Nine out of ten Ukrainians could face poverty and extreme economic vulnerability if the war drags on into next year, wiping out two decades of economic gains, the United Nations Development Program (UNDP) said on Wednesday.
Achim Steiner, the UNDP administrator, said his agency was working with the Kiev government to avoid the worst-case scenario of an economy collapse. The aim was to provide cash transfers for families to buy food to survive and sustain basic services.
“If the conflict is prolonged, if it continues, we will see poverty rates increase significantly,” Steiner told Reuters.
“Clearly, the extreme of the scenario is an implosion of the economy as a whole. And that can lead to up to 90% of people falling 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 purchasing power of $5.50 to $13 per person per day, he added in a video interview from New York. Before Russia invaded the country on Feb. 24, about 2% of Ukrainians lived below the $5.50 line, he said.
Ukraine’s government’s top economic adviser, Oleg Ustenko, said last Thursday that Russian invading forces have so far destroyed at least $100 billion in infrastructure and that 50% of Ukrainian businesses have closed 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.
money transfers
UNDP reviews “tried and tested” programs that have been used in other conflict situations, he said.
“Money transfer programs, particularly in a country like Ukraine, where the financial system and architecture are still functional, where ATMs are available, a critical way to reach people quickly is with cash transfers or a basic income. temporary,” he said.
The logistical challenges were significant but “not insurmountable,” he said.
“Clearly, some of the recent announcements by the World Bank and the International Monetary Fund in terms of lines of credit and financing that are being made available will obviously help the Ukrainian authorities to implement this program,” he said.
The UNDP report said an emergency cash transfer operation, which costs 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 a day per person would cost $430 million a month.
Ukraine’s economy is expected to contract by 10% in 2022 as a result of Russia’s invasion, but prospects could worsen dramatically if the conflict lasts longer, the IMF said in a report released on Monday.
The World Bank on Monday approved nearly $200 million in additional and reprogrammed financing to bolster Ukraine’s support for vulnerable people. The funding adds to the $723 million approved last week and is part of a $3 billion package of support that the World Bank is racing to bring to Ukraine and its people in the coming weeks.
Steiner stressed Ukraine’s importance to the economies of other nations, especially a group of African nations that he says receive a third of their wheat supplies from Ukraine and Russia.
“We are also trying to stabilize an economy that is for 45 African nations, least developed countries, the breadbasket for them,” Steiner said.
Source: CNN Brasil
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