conditions on refugees and demonstrates that refugees have been more adversely affected by the current crisis than other Palestinians. Refugees are less likely to find work, are more dependent on public sector employment and more likely to live in deep poverty than non-refugees.

Key findings include:

• the sharp drop in manufacturing GDP over the past year does not bode well for future private sector employment creation and overall economic growth in a country with a young and rapidly growing labour force
• loss of income impacted upon around 25 percent of the work-force and their dependence - this has most severely impacted the Gaza Strip where almost 41 percent of employment was in the public sector, with measurable effects on the number of people living in poverty
• since 2000, about two-thirds of the Palestinian poor have had consumption levels below the deep consumption poverty line - defined as the inability to meet basic needs
• between mid 2005 and mid 2006 deep income poverty levels rose by 39 percent in the West Bank and by 55 percent in Gaza
• despite unprecedented levels of humanitarian assistance in 2005, the total number of deep poor persons has increased by an estimated 82,000 persons, nearly all of them refugees, suggesting worsened conditions in Gaza where refugees are concentrated.

The reader is reminded that the extent and intensity of the crisis facing Palestinians in 2006 must be evaluated in the context of more than five years of unprecedented macroeconomic turmoil and socio-economic adversity.