UNDP: Nine out of ten Ukrainians could 'freefall into poverty' in prolonged war

Ukrainian rescue workers remove debris from a building after a shelling in Kharkiv, Ukraine, 16 March 2022. (Keystone/EPA/Vasiliy Zhlobsky)

The UN’s development agency calls for large-scale cash assistance to Ukrainian citizens as war threatens to wipe out almost two decades of socio-economic gains. 

Ninety per cent of the Ukrainian population could be pushed below the poverty line or face extreme economic vulnerability in case of a prolonged war with Russia, wiping out almost two decades of progress, the United Nations warned on Wednesday. 

The UN Development Programme (UNDP) has projected four scenarios of economic contraction based on evidence from previous armed conflicts and war-hit countries and an assessment of the deteriorating situation on the ground.

In the worst-case scenario of the war dragging on, it estimates that 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 per cent at high risk of falling into poverty within the next twelve months.

“An alarming economic decline, and the suffering and hardship it [the war] will bring to an already traumatised population must now come into sharper focus. There is still time to halt this grim trajectory”, said UNDP Administrator, Achim Steiner. 

According to estimates by the Ukrainian government, at least $100bn worth of infrastructure, buildings, roads,  bridges, hospitals, schools, and other physical assets have been destroyed.

Some 50 per cent of Ukrainian businesses have been forced to shut down completely, while the other half are forced to operate well -below capacity. 

The largest UN agency in the country, the UNDP is working in collaboration with other humanitarian agencies and the Ukrainian government to provide immediate crisis response and try to prevent the economy from collapsing.

It wants to provide cash assistance to families and estimates that such a programme, costing around $250 million per month, would cover partial income losses for 2.6 million people expected to fall into poverty.  

A similar strategy was introduced to Ukraine through the 2016 Humanitarian Response Plan, and has been proven effective.

The UNDP defines the poverty line as $5.50 per day. Around two per cent of the population were estimated to be living below the poverty line before the conflict. 

Based on its first scenario where the economy contracts by seven per cent, the number of people below the poverty line would increase to 4.2 per cent and 28 per cent in the worst-case scenario where the economy contracts by 60 per cent.