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Nine out of 10 Ukrainians could be plunged into poverty if the war drags on over the next year, wiping out two decades of economic gains, the U.N. Development Programme (UNDP) said on Wednesday (March 16).
Achim Steiner, UNDP Administrator told Reuters on Tuesday (March 15) that his agency was working with the Kyiv government to avoid a worst-case scenario of the economy collapsing and hoped to provide cash transfers to families to buy food and other basics to keep them from fleeing.
“If the conflict is a protracted one, if it were to continue, we are going to see poverty rates escalate very significantly,” Steiner told Reuters.
“Clearly the extreme end of the scenario is an implosion of the economy as a whole. And that could ultimately lead to up to 90 per cent of people either being below the poverty line or being at high risk of (poverty),” he said.
The poverty line is generally defined as the purchasing power of $5.50 per person per day, he added in a video interview from New York. Before Russia launched its invasion on February 24, the poverty rate in Ukraine was estimated at 2 per cent, he said.
“We estimate that up to 18 years of development gains of Ukraine could be simply be wiped out in a matter of 12 to 18 months,” Steiner said.
UNDP is looking at “tried and tested” programmes that it has used in other conflict situations, he said.
“Cash transfers programmes, particularly in a country such as Ukraine where the financial system and architecture is still functional, where ATMs are available, a critical way in which to reach people quickly, is with cash transfers or a temporary basic income,” he said.
“Clearly some of the recent announcements by World Bank and International Monetary Fund in terms of credit lines and funding that is being made available will obviously assist Ukrainian authorities to be able to deploy such a programme,” he said.
The UNDP report said that an emergency cash transfer operation, costing about $250 million per month, would cover partial income losses for 2.6 million people expected to fall into poverty.
A more ambitious temporary basic income programme to provide $5.50 per day per person would cost $430 million a month, based on its initial estimates.
Ukraine’s economy is expected to contract by 10 per cent in 2022 as a result of Russia’s invasion, but the outlook could worsen sharply if the conflict lasts longer, the International Monetary Fund said in a staff report released on Monday (March 14).
The World Bank on Monday (March 14) approved nearly $200 million in additional and reprogrammed financing to bolster Ukraine’s support of vulnerable people. The funding comes on top of $723 million approved last week and is part of a $3 billion package of support that the World Bank is racing to get to Ukraine and its people in the coming weeks.
Published : March 16, 2022
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