GENEVA - November 21 - A growing number of households in the Palestinian territories are becoming impoverished, according to a report recently completed by the International Committee of the Red Cross (ICRC).

The ICRC's Household Economy Assessment reveals a significant deterioration of the household economies in both the West Bank and Gaza over the last four years. About 60% of the households in both areas fall into categories described by their own communities as “poor“ or “very poor”. The situation in Gaza, where extremely high levels of poverty were detected, is especially bad.

"This confirms the fears expressed repeatedly by the ICRC concerning the consequences in humanitarian terms of the economic situation in the West Bank and Gaza," said Dominik Stillhart, head of the ICRC delegation for Israel and the occupied territories. The report illustrates how recent events, such as the cutting off of funds to the Palestinian Authority and continuous restrictions on movement, are exacerbating the economic deterioration that has been under way for some time now.

The ICRC used a system of classification determined by the communities themselves, and based on income in cash, to distinguish between “very poor”, “poor”, “middle”, and “better-off” families. "Not only is the number of “poor” families increasing," said Christophe Driesse, ICRC relief coordinator in Israel and the occupied territories, "but the average incomes of “poor” and “middle” households have also dropped dramatically since 2003. This implies a reduction in what people can purchase to meet their basic needs."

Households in the areas surveyed by the ICRC’s Assessment fall well below the World Bank’s poverty line if their cash income alone is considered. “Poor” households normally supplement their cash income with “coping mechanisms” such as humanitarian assistance, support from relatives, credit or loans, sale of property and possessions, small-scale commercial activities, additional income generated by women and children, and even delaying higher education. However, these “coping mechanisms” have grown fragile: most of them have been in use for four years. "For example, small shops are increasingly reluctant to extend credit because debtors are becoming unable to repay their loans," said Mr Driesse.

According to the Assessment, the economic situation of "middle" and "better-off" households is also worsening, and these groups are a major source of informal economic and social support.

Mr Stillhart concludes, "Humanitarian assistance alone, in whatever form, will not solve the problem in a sustainable way. It is the responsibility

###