5 Facts About Poverty in Israel

About Poverty in Israel
A steadfast ally of the United States and one of the most influential countries in the Middle East, Israel has played a key role in global politics and technology. For millennia, Jewish people experienced persecution as a minority across Europe, with others often using them as convenient scapegoats in times of crisis. This culminated in the Holocaust, a genocidal campaign that Nazi Germany waged to exterminate the Jewish population. Millions died and the collective suffering forced upon the Jewish people led to calls for a Jewish state in the Middle East. Several facts about poverty in Israel illustrate the progress the nation has made over the years, despite its history of conflict and strife.

Dividing the Palestinian Territory

The British answered these calls when it divided the Palestinian territory in two: one half for the Jewish population and the other for Palestinians. Israel began as a majority Jewish and democratic state. Once again, however, the Jewish population faced a lack of acceptance by their neighbors. Arab countries attacked Israel on numerous occasions, seeking to expel them from the region. All the while, a growing conflict simmered between the Israelis and Palestinians that would come to be a defining issue in international relations for decades to come.

More recently, Israel has successfully emerged as a highly developed country, equipped with world-beating technology industry. Acceptance has risen among its Arab neighbors through the signing of the Abraham Accords, which featured the normalization of relations between Israel and several Gulf states.

Still, the conflict with the Palestinians is ongoing with no clear end in sight, and Israel has one of the highest rates of poverty for an OECD country. In addition, the COVID-19 pandemic has now added further uncertainty to an already tenuous situation. Uncertain times lie ahead.

5 Facts About Poverty in Israel

Poverty is rising. OECD studies indicate that Israel has the highest poverty rate of all developed countries. In 2013, roughly 21% of the population lived below the poverty line. This was slightly higher than Mexico, which had a poverty rate of 20%. Preliminary estimates also show the situation getting worse, not better. In 1995, the same figure was only 14%. For the same period in the United States, poverty remained stagnant, again suggesting less encouraging trends for Israel than in other developed countries. Still, the overall rate of extreme poverty — $1.90 a day or less — remains low, just 0.2% in 2016. This is an increase from 0% in 1979, albeit small.
Life expectancy is high in Israel. Despite its ongoing struggle to alleviate poverty, Israel has one of the highest standards of living on Earth. From a low of 71 years in 1969, Israel has made dramatic strides to improve life expectancies for both men and women. In 2019, the Israeli life expectancy of 83 years was much higher than the 79 years in the United States, even approaching the Japanese average of 84 years, the highest rate in the world.
Israel is one of the most prosperous countries in the world. Measured in GDP (PPP) per capita, Israel in 2020 was almost four times better off than the typical emerging economy and more than two times as prosperous as China, the mainstay of the developing world.
Israeli economic growth is unusually fast for a developed country. In the last two decades of the 20th century, Israeli economic growth was record-beating, peaking at 10% in 1995 — a rate only exceeded by large developing nations like China. In the 2000s, Israeli growth has slowed but still remains faster than many of its counterparts. Then, in 2019, shortly before COVID-19 sent the global economy spiraling into recession, the Israeli economy expanded by 3.4%, faster than the United States, Japan and Germany.
The disposable income gap — the amount of money citizens retain after taxes — is widening. Along with growing poverty, the last cloud in the sky is income inequality. Since 1986, the Israeli Gini coefficient for disposable income has increased, leading to a higher rate of inequality than the United States, Germany, Britain and France.

Looking Ahead

The country’s weaknesses are twofold: growing poverty and income inequality. Both challenges exacerbate one another and show no signs of abating. However, unlike many nations, Israel has a strong foundation to build from. Israel possesses some of the highest standards of living and enjoys steady economic growth. Additionally, the country is receiving help from other avenues too. NGOs have cropped up across the country with dedicated missions of poverty reduction. One of the largest is Pitchon Lev, founded in 1998 and active in 50 individual municipalities within Israel. For more than two decades, the organization has worked directly with the poor, providing food and key necessities to 250,000 people a year. Going forward, the rise of these organizations can help turn the tide and usher in a brighter period for Israel.

– Zachary Lee
Photo: Flickr

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