chapter  7
29 Pages

Structuring a pension scheme for a future Palestinian state

ByEDWARD A. SAYRE, JENNIFER C. OLMSTED

The economic situation facing Palestinians in the West Bank and Gaza Strip is particularly dismal at the moment. Poverty rates have risen dramatically, in part due to intolerable unemployment rates. While the Palestinian Authority (PA) has, on the one hand, been attempting to build its institutional capacity, the pressure of dealing with the al-Aqsa intifada and the Israeli reaction to it has meant plans to develop a more comprehensive set of institutions have been postponed. As the current situation has acutely shown, one of the biggest gaps in institution building remains in the area of social security. No basic law governing pensions, unemployment insurance and disability insurance exists to date. The lack of a formal social security system not only increases economic uncertainty for the elderly, but also deprives Palestinian workers in Israel of contributions to the Israeli Social Insurance owed to them.