Why are the social gaps so high here? Why is poverty so profound? Have we become like Sodom and Gomorrah?

The Bank of Israel report released on Wednesday offers several explanations. It even accuses the government of a number of failures. But one main explanation distinguishes us from other Western countries - two poor communities that hardly take part in the workforce and have large families. Such things don't happen in Europe and the rest of the West.

Sixty percent of ultra-Orthodox men don't work, three times the rate of 30 years ago. Among the Arabs, 27 percent of the men and 70 percent of the women don't work. Is it any wonder these two communities are the poorest? Is it any wonder 20 percent of Israeli families are below the poverty line?

We can and must fight poverty. The Haredim can be forced to teach their children mathematics, English and history so that one day they may join the labor force. Israel can foster employment opportunities in Arab towns to enable Arab women to work close to home. It can invest in day care centers, proper public transportation and subsidies for commuting to work. But the government does virtually none of these things.

Last summer's social-protest movement stemmed in part from the sharp rises in housing and food prices, the report says. These problems can be solved, too.

The Israel Lands Administration must be closed down and state lands must be sold to anyone who wants them, without bureaucracy or delays. The ILA's slow release of land and high assessment rates are the main reasons for the exorbitant housing prices. We must also shorten planning and construction procedures, which thwart every initiative and catapult housing prices.

The way to overcome the high food prices is simple - reduce the crazy taxes (190 percent ) on imported beef, poultry, fish, dairy and dozens of other food products.

But are the Bank of Israel's figures right? Is the situation here really that bad? A World Bank study shows that Israel's economic activity is actually 23 percent higher than reported. That is, our gray economy is one of the largest in the world.

The head of the National Insurance Institute, Esther Dominissini, recently said that "among the Haredim and Arabs there is considerable underreported income. Poverty there is much lower than reported."

In view of this, the NII conducted a survey of family expenses, which is more reliable than an income survey. It found that Israel's real poverty rates are 40 percent lower than reported. Only 12 percent of households are below the poverty line, not 20 percent.

This puts us more or less in the middle of the Western world's poverty list, not at the top. Of course, 12 percent is also too high, and the government must reduce poverty and narrow the gaps - in part by reducing the huge salaries of heads of companies on the stock exchange.

But at least we can take comfort in knowing that we're not the worst in the West. No Sodom and no Gomorrah.