Every day of delayed peace will accelerate a freefall into poverty for Ukraine, warns UNDP

Early data estimates suggest that 90% of the Ukrainian population could be facing poverty and extreme economic vulnerability should the war deepen, setting the country – and the region – back decades and leaving deep social and economic scars for generations to come.

Posted March 16, 2022

Kyiv railway station. 3 March 2022.

Oleksandr Ratushnyak, UNDP Ukraine

New York – In the event of a continuing, protracted war in Ukraine, 18 years of socio-economic achievements could be lost, with almost one third of the population living below the poverty line and a further 62% at high risk of falling into poverty within the next twelve months, according to an early projection released today by the United Nations Development Programme (UNDP).

“The war in Ukraine is causing unimaginable human suffering with a tragic loss of life and the displacement of millions of people. While the need for immediate humanitarian assistance to Ukrainians is of the utmost importance, the acute development impacts of a protracted war are now becoming more apparent,” said UNDP Administrator, Achim Steiner. “An alarming economic decline, and the suffering and hardship it will bring to an already traumatised population must now come into sharper focus. There is still time to halt this grim trajectory.” 

Based on its longstanding, trusted partnership with the Government of Ukraine, UNDP has been working in all 24 oblasts (administrative districts) of Ukraine with more than 332 municipalities, 15 civil society organizations hubs, and more than 17 business membership associations across the country.

As part of the coordinated United Nations Country Team’s response, UNDP is now leveraging this extensive network for immediate and scaled up support to the people of Ukraine, focusing on immediate crisis response and maintaining core government functions for emergency response management and public service delivery.

“In order to avoid further suffering, destruction and impoverishment we need peace now,” said Steiner. “As part of the United Nations’ unwavering commitment to the Ukrainian people, UNDP’s primary focus is to help preserve hard-won development gains. That includes supporting the government to sustain critical governance structures and services, which constitute the bedrock of all societies.”

According to government estimates, at least $100 billion worth of infrastructure, buildings, roads, bridges, hospitals, schools, and other physical assets have been destroyed. The war has caused 50% of Ukrainian businesses to shut down completely, while the other half are forced to operate well below capacity.

Among the largest UN agencies on the ground in Ukraine, UNDP has remained operational throughout the conflict and is now boosting its presence with targeted, specialized deployments in key areas such as debris management, damage assessment and emergency livelihoods including cash-based assistance, and also offering operational entry points and platforms to development and humanitarian partners to channel and scale support to the Government and people of Ukraine.

A series of policy measures in the coming weeks could assist and mitigate a freefall into poverty as the conflict rages on.  In view of the scale of the needs and priorities, and of the country’s strong banking and financial services infrastructure, UNDP joins the UN Crisis Coordinator in promoting the use of multi-purpose cash assistance which could help reach the largest number of people in desperate need across the country. For example, UNDP’s initial estimates are that a large-scale emergency cash transfer operation, costing approximately $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 (TBI) that provides a basic income of $5.50 per day per person would cost $430 million a month, based on initial estimates.

In neighbouring countries, and in support of the inter-agency Regional Refugee Response Plan, UNDP is working with UNHCR to ensure a strong focus on resilience and development for the millions of displaced people who have fled the violence. This joint support to refugees and host communities will focus on livelihoods, through income generation and employment.

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