© Reuters. FILE PHOTO: A woman walks with a bicycle next to a building damaged during the Ukraine-Russia conflict in the separatist-controlled city of Volnovakha in Ukraine’s Donetsk region, March 15, 2022. REUTERS/Alexander Ermochenko


By Stephanie Nebehay

GENVE (Reuters) – Nine out of 10 Ukrainians could face poverty and extreme economic vulnerability if war continues into the coming year, wiping out two decades of economic gains, the UN Development Program (UNDP) said Wednesday.

Achim Steiner, UNDP administrator, said his agency was working with the Kiev government to prevent a worst-case collapse of the economy. It was intended to make families pay money to buy food to survive and to prevent them from fleeing while supporting basic services.

“If the conflict is prolonged, if it continues, we will see the poverty rates escalate very significantly,” Steiner told Reuters.

“The extreme end of the scenario is clearly an implosion of the economy as a whole. And that could ultimately lead to up to 90% of people either living below the poverty line or at high risk of (poverty),” he said. in a video interview from New York.

The poverty line is generally defined as a purchasing power of $5.50 to $13 per person per day, he added in a video interview from New York. Before Russia launched its invasion on Feb. 24, an estimated 2% of Ukrainians lived below the $5.50 mark, he said.

Oleg Ustenko, the Ukrainian government’s chief economic adviser, said last Thursday that invading Russian forces have destroyed at least $100 billion worth of infrastructure so far and that 50% of Ukrainian businesses have been shut down completely.

“We estimate that up to 18 years of Ukraine’s development gains could simply be wiped out in a matter of 12 to 18 months,” Steiner said.


UNDP is looking at “tried and tested” programs it has used in other conflict situations, he said.

“Cash transfer programs, especially in a country like Ukraine, where the financial system and architecture are still functional, where ATMs are available, is a critical way to quickly reach people with cash or a temporary basic income. “, he said.

The logistical challenges were significant, but “not insurmountable,” he said.

“Clearly, some of the recent announcements from the World Bank and the International Monetary Fund in terms of credit lines and funding being made available will help the Ukrainian authorities to implement such a program,” he said.

The UNDP report said an emergency money transfer operation, costing about $250 million a month, would cover partial income losses for 2.6 million people expected to fall into poverty. A more ambitious Temporary Basic Income program to provide $5.50 per day per person would cost $430 million per month.

Ukraine’s economy is expected to shrink by 10% in 2022 as a result of the Russian invasion, but the outlook could deteriorate sharply if the conflict continues, the IMF said in a staff report released Monday.

The World Bank on Monday approved nearly $200 million in additional and reprogrammed funding to bolster Ukraine’s support for vulnerable people. The funding comes on top of the $723 million approved last week and is part of a $3 billion bailout package that the World Bank is rushing to reach Ukraine and its people over the coming weeks.

Steiner stressed the importance of Ukraine to the economies of other countries, especially a group of African countries that he said get a third of their wheat supplies from Ukraine and Russia.

“We’re also trying to stabilize an economy that is the breadbasket for 45 African countries, the least developed countries,” Steiner said.

This post Ninety percent of Ukraine’s population could face poverty in protracted war

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