The report, the first in an ongoingprogram, presents the results of a statistical analysis ofhousehold-level data for the periods 1995/1996, and1999/2000, as a contribution to the preparation of acomprehensive poverty reduction strategy in Egypt. Despiteconsiderable progress towards improving some of thenon-income dimensions of poverty, more needs to be done toease poverty. The main findings suggest a changing pictureof poverty in the country, where poverty patterns changedfrom the urban-rural divide that had characterized the past,to a geographical/regional pattern, highlighting the lack ofeducation as the strongest correlate of poverty. Statisticsshow that while inequality rose slightly for Egypt as awhole, the level was still comparable to other middle incomecountries; unemployment was high in urban areas; and, genderdifferences in poverty were small at an overall level, butwere significant across regions, particularly in ruralareas. Given the changing, complex picture of poverty inEgypt, a poverty reduction strategy will have to becomprehensive, yet flexible, hence, the report suggests amore sustainable growth in jobs, productivity, and incomesfor the poorest; improved educational opportunities both formen, and women; reversal of growing, regional disparities inincomes, opportunities, and services; and, provision ofsafety nets that protect the most vulnerable.